Software Audits In India Block Companies From Backing Up Their Data, Claiming It's Infringement

from the yikes dept

Gautam John writes in with a couple of posts concerning software audit “raids” done in India (also common in the US). The first explains how unfair the process is, noting how it’s basically court-sanctioned extortion. Outside groups get to basically stop your business for a whole day, harming your reputation among both employees and clients (even if you haven’t done anything wrong) and then can squeeze you to pay up. The Associated Press did a big expose on how the BSA, in particular, has a history of using underhanded means to squeeze many small businesses to pay up — even noting that the BSA keeps the money, rather than distributing it to firms. The most egregious part, though, was where the “auditors” refused to allow the company to back up its data, saying that the data might be created with unauthorized software, and thus, backing up the data would be infringing.

The BSA quickly responded, asking the blog owner to post its detailed response, where it defends the raids. Unfortunately, its defense is incredibly weak. It starts off — as does pretty much every BSA story — with it claiming that “independent studies” show how much damage to the wider economy unauthorized file sharing does. That’s not accurate at all. We’ve picked apart the numbers before, showing how the BSA numbers are totally bogus (and, while it’s a third party that came up with the numbers, it’s entirely paid for by the BSA). A big part of the problem is that the industry only looks at the downside to the economy, and doesn’t include any factor to recognize that companies that use unauthorized software also help the economy. Perhaps the downsides outweigh the upsides… but totally ignoring all upsides and then double, triple and quadruple counting the downsides via “ripple effects” does not make for a credible study.

However, the BSA then goes on to defend the practice of not allowing companies to back up their data, by basically saying “hey, that’s the law.” But, of course, that only supports the original poster’s complaint that this is effectively “court sponsored extortion.” It does nothing to explain what’s illegal about backing up your data (which is not covered by the copyright of the software companies).

Of course, in the end, all these sorts of tactics do is push people to explore open source alternatives, not just because they’re cheaper (sometimes free, though, not always), but because they don’t have to put up with legal bullying and extortion-like tactics.

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Comments on “Software Audits In India Block Companies From Backing Up Their Data, Claiming It's Infringement”

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37 Comments
Weird Harold (user link) says:

Re: Re: Re:

Which facts are missing?

Hmm.

“I met X again recently and we resurrected our old discussion on the inequity of IP raids. I asked him to write a piece on this for us, given his vast experience with these sort of cases. And here is what he has penned: very heartfelt, and yet very persuasive.”

Because there is no mention of the company, the software involved, etc, there is no way to match this story to anything that may or may not have happened. For all we know, this could be a montage of 10 different circumstances. We really don’t know.

There are plenty of other issues, like why a company that is “raided” in “physically and emotionally draining” that lasts well into the night never got their own lawyers on site. Also, without context to understand the Indian legal system and actual functioning of day to day business, it is difficult for a reader from outside of the country to understand what is going on (example that much of what happens in India is done not through completely court case but with payoffs, bribes, and manipulation – it sucks, but the software companies didn’t suddenly invent a new game).

My main point is this: Techdirt is a blog, and the other posts are on a blog. Outside of the BSA post (which is not a post, just a quoted text), much of the rest of this is opinion, supposition, and untraceable stories passed on by an anonymous source. So in the end, it is pretty much all opinion and unsubstantiated information.

The infamous Joe says:

Re: Re: Re: Re:

I still don’t understand, I’m sorry.

The BSA responded to the post, so regardless of specific names, we know it occurs, because they, instead of denying it, said: this is why we do it.

The BSA post also dips into Indian laws, which happen to allow this type of thing, which is clearly why Mike calls it *court sanctioned*.

The point is, it’s out of control, it’s unfair, and it makes no business sense in the long run.

So, again, what facts are missing?

Ryan says:

Re: Re:

So…by process of elimination, I presume your point is either that this blog post either got the law wrong and the underlying assumptions are thus invalid, or you think that this process is fair, contrary to the assertions of the blog. There really isn’t any argument against the second case (logically stepping through how a process is unfair does not require citations), so would you mind explaining how the blog misinterpreted the law?

Anonymous Coward says:

Re: Re:

This must be a record – three techdirt links and two blogspot links in the same piece. opinion + opinion + opinion + opinion + opinion + speculation = fact?

