What is a Software License?
This may sound like a very obvious question, but for anyone new to the field it is important to understand exactly what software licensing, and a software license agreement, are.
A Software License is a contract of agreement between a software publisher and an end user of the licensed application. The Software License tends to be regulated by a document known as an End User License Agreement, or EULA. Though software licensing can be put in place via a paper agreement, it is most often embedded in the software itself as part of the installation process, or included as part of electronic product documentation.
For consumer software the software license agreement will usually be a standard document, which all purchasers must agree to before gaining access to the software. Enterprise software and other software provided to large corporates on the other hand is often governed by a bespoke software licensing agreement which can be the result of lengthy negotiations between the vendor’s and purchaser’s lawyers and may require considerable expertise to manage.
It is also important to understand that software vendors sell licenses for use of their software, they do not sell the software itself. So the software license agreement defines the “rights” that the user gets when they pay for said license.
The software licensing agreement will protect the authors copyright and intellectual property rights (IPR) by defining the rights of the end user in relation to the usage of the application. For example:copying or duplication of the software for purposes other than backup is likely to fall outside the terms of most software license agreements, as is installation on more than one computer.
Because the end user has purchased a license to use the software editing the code, or changing the program in any way is also usually forbidden under the terms of the software license agreement. Software licenses might also restrict reverse engineering and bypassing controls intended to cut down on pirating, technology for achieving this is usually referred to as “copy protection software”. The exception to many of these controls is “open source software” whose use is generally unrestricted.
Most End User License Agreements also include liability limitation clauses designed to protect the publisher in the case of any unforeseen circumstances that might arise, or damage which might be caused as a consequence of using the software. This could be anything from a computer crash to loss of data, time or income.
Due to the nature of software it is also common for EULA’s to contain little or no warranty as to the suitability or performance of the product. For software publishers getting the EULA right can be critical to business success.
Careful consideration needs to be given to ensuring retention of intellectual property and thus retaining the ability to generate revenue from it. It is also important that you protect yourself from the various legal issues that may arise from selling software.
As an end user you need to be aware of what type of license you need and ensure that your use of software does not abuse the basis of the license you hold in order to avoid accusations of “software piracy”.
You will find a wide range of information on Software Licensing and copy protection within the knowledge base.
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