Sued by Altium - Don't Do What I Did!

[mikeselectricstuff]

Funny thing is they used network of a corporation they have no relationship with to track down OP...
Also it is debatable, if OP didn't really buy software from them, then any contractual relationships are null and void, including Alitum's right to gather any data from OP, regardless of what it says in a blurb on a screen.
It is a piracy to use illegally purchased software, but Altium cannot spy on people without consent.That is practically industrial espionage and is highly illegal in any country. And in EU it is GDPR violation too..

Yes. if you wanted to take such a case all the way there is a better than average chance that you'd "win". I use "win" in quote marks because you don't actually, it would suck away all your life and money in the process.

Though in the same way that Altium threatened the OP with action on questionable legal grounds, a reply along the lines of "I won't persue your illegal privacy violation if you drop your case against me " might have been worth a try.

[janoc]

Regarding data collection, I'm not sure that Altium has done anything illegal here.

calling home with some details it's ok.
mapping his customers and contacting them, DEFINITELY NOT!

Nobody "mapped" any customers.

They couldn't know the company is his customer. The software phoned home (also) from that network, so they sent the legal nastygram to the owner of that network. It is that simple. Altium had no means to know that it was a contractor using a bogus license on the network of his client until they sent that letter - vs an employee using a cracked copy of Altium on their work PC. Yes, that does happen too. People really are that stupid ...

Let's not make this into some sort of crazy corporate conspiracy.

This "phoning home" functionality is pretty much a standard way of license enforcement on industrial software.

BTW, people who were waving privacy laws here are wrong - those don't apply to B2B relationships, there all that matters is what is in the contract. If you sign (or "agree") to a contract or EULA saying that you owe your firstborn to Microsoft, well, then you may well end up having to deliver at some point. If people finally started to read what fine print is in the T&Cs and EULAs they are clicking through (and thus "agreeing" to - sorry, the courts said this was legal as long as you can see them beforehand and can decline, so tough luck ...), then they maybe wouldn't be surprised as much.

E.g. did you know that pretty much 90% of software EULAs reserve the right for the right holder to come unannounced to your company and audit you, at your expense, for license compliance? Check the licenses for any Microsoft or Autodesk products, for example. Various "analytics" and data collection is mentioned there as well. And you have agreed to all of that ...

[PlainName]

Regarding data collection, I'm not sure that Altium has done anything illegal here.

calling home with some details it's ok.
mapping his customers and contacting them, DEFINITELY NOT!

What irks me is they didn’t contact anyone UNTIL I plugged into a “high value asset” network. Choice words have been used. They obviously thought they were getting a payday.

I think it might be more of the legality. If you use pirated software it's debatable if you've stolen anything - they could argue that you've deprived them of the profit from a sale, but you can counter by saying you wouldn't've bought it anyway.

OTOH, when you use the product to provide a service for which you're paid, that's a different kettle of fish and they can seriously argue that not only have you deprived them of a sale but you've profited from it too. Thus they do nothing until they know you're using it professionally, and then it's a slam dunk.

[thm_w]

Some similar cases:
https://www.justice.gov/usao-ks/pr/two-kansas-companies-sentenced-using-illegal-software
https://torrentfreak.com/software-company-still-fighting-u-s-navy-over-millions-in-piracy-damages-220811/

In the US at least, it seems reasonable to sue for cost of license and win in court.
Siemens is doing the same, maybe Altium learned from them: https://www.torrentlawyer.com/2016/09/09/software-developers-are-now-tracking-piracy-through-the-use-of-the-software/

