A recent Northern District of Idaho case should shed some light on how to apportion legal liability for copyright infringement damages related to business software usage.
In Brasher's vs. The Software & Information Industry Association, Adobe, Corel, McAfee, Symantec, Idaho Auto Auction, ADP, and Robert Gillespie, plaintiff Brasher's, the target of an SIIA software audit, filed suit asking the court to determine who is legally responsible for unlicensed software found on its computers during the audit. Brasher's sues Gillespie, a former IT administrator and presumed informant for his role in installing the software and seeks indemnity from Idaho Auto Auction the company it acquired assets from which included computers with unlicensed software.
This lawsuit provides some valuable lessons.
(1)The plaintiff claims it had no knowledge that the computers contained allegedly infringing software when it acquired the computers. Lack of knowledge or intent is usually not a good defense to a copyright infringement claim when liability attaches without regard to fault or knowledge.
This case highlights the importance of due diligence and properly documenting asset transactions involving the sale of computers with software installed.
(2) The plaintiff alleges that the former IT administrator installed unlicensed software in violation of company policies. He was subsequently terminated and thereafter informed SIIA that Brasher's had pirated software on their computers. The plaintiff alleges a very common fact pattern: IT administrator is terminated and makes a software piracy complaint against the former employer to the SIIA.
It will be interesting to see how receptive the court is to Brasher's claim that Gillespie should be individually liable for software he installed in violation of the company's policy. The case against the informant is always a tough call. Most unemployed IT guys are not viable defendants.
(3)The plaintiff alleges that the SIIA repeatedly made demands for payment several times the total retail price of the software and far in excess of any damages suffered by SIIA's members. Brasher's claims that they repeatedly offered to settle with the SIIA, including an offer of $12,500, despite the fact that the retail price of the software allegedly infringed is less than half that amount and that the SIIA rejected their settlement offers.
The SIIA's multiple of MSRP approach to software audits is under direct attack. I think the court will be receptive to Brasher's claims that an arbitrary multiple of MSRP is not appropriate for calculating damages in software copyright infringement cases.