Almost two thirds of UK corporates admit they are probably breaking the law, by using unlicensed or counterfeit software.
A survey, by anti-piracy group the Federation Against Software Theft (Fast), found 60 per cent of users admitted they are not 100 per cent 'software compliant'. The survey was based on 500 users of various company sizes and from different industry sectors.
Richard Willmot, head of corporate services at Fast, said the figure is likely to be higher because users' perception of compliance is lower than the legal requirements.
"Users often say they are compliant because they don't buy software from car boot sales from blokes in donkey jackets. We have to then spend 20 minutes explaining to them what it really means.
"Put simply, non-compliance is a criminal offence and company directors are criminally liable, so we are concerned but not hugely surprised," he said.
But users hit back at the claims. David Roberts, chief executive at blue chip user organisation The Infrastructure Forum, said more needs to be done by vendors to create less complex standard licensing terms.
"I would take immediate issue with the quality of the survey. It is an onerous task for user organisations to reach a position where they can guarantee compliance. We need to reduce the volume of differential policies across vendors," he said.
Willmot advises companies can carry out four simple steps to achieve compliance.
These include defining policies and procedures, conducting a network audit - including laptops and PDAs - reconciling all licences and keeping abreast of ongoing changes in the law.
But Willmot admitted that IT and network managers have a difficult time keeping track of software use in the company.
"Corporate culture is departmentally driven and so the box and licence gets thrown into a cupboard. We recommend a central IT function to help users manage software."
The warning follows the out of court settlement last month between Clackmannanshire Council in Scotland and vendor-backed anti-piracy group the Business Software Alliance (BSA), over the illegal use of 470 Microsoft Office 97 licences.
The BSA claims the UK software industry lost £346m through piracy in 2000.
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