In Wave 2 (2016), Siemens filed a similar lawsuit, this time against 100 new defendants. They surprised a number of defendants with settlement numbers of $50,000+ (eventually, we learned that they were settling licenses to their software, and they actually cost that much). This second wave lawsuit \"on the books\" looked to be a failure because they missed a FRCP Rule 4(m) deadline to name and serve defendants. As a result, they dismissed the entire lawsuit, however, I know that they continued after the dismissal to contact accused defendants (or their attorneys) with the intention of having those accused defendants  purchase a license to cover their use of the Siemens Industry Software Inc. NX software.   
In Wave 3 - 5 (2017-2018), they repeated what was a successful strategy in the previous lawsuits. They spent their time looking for individuals who used pirated versions of their software for profit. In these waves, Siemens Industry Software Inc. considered asking defendants for large settlements, however, to date this has not materialized and they continue to attempt to legitimize their accused defendants to become lifelong customers through the sale of licenses to their software.   
In Wave 6-7 (2019), Siemens Industry Software Inc. changed their strategy, attempting to streamline the settlement process. They still analyzed each defendant to determine whether they were a) running their own engineering business (and billing clients using the pirated software), or whether they were b) employees or independent contractors working on a project where their employer did not properly license them. They also analyzed whether the engineer was c) what we call a \"tinkerer,\" although the way Siemens handled this category changed.    In previous lawsuits, those that used the software for \"hobby\" purposes (e.g., 3D printing, designing private home uses, etc.) were considered \"tinkerers.\" Many of these engineers knew how to use the software from work (where they were properly licensed). Others used the software for training purposes only (for the purpose of one day getting a job where they would need to use that software). Because their use was formerly considered \"non-revenue producing,\" Siemens did not require them to obtain a software license.   
IN WAVES 6 AND 7, *THIS CHANGED*. In the most recent set of cases, Siemens Industry Software Inc. still asked defendants to buy software from them to legitimize their use. It did not necessarily need to be the same $30,000 NX software they used prior to being sued, but lesser versions with fewer features, or altogether other software packages were presented as options.

Obviously how Altium handled this was not ideal, they could have blocked the license in an upgrade, etc. But, this could be the reality going forward.

For any pirated software, always block all ingoing + outgoing connections in windows firewall.

[johnboxall]

Makes me wonder if Altium have people going after those who still have access to free AD through university, etc., and using it for commercial work.

[Berni]

The thing is the OP did not know he was using a pirated license.

He tried to do he proper thing and get a license but with how expensive Altium is these days it is understandable that he didn't want to pay full price for it. If he uses Altium at work then i can also understand not wanting to use a cheaper tool for this. Sure the bitcoin part becomes suspicious but when you find a good deal and are under time pressure to make it happen a lot of people would let the guard down (especially with a seller they heard good reputation of).

We can thank the OP for sharing the story to serve as a warning to anyone else who thought this might be a good idea to do.

Lesson here is that if you bring your own computer to any corporate network be careful about what you let into the internet or tunnel your way out of there before going into the internet.

[mcinque]

Nobody "mapped" any customers.
They couldn't know the company is his customer.
so they sent the legal nastygram to the owner of that network. It is that simple.

no conspiracy here.
that might be a reasonable explanation but does not explain why these actions occur only after the "pirate" has become economically attractive and able to pay for years of licensing.

[mcinque]

E.g. did you know that pretty much 90% of software EULAs reserve the right for the right holder to come unannounced to your company and audit you, at your expense, for license compliance? Check the licenses for any Microsoft or Autodesk products, for example. Various "analytics" and data collection is mentioned there as well. And you have agreed to all of that ...

the fact that I pressed "I agree" in a EULA that want to take actions not allowed by law, does not make that contract valid. you can't write in the conditions that (e.g. I exaggerate) by using that software you give up ownership of your internal organs to the developer. so even if they write anything, it still has to be allowed by the various laws and regulations.

[envisionelec]

The thing is the OP did not know he was using a pirated license.

He tried to do he proper thing and get a license but with how expensive Altium is these days it is understandable that he didn't want to pay full price for it. If he uses Altium at work then i can also understand not wanting to use a cheaper tool for this. Sure the bitcoin part becomes suspicious but when you find a good deal and are under time pressure to make it happen a lot of people would let the guard down (especially with a seller they heard good reputation of).

