Using unlicensed software in your business can be very expensive

Companies often use software programs without the proper license, and without taking into account the consequences that this fact can entail.

The Commercial Court No. 2 of Alicante has recently sentenced two companies based in the Alicante town of Ibi to pay more than 453,000 euros in damages for the use of unlicensed software programs.

That amount, to which we must add the costs of the process and legal interests, is one of the largest compensation imposed to date in Spain.

With the installation and reproduction of computer programs without the proper license from the creator of the program, the intellectual property rights of the authors of the program are being infringed, and this obviously has consequences.

On numerous occasions, companies use "pirated" programs, trusting that no one will notice. In fact, according to a study by the consultancy IDC, four out of ten Spanish companies use unlicensed software. But beware, because there are methods to report these facts.

How do you detect pirated software?

Through the website of the BSA entity - The Software Alliance, which groups together the main software companies, Anyone can provide data to start an investigation process against a company for violating the intellectual property of the software, using a simple and confidential form.

This is how the investigation of these two companies in the town of Ibi began in 2020, both dedicated to the design and manufacture of parts and products using plastic injection.

From the investigation, and the report carried out by a computer expert, it was concluded that the program (CAD-CAM) was the property of the plaintiff company, which at the time of the use of the software by the defendant company was for sale, and that the defendant company used the software, without being authorized to use it, that is, it did not have the necessary license.

According to the Commercial Court No. 2 of Alicante, it has been shown that the right of the plaintiff to exploit its software has been infringed.

How is compensation calculated for infringing the rights of the creator of the program?

This extreme is regulated in the Intellectual Property Law (Royal Legislative Decree 1/1996, of April 12). Article 140.2 establishes that at the choice of the injured party, one of the following criteria will be used to set the amount of compensation:

a) Negative economic consequences, including the loss of benefits that the injured party has suffered and the benefits that the offender has obtained from the illicit use. In the case of moral damage, compensation will proceed, even if the existence of economic damage has not been proven. For its evaluation, the circumstances of the infringement, the seriousness of the injury and the degree of illicit dissemination of the work will be taken into account.

b) The amount that the injured party would have received as compensation, if the offender had requested authorization to use the intellectual property right in question.

In this case, the plaintiff has opted for option b, setting an amount of 453,480 euros for damages, a value that corresponds to that of the market for programs used without a license.

To this amount must be added the legal interest generated from the filing of the claim, plus the costs of the procedure, finding an amount greater than 500,000 euros.

In addition to paying this compensation, the condemned companies must destroy the illegal copies found on their computers, as well as cease their use.

This sentence is an example of how dangerous it can be for a company to use unlicensed software on their computers, both legally and financially. Well, it could even mean its closure, in case of not being able to face the payment of the imposed penalty. Also, let's remember that the use of unlicensed programs is also linked to an increase in cyber attacksTherefore, the use of a properly licensed and updated program can save us more than one headache.

Related Reading:

  • Minor cybercriminals, what responsibility do parents have?
  • Is your company prepared for cyber attacks?

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