Pub. 1 Issue 4

21 WINTER 2014 of threatening letters to the business owner demanding that, in lieu of litigation, a software audit be conducted to identify all suspected software products in use for which licenses may not exist. The threats are backed by statutory damage provi- sions which, under the Copyright Act, allow for recovery of up to $30,000 per infringement (if the infringement is found to be “nonwillfull”) and up to $150,000 per infringement (if willfulness is found). Once the audit results are made known, the Trade Association will most often enter into settlement negotiations wherein the Trade Association will demand that the business owner pay the maximum retail costs of each unlicensed software product found to exist at the business plus a multiplier of 2x, 3x or 4x these costs in lieu of being subjected to the statutory damage provisions plus attorneys’ fees and costs incurred by the Trade Association in any settlement. So for example, if the business owner is found to have an unauthorized copy of Corel® WordPerfect® loaded on eight of its computers, the settlement may look as follows: Now imagine that the business owner is also found to have on its computers a couple unauthorized copies of Adobe® Acrobat ® Professional, ten of the Microsoft® Office prod- ucts (e.g., Excel® and Powerpoint®) and a Rosetta Stone® product (loaded on a business computer by an employee who wants to learn Spanish during his/her lunch break). Under the Copyright Act, the business owner is looking at potential statutory damages in excess of $400,000. Needless to say, the potential liability is not worth the risk. We strongly suggest conducting a software audit before a Trade Association gets wind of a probable violation at your business. The costs of the audit and any software licenses then found to be lacking is a small price to pay before a Trade Association comes knocking.  8 x $299.00 (retail price) $2,392.00 x 3 (the multiplier) 7,176.00 plus attorneys’ fees and costs 5,000.00 $14,568.00 If you have employees, you have a reason to call us. 444 South Flower Street • Suite 1590 • Los Angeles, California 90071 • 213.330.4500 www.laborlawyers.com SOLUTIONS AT WORK ® ATLANTA BALTIMORE BOSTON CHARLOTTE CHICAGO CLEVELAND NEW ORLEANS ORLANDO PHILADELPHIA PHOENIX PORTLAND LOS ANGELES LOUISVILLE MEMPHIS NEW ENGLAND NEW JERSEY GULFPORT HOUSTON IRVINE KANSAS CITY LAS VEGAS COLUMBIA COLUMBUS DALLAS DENVER FORT LAUDERDALE SAN ANTONIO SAN DIEGO SAN FRANCISCO TAMPA WASHINGTON, D.C. Los Angeles Dealer 7.5x4.75.indd 1 7/5/13 12:00 PM