We can thank the OP for sharing the story to serve as a warning to anyone else who thought this might be a good idea to do.

Lesson here is that if you bring your own computer to any corporate network be careful about what you let into the internet or tunnel your way out of there before going into the internet.

Correct on all fronts. I had sent my clients screenshots of the license page showing them it was “valid” to instill confidence. They knew there were pirated copies out there and so did I, and having that working license along with my company name gave me full confidence. Having contacted Altium Sales for support gave me added confidence. If it was illegal then why didn’t they say so? I had a lengthy discussion with a former East Coast (USA) Altium Sales engineer, Andrew Krautner, who suspiciously left the company just as the situation was getting underway. We had discussed adding the SolidWorks MCAD connector around August 2020 and he gave me a trial of it. And it worked fine. I had full access to the Component manager and associated Active BOM. How could I not believe it was 100% legitimate?

The fact is I couldn’t. I got ripped off and proving it was impossible. I had emptied and closed my bitcoin wallet after the prices went to its peaks in late 2019 and I cashed out. I pled my case to my attorney and that was it. I’m not some high rolling EE. I was a technician for 15 years before my wife left me and I decided I needed to make more money so I became a PCB designer. I’d used other free packages for years but worked for a couple companies that used Altium. I organically came up, made some designs for myself and others. Sold some of them. It was fun.

Now it’s not fun, I’m pissed off. But what am I going to do about it other than find another client somehow with my best bridge and reference burnt to a crisp? 

[DavidAlfa]

$18K? I'd close the company and create a new one
Here, under certain circumstances, they dodge a lot of debts that way by creating limited companies.
That way, legally they can only sue the company, not you. However burocracy is not my thing.

Knew several guys with debts near 5 digits. No problem, I create a new company but at my wife's name.
Then he worked there with employee title, but actually doing the important stuff, appearing as simple worker to Authorities to dodge all the legal stuff.
4-5 years after, the debt is expired, that day at 00:00h it became the manager again.

"Envision Electronics Ltd." ->"Envision Technologies Inc." -> Keep using pirated Altium, destroy Ethernet port so it can't ever connect to Internet.
That's what you get when you abuse using your priviledged position.

[envisionelec]

$18K? I'd close the company and create a new one
Here, under certain circumstances, they dodge a lot of debts that way by creating limited companies.
That way, legally they can only sue the company, not you. However burocracy is not my thing.

I very nearly did this just a few weeks ago. I’d much rather have a legal license given PCB design is a passion of mine and still like Altium even with its many flaws. I do use it daily for work and am extremely fluent in that I also teach and tutor others.

[thm_w]

I very nearly did this just a few weeks ago. I’d much rather have a legal license given PCB design is a passion of mine and still like Altium even with its many flaws. I do use it daily for work and am extremely fluent in that I also teach and tutor others.

Nothing stopping you from opening a new company any paying for a legal license on that one.
Granted its already ~$12k if you got a perpetual license so the 6k savings may not be worth it.

[envisionelec]

Nothing stopping you from opening a new company any paying for a legal license on that one.
Granted its already ~$12k if you got a perpetual license so the 6k savings may not be worth it.

I was already into the agreement and my attorney thought they might try to go after me personally. I didn’t want to drag this out. The kicker? I couldn’t buy the perpetual license and was forced into a 3 year on-demand. So I have to buy a perpetual in 2025 if they even offer it by then.

[T3sl4co1l]

I'm curious whether they can provide a written statement of proof of legitimate ownership.  Or title if you will.  Would a salesperson have the legal authority to issue such a statement?  A manager?  Their legal side?

Hm, is there even anything in the normal license and sale that prohibits them from suing you under otherwise normal conditions (i.e. without suspicion of duplicating / selling / etc. as prohibited by terms and permitted in the region)?  It's been so long since I saw the terms I don't remember, hmm...

