Software Use and Your Legal Liabilities

2. Legal Basics

2.1 When you 'buy' software, you usually purchase a licence.

This sets out exactly how you can use the software.

• Almost all standard software packages are sold with a licence. If you commission bespoke software, you can have the copyright assigned to you.
• The licence will specify how many copies you can make (and use). Unless the licence states otherwise, you may only use one copy of the software on one computer, although many licences allow you to retain up to two copies for back-up purposes.
• Some licences place restrictions on who may use the software, and for what purposes. Some software is provided free, or at a reduced price, for academic or personal use. Commercial use of such software is prohibited.

2.2 Breaching the licence is software piracy.

Typical breaches include:

• Making or selling illegal copies.
• Using illegal copies of software, even unknowingly.
• Using legally acquired software on more computers than the licence allows.
• Allowing employees, or other contacts, to make unlicensed copies of software.
• Allowing a consultant to install software on your system when you do not have a licence for it.

2.3 Software piracy is a criminal offence.

• You risk up to two years in jail, or an unlimited fine.

2.4 Software publishers may sue you for piracy.

• You can be sued for any improper use of their intellectual property.
• Damages can run to tens of thousands of pounds. They are normally linked to the amount of money lost, which depends on the number of illegal copies and the length of time they have been in use.
• You also face the possibility of the expense and disruption of legal action, regardless of whether you have to go to court.

2.5 It can be easier than you think to be found out.

• The software publishers' trade association, the Business Software Alliance (BSA), offers a reward of up to £10,000 for information on the illegal use of software.
• Disgruntled employees or ex-employees may inform on you.
• Any consultant or company you use to support your IT system is likely to discover any illegal software.

2.6 Your reputation could suffer if it is made public that your business has been using illegal software.