In the use of unlicensed software, company executives cannot hide behind the corporate veil; depending on the nature of the act, they bear direct personal criminal and civil liability. Since criminal sanctions cannot be imposed on legal entities pursuant to the Turkish Penal Code No. 5237 (TPC), company officers who permit the use of pirated software or fail to exercise requisite oversight face imprisonment, judicial fines, and severe damage awards. The liability of company executives for the use of unlicensed software encompasses not only the employees who personally commit the infringement, but also the management bodies that fail to fulfill their organizational duty of supervision. An executive’s assertion of lack of knowledge regarding the infringement generally does not eliminate criminal or civil liability in light of the standard of a prudent merchant.
Legal nature of company executives’ liability in the use of unlicensed software
The liability of company executives for software infringements stems both from the principle of personal criminal responsibility in criminal law and from the duties of supervision under commercial law. Under the Law No. 5846 on Intellectual and Artistic Works (LIAW), computer programs are protected as scientific and literary works, and their unauthorized reproduction constitutes a criminal offense. In infringements committed within a company, the executives at the head of the organization are included in the investigation as perpetrators or instigators alongside the IT personnel who actually executed the act.
Pursuant to Article 369 of the Turkish Commercial Code No. 6102 (TCC), company directors and board members must perform their duties with the diligence of a prudent manager and protect the interests of the company in accordance with the principle of good faith. Condoning the use of unlicensed software or failing to establish internal compliance mechanisms constitutes an explicit breach of this duty of care. Damages sustained by the company due to such negligence may be directly indemnified through a right of recourse against the liable executives pursuant to Article 553 of the TCC.
From the perspective of criminal law, since legal entities lack criminal capacity, sanctions directly target company directors, board members, or, where a delegation of authority has been executed, the respective executive directors. For a delegation of authority to be legally valid, an explicit, written, and specific assignment of duties regarding software licensing and the auditing of IT infrastructure is mandatory. Otherwise, senior executives possessing general representation authority are held directly liable.
What are the penalties for using unlicensed software?
The primary statutory penalty for using unlicensed software, pursuant to Article 71 of the LIAW, is imprisonment from one year to five years or a judicial fine. This article directly penalizes any person who adapts, reproduces, distributes, or possesses for commercial purposes unlawfully reproduced copies of a work without the rightholder’s consent. Although a prison sentence handed down by the court may be converted into a judicial fine if statutory conditions are met, the commission of the offense within the scope of commercial business operations may lead the court to deviate upwards from the statutory minimum sentence.
In addition to criminal sanctions, rightholders possess the right to initiate an action for statutory compensation pursuant to Article 68 of the LIAW. The rightholder may claim compensation up to three times the standard license fee of the software. Because these compensation amounts are calculated on the basis of current market values and currency exchange rates, they fluctuate according to economic conditions on the filing date of the lawsuit; current values must therefore be re-evaluated on a case-by-case basis.
As a result of criminal and civil proceedings, company-owned computers, servers, and data storage devices may be seized or confiscated by transfer of ownership to the public. Furthermore, security measures such as the closure of the business premises or suspension from commercial activity may be imposed. These sanctions not only inflict reputational damage upon the company, but also directly impact the professional careers of executives by being recorded in their criminal records.
Can a company executive be held personally liable for pirated software?
A company executive is held personally liable if the infringement occurred under their direct order and instruction, or if they neglected their supervisory authority through intent or gross negligence. Criminal courts rigorously scrutinize whether administrative and technical measures were implemented within the company to prevent the use of pirated software. Failing to restrict administrator installation privileges on computers or leaving IT infrastructure unmonitored is deemed the fault of the executive.
In determining the boundaries of personal liability, the doctrine of organizational fault applies. If mandatory internal audit directives have not been drafted and employee software licensing compliance policies have not been adopted within the enterprise, the executive cannot establish absence of fault. As frequently emphasized in judicial proceedings by Atty. Arb. Billur Güler Aslım, the principal method to avoid criminal liability is establishing through documentary evidence that periodic audit systems have been instituted within the enterprise.