Techdirt is an opinion and analysis site and you’re complaining that they have an opinion and analysis? Get real. If you’re looking for a news site then go somewhere else. How hard is that to understand?

Weird Harold (user link) says:

Re: Re: Re:

The point is that too many people reading it will think it is a collection of facts. Mike and Carlo both make multiple links into their own site (google SEO), which in turn link to other articles, etc, and unless you are very observant, you can start to think this stuff is fact. The old “Repeat a lie often enough..” at work.

What is the worst in this case is that the initial blog post, the one that started it all, is very likely a fantasy piece, or something built up by taking small items frm 10 or 20 different cases and weaving them together to form a worst case scenerio to get you all worked up about how bad BSA is.

Yet, very little time is put forward for the more simple issue: The company is using unlicensed software, and got caught. But we don’t want to dwell on that, because it would make people think for a second that the BSA is just randomly knocking doors, a collection of jack booted thugs shaking poor little indian businessmen down for a few rupees.

It’s just not right.

Yohann says:

Small businesses

BSA seems to go after large businesses, but I’ve seen IT with small, privately owned businesses that use loads of pirated software. By small companies, I mean ‘work from home’ businesses that use thousands of dollars of software to manage their finances and those of their clients. I was surprised how many business owners knew about where to find such software.

I guess they’ll be going into people’s homes now. I used to know a larger company that started primarily on pirated software. As soon as they had enough money, they changed all software to open source and are now legal. But had they paid for the pirated software, they wouldn’t have even got off the ground.

They can’t catch everyone, so they have to get their money some other way.

BigKeithO says:

A company I used to work for recently went through one of these audits. There was some issue with the types of CAL’s that a reseller sold to the company, they we’re deemed the incorrect type even though the correct number was purchased. The option given to the company was to buy the CAL’s all over again (even though there was an excess of them in the first place, just the wrong kind) or uninstall the program.

The company decided rather than paying for the software (oh sorry, the license to have the privilege of using the software) twice they would uninstall and go with an open source solution.

So its actually opinion + opinion + opinion + opinion + opinion + speculation + fact = fact in this case WH.

Overcast says:

Question – if the BSA is doing an audit, using a Windows machine, isn’t against the licensing agreement for them to use the Windows machine without a license?

Meaning – the BSA is breaking the law by using the machines or looking at what’s on them (accessing them) without an explicit license to do so?

Per user/Per machine – they would in fact be a ‘user’.

another mike says:

Re: BSA

This is exactly what I’m thinking every time he starts ranting about the BSA. It takes a bit for me to realize he’s going off on that software infringement mafia.

I think the real BSA need to sue for trademark infringement. Just like how the World Wildlife Fund successfully sued World Wrestling Entertainment (formerly the World Wrestling Federation) for their trademark on the grounds that the guys using the panda logo have been around longer.

We should at least google-bomb the BSA some more.

/be prepared

Rob Miles (profile) says:

How does open source software help?

I know open source software is cheaper, and easier to manage, but if the BSA comes in for an audit, how does being an all-open source shop help you? They can still close you down for the whole day while going through your computers, they can still harm your reputation with your clients and employees. In the long run they’ll have nothing, of course, but they can still harass you.

The infamous Joe says:

Re: How does open source software help?

I can’t find where I read it, so it could be completely made up, but I think you have to actually *buy* software from someone represented by the BSA for you to show up on their radar. Further, I think part of the “business” license you buy allows them to randomly audit your company.

So, if you stick with open source software not on their member list, you’re good to go.

Also, apparently if you report piracy in your company, you can get up to $1,000,000. Oh, and 35% of all software is pirated. And pirated software can destroy your computer. Sheesh. Their website is something else.

Lawrence D'Oliveiro says:

The Real Issue

I think I can guess why they’re blocking the backups. In Microsoft’s Windows licensing agreement, it says quite clearly you’re only allowed to have “one copy on one machine”. Since a backup of the OS installation would create another copy of the OS, that’s clearly not allowed. If there was a way to just backup the data without backing up the OS, that would help, but Windows doesn’t make it easy.

cram says:

Software piracy is a huge issue in the Indian context – there have been instances of even computer education companies using pirated software worth tens of millions. Every piece of software imaginable is available freely in the black market at dirt cheap prices – in Nehru Place in New Delhi you can find pavement vendors selling assembled laptops with any software you want installed – it’s customization at its best.

