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If you’ve received a letter from BSA | The Software Alliance (BSA) alleging unauthorised software use, you’ve probably already read our first article, which provided some background information about the BSA and the software audit process.

This article discusses the potential fines that may be sought by the BSA and provides tips for making a commercial settlement offer to resolve your dispute with the BSA.

Will I be required to pay fines?

If the BSA suspects a business of unauthorised software use, it may demand that the business pay a fine. The fine may include the unpaid licence fee, as well as additional compensation for the BSA member and even legal fees.

An American firm has developed a calculator that estimates the potential fine in a BSA software audit. This calculator should be used as a guide only. In each case, the BSA fine will depend on the circumstances and the calculation of fines may be different in Australia.

It is important to remember that the BSA is not a government authority and has no authority to issue fines or penalties. However, the BSA may take legal action for copyright infringement and seek damages under the Copyright Act 1968. For this reason, the BSA fine should be treated as a commercial proposal to settle a dispute.

How do I make a settlement offer?

The steps a business should take if it receives a letter from the BSA will vary in each case. In Part 1, we suggested that you would be more likely to reach a quick and reasonable resolution if you cooperate with the BSA and the software audit.

If you are guilty of unauthorised software use, it may be a good idea to consider making a settlement offer to the BSA. In general, the BSA and its members probably would like to avoid the hassle of taking you to court – and so they will be open to your proposal.

Here are some useful tips for making a settlement offer:

  • Be proactive. By making an offer early in the process, you will demonstrate to the BSA that you are serious about reaching a resolution. Acting first will also provide a base for future negotiations if the BSA does not accept your initial offer. It is good idea to make an offer before the BSA suggests a fine, which may be much higher.
  • Identify the right offer. Deciding on the right settlement figure can be difficult. Obviously, you do not want to make an offer that may be higher than what the BSA would ask for as a fine. However, the offer should not be so low that the BSA is likely to reject it without proper consideration. As a guide, the offer should be a figure you are comfortable with (and able to pay) and which that the BSA is reasonably likely to accept.
  • Without prejudice. Any response or settlement offer to the BSA should be made on a “without prejudice” basis. “Without prejudice” is used for communications aimed at resolving an existing dispute – and these communications cannot be used against the person in future court proceedings. For example, if you make a without prejudice offer that is rejected by the BSA, you will not lose your right to deny any unauthorised software use at a later time.
  • Confidentiality. The BSA publicises some of its enforcement victories on its website. This type of negative publicity may be harmful to the reputation of your business, particularly if you work in the software or tech industry. So, before reaching a resolution, ask the BSA to agree not to disclose the details of your matter by entering into a confidentiality or non‑disclosure agreement.


Dealing with any commercial dispute can be difficult. The BSA will always have lawyers acting for them, so it is easy to feel a bit out of your depth. If you need assistance deciding how to respond to a letter from the BSA, making a settlement offer or drafting a non‑disclosure agreement, it is best to speak with a lawyer. At LegalVision, we can help you in dealing with the BSA, so give us a call on 1300 544 755.


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