When a company has a license agreement with a software publisher, it is generally in the company’s best interest to take any demands for an audit very seriously and approach such a demand in the same manner the company would approach a litigation hold letter. The audit is typically meant to ensure compliance with license agreements. Some publishers may utilize third parties like the Software and Information Industry Association and BSA|The Software Alliance to conduct audits on their behalf.

If a company fails to acquiesce to a software publisher’s audit demand, either by ignoring the request or seeking to remediate the deficient software, the software publisher could file a copyright infringement suit against the company for failing to comply with its license agreement. A company’s attempts to remediate the deficient software, either by uninstalling or replacing it with new licenses, could seriously undermine any defenses it might have against the copyright infringement suit. Furthermore, if there is any evidence that a company did attempt to remediate deficient software, the software publisher may request that the court issue sanctions for spoliation of evidence during the course of the lawsuit. In addition to potential sanctions for spoliation of evidence, depending on the severity of the attempted remediation, a court may determine that the attempted remediation constituted willful copyright infringement, which could result in punitive damages.

By treating the audit demand like a litigation hold letter, a company can prevent actions from being taken internally that may undermine its legal position should the software publisher decide to file a copyright infringement suit. This may help prevent claims of spoliation of evidence and reduce the potential for large monetary penalties.


To learn more, please contact Chappano Wood at cwpll@cwpll.com or (614) 228-4422. These materials are provided by Chappano Wood PLL for informational purposes only, and do not constitute legal advice. An attorney-client relationship is not created by visiting this Website or by sending us e-mail. Internet subscribers and online readers with legal problems should not act upon this information without seeking professional counsel.

Internet subscribers and online readers with legal problems should not act upon this information without seeking professional counsel.

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Last updated 18-Jan-2016.