Key issues in software licence agreements
Produced in partnership with Tom Bohills of Red Deer and John Benjamin of DWF
Key issues in software licence agreements

The following TMT practice note produced in partnership with Tom Bohills of Red Deer and John Benjamin of DWF provides comprehensive and up to date legal information covering:

  • Key issues in software licence agreements
  • Identifying the software
  • Source code and object code
  • Versions, upgrades and updates
  • Difference between upgrades and updates
  • ‘Off-the-shelf’ software vs ‘custom’ software
  • Licence grant and scope
  • Scope of use
  • Exclusivity
  • Duration
  • More...

Software can be broadly defined as a computer program comprising a series of instructions which, in combination with the underlying hardware and inputs from an end user, allow or cause a computer to perform a specific operation.

There are various categories of software based on the operation it causes the computer to perform. For example, operating systems such as Microsoft Windows or Apple’s macOS control and manage a computer’s basic functions. A computer’s operating system is what recognises input from devices like the keyboard and mouse, sends output to the monitor and manages the sharing of memory between programs.

At the other end of the scale are applications which sit on top of the computer’s operating system and provide a particular, visible function to the end user of the machine. Examples of applications range from word processors to media players to games.

A software licence is a binding agreement that grants a customer the right to use a defined piece of software subject to certain restrictions.

This Practice Note considers the following issues and key terms in software licence agreements:

  1. Identifying the software

  2. Licence grant and scope