Software publishers have an arsenal of resolution frameworks at their disposal when
seeking to enforce their contractual and intellectual property rights. These frameworks
vary in terms of cost and time and are generally relative to the seriousness of the allegations and the amount in controversy. They include:
- License True Ups
- Cease and Desist Letters
- Audits
- Self Audits
- Independent Audits
- SAM Engagements
- Publisher-Staffed Audits
- License Termination
- Mediation
- Arbitration
- Litigation
License True Ups
The least adversarial software dispute resolution mechanism is a license true up. Many
software licenses contain provisions that require the end user to determine how many licenses it needs and “true up” by purchasing those licenses. True up mechanisms work best where there is an ongoing and positive relationship between the publisher and the end user and both sides have a vested interest in continuing the relationship.
Audits
A software audit is the most common software dispute resolution. The types of audits initiated by software publishers and trade associations include self audits, independent audits, software asset management (“SAM”) engagements, and publisher-staffed audits.
1. Self Audits
Self audits are the least disruptive and most predictable types software audit. They are a mechanism often employed by trade associations acting on behalf of software publishers. The trade associations, and in some instances, the publisher itself, requests that the target company conduct a self audit and report the results of the audit to the trade association or publisher.
2. Independent Audits
An independent software audit involves the use of a third-party auditor to gather the facts
relevant to the dispute. Unlike a self audit, independent audits require detailed discussions regarding confidentiality and non-disclosure agreements as well as a definition of the audit scope. Independent audits are preferred over SAM engagements and publisher-staffed audits because the auditor is usually ethically obligated to remain independent.
3. SAM Engagements
SAM engagements are also conducted by third-party auditors or consultants, but there is no obligation that the auditor in a SAM engagement be independent. Participation in a properly managed SAM engagement may be in the client’s best interest
because such engagements typically provide some flexibility and a lower total cost of resolution than self audits and independent audits.
4. Publisher-Staffed Audits
Publisher-staffed audits are the most intrusive and least impartial resolution framework. In these audits, the publisher’s employees collect information relevant to the dispute.
It is never advisable to agree to a publisher-staffed audit without examining all of the alternatives first.
License Termination
Termination of an organization’s license agreement is the publisher’s hammer and prelude to litigation. It often results in unforeseen costs to the business and escalates the dispute to higher levels.
Mediation and Arbitration
Mediation and arbitration are alternative dispute resolution processes that take place before formal legal proceedings are contemplated and may facilitate communication and out-of-court resolution.
Litigation
Litigation is surprisingly uncommon between parties with ongoing business dealings of any kind. Both the publisher and business are eager to avoid the steep costs associated with litigation.