(Point being, they might simply decline to do so, even if you're doing everything fully legitimately, even if you offer to pay as some kind of additional level license, or contract; just because such statement or contract would limit them from potential future actions whether they need to or not.)

Tim

[janoc]

Nobody "mapped" any customers.
They couldn't know the company is his customer.
so they sent the legal nastygram to the owner of that network. It is that simple.

no conspiracy here.
that might be a reasonable explanation but does not explain why these actions occur only after the "pirate" has become economically attractive and able to pay for years of licensing.

Well but that has likely nothing to do with "mapping anyone's customers" but all to do with the fact that if they sue him/her for a single violation, the court would likely send them packing as the relief demanded would be disproportionate to the offense claimed. So they likely needed/wanted to accumulate more evidence that this was systematic and not a one time issue. But I don't know what their legal strategy is/was.

E.g. did you know that pretty much 90% of software EULAs reserve the right for the right holder to come unannounced to your company and audit you, at your expense, for license compliance? Check the licenses for any Microsoft or Autodesk products, for example. Various "analytics" and data collection is mentioned there as well. And you have agreed to all of that ...

the fact that I pressed "I agree" in a EULA that want to take actions not allowed by law, does not make that contract valid. you can't write in the conditions that (e.g. I exaggerate) by using that software you give up ownership of your internal organs to the developer. so even if they write anything, it still has to be allowed by the various laws and regulations.

Sure - but that about the firstborn was a hyperbole to drive the point home. The "phone home" functionality and license enforcement certainly don't fall under that category. People forget that many consumer protection and privacy laws in the EU apply only to physical persons/consumers and not businesses and contractual relationships between them. Once you are a contractor, you are a business and a different (and much looser) set of rules applies.

[jpanhalt]

There's a lot of murky stuff that envisionelec has been through.  I sympathize with him and wish him the best in his future.

My first thought was the "first sale" law in the US (https://www.justice.gov/archives/jm/criminal-resource-manual-1854-copyright-infringement-first-sale-doctrine ).  That is, someone can resale a legitimate copy of a copyrighted work.

The second was a question of timing.  Adverse possession generally applies to real property, and application of that law to IP is evolving.  Google can give some references. The one from Harvard Law Review was too lengthy for me to read.  But, it remains a question.  Therefore, the smart lawyers at Altrium wanted to wait until it was financially worthwhile to sue, but not too long.

Now, as for a possible defamation lawsuit against Altrium, there is probably some basis for that in that envisionelec thought he had a legitimate license.  The problem is cost, as in the American system, both sides pay their own costs.

In the end, I think envisionelec chose the most economical route.  It's a bit disturbing that he cannot get a perpetual license now, but his attorney probably knew the defamation lawsuit would be a longshot.

[thm_w]

I was already into the agreement and my attorney thought they might try to go after me personally. I didn’t want to drag this out. The kicker? I couldn’t buy the perpetual license and was forced into a 3 year on-demand. So I have to buy a perpetual in 2025 if they even offer it by then.

Yeah I guess thats a possibility if you are not 100% strict with the business: https://web.archive.org/web/20170520215758/https://www.sba.gov/blogs/three-ways-lose-personal-liability-protection-and-what-do-about-it

My first thought was the "first sale" law in the US (https://www.justice.gov/archives/jm/criminal-resource-manual-1854-copyright-infringement-first-sale-doctrine ).  That is, someone can resale a legitimate copy of a copyrighted work.

Its not a legitimate copy though, doesn't matter if you thought it was legit or not when you bought it. This is the value in purchasing from an established company through name, so if it turns out to not be legit, you might be able to go after them. Of course this is incredibly difficult, because the lawyers will likely come and threaten you if you list your license for sale (oddly there is one on ebay atm, could be a scam though ebay.ca/itm/294171309463).

The only out could be if Altium certified in writing "the license you have is legit", but, they only implied as such. I don't know if that is enough.

