WHAT IS A SOFTWARE LICENSE AGREEMENT?
In simple terms, as per the author, a Software License Agreement is a kind of contract between the owner of the software and the licensee, that is the purchaser of the software, where the licensee is allowed to make use of the software but not own it. The main objective of such agreement is that the owner of the software can protect the interest of the company and the licensee also benefits from the same as they get to use the software. The software owner retains some rights that the licensee does not have, such as the ability to keep selling the software to
other people and the right to use it on a lone computer.The licensee also receives additional privileges, such as the right to change the code to improve the software’s compatibility with other systems. End-user licence agreements (EULAs), a term that has fallen out of fashion, was used for Software License agreements.
For the use of MS Word, you might have a license from Microsoft. You might have purchased a copy of Word “forever” years ago, but it stopped being updated. Then you had to purchase it annually. The programme is not yours, but you are free to use it however you see fit. The terms of what you can and cannot do with the software are outlined in the Software License Agreement.
For instance, you can use it to create documents and show or give them to other people, but you cannot reverse engineer the software or get into the code.
WHAT ARE THE TERMS THAT AN AGREEMENT?
There are four main sections of software license agreements and each one covers different information that is key to the execution of the agreement, as follows:
• General information – This section contains information on the date the agreement will enter into force, the timeframe of the agreement’s terms, and the type of agreement. Even though this information is very general, it is significant because it establishes the overall tone of the agreement.
• Parties involved – The parties entering into the agreement are named in this section, which is crucial. It will include information about the person or business buying the licence as well as details about your corporation as the one providing the licence. Along with their address and other contact details, you must enter their full name. You must also specify whether it is a person or a business. Both parties will need access to this information.
• Terms of the agreement – You can find a list of all the terms of the agreement in this section. This includes the licence fee, which you can specify as a set price or a set price plus yearly maintenance fees. You should also specify whether the licence will come with the source code and whether it is a site licence. Another choice is a site licence, which enables your client to use the software on multiple computers at a single location. Additionally, this
section will contain some details about any maintenance, support, or refunds that your business may or may not provide under the terms of the agreement.
• Fine details – Any specifics not covered by the other sections of the software licence agreement should be explained in this section. Instead of using terms that are generally expected, these terms tend to be more customised to your situation. The location for signatures and dates will be listed in this section as well. If you want to, you can also include a requirement that it be notarized.
TYPES OF SOFTWARE LICENSE AGREEMENT
Primarily, there are five categories or kinds of software licenses. A wide variety of licensing scenarios which range from free software to commercial software are covered by them.
Below, the author has outlined the five types of software agreements used most commonly by developers and software-as-a-service (SaaS) providers:
TYPE 1: PUBLIC DOMAIN LICENSES
Anyone is free to use and modify software with a public domain license. This “permissive” license allows the software to be modified and the code to be incorporated into projects or applications. When using public domain software in tasks or other crucial business applications, companies must use caution.
TYPE 2: GNU/LESSER GENERAL PUBLIC LICENSES
Open source libraries may be incorporated into software by developers who use an LGPL licence. They are free to licence the code they write for projects using an LGPL-licensed library under any other licence. The developed code sourced from the library will be subject to the terms of the original licence if any portion is copied or modified, which is an exception to this
rule.
TYPE 3: PERMISSIVE LICENSES
One of the most typical open-source software licence types is this one. Few requirements or restrictions are placed on the distribution and modification of the software by a permissive licence. The conditions for safeguarding licence notices and software copyright, the permitted uses of the software, trademark requirements, and other restrictions differ between permissive
licences.
TYPE 4: COPYLEFT LICENSES
Restrictive conditions apply to copyleft licences. Users are permitted to alter licenced code as part of a software project under a copyleft as long as they distribute the updated version in accordance with the same software licence as the original code. If the code was only meant for private use, the new product needs to have the same designation.
TYPE 5: PROPRIETARY LICENSES
Applications cannot be copied, modified, or distributed without a licence for proprietary software. This kind is the most restrictive because it protects the owner or developer from unauthorised use. Lawyers who specialise in software licensing agreements can assist you in negotiating and drafting a proprietary licence that forbids illegal activity.
This article is written by Yeshwi Nathani,Symbiosis Law School, Pune.
