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In our digital world, more and more tasks depend on software and technology to effectively handles tasks such as managing our money, controlling our traffic signals, trading stocks and bonds, heating and cooling our homes and numerous other tasks that we take for granted in our day to day lives.
While software helps to make our lives easier, the role of a software licensor or licensee is much less simple. Both parties want the computer programs to be effective, yet protected. When problems arise, however, a poorly designed license agreement can lead to substantial costs of time, money and headaches.
There are typically two types of software license arrangements. First, there are commercial software agreements, typically between vendors who seek to license the software for a business use. An example of a commercial software arrangement might be an agreement between Vendor X to license it’s database management software to Vendor Y to handle inventory of ice cream. Similar problems are prevalent in software distribution arrangement, where Vendor A may contract to distribute Vendor B’s software to end users, with Vendor A serving as the classic “middleman.” While seemingly straightforward, both Vendors need to answer numerous questions about their agreement before their arrangement can come to fruition.
For example, which vendor is responsible for supporting the software if errors occur or if updates are required? Once support determines that further work may be required, who is responsible for handling the maintenance of the software (or the hardware on which it is run)? May the licensee modify the labels or the media on which the software is provided? Can the licensee sub-license the software, and if so, on what terms? What warranties are provided? May the software be used internationally or exported?
Comfortably answering these questions, plus many others, is imperative in drafting a commercial software license that works for both parties. CyberLaw can help assure that your commercial license agreement is organized and thorough.
Second, software is licensed to end users, usually consumers, from the software manufacturer. The classic example of a consumer-based software license is a personal computer user’s right to use Microsoft’s® Windows® Operating system. Although the software comes in a disk and box like many other goods a consumer might purchase, the consumer only has a right to use the software for certain limited purposes. Unlike purchasing a toolkit, where the consumer may modify or resell the good, software does not provide such freedoms.
Carefully wording an end-user license agreement saves you substantial time and money and assures that you will be well prepared if you ever have a circumstance where your license is being violated. Whether you need CyberLaw to draft your agreement from scratch or simply audit and analyze your pre-existing agreement, having legal counsel review your agreement is a smart decision. Contact the firm today to learn more about the firm's software licensing services.
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