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Risks of unlicensed software escalate

Joey Gardiner

Over 60 per cent of companies are running the risk of incurring massive fines because they don't know if they're running illegal or unlicensed software.

The problem is particularly acute because software vendors often turn to more rigorous licensing enforcement during a recession to try and garner more revenue.

In its latest survey, the Federation Against Software Theft (Fast) found almost two-thirds of firms don't think they comply with software licensing laws.

This means companies could be opening themselves up to fines and other legal action, including the imprisonment of company directors.

Richard Willmott, head of corporate services for Fast, said: "Unfortunately these figures are more concerning than they are surprising. We go into companies all the time which are initially sure they comply with the law, but mostly we find that they haven't really thought about the issue.

"We're not talking about actively pirating software here, we're talking about employees downloading software off the web, and we're talking about licenses expiring and not being renewed, or just being lost."

Willmott urged IT directors and company officers to properly audit the software they have, and to enforce company policies on the downloading of programs.

Fast's figures will come as little shock to the IT user community, which is regularly cajoled by both Fast and the British Software Alliance (BSA) to get its licensing house in order.

However, technology law specialist Tarlo Lyons claims the problem is particularly pressing in the current economic climate.

Larissa Cameron, solicitor for the London law firm, said it had seen an large increase in such cases in recent months.

She said: "We have clients coming to us feeling there are being squeezed by their software suppliers to pay up for licences.

"Suddenly suppliers that are lax over licensing in the boom times are focusing their attentions on this area, and looking to use it to increase revenue."

Cameron also urged user firms to ensure they had paid up for their licences quickly before the software supplier came knocking.

However, IT directors for the most part remained unimpressed by the calls.

David Rippon, chairman of IT director's association Elite said: "The number of cases that actually come to court belie the finding that two-thirds of companies are running illegal software.

"Much of the problem is caused by licensing policies from the software vendors that are so confusing and labyrinthine it makes it sometimes impossible for IT directors to know what they have to do to comply with them."

Copyright © 2003 CNET Networks, Inc. All Rights Reserved. is a registered service mark of CNET Networks, Inc.

First published January 31, 2002

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