[EEVblog]

I'm curious whether they can provide a written statement of proof of legitimate ownership.  Or title if you will.  Would a salesperson have the legal authority to issue such a statement?  A manager?  Their legal side?

When you run altium it doesn't work unless your license is validated by the Alitum server, and it tell you in the software whether it's legit or not.
Doesn't this imply that Altium have approved the license for use?

This is not hacked software that bypasses the Altium server check or something, right?

[envisionelec]

When you run altium it doesn't work unless your license is validated by the Alitum server, and it tell you in the software whether it's legit or not.
Doesn't this imply that Altium have approved the license for use?

This is not hacked software that bypasses the Altium server check or something, right?

I was able to login and use the Component Manager. I had checked “YES” to send data to Altium. I used 365 to work with my client. We exchanged design change information.  From my perspective I don’t know how that could have worked if it was hacked to bypass their servers. If I wasn’t connected to the internet, it couldn’t access any of those features.

I never spoke to anyone at Altium and I was on a blacklist to their sales and media team. I tried through their Reddit account, YouTube anywhere I could to get answers. They’d either ignore me or tell me to work through the attorneys. I feel railroaded but what else could I have done but step up, tell them everything I knew and hope for the best?

[T3sl4co1l]

I'm curious whether they can provide a written statement of proof of legitimate ownership.  Or title if you will.  Would a salesperson have the legal authority to issue such a statement?  A manager?  Their legal side?

When you run altium it doesn't work unless your license is validated by the Alitum server, and it tell you in the software whether it's legit or not.
Doesn't this imply that Altium have approved the license for use?

This is not hacked software that bypasses the Altium server check or something, right?

Nah that's all automated process, no legal representative is involved.

For example, whether there are bypasses in that API, who knows.  Maybe they know, maybe they don't.  Maybe the file merely need be self-consistent to pass.  Maybe it's a crypto key and they check it against their database (one would at least hope they have something like this?!).  Maybe it's both and they intentionally make it permissive to track questionable usage easier..!

...Is there anything about this in the EULA, or site terms or anything?  Usage terms on their servers might yield some clues, albeit vague.  I would think it reduces to something like: use of services does not constitute legal entitlement to usage of paid software, rights reserved, etc.

I never spoke to anyone at Altium and I was on a blacklist to their sales and media team. I tried through their Reddit account, YouTube anywhere I could to get answers. They’d either ignore me or tell me to work through the attorneys. I feel railroaded but what else could I have done

This is SOP.  Most salespeople are instructed to, once a legal threat has been made, direct the party to their lawyers exclusively.  Anything an employee might say could be construed as evidence against the case; employees don't have authority to make legal statements; etc.

You might not need legal representation to talk to their lawyers, but the likelihood of saying something stupid goes up exponentially, so if you wish to continue doing any kind of business with the company at that point (or have to prosecute them, or defend yourself from them), best do it through a lawyer.

tell them everything I knew and hope for the best?

Also a good plan is to STFU.  Not to add insult to injury, of course -- again, my condolences -- but FYI.

Relevant clip:



Of course, they're talking about police, but police are but agents of the criminal legal system.  Similar (different, but similar) principles apply for civil cases.  Or indeed, if a piracy case happens to be brought under criminal rules, well, there you go.  (Sounds like that's not the case here, but something to keep in mind for those, ehh...deeper into things shall we say.)

Provide only what information has been requested, that they have a legal right to ask for.  Namely: that a court has ordered you to deliver, or, more to the point -- that your lawyer says you have to.  You can (and should!) provide as much info as possible to your lawyer, and should give as little as possible to a potential adversary.

Likely here, they built enough of a case against you from usage logs, tracking whatever info the license file has, along with the phone-home (that you enabled(!!)), and simply waited until a big enough target presented itself (i.e. your client).  And failing that, they fell back on you for any kind of payday they could extract.

Anything you admitted to, along the way, might not've even been relevant -- they might've already known where the file came from and that it was transferred in violation of terms, or absent from the database and immediately flagged, or something; or it might've further tightened their case against you.

