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According to a study conducted for the BSA by Ipsos- Insight, 23 percent of U.S. professionals surveyed acknowledged that some to all of the software being used in their offices did not have the proper licenses. While nearly 90 percent agreed that software piracy was an unacceptable risk, 28 percent said it was acceptable to save money by distributing copies of software to coworkers without the right licenses.(8)

Architects were particularly relaxed about licensing. Piracy was an unacceptable risk, according to eight out of ten architects surveyed, but 48 percent said at least some of the software in their workplaces was unlicensed. That proportion was higher than for any other profession in the survey, which included accountants, architects, engineers, financial service professionals, and graphic designers. Engineers took a more stringent view, with three-quarters saying there were antipiracy policies in place in their workplaces. Engineers also had the second lowest reported incidence of workplace piracy at 13 percent, behind accountants.

Failure to obtain proper licenses can be costly. For instance, the BSA said in December 2004 that a Florida architecture firm agreed to pay $150,000 to settle claims that it had unlicensed Autodesk and Microsoft software on its computers.(9) A California engineering firm agreed to pay $43,500,(10) and a Camden, N.J., engineering firm was hit for $75,000.(11) U.S. law provides civil damages of up to $150,000 for each program copied, and criminal prosecutions can lead to fines of up to $250,000 and jail sentences of up to five years.(12) In addition, firms risk damage to their reputations due to the publicity in such cases.

While businesses may assume that software companies will never know if they have secured adequate licenses, antipiracy investigators have a very effective tool: inside tips. Most investigations start with a call from a disgruntled employee or a former employee.

Besides failing to secure adequate licenses, companies can risk copyright actions if they use portions of another company’s software in their own programs. Such cases typically arise when a firm hires an employee from another company to develop or update in-house software. The new hire may then reuse code he or she had developed for his or her previous employer to save time in the new job or inadvertently insert proprietary code from other sources, such as the Internet.

Another risk that has emerged centers on the increasingly popular Linux operating system, which is known as an open-source program because its core code is freely available without licensing. Linux, however, has become embroiled in controversy as SCO Group Inc. has pressed legal action to collect license fees, arguing that it owns a key portion of the Linux code through its acquisition of rights to Unix software. SCO has launched a high-profile legal campaign against companies such as International Business Machines Corp. that include Linux in their products. SCO also has sent warning letters to hundreds of companies that use the software.(13)

Copyright and Trade Secrets
Architects face copyright issues not only as purchasers of software but also as creators of original designs. Those issues, which are heightened by the ease with which electronic designs can be copied, include using someone else’s copyrighted design or not being compensated for the reuse of the architect’s own designs. Just as in software, copyright issues can arise if an employee uses design elements in a building plan developed for a previous employer. For instance, in 2003, a Los Angeles architect sued a former employee for theft of trade secrets, alleging that the employee had copied designs for a one-of-a-kind Bel Air mansion to build a knock-off mansion just a few miles away in Beverly Hills. The architect also sued the builder and the property owners for copyright and trademark infringement.(14)

Copyright protection was extended to architectural works by the Architectural Works Copyright Protection Act in 1990. The law extends protection to the original design of a building in “any tangible medium of expression,” such as the building itself and plans or drawings on paper or in electronic format. Penalties include statutory damages as well as the repayment of any profits.(15) Those profits can be substantial for designs that are used repeatedly.

For example, in 2001, Austin, Texas-based architecture firm Kipp-Flores Architects was awarded $5.2 million in a case involving a Virginia-based home builder that reused the same design hundreds of times. The court found that the contractor had only a one-time right to use the home design and ordered the builder to pay back the profits it had made on 304 houses.(16)

The loss of intellectual property is also an issue for engineers. The theft of trade secrets through copying of engineering designs can represent substantial losses of revenue and market share for companies that have invested billions of dollars in developing new products or manufacturing processes. For instance, in 2004, General Motors Corp. (GM) sued Chinese automaker Chery Automobile Co., Ltd., for alleged copying and unauthorized use of trade secrets from the Chevrolet Spark, which is based on the GM Daewoo Matiz mini-car. GM, which spent hundreds of millions of dollars designing, engineering, and testing what has become one of the world’s most popular mini-cars, said Chery’s QQ mini-car was so nearly identical to the Matiz that the vast majority of parts in the cars were interchangeable.(17)

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