I read with intrigue the post from John Tomeny that Adobe, Autodesk, and Corel sued Forever 21 alleging copyright infringement. I’ve known John for nearly 20 years and work with him closely on ISO working group 21 activities (the folks who are responsible for the 19770 ITAM standard). What intrigued me was this is the first case (at least that I recall) that has been filed by a software vendor in some time.
I used to work on the vendor side – overseeing McAfee’s (now Intel) global license compliance program, and then working with BSA who are known for representing some of the larger software vendors and collecting “tips” for reporting software piracy.
I have three thoughts about this news:
- The complaint itself: I got a copy of the complaint (you can search for it online, I used the term, “Adobe v Forever 21”) and glanced through it. When looking at the section on the infringing activities of the defendant, the complaint alleges that Forever 21 did not purchase adequate licenses for the defendants’ products, and that Forever 21 circumvented technological control measures that control access to the defendants’ products. If this is true, it means Forever 21 went beyond simple copying of the software and “cracked” the technological measures to prevent unauthorized use in the first place. This goes beyond the traditional type of piracy brought by vendors and their associations.
- Reputational Damage: Jason Keogh posted about the reputational damage this may (or may not) inflict on Forever 21 and their customers. My research reveals that Forever 21 is a family owned business. It is my position that Forever 21 will not see much of a hit from this lawsuit as it will come down to a civil penalty (paid by the owners of the company). However, the same might not be true for a publicly held organization. When shareholders learn that a publicly held organization use unlicensed software, they see it as a failure in company management. Further, I’ve been on calls when organizations essentially ‘plead with me’ to reduce the amount of the settlement to keep it below a certain threshold as a penalty over that threshold was material – and therefore reportable to the board of directors.
- Association Involvement (or lack thereof): I find it interesting that neither association (BSA or SIIA) is a part of this action. While software vendors do not have to file these cases through their respective associations, I find it interesting the vendors went at this themselves. I could make suppositions as to why this is the case, but I leave it up to you to formulate your own thoughts.
Bottom line. This lawsuit will be resolved via a settlement agreement with Forever 21 agreeing to pay a fine and agreement to only use licensed software moving forward. I’d love to hear from you whether you think these types of actions are useful – and if so, in what way.
Until next time.