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Architecture and Engineering: Managing New Risks in a Rapidly Changing Industry

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To protect their business and reputations, design firms need robust information and technology management policies.

Copyright Exposures
A failure to secure adequate licenses for expensive business and design software remains an area where many architectural firms develop a blind spot. Software vendors are aggressively trying to counter this issue with measures such as auditing their customers’ licenses. Voluntary audits may be done by an A&E firm itself, by a consultant, or by the software vendor. Involuntary audits typically take place after a software vendor or industry group is tipped off about illegal software use.(28)

To ensure that they have — and can document — licenses for everyone using the software, firms should actively conduct periodic software audits. Firms also should take a proactive approach to avoiding the use of pirated software by developing a software management policy and communicating it to their employees.(29) Companies also can consider buying third-party software-auditing programs.(30)

A firm’s information management policy should address new hires and include contracts that forbid the use of material owned by third parties, most typically former employers. As employees move from firm to firm, they may bring with them copies of work that they had performed for previous employers. The policy forbidding the use of such materials should apply not only to architectural and engineering designs, but also to software that is developed in-house in order to prevent a programmer from deciding to save time by using a bit of code developed for a previous employer or borrowed from open-source software involved in a license dispute. Many software development companies now routinely scan their programs to make sure there are no bits of borrowed code or open-source code that may make them a target for litigation.(31)

To avoid getting embroiled in open-source software copyright disputes, firms should seek indemnification from providers of Linux services. Computer companies such as Hewlett-Packard Co. have said that they will indemnify customers that buy Linux to run on HP computers against any legal claims by SCO.(32) Linux distributor Novell, Inc., which sold the Unix rights to SCO, also said that it will indemnify customers against claims from SCO.(33)

Exposures Related to Ownership of Design
When it comes to physical designs, firms need to protect their own copyright interests and limit their potential liabilities. To ensure that commissioned work is not reused or used improperly, firms should institute procedures to inventory and archive information, control access to designs in progress, and maintain system logs.

Because of the ease with which electronic documents can be copied, firms without an adequate digital-rights management plan may stand to lose substantial profits from projects for which they are not being compensated. The same kind of technology that allows software and music pirates to make thousands of illegal copies of a disc also makes it easy for a client to copy complex designs and reuse them over and over.

In most cases, architects and engineers retain ownership of their designs and only through explicit release can third parties use the design for other projects. Design contracts should state clearly which party retains ownership rights for the work and under what circumstances it may be reused or modified. To protect their intellectual property in the event of a dispute, firms should register their copyrights as part of a comprehensive digital-rights management program.

For example, the Texas architects who won the $5.2 million judgment over the repeated use of housing designs said that they always register their designs with the U.S. Copyright Office because of the potential for infringement in multiple-unit housing projects.(34)

Managing Electronic Documents
Running a paperless office doesn’t free a firm from the need to manage documents ranging from human resources records to client enquiries and sealed final plans. While electronic documents are easily created, they may just as easily be forgotten or misplaced. In a lawsuit, however, being able to find the right document may mean the difference between winning and losing. In addition, a firm’s reputation can be hurt by allegations of sloppy record keeping.

To avoid potential problems, firms need procedures to manage all of their electronic documents. A formal records-management program can help improve the overall management of a firm, its projects, and its business communications.(35) Such a program will lay out which documents are to be retained, how they can be retrieved, and which documents can be destroyed on a given schedule. This should cover not only project documents, but also internal business records such as accounting, human resources, marketing, and, especially, e-mail.

A key consideration is the length of time that documents should be retained for both business and legal purposes. Records that are not to be retained permanently should be destroyed according to legal requirements and on a specific schedule. Documents should not be kept longer than necessary nor be destroyed randomly because doing so may create a negative impression in a legal dispute. That is particularly true for e-mail, treatment of which has proven to be among the most contentious issues in legal disputes.

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