one of my clients sells software. a problem they face as a software company is that their software gets pirated and hacked eventually finding their way as links and references on numerous spammy and otherwise shunned (deemed "bad") sites. should this be a major SEO concern, in terms of the way search engines evaluate their link profile? furthermore, how does this affect the site authority/credibility?
Authority and Trust (credibility) are two different things. Most new sites I believe start off with zero authority and zero trust. The exception is that if a site has establish a high amount of trust, when that company registers a new domain then the new domain may instantly inherit a certain degree of trust because Google knows they are owned by a trusted domain. Domain authority is more based on how many inbound links your domain as a whole has, how many unique domains link to your domain, how much PR your domain as a whole has, whether most of your backlinks link are to your home page or do your backlinks link to LOTS of pages on your site, etc. These are all signals that would indicate to Google whether other sites see you as an authority or not. I don't think backlinks like the ones you described will really affect domain authority. There are very few ways that inbound links can hurt you UNLESS you are caught red handed buying links or paying for site review posts, basically another form of bought links, in which case Google will slap a penalty on you and flag your domain as untrusted (ding your domain trust). If inbound links from spam sites were allowed to negatively affect your authrority then your competitors could put you out of business by spamming bad sites with links to your site. Surely Google is aware of this. They typically don't implement metrics in such a way as to allow other sites / competitors to intentially cause you harm via spam techniques. Domain trust (credibility) is something all together different. Supposedly when Google decided to make "trust" a factor in their algorithm they started with a list of what they believed to be absolutely trusted domains (ATD). They then looked at which sites those trusted domains linked to and labeled those domains that were only one hop away from the ATDs as highly trusted domains (HTD). They then looked at which sites those highly trusted domains linked to and labeled those domains as moderately trusted domains (MTD)... and so on. After you get 4 or 5 hops away from the absolutely trusted domains, the sites have very little if any trust, and you start getting into the spammy sites. It's VERY similar to the "seven people removed from Kevin Bacon" thing. They also look at which sites your domain links to and their domain trust factor, which sites those domains link to and their domain trust fact, etc. to get a feel for whether your site can be trusted... whether your site is promoting other trusted domain or whether your site is directly or indirectly promoting spammy sites. The idea of domain trust is that if you get links from trusted domains, high trusted domains, moderately trusted domains then those trusted domains are vouching for you and will pass you some degree of trust. And if you are linking out to trusted domains and are promoting sites that are already trusted, then you can also be trusted. Again, I doubt it if backlinks like the ones you described will really affect domain trust negatively. My guess is they won't hurt, they just won't help similar to inbound links from sites which are penalized. They generally don't hurt your site, they just don't help since they are likely flagged to not pass you PR and not be counted for ranking purposes. If they were then your competitors could damage your domain trust by spamming bad sites with links to your site. Linking out to bad or untrusted domains can hurt your trust, but I doubt inbound links from untrusted domains will hurt. But it's always a guessing game.
Well it doesn't really matter since they have little control on the incoming links with the sites they have but if they are linking with some bad neighborhood sites, (sites that employ black hat SEO,) then the chances are the site may be penalized. Just a way of caution
I agree that these kinds of links shouldn't harm your website. To be safe, build up a strong enough link profile that any spammy links would be dilluted.