CAAST settles with eight Canadian companies for software piracy

by Chris Talbot

A total of eight Canadian companies have been singled out by the Canadian Alliance Against Software Theft (CAAST) for having unlicensed copies of software installed on company computers. The settlements out of court of more than $300,000 combined are intended to be good reminders for small businesses to do software audits on their systems.

In Ontario, five companies were named as having unlicensed software on their systems -- Engineering.com of Woodbridge, MI Group of Mississauga, NAQ Inc. of London, Palcam Technologies of Newmarket and Robertson Inc. of Milton. The Ontario companies settled out of court for a combined total of $253,300. In Alberta, three companies -- Alberta Fuel Distributors of Edmonton, Focus Corp. of Edmonton and PHH Environmental Ltd. of Edmonton -- settled their claims out of court for a total of $77,000.

However, Jacqueline Famulak, president of CAAST, said there was no malice in each case, and every company named had grown in size while forgetting to keep up their software licences.

"They might be larger companies, but in the realm of things, they're not like huge, international mother companies. These are local companies that were affected," Famulak said.

According to research conducted by the Business Software Alliance (BSA), a global watchdog group, 39 per cent of every piece of business software in Canada is unlicensed, or pirated. That translates into nearly four of 10 pieces of software are pirated. The BSA only conducts its research on business software, but Famulak said she predicted the piracy rate would be significantly higher in Canada if the research took consumer software (like computer games) into account.

One of the things that CAAST has always tried to do is raise awareness within the business community by essentially reminding companies that they need to own the correct number of licences for the software they use.

"What we find is within small/medium businesses, it is quite often the case that they are under-licensed," Famulak said.

For instance, Company A has 30 employees and 30 computers. The company has a great year and needs to expand. It hires 10 more people and buys 10 more computers. However, did Company A buy 10 more licences for the software? Too often, the answer is no, Famulak said.

"A lot of times, it's an oversight because it's just not a physical thing that you see like the computer on the desk, and the companies end up unwittingly under-licensing their software," Famulak said. "And this happens a lot in the small/medium business realm because the companies are either ramping up quickly or perhaps they don't have an IT guy on staff that's going to monitor these things. So we find that under-licensing is quite prevalent."

As oversights go, under-licensing is a costly one, as the eight companies recently by CAAST found out. Famulak said that when CAAST approached each of the companies named in the settlement announcement, they all did software audits, purchased the proper amount of software licences they needed and put software compliance programs into effect.

However, don't let it be said that CAAST and the BSA are no more than watchdog waving its fingers at companies and shouting "no."

First published December 16, 2003