The Business Software Alliance has developed a standard formula for assessing fines as part of its settlement process. It is important to note that the BSA is not a governmental entity and has no independent authority to levy an enforceable fine. Business Software Alliance fines are therefore merely offered in settlement to avoid litigation and, like all pre-litigation settlement offers, are negotiable with the help of experienced counsel.

Dated Proof of Purchase Required
The BSA's methodology for calculating fines starts by treating as unlicensed all software products for which there is a lack of adequate documentation, including dated proofs of purchase. All proofs of purchase must be dated prior to the Business Software Alliance's initial letter to be considered valid evidence. Because companies may not always have access to the requisite dated proofs of purchase, the BSA's proposed fines are often based, in part, on software titles that companies legally own and properly acquired.

Unbundling Software Suites
The Business Software Alliance also unbundles the products in software suites such as Microsoft Office. So instead of proposing a fine based upon one copy of Microsoft Office, the BSA proposes a fine for Microsoft Outlook, Microsoft Word, Microsoft Excel, and Microsoft PowerPoint. The result is a proposed fine of $1,126 for a product that retails for $339.

The Arbitrary 3x Multiplier
After disallowing credit for valid software without dated proofs of purchase and unbundling all software suites, the Business Software Alliance then applies an arbitrary multiple of three times the full retail price for each software title. Accordingly, one allegedly unlicensed copy of Microsoft Office will carry a proposed fine of $ 2,252.

The Attorney’s Fees
To add insult to injury, the Business Software Alliance’s proposed fine will include a line item for $3,500 to pay the BSA’s attorney’s fees. While this is not usually a large number as a percentage, it should be taken into account when considering potential exposure. To calculate your potential exposure, use our Business Software Alliance Fine Calculator.