If your company is facing a software audit, Scott & Scott, LLP can help. Software audits by software publishers and their trade groups are on the rise. Many companies are paying substantial fines and suffering negative publicity resulting from license compliance investigations. If your business runs software published by Microsoft, Adobe, Autodesk, IBM, Oracle you may be at risk for a software audit.

Scott & Scott, LLP has developed a comprehensive solution to respond to software audit matters including technology to perform a software inventory and analysis, IT professionals that understand the technology used in a variety of businesses, and experienced attorneys to handle the legal process.

Our professionals have assisted businesses with various types of software audit matters such as:

  • Software audits initiated by the Business Software Alliance (BSA) and the Software Information Industry Association (SIIA)
  • Software asset management engagements & SPLA license reviews initiated by Microsoft
  • License compliance reviews by Oracle and IBM
  • Audit requests from Adobe, Autodesk, and other software publishers
  • Federal Copyright Infringement Litigation Involving Autodesk & the SIIA.
  • Arbitration of Copyright Infringement Claims before the American Arbitration Association.

Scott & Scott, LLP has represented over 500 companies across the United States in software audit matters. We have the knowledge and experience to protect your legal rights throughout the burdensome and expensive software audit process.

Software Audit Blogs

Accurate Inventory Information Crucial to Software Audit Outcome

Christopher Barnett

Obvious though it may sound, in almost every software audit the most crucial element contributing to a positive outcome is an accurate inventory of what software is deployed. Unfortunately, far too many businesses faced with an audit end up receiving grossly over-inflated compliance-purchase demands, because the inventory data received by the auditors and used to calculate a license position is faulty. Here are three top tips for taming the inventory beast.

Be Wary of All Factors Affecting Potential Exposure in Software Audits

Christopher Barnett

Most businesses that try to plan for software audits and to estimate the potential exposure they could incur in the event of those audits know that the primary cost components of that exposure typically are the prices associated with any licenses they may have failed to acquire. 

A Software Audit Settlement Is Not Complete Until All Obligations Are Met

Keli Johnson Swan

The majority of copyright infringement claims against consumers using copyrighted software are resolved by settlement rather than litigation, for a multitude of reasons. In some instances, the settlement agreements contain post-settlement obligations that can affect the release of liability for all copyright infringement claims. The following are the most common examples of the settlement obligations that must be completed in order to secure the release of liability.

Software Audit FAQ's

Q: How prevalent is it to negotiate such audit restrictions that you have been discussing up front into the license agreement?

A: Negotiated audit terms and audit forbearance are concepts that come up frequently when negotiating software licenses.  The best time to re-balance one sided provisions in license agreements is when new purchases or renewals are taking place. Many of our larger clients have standard audit clauses that they include as redlines in all software deals.  

Q: Should you have a detailed Scoping Document agreed with Auditor (if its a big 4 accountancy firm) before you allow audit to commence? Should this be legally binding and therefore executed by you and appointed auditor?

A: The most common pre-audit document we see when the big 4 are involved is the Non-Disclosure Agreement (NDA).  We generally edit the NDA to include some scoping details, most particularly a review period after the findings are made but before it is shared with the vendor.  Other details regarding scope are generally beyond the purview of what auditors can agree to and are therefore usually negotiated directly with the vendor.  We recommend that a pre-audit NDA be signed by the parties in all audit matters.

Q: How have Software as a Service (SaaS) subscription licensing approaches changed the audit process? Are audits 100% focused on downloaded software?

A: Subscription licenses have changed the software industry landscape in a number of ways.  Most SaaS solutions are easier to account for from a compliance perspective and therefore traditional audits focused on deployments and entitlements are not as common.  In some instances there are still disputes over whether or not the licenses are being used consistently with the license grant, i.e. geographic scope, no third-party access.  In other cases, audits revolve around licensing metrics such as revenue, number of employees, etc.  In short, while the topics differ from audits of on-premises software, there seems to be plenty to fight over in the Cloud. 

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Rob Scott

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COO

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