Fast track

Fast’s main business is the protection of software, but it could also be a good way for a law firm to find that perfect company to add to their client list. Naomi Rovnick reports

Paul Brennan has one piece of advice for technology lawyers in need of updating their client list: join the Federation Against Software Theft (Fast). The organisation does not actually instruct external lawyers itself, but it matches up its members with IT lawyers, giving solicitors unrivalled access to corporates with a myriad of legal needs.

Fast exists to stamp out software theft. Software companies go to Fast when they believe their software has been stolen and to make sure they are compliant with software licensing rules. Software publishers such as Intel, Oracle and Network Associates are all members of Fast. Of the FTSE 100 companies, 80 are members. End users of software that have joined the organisation include BAA and Camelot.

Brennan’s crack squad of three lawyers responds to calls from software publishers who think their software is being used illegally. The team will investigate and then litigate or mediate on the software publisher’s behalf, and cases usually settle. But due to an overflow of work, Fast has just set up a mediation panel consisting of solicitors who are Fast members. Mediators from firms such as Lovells have benefited from a constant flow of work since being selected for the panel.

Brennan says: “We set up this referral system as we couldn’t handle all the work ourselves. We specifically wanted mediators with experience in the computer industry. Mediators will say they can do cases in any industry, but our members want someone who can talk to them in their language.”

The mediation panel is chaired by Lovells partner Conor Ward and involves solicitors from Lovells, Pinsent Curtis Biddle, Morgan Cole, Hobson Audley and Wragge & Co. Hourly rates for work done by members of the mediation panel are not quite as much as they would charge in their firms. The going rate is £750 for a three-hour mediation session.

Mediators who want to join the panel have to apply and Brennan says that many have already been turned down. But mediation is not the only way lawyers can gain access to Fast members and potential clients. “Fast has around one event a week and lawyers have speaking opportunities at all of them, as well as the opportunity to write articles for us,” says Brennan.

This may seem a little akin to the hard sell, but Brennan thinks that while IT work is thin on the ground for lawyers, software theft could be a growth area. “It’s a win-win situation,” he says.

Fast has just surveyed its members to identify their legal needs. When asked if Fast seminars contained relevant topics of legal interest, 88 per cent of members said yes. When members were asked what topic they would like to attend legal seminars on, 73 per cent selected ‘law for IT managers’. When asked if they would like a consultation with a legal specialist in their chosen area, 53 per cent of members said yes.

Civil mediation and giving seminars on legal issues are a far cry from the old function of the Fast legal team, which dealt mainly with criminal investigations. Brennan, a trained barrister who articled as a criminal lawyer, arrived at Fast in the summer of 2001, after a spell at 46 Essex Street and four years as an investigative manager and legal counsel at Intel in Hong Kong. By October 2001, he had reorganised the legal function into its current guise.
The organisation now treats software theft mainly as a civil matter.

“Before I came, our duties mainly related to police and trading standards investigations,” he says. “We became very famous and very good at policing criminals, but we also got the odd brick through the window. So why have that when you can sort out problems through civil means?”

Brennan says that one reason software theft can now be treated as a civil matter is because its nature has changed. He says that it has shifted from market traders selling dodgy computer games to larger corporations selling or using unlicensed software, both knowingly and

Fast estimates that last year, the Western European software industry lost $2.7bn (£1.77bn) due to illegal software use and part of the problem is due to software being illegally counterfeited. However, Fast says that the most significant problem lies within the business community, where the main issue is mismanagement of software licenses.

“We estimate that 26 per cent of software in use by large corporations is being misused,” Brennan says. “This is usually because companies are buying a product legally, but copying it without a licence throughout the organisation.”
In July, Brennan’s team recovered £51,000 on behalf of Network Associates from an international company for using software without a licence. Within weeks, the legal team had intervened and the company paid up for the illegal licences. The company also agreed to pay compensation to Network Associates for past use and installation of the unlicensed software.

Brennan’s legal team has a lobbying function as well as a duty to investigate and intervene in software theft. The federation is currently lobbying the Government on the EU Copyright Directive with the help of Clifford Chance intellectual property partner Vanessa Marsden and Mayer Brown Rowe & Maw IT partner Paul Brinsley. According to Fast, the directive, which was passed in April 2001 and must now enter UK law, does not adequately protect against software theft or cover the circumvention of the protection that software publishers put on their products. Brennan says that this is due to the Government getting itself in a muddle over the EU directive and existing laws that apply to software piracy.

“The copyright directive doesn’t apply to software at all because pirates’ circumvention of software protection was dealt with in a previous directive. The Government doesn’t want to open up a can of worms by trying to modify the EU directive,” he says.

But Fast is struggling a bit to convince its members to support its lobbying efforts. In the legal survey, Fast asked its members if lobbying Government and other organisations on legal IT issues was of use to their organisations. While 47 per cent said yes, a huge 41 per cent answered no. “Unfortunately many software publishers don’t see the wider issues that are affecting them,” says Brennan. “Maybe that’s because they could all do with a good lawyer.”
Paul Brennan
General Counsel
Federation Against Software Theft

Organisation Federation Against Software Theft
Sector Software
Employees 40
Legal capability Three
Turnover £3.5mOver
Annual legal spend £350,000
General counsel Paul Brennan
Reporting to Fast chief executive Geoffrey Webster
Main law firms Lovells, Clifford Chance, Pinsent Curtis Biddle, Morgan Cole, Hobson Audley