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Thursday, July 19, 2012

What you don't read might kill your company

I grew up in small town in the western part of the US.  During Junior High, we had 1 hour lunch period, which left just enough time to walk to the local hamburger stand, grab some food and get back in time for afternoon classes.  On occasion, we would skip lunch and just hang out in some of the stores along Main Street.

Being young and foolish, my friends and I thought it would be cool to go into one of the stores, slip a candy bar into our coat pocket and leave without paying. We thought this would get us a free candy bar.  What it did lead to was explaining our mistake to our parents as well as the local Judge.  Neither of them thought it was very cool. I don’t remember the amends required within the legal system.  However, my parents did not shy away from real punishment.  Rather than a hand, a paddle or a belt, my parents kept a razor strap hung behind the kitchen door. I remember they used it on this occasion.

Over the course of my professional career, I have worked with a few companies that have violated Software License Agreements.  The items below will help you understand these agreements and avoid violating them as well as the embarrassment, fines and penalties that go with such violations. Working with companies who violate these agreements, we pick our terms carefully.  We talk about being in violation of the license agreement; we call it a compliance issue and sometimes call it piracy.   We hesitate to call it stealing. When I stood in front of my parents, the judge and even the storeowners, they referred to my crime as shoplifting.  This sounded better than stealing; although we all knew my friends and I were a 13-year-old thieves.

Whether we call it compliance, piracy, or something else, when you use software without a legal license you are stealing from the company who created the software. I am not a lawyer and claim no legal knowledge.   As outlined in the confession above, I do have some minimal experience, though many years ago, as a thief.

Here are ten things you should know about your software license agreement.  I use the Siemens agreements for Solid Edge, NX, FEMAP, to create this list.  However, these are similar to most software agreements for similar products.

1)     Read and understand the agreement.   With some products, (NX/Unigraphics and Teamcenter) this is a written document signed during the purchase process.  With others (Solid Edge and FEMAP), this is an on-line agreement you accept when you install the software.  Once you install the software, the license agreement is legally binding.    The agreement is the final definition of your terms of ownership and use.

2)     You buy a license, not the software.  You don’t buy software and thus don’t actually own software.  You purchase a License to use the software under the terms outlined in the agreement. Software is protected under copyright and other similar laws and remains the property of Siemens PLM Software. 

3)     Only you can use the software.  If purchased by an individual, you can use the software.  If You are a company, your employees can use the software.   A contractor located at your facility can also use it.  A contractor not at your facility cannot use it.  No other company can use it – not even another company you own or a subsidiary of your company.

4)     Where can you use it?  You purchase the license in a Territory – this is typically a country.   You can use it within that country and not outside that country.  There are global licenses for some products, but these are very rare and have extra agreements, higher costs, minimum purchases and other additional terms.

5)     The license is non-transferrable.  You cannot re-distribute the license in any way.  You cannot sell it, give it away, loan it, etc.  Even if your company is acquired, the license is not transferred without the agreement of the owner of the software.

6)     You cannot analyze the software for any purpose competitive to Siemens PLM Software.  If you conduct benchmarks or tests with the software, the results of those tests are the confidential information of Siemens and you cannot publish them or reveal them to any third party.

7)     There are special terms in the agreement covering Student Licenses, Academic Licenses, Trial Licenses, etc.  Using this software for any commercial purpose (anything you are paid for), violates the agreement.  A non-student using a student version is also illegal.

8)     Compliance with the agreement.  The vendor reserves two right s relating to compliance with this agreement: a) they can embed mechanisms into the software to monitor compliance with the license agreement;  b)  you agree cooperate with any investigation into the violation of the agreement including access to your facility, your computers, etc.

9)     Home use Licenses – Solid Edge (and only Solid Edge) provides a home use license.  This allows a person who uses the software 80% of the time at work, to have a copy on a home computer or laptop.  Only this individual is authorized to use the home use license.  No-one else inside our outside your company can use this license. 

10)  Maintenance Services – the agreement outlines the services provided as part of your maintenance agreement.  You should review these terms as well. Violation of the license agreement (software piracy) is a significant business issue for software vendors.  The Business Software Alliance tracks and prosecutes software piracy.  They report over $63 Billion worth of software was pirated (stolen) in 2011. BSA estimates that 24% of software used in developed countries (42% worldwide) is obtained illegally. Software Piracy is theft.  In legal terms, it is copyright infringement.  It carries criminal fines up to $250,000 and 5 years in prison as well as civil penalties up to $150,000 per infringement.    Multiple infringements mean multiple penalties.

To learn more about software piracy, you can visit the BSA www site at
If you have a specific situation, you would like to discuss or if you think you might be in violation of your agreement, give me a call or drop me an e-mail.  We can discuss it while we share a legally-purchased candy bar.

Don’t wait for the Piracy Police to knock on your door.  The fines, penalties and jail time could kill your business.

Kim Corbridge
Director of Corporate Sales

1 comment:

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