I seem to recall hearing that Forever 21 was sued for allegedly violating copyright. What ever happened to that case and what do you think it means to wider ITAM community?
You are indeed correct. Forever 21 was sued by Adobe, Autodesk and Corel. Sam originally reported on this back in February of this year.
By way of background, the plaintiffs alleged that Forever 21 pirated 63 different instances of Adobe software including copies of Photoshop, Acrobat, and Illustrator. Autodesk and Corel also joined Adobe in the suit, based on pirated copies of Autodesk, WinZip, and PaintShopPro, among others.
Sam did a bit of sleuthing and found that Forever 21 filed a response to the complaint. In reading the response, I was fascinated at how hard Forever 21 pushed back against the complaint. While this may be simple posturing on their part, it may also mean that Forever 21 intends on fighting this to the end (they asked for a jury to sort everything out). If this plays out this way, it will represent one of the very few end-user piracy cases to go to court in many years.
So, what does this mean to the wider ITAM community?
Every SAM manager knows that vendors are increasingly conducting audits. The latest stat from Gartner is 68% of all organizations will get one or more audit requests this year. Does this case filed by the vendors against Forever 21 represent a new threat to ITAM managers? I don’t think so and let me explain in three ways:
- Vendors don’t like to sue their customers: Auditing for compliance is one thing, suing is another. Vendors only consider litigation when other methods have failed. In this case, it is alleged that Adobe tried to work with Forever 21 to resolve their claims – and were rebuffed by Forever 21.
- Copyright litigation is complex, and costly (for both sides) with unknown outcomes. Even though the US Copyright is clear on what constitutes unauthorized use, judges are given wide latitude in determining damages. If the case is determined to be non-willful, the penalties can be as low as $200. For willful cases, the fines can go to $150,000! Given the wide latitude in fines, most plaintiffs and defendants end up settling these types of matters via a settlement agreement.
- Litigation may be rare, but as this case tells us all, the threat is still there. Being proactive with a IT Asset Management program, having proper (standardized) policies and processes in place, conducting regular audits and doing reclaim of unused software is a great way to stay ahead of compliance (and being ready for audit when it happens).
However the facts turn out in the Forever 21 case, one thing is clear. Forever 21’s name will, excuse the pun, be “forever” associated with unlicensed software. Is that a cost you want to associate with your business?
Lastly, as I previously predicted, this case will most probably be resolved via a confidential settlement agreement. Even though Forever 21 responded back to the original complaint, something it is required to do by law, I believe cooler heads will prevail and at one point, one of the parties will blink and say let’s get this case over with and move on.