Software Audits Pose Potential Problems for Adult

Stephen Yagielowicz

Piracy is a hot button issue for the adult entertainment industry today, but software publishers have combated the problem for many years; engaging in an ongoing struggle against computer users that think it is “OK” to share and used unlicensed software, from Photoshop to Windows and beyond — many of which periodically “call home” for new updates, revealing the software’s installed location in the process.

Attorney Dan Pepper of the Pepper Law Group recently posted an article on his Technology Law blog (www.informationlaw.com) discussing the pain and expense of software audits, which have been steadily rising during the past decade.

The bottom line is that routine, periodic audits are the only way for software companies to ensure full payment for their intellectual property.

Pepper cites a Gartner report revealing that 61 percent of survey respondents say they were recently audited by at least one software company; with IBM, Adobe, Microsoft and Oracle, claiming the top spots for audits performed.

As for why a specific company might be targeted for an audit, Pepper says that it may be the result of a disgruntled employee acting out of revenge; a software vendor deciding that it was your turn; or perhaps a random audit by an IT compliance agency, such as the Business Software Alliance (BSA).

“The bottom line is that routine, periodic audits are the only way for software companies to ensure full payment for their intellectual property, and they are counted on as a new revenue source when new license revenue is decreasing,” Pepper explained. “Sooner or later, your company can be expected to be selected.”

Pepper says that many companies underestimate the risk of being singled-out and the consequences for non-compliance; and that software policy is not enough for protection.

“Beyond the direct financial costs involved, software audits also impact organizations by disrupting normal business operations, by drawing IT and executive personnel away from the needs of their customers,” Pepper continued. “The financial impact of an audit may include damage to an organization’s brand reputation, and can draw the attention of other software vendors seeking additional revenue.”

The Gartner report notes that if you answer “no” or “I don’t know” to questions such as “How long has it been since a meeting was held on contract compliance and asset management?” or “Does the enterprise have written procedures on software procurement processes?” and “How long has it been since a desktop audit was performed?” that your company presents a high risk of non-compliance with licensing requirements.

“If your company receives the dreaded letter from a software vendor demanding an audit, preparing an effective and comprehensive strategic response is vital,” Pepper concluded. “If your company has not yet received the dreaded letter, and you are at high risk of non-compliance, conducting a comprehensive review of your existing technology licensing agreements to determine the software vendor’s auditing rights is paramount.”

As dedicated as the online adult industry is to preserving intellectual property rights, it should have no problem in ensuring that it is authorized to use the software installed on the computers used to make and market its wares.