If your company has received a letter from the BSA | The
Software Alliance requesting a software audit, you are probably
wondering whether you should cooperate or ignore the request. I
have been handling BSA cases for almost a decade and advise my
clients to cooperate but to do so in a manner that will not
jeopardize their legal position in the event that cooperation does
not result in an acceptable out-of-court settlement. After handling
over 230 BSA cases I have learned that business clients almost
universally seek a resolution that has the lowest total costs and
the most predictability. In BSA audits, these costs are software
licensing fees, fines payable to the BSA, attorney's fees,
organizational impact, and the potential damage to brand associated
with negative publicity. In my experience, a properly handled BSA
audit can always be resolved for a lower total cost through
cooperation than through litigation.
Most importantly, cooperation does not preclude litigation in
the future if the BSA is unreasonable in its approach to
settlement. In other words, you can always go to court if the
out-of-court, lower total cost approach is not satisfactory.
However, we have seen audit targets and other lawyers make several
mistakes that actually detriment their legal position during
negotiations with the BSA.The two critical success factors to
properly handling a BSA audit are making sure that the information
gathered during the process, which would not otherwise be
discoverable in a court proceeding, is protected by attorney
work-product and attorney client privileges. In addition, no
information should be provided to the BSA unless and until the BSA
agrees that the information is governed by Federal Rule of Evidence
408 which will ensure that the information will not be admissible
in court if an out-of-court resolution is not reached with the BSA.
If you have been contacted by the BSA, you should contact an
experienced attorney to assist you with strategy before finalizing
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Time and again, defendant corporations find themselves settling cases at inflated valuations simply to avoid the costs to preserve, review and produce substantial amounts of electronically stored information.
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