[Direct answer]Yes. If the company installs and uses unauthorized commercial software on office computers and servers for production and operation, this constitutes an act of reproduction under the Copyright Law and constitutes infringement. In serious cases, criminal responsibility may also be pursued. According to Articles 52 and 54 of the Copyright Law of the People's Republic of China (amended on November 11, 2020 and implemented on June 1, 2021), the right holder may claim to stop the use and compensate for losses. The compensation shall be calculated according to the actual losses, illegal income, or a reasonable multiple of the license fee. Where it is difficult to calculate the compensation, the statutory compensation of not less than 500 yuan but not more than 5 million yuan shall apply. Where the infringement is intentional and serious, punitive damages of not less than one but not more than five times the actual damages may be applied. It is recommended to conduct a software asset inventory and complete the legalization as soon as possible.

1. Problem background and typical scenarios

Common scenarios include: startups installing pirated office software and design software in bulk to save costs; employees downloading pirated tools for work; enterprises using unlicensed databases or middleware on their servers; and purchasing only partial licenses for software but over-installing or deploying it in multiple locations. Right holders typically protect their rights through notarized evidence collection, sending legal letters, filing administrative complaints, or directly suing. Many enterprises only become aware of the risks after receiving legal letters or audit notifications.Enterprise intellectual propertyTherefore, compliance has become a key focus of legal services.

II. Key points of dispute

First, whether commercial use constitutes infringement. The use for non-production and business purposes differs from commercial use in terms of liability determination. If an enterprise, as the end user, commercially uses unauthorized software, it constitutes infringement. Second, the scope of authorization. Authorizations often distinguish between versions, user numbers, device numbers, deployment methods, and time limits. Even if you purchase genuine software, using it beyond the scope may still constitute infringement. Third, the subject of liability. The company is the user and the party responsible for liability. Employees' individual actions cannot exempt the company from liability, but can serve as a basis for internal accountability. Fourth, calculation of compensation. Rights holders often use commercial scale, the number of installations, and the price of genuine software as the basis for calculation. Intentional infringement and repeated infringement will increase the amount of compensation.

III. Professional analysis by Henglue Lawyers

From the practical experience of handling software copyright disputes at Henglue Law Firm, the parties often argue not about whether there is infringement, but about the scale of infringement and the amount of compensation. The rights holders usually collect evidence by purchasing software through notarization, IP and account records, and installation data; while the enterprises defend themselves from the perspectives of the number of installations, usage duration, whether the software is actually used for business, and whether it has been discontinued. Our common approach is to first compile a software asset inventory, distinguishing between genuine copies, trial versions, free alternatives, and unauthorized copies; then verify the purchase contracts and authorization certificates to confirm whether there is excessive installation; and finally negotiate a settlement with the rights holders, which is often more cost-effective than litigation. It should be noted that deleting the software does not necessarily exempt the enterprise from liability for compensation incurred before the infringement is stopped. It is more beneficial to deal with the issue early rather than delaying it; and the disputes often involve technical issues such as software decryption and code analysis.Software procurement and licensing contractsFor those terms that need to be reviewed, they should also be sorted out simultaneously.

IV. Practical suggestions and legal basis

According to Article 52 and Article 54 of the Copyright Law of the People's Republic of China (effective June 1, 2021), Article 24 of the Regulations on the Protection of Computer Software (promulgated in 2001 and amended in 2013), Article 217 of the Criminal Law of the People's Republic of China (amended on December 26, 2020 and effective March 1, 2021), and Article 1185 of the Civil Code of the People's Republic of China (effective January 1, 2021), enterprises shall establish a software licensing system: centrally procure and retain authorization certificates; establish a database to record the version, quantity, and term; establish a software installation approval process; conduct regular self-inspections and set up license expiration reminders. For tool software used in R&D and confidential positions, enterprises shall prioritize purchasing commercial licenses or using compliant open-source solutions, and conduct compliance checks on open-source licenses when necessary, and obtain relevant certifications as needed.Special legal checkupIdentify and address potential risks.

5. Henglue Law Firm's Reminder

The legalization of software is not just a legal risk issue, but also relates to financing due diligence, listing compliance, and government procurement qualification review. Three tips: After receiving a letter from the rights holder, don't rush to reply or promise compensation. You should first verify the other party's rights basis and your own installation situation; stopping use and completing replacement can effectively control the expansion of losses; and pay attention to the confidentiality of the rectification materials disclosed externally to avoid them being used as evidence of fault. If employees install pirated software without authorization, they may also be implicated in the dispute.Human resources managementProblem: If there are criminal risks involved, you should hire a lawyer as soon as possibleCriminal defenseThe lawyer assesses the situation and explains the rectification measures to the judicial authorities.Beijing Henglu Law FirmTip: It's better to legalize software as soon as possible rather than putting it off.

VI. Frequently Asked Questions

Q1: Will the company definitely be held accountable if it uses pirated software?

There are real risks, but most cases end in settlements or administrative handling. Whether to hold someone accountable depends on the right holder's willingness to protect their rights, the scale of the installation, and whether it is used for production and operation. The probability of being sued is significantly higher for large-scale and repeated infringements, and the risk of ignoring a lawyer's letter is the greatest.

Q2: What evidence materials do I need to prepare?

Purchasing contracts and authorization certificates, invoices, software asset ledgers, installation records and account information, employee software usage regulations, rectification and uninstallation records; when being accused of infringement, it is also necessary to verify the other party's software copyright registration certificate and the version correspondence, to confirm whether their rights base covers the version alleged to be infringed.

Q3: Approximately how much will the compensation be?

For those with verifiable genuine prices and installation quantities, the compensation shall generally be calculated at a reasonable multiple of the license fee or the actual loss; for those difficult to calculate, the statutory compensation shall be applied in the range of more than 500 yuan but not exceeding 5 million yuan, and for those who commit serious intentional infringements, the punitive compensation shall be no less than one time but not more than five times the actual loss. The amount of the settlement through negotiation is usually lower than the expected amount in the judgment.

Q4: How long does it take to handle such disputes?

After the rights holder sends a letter, the negotiation and settlement are usually completed within several weeks to several months; it generally takes six months to enter the first-instance litigation, and the period may be extended if it involves evidence collection and appraisal; if it involves criminal proceedings, the period will be even longer. The sooner you stop using the infringing product and complete the replacement, the shorter the processing period will be.

Q5: What should I do first?

First, conduct an internal software asset audit to identify the types, quantities, and usage scope of unlicensed software, while stopping new installations and initiating replacements. Next, evaluate the cost of legalization and the scope for settlements. If necessary, engage a lawyer to communicate with the other party to avoid making compensation commitments without proper preparation.

The above content is based on the compilation of judicial practices in the Beijing area. The facts of individual cases and the jurisdiction of the court may affect the conclusions. Welcome to consult Henglue Law Firm about specific situations.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence, to avoid missing the statutory time limit.Intellectual property protection legal services·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.