If nothing else -- also a lesson that corporations are not here to return good will, or good-faith effort.  Corporations are in it for the money, and money alone.  Assert your privacy rights early and often; there is no such thing as "having nothing to hide".  The legal system is strictly adversarial, and works on strength of evidence; lack of evidence, or defense against it, is indeed taken as guilt of a charge.  ("Innocent until proven guilty" is criminal only..!)

If it helps the explanation -- like science, law is a system of reason; but it is a system parallel to, and different from, science.  (Indeed, significantly predating modern science as we know it.)

For example, science is admissible in court, but strictly in the form of a witness testifying to such (or related material doing the same: affidavits, briefs, etc.).  Two witnesses can give perfectly contradictory "scientific" evidence (on, according to science, "well proven" subjects), and this is perfectly consistent from a legal standpoint.  Whereas in science, such a contradiction would be, at best, paradoxical, and more likely simply out-and-out false.  But in law, such contradictions are simply unresolved allegations.  Any points the parties do not contest, or consent to, or agree upon; and which the judge has not dismissed -- are left to be proven in a court, in front of a jury of peers -- if taken this far, it is left up to the common man to decide which points are legal fact and which are not.  (Scary, huh?!)

Standard disclaimers, IANAL, not legal advice, etc. etc.

Tim

[envisionelec]

tell them everything I knew and hope for the best?

Also a good plan is to STFU.  Not to add insult to injury, of course -- again, my condolences -- but FYI.

To clarify, I only communicated my legal position with my attorney. I contacted Altium through those means to find out why they stopped talking to their counsel for 5 months while everything I worked for disappeared.

[dietert1]

As far as i understand, this case is special in that the OP fell victim to a scam right at the beginning. At least that's the claim.
Probably the large majority are cases where kids or students find those key generators online and try them to install a very expensive software ("trophy"). We don't know who puts those key generators onto the web. Could be the software companies themselves, trying to discover new clients online. So it makes sense they spy for some time to find out whether they discovered a professional client - probably an extremely rare case again. They will know looking at the projects executed.
Of course somebody aware of using a false license won't ask for support.

Regards, Dieter

[Black Phoenix]

We don't know who puts those key generators onto the web. Could be the software companies themselves, trying to discover new clients online.

Most of the times are programmers who are very good and like a good challenge or being the first to crack a new product.

https://youtu.be/4OnTv2989OQ

I don't know any company who would to that from start.

[T3sl4co1l]

tell them everything I knew and hope for the best?

Also a good plan is to STFU.  Not to add insult to injury, of course -- again, my condolences -- but FYI.

To clarify, I only communicated my legal position with my attorney. I contacted Altium through those means to find out why they stopped talking to their counsel for 5 months while everything I worked for disappeared.

Ah good, got it.

Also should add, your lawyer probably clarified much of this to you, so this is mainly for others' interest of course.

Tim

[CatalinaWOW]

For example, science is admissible in court, but strictly in the form of a witness testifying to such (or related material doing the same: affidavits, briefs, etc.).  Two witnesses can give perfectly contradictory "scientific" evidence (on, according to science, "well proven" subjects), and this is perfectly consistent from a legal standpoint.  Whereas in science, such a contradiction would be, at best, paradoxical, and more likely simply out-and-out false.  But in law, such contradictions are simply unresolved allegations.  Any points the parties do not contest, or consent to, or agree upon; and which the judge has not dismissed -- are left to be proven in a court, in front of a jury of peers -- if taken this far, it is left up to the common man to decide which points are legal fact and which are not.  (Scary, huh?!)

Tim

AFAIK your are completely correct on this.  And totally scary.  This is the feedstock of the current wave of ambulance chasers going after Roundup here in the US.  There is still some scientific dispute about whether Roundup is the primary culprit in a family of diseases, but after a single jury of 12 non-scientists decided that Roundup is the cause it is now legally an established fact.