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ARTICLE · 24 APRIL 2024

Navigating Unregulated Software License Audits

Tactical Law Group LLP
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While there are prescribed standards for conducting several types of audits, external software license audits remain unregulated and ripe for legislative intervention.

United StatesAccounting and Audit
Dee Ware
Dee Ware

While there are prescribed standards for conducting several types of audits, external software license audits remain unregulated and ripe for legislative intervention. Until then, companies must fend for themselves.

From our experience, a software publisher's motivation to conduct an audit falls into at least one of the following buckets:

  • Compliance - to verify compliance in the ordinary course of business and calculate a true-up if usage exceeds the terms of the operative license agreement
  • Renewal/Sales – to gain leverage in negotiating a renewal and/or to sell additional products
  • Profit – to extract additional money through the threat of or actual initiation of litigation for copyright infringement and/or breach of contract

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