I don’t understand why companies, which are making money using software built by other companies, need to take the piracy route – sheer greed on their part, I guess.

cram says:

complete BS

Just read through that entertaining ghost post. Damn, it reads like a bad movie script! It’s so full of BS I wonder why Mike’s even given it credibility by featuring it here.

“The order allows them to walk into your office and conduct an audit of all your office computers to collect evidence of the use of unlicensed software in your office.”

Indian courts don’t issue such orders arbitrarily. If they have, there must be sufficient reason to believe there is unlicensed software in the office.

“The audit lasts several hours and continues well into the night. Needless to say, it is physically and emotionally draining on you as your work has come to a stand-still.”

It won’t be physically or emotionally draining if all the software in your office is licensed.

“You have already lost face with your employees, and possibly even clients who have visited your office during the audit.”

Which is well-deserved, I might add. After all, how can you command the respect of clients and staff if you are installing pirated software?

“As you have several dozen computers purchased over a period of time, and the audit is conducted unannounced, you may not have the time to gather documentation and invoices demonstrating the purchase of licensed software.”

Crap! What kind of a company are you running if you can’t readily produce proof of license? Imagine you are speeding on a highway – if a cop pulls you over and demands to see your license, can you offer this excuse?

“As everything is happening so fast and your whole world has been turned upside down, you do not have the time, presence of mind or legal representation…”

You shouldn’t be running a company if you are guilty of all of the above!

“You promptly rush over to the hotel in an attempt to save your business, reputation and sanity and make this go away at any cost.”

If your business, reputation and sanity are so important you, perhaps you should think twice before installing pirated software.

“They provide you with an exorbitant settlement figure that will effectively bankrupt you.”

Hahaha…this is hilarious!

“Does this not strike anyone as an extreme method of enforcement ? Does it not strike anyone that the courts are an unwitting tool in this extortion ?”

Nothing but the work of an extremely imaginative mind at work!

Easily Amused says:

Re: complete BS

First off, that’s a great ‘guilty until proven innocent’ mindset you have there. I hope no one who looks vaguely like you on a grainy security tape ever robs a liquor store.

Second, you have obviously never been in a tech center when an audit is going on. I don’t even mean a court sanctioned raid… just the annual (or whatever interval) check that the legal department in your company requires. Of course they require it only so they can have something to show the hounds of the software companies when they come sniffing around.

It kills productivity for at least an entire day, with everyone nervous about what might be found on their systems that wasn’t deleted or installed by someone else. Years back I worked for a major ISP. Internal audit we ran found that we were using a 2000 count license of MS Office on around 2200 workstations. Due to the way the licenses work, we had to ferret out those machines and take it off, then install again from a new license – rather than just pay a bit more. Our lawyers said that if we had been audited and “caught” like that it would have been a massive settlement and more than a few people would have gotten walking papers.

Don’t be that guy who makes up shit and then calls someone else out for being “extremely imaginative”…

cram says:

Re: Re: complete BS

“First off, that’s a great ‘guilty until proven innocent’ mindset you have there. I hope no one who looks vaguely like you on a grainy security tape ever robs a liquor store.”

I plead guilty. But that mindset is the result of massive piracy countrywide in India. Piracy IS the norm there, not the exception.

“Don’t be that guy who makes up shit and then calls someone else out for being “extremely imaginative”…”

Now you are guilty. I was merely calling BS on that blog post; where did I make up shit?

Mechwarrior says:

A good consequence of this is that more companies are going to opensource (often better) solutions. BSAA can rake in the dough now, but once opensource has reached a critical level, their revenue will go down.

At that point, they will go after companies who use opensource software with the pretext that “someone” is using software illegally, and of course, they are the state-sanctioned police to investigate it.

angad says:

save cost on these audits

Only two forces work in this world need and greed, its the greed of the individual to use pirated products to save cost and need for BSA to crub piracy to prottect intrest of Software publishers.

Companies should take indian cost advantage of conducting software licence compliance by KPMG India who have experience of doing such audits for software publishers and are now doing it independently for organisations.

if someone wants to know more drop a mail on angad99@gmail.com

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