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Does Unlicensed Software Put your Organization at Risk?

For a legitimate business or entity, it is important to have commercial software that is registered so that further complications do not arise from illegally downloaded or unlicensed software. The only time having unlicensed software may be exempt from business difficulties is if the company or owner has developed the application and is using it for this or her organization.

Unlicensed software is usually found to either have been illegally downloaded or stolen from the owner. When a business is using such, the owner may face severe fines or other punishments when discovered. Getting caught is the problem with using such applications. However, some computers recognize unlicensed software and will not let the person using it work with it unless it has been updated or an activation code that has been recognized as licensed is input manually. When someone online takes notice of these matters, the business may face further problems, and this could lead to legal claims. The owner of the software may sue the company utilizing the application, and then a lengthy legal battle may ensue.

There are numerous ways for a business to succeed in noncompliance when using different types of software. There are similar detection methods and
risks as well as ways to mitigate possible damage of using these applications. Part of the confusion for many that are not computer savvy is that an individual may own the hardware, but software is rented in a manner. The license for using the intellectual property only lasts for so long before it must be renewed through an additional purchase. This software is not owned by the company but remains in possession of the vendor. Additionally, there are limits to how the software may be used by the licensee and how many computers may install it.

The Software Arrangements

When a company deals in business interactions and transactions with others and various entities, the owner or management acquires software through a license for so many computers. These applications are installed by the tech team and employees use them as permitted by the company. However, if there are other intellectual property concerns or ownership within the organization, it is possible that proprietary software is run on devices within the building that is not found at other companies. However, when managing dozens or hundreds of computers and purchasing license agreements for the terms of one or more years, there is usually an arrangement negotiated for the company either through the manufacturer of the software or the owner of the IP itself.

Terms of Software

To remain in adherence of conditions and terms when purchasing software, it is important that nothing illegal is accomplished while using the application. Other such actions could include selling the licenses to unauthorized vendors or individuals, inappropriate actions and similar concerns. The owners of the software usually place these conditions and terms in the installation where they are accepted to use the IP on a computer. Whether this is a specific person or an entire business, the terms of the software are clear before it is installed. Violations could lead to criminal or civil consequences against the perpetrator.

The Risks of Unlicensed Software

Noncompliance with licenses, IP and software could lead to severe risks of legal matters and issues. One serious risk is if software has been illegally downloaded. Even if employees are in on the arrangement, the penalties for these actions are often severe. Another risk is if a worker has installed similarly obtained software on a work computer. This activity could remain concealed from the owner, but the tech department could find this information or an auditor of the company and then the owner or management may face brutal charges.

Another risk is when the company has used software outside the terms of service or the conditions set forth by the licensing company. Violations most often occur when the company has placed the software on more computers through other means than is permitted. If more employees have been given access than the terms specify, this may through the business out of compliance. Commercial purposes versus home or non-commercial are a risk that may lead to punishments.

Lawyer’s assistance with Unlicensed Software

While it is best to have a business or intellectual property lawyer on hand at all times, it is crucial one is hired for possible violations of the laws or when civil charges are possible. The legal representative may also explain the risks of unlicensed software and help avoid these situations.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.

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