Business Counselor October 4, 2017 Jennifer A. Puplava

Get Your Software Licenses in Order–And Beware of the BSA

Have you or your business received a letter from the Business Software Alliance (“BSA”) claiming that your software licenses are out of order? Would you be prepared to respond to such a letter?

The Business Software Alliance is a trade association representing major software vendors such as Microsoft and Adobe. Under the guise of enforcing software licenses on behalf of its members (and often after receiving information from a targeted entity’s disgruntled employee), the BSA will send a letter to a target entity claiming that the entity is in violation of its software licenses. Such a letter often includes an invitation to the target entity to audit its own records and provide the information to the BSA for payment of a fine in lieu of a copyright infringement lawsuit. Software audits can be difficult and expensive, although they are in many cases far less expensive than the damages and fees a business would incur on the wrong side of a copyright infringement lawsuit.

An audit demand from the BSA generally requires that a target entity not only provide an inventory of workstations, software products, and license information but that it also provides proof of purchase of the licenses. If a target entity can show full compliance with license requirements, the matter can be resolved without payment of a fee to the BSA. However, if a target entity has not maintained clear records regarding the purchase of its licenses, the BSA may demand payment of a fine and purchase of additional licenses.

Every business should take the time to gather and organize records regarding all software purchases and installations, and to regularly update those records. Whether you use one of the many software asset management tools in the marketplace, or you utilize a less formal method, you should be keeping track of the identity, version, number of installations, and license key of each software product installed on each workstation and server. Your business should also keep a record of all software purchases (e.g., receipts for the purchase of licenses). Taking these steps now will save umpteen hours of stress and disruption later if/when you receive a nasty letter from the BSA, particularly because the BSA usually requires rapid response to audit demands.

Letters from the BSA are serious and should not be disregarded, but care should be taken before providing a response to the BSA. Businesses should consult with an experienced attorney to ensure that they are responding properly to a request for a software audit.

If you have any questions regarding software management or audits, or if you need assistance responding to an inquiry from the BSA, please contact Jennifer Puplava at or 616-632-8050.