Screw set to tighten on software misuse

Law change plan could mean raids by Trading Standards officers

Law change plan could mean raids by Trading Standards officers

Trading Standards officers could be given powers to raid and audit firms suspected of using unlicensed software under reforms to copyright laws proposed last week.

The planned reforms, contained in the government-commissioned Gowers Review of Intellectual Property, would give software suppliers new powers to claim punitive damages from firms found to have breached licence conditions.

The proposals will put renewed pressure on IT directors to ensure auditing systems are in place to monitor software use, and that staff are educated on how to avoid deploying unlicensed software.

The report, commissioned by the Treasury, sets out to boost the UK's economic effectiveness by strengthening the enforcement of intellectual property rights, and calls for tougher penalties that will have an "effective and dissuasive" impact on firms' behaviour.

But the review has alarmed some user groups, who see the proposed involvement of Trading Standards as a step too far. "I think this is going to turn software licences on their head. Businesses will be forced to take a different view of the acres of small print in licences," said David Roberts, chief executive of the Corporate IT Forum.

Supplier body the Federation Against Software Theft said it would expect Trading Standards officers to take action against organisations that persistently flouted software licences if the Gowers recommendations become law.

"We would argue that the misuse of software on the network used in the course of business could be treated as a criminal offence," said Fast's legal representative, Julian Heathcote Hobbins.

Dai Davis, IT contract lawyer at City law firm Nabarro Nathanson, warned that the involvement of Trading Standards in the complex area of software licensing could prove a "complete nightmare" for firms that have genuine disputes with their suppliers. "One of the problems with software licences is that they often say things that do not have legal effect," he said.

IT departments would have to think more carefully about how software is used, said Kim Walker, head of intellectual property at law firm Pinsent Masons.

Philip Virgo, strategic adviser to the Institute for the Management of Information Systems, said businesses should conduct an audit of their software. "The key thing to remember is that using unlicensed software is a criminal offence. Gowers is simply making it easier to enforce," he said.

Virgo said firms could protect themselves against potential raids by taking pre-emptive action and alerting Trading Standards about any dispute with suppliers. "The obvious thing to do is slip a mediation clause into the contract," he said.

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