Below is a comprehensive discussion of software license infringement by employees under Philippine law. While this article aims to give an extensive overview, please note that it is for informational purposes only and does not constitute legal advice. For specific concerns, you should consult a qualified attorney licensed in the Philippines.

1. Introduction

Software license infringement occurs when a person uses, copies, distributes, or modifies software in a way that breaches its license terms. In the workplace context, this often arises when employees:

Install software on multiple devices beyond the permitted number.
Use pirated or unlicensed copies of software.
Continue using software beyond the trial period or subscription without payment.
Share software access credentials improperly.

Under Philippine law, software is protected by intellectual property statutes and regulations, making software license infringement a violation of both civil and criminal laws. Employers must also be aware that they could be held liable if they fail to supervise or control such infractions.

2. Legal Framework

2.1. The Intellectual Property Code (Republic Act No. 8293)

The principal statute governing intellectual property rights in the Philippines is the Intellectual Property Code of the Philippines (R.A. 8293). It protects “literary and artistic works,” which include computer programs. Under R.A. 8293:

Exclusive Rights of Copyright Owners: Copyright owners (including software creators) have the exclusive right to reproduce, distribute, and use their software.
Infringement: Unauthorized copying, use, or distribution of software constitutes infringement.
Civil Remedies: The copyright owner can seek injunctive relief, damages, and other remedies, such as the seizure and destruction of infringing goods.

2.2. The E-Commerce Act (Republic Act No. 8792)

The Electronic Commerce Act (R.A. 8792) covers electronic transactions and penalizes certain unlawful acts committed through electronic means. While it mainly deals with legal recognition of electronic documents and signatures, it underscores the importance of secure and lawful electronic usage. Software infringement done electronically (e.g., downloading or distributing pirated software) can fall under certain provisions if it involves fraud or unauthorized access.

2.3. Cybercrime Prevention Act (Republic Act No. 10175)

The Cybercrime Prevention Act (R.A. 10175) penalizes offenses such as illegal access, data interference, and cyber-squatting. While software infringement per se may not be the primary violation under this law, acts committed alongside infringement—like hacking into a system to obtain software—could be considered cybercrimes.

2.4. Related Rules and Regulations

National Bureau of Investigation (NBI) and Philippine National Police (PNP): Their cybercrime divisions can investigate and enforce intellectual property rights related to software infringements.
Optical Media Board (OMB): Focuses more on physical media (CDs, DVDs), but has coordinated with other agencies in tackling software piracy.
Courts: Civil and criminal courts handle IP and cybercrime cases.

3. Liability of Employees

3.1. Direct Liability

Employees who commit software infringement—such as using unlicensed copies, sharing unauthorized copies, or bypassing license restrictions—can be held directly liable. Potential consequences include:

Criminal Penalties: Copyright infringement can carry fines and imprisonment.
Civil Damages: The software owner can sue the infringing employee for damages, which may include actual damages, attorney’s fees, and other costs.

3.2. Disciplinary Action by Employers

Even if the employer is not directly involved, an employee found to be infringing software licenses may face internal disciplinary proceedings, including suspension, demotion, or termination, depending on company policies.

4. Liability of Employers

4.1. Vicarious or Secondary Liability

Employers could be found indirectly liable under certain circumstances, especially if they:

Allowed or encouraged infringing activities.
Failed to supervise employees adequately or enforce anti-piracy policies.
Benefited financially from the unauthorized use of software.

In the Philippines, vicarious liability can be established if the infringement occurs in the course of the employee’s job duties and the employer either knew or should have known about the act but did nothing to prevent it. The employer may then face claims for damages or injunctive relief.

4.2. Criminal Liability

While the more typical approach is civil liability, criminal charges may attach to company officers or managers who knowingly participate in or ignore repeated instances of infringement. If there is proof that the employer actively directed or benefited from software piracy, local prosecutors could file a criminal case based on the Intellectual Property Code or related legislation.

5. Enforcement and Remedies

5.1. Civil Remedies

Injunction: Courts can issue an injunction to stop the infringing activity immediately.
Damages: This includes actual damages (based on lost sales or license fees) or statutory damages, if such are proven or prescribed.
Attorney’s Fees: A successful copyright owner may also recover attorney’s fees and costs of litigation.

5.2. Criminal Penalties

Fines: Under Philippine law, fines for IP infringement can range significantly depending on the gravity of the offense.
Imprisonment: Severe cases or repeated offenses can lead to imprisonment.

5.3. Administrative Actions

In some cases, the Intellectual Property Office (IPO) of the Philippines or the Optical Media Board can impose administrative sanctions and penalties. These bodies can conduct inspections, confiscate unauthorized copies, and impose fines.

6. Corporate Compliance and Preventive Measures

To avoid software license infringement by employees and the associated legal risks, companies should establish and enforce strong compliance policies:

Software Asset Management (SAM):
- Maintain accurate records of all software licenses.
- Track software installation and usage.
Audits and Monitoring:
- Conduct regular internal audits to ensure all software is properly licensed.
- Employ monitoring tools that prevent unauthorized installations and alert management to suspicious activity.
Employee Education:
- Provide training programs on software licensing rules.
- Issue reminders about penalties for software piracy.
Clear Policies and Procedures:
- Include clauses in employment handbooks or policies clearly stating prohibited activities.
- Spell out disciplinary consequences for license violations.
Restrict Installation Privileges:
- Limit administrative rights to authorized IT personnel.
- Require employees to seek approval before installing any software.
Regular Updating and Renewals:
- Ensure that software licenses are up to date, renewing or canceling subscriptions as needed.
- Remove any software that is no longer in use or whose license has expired.

7. Key Considerations in Litigation

When software infringement happens and litigation becomes necessary, note the following:

Burden of Proof: The software owner typically must prove ownership and infringement (i.e., unauthorized reproduction or use).
Evidence: Digital forensics, computer logs, correspondence, and internal policies can be used to prove wrongdoing.
Good Faith Defense: An employee might claim good faith or ignorance in some instances (e.g., used software believed to be properly licensed). However, ignorance is generally not a valid defense in clear-cut piracy cases.
Settlement and Alternative Dispute Resolution (ADR): Many software owners prefer to settle or use ADR to avoid lengthy court proceedings. Settlement often involves paying license fees plus damages.

8. Jurisprudence and Enforcement Trends

While Philippine courts have long recognized the protection of software under copyright law, actual case rulings concerning employee-related software infringement are not typically published in mass. However, enforcement efforts have increased with collaboration among government agencies, private sector alliances (e.g., the Business Software Alliance), and the national police. Companies that disregard software compliance have faced raids and significant fines.

9. Conclusion

Software license infringement by employees is a serious matter in the Philippines, carrying both civil and criminal liabilities under the Intellectual Property Code and related laws. Employers have a crucial role in preventing breaches by adopting robust internal policies, educating employees, and conducting regular audits. Failure to do so may expose both employees and the organization to legal risks—including fines, damages, injunctions, and even criminal prosecution.

If you suspect software infringement within your organization or face potential legal action, it is best to seek professional legal advice to manage risks, negotiate settlements, or defend against lawsuits. Proper software compliance strategies and ongoing vigilance remain the best defense against violations and their consequences.

Disclaimer: This article is for general informational purposes only and does not constitute legal advice. Specific cases require individualized analysis and consultation with a qualified attorney licensed to practice in the Philippines.