Experts Warn That Outsourcing Raises Legal Issues Over Software Licenses

by Robin Pilgrim, LawAndTax-News.com, London

10 July 2003

The UK's Federation Against Software Theft (FAST) on Tuesday warned that companies which provide outsourcing services should ensure that their customers' software licenses are up-to-date and allow for outsourcing use.

According to FAST, an unnamed outsourcing company recently found itself facing prosecution due to its client's inadequate software licensing regime. Accordingly, the anti-piracy group has urged all such firms to do their due diligence before beginning work on a contract.

Speaking this week, Olswang lawyer and FAST Legal Advisory Group member, Simon Briskman suggested that:

'Too few companies consider software issues before committing to an outsourcing contract. Current licenses should be pulled out of bottom drawers and read - they may not allow outsourcing. New licenses must clearly set out the rights of use for both the service provider and customer.'

Chris Butler, of outsourcing specialists, Liberata seconded this, announcing that:

'It is essential that the organisation works with the outsourcing provider to ensure that complete audit records of software and hardware licensing and any shortfall are gathered during the due diligence phase of any business take-on, that the outsourcing company provides that their own licensing is scrupulous and auditable and that strict controls are introduced to prevent unauthorised license creep.'

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