In civil litigation, the rightholder primarily seeks compensation from the legal entity. However, in cases of liquidation, bankruptcy, or insolvency where the company’s assets are insufficient to cover the judgment debt, creditors may proceed directly against the personal assets of board members due to their unlawful acts. This scenario exposes an executive’s personal bank accounts and real estate assets to substantial attachment risks.
How are the preservation of evidence and search procedures conducted?
The procedure for the preservation of evidence in unlicensed software disputes commences with the rightholder filing a criminal complaint with the Chief Public Prosecutor’s Office or requesting a determination of evidence from the competent civil court. Conducted pursuant to Article 400 of the Code of Civil Procedure No. 6100 (CCP), this application is typically executed ex parte as an unannounced inspection. During the search, court-appointed expert witnesses and law enforcement officers enter the business premises to inspect digital data stored on computers.
The search and inspection procedures are executed subject to specific procedural rules:
- The search warrant or evidence preservation order is served on the authorized corporate representative.
- Computers, servers, and data storage devices are scanned using specialized forensic software under the supervision of court experts.
- Installation dates, serial numbers, and license validation keys of the identified programs are recorded in the official inspection minutes.
- Forensic disk images (bit-stream copies) of the computers are acquired, or devices deemed necessary are seized and placed into protective custody.
Subject-matter jurisdiction lies with the Civil and Criminal Courts for Intellectual and Industrial Property Rights. In judicial districts where these specialized courts do not exist, the general Civil Courts of First Instance and Criminal Courts of First Instance have jurisdiction. For example, intellectual property cases are heard by specialized courts in central Antalya, whereas in outlying districts these proceedings are handled by Civil Courts of First Instance. Following the execution of the evidentiary inspection minutes, rightholders must initiate actions for damages within statutory limitation periods.
Common managerial errors and illustrative scenario
In practice, the most frequent error committed by executives is the assumption that the company cannot be held liable for software installations made at the personal initiative of IT staff or regular employees. Another widespread misconception is allowing personal laptops brought by employees from home to connect to the corporate network and be used for commercial operations. Any unlicensed software operating on devices located within company premises or utilized for business operations directly binds the enterprise and its executives.
A dispute involving a limited liability company providing architectural drafting services in Antalya illustrates this principle. To reduce licensing costs, the general manager failed to renew design software licenses on office workstations and tacitly condoned employees using cracked software downloaded from the internet. Upon a formal complaint by the rightholding software corporation, an expert inspection was conducted under law enforcement escort, which documented the use of unauthorized software across twenty distinct workstations.
Consequently, criminal proceedings were instituted against the general manager under Article 71 of the LIAW, alongside a civil claim for threefold statutory compensation amounting to hundreds of thousands of liras. Although the manager argued that he did not personally install the applications and that employees had installed them for their own workflows, the court rejected this defense on the grounds that commercial benefit accrued directly to the company and the executive willfully neglected his supervisory duty. The corporate executive was both sentenced to a judicial fine and held personally liable to pay compensation out of his private assets.
Preventive measures executives must implement to avoid liability
To avoid potential criminal and civil proceedings, executives must establish full institutional control over enterprise IT systems. Preventive measures must not be limited to crisis management, but must comprise a continuous auditing framework governing standard business operations.
- Enforce administrator privilege restrictions that bar employees from unauthorized software installations.
- Conduct periodic audits of all corporate IT assets and immediately uninstall any detected unlicensed software.
- Draft internal disciplinary and information security directives, serving written notices to personnel confirming that software licensing violations constitute grounds for termination for just cause.
- If IT infrastructure management is outsourced to a vendor or delegated to internal personnel, incorporate explicit contractual clauses detailing duties and liabilities regarding license compliance.
- Maintain systematic archives of software purchase agreements, invoices, and license validity terms within accounting and IT departments.
The use of unlicensed software exceeds the scope of a routine copyright dispute; it represents an acute legal hazard exposing corporate executives to direct criminal imprisonment and ruinous claims for damages. When the principle of personal criminal responsibility is evaluated alongside an executive’s supervisory duty of care, every unmonitored computer constitutes a potential threat to the executive’s personal assets and liberty. Mitigating these risks requires the complete implementation of internal technical controls and the rigorous alignment of IT processes with the applicable legal framework.
