Companies across all industries are seeing a significant uptick in software audits and similar software license compliance reviews. These audits can disrupt the day-to-day operations of even the most efficient IT departments and result in additional license fees, back-maintenance payments, penalties for noncompliance and external legal fees. More aggressive software licensors also may threaten breach of contract claims, infringement claims, remote disabling of software, suspension of maintenance and other more disruptive measures.
At Hunton & Williams LLP, we have significant experience helping companies deal with software audits and are one of a few firms to successfully litigate and try software audit disputes. Even rarer, we have done so for both licensor and licensee. This broad experience has taught us certain tricks of the trade, such as understanding how to handle regular onsite interactions that sometimes occur between vendor and client personnel during an audit. Interactions of that nature may seem innocuous enough, but failure to monitor this relationship may result in the premature signing of a deployment summary—a document so important that it could constitute undisputed evidence of noncompliance, warranting the entry of summary judgment in favor of the licensor regarding liability. Other tricks we deploy include establishing and conducting privileged investigations into compliance issues using third-party experts, where appropriate. We regularly work with such experts to help clients understand and manage compliance issues.
One of the best ways to mitigate the effect of an audit is to have a strong contract in place. Our lawyers have assisted numerous companies protect themselves from software audits by ensuring that necessary rights are acquired for the intended uses and users of software. We also assist our clients in limiting the scope of proposed audit provisions and counsel them on licensing traps often set by software licensors in their form agreements. We understand such complexities and have extensive experience negotiating with the major software vendors, including Microsoft, IBM, SAP and Oracle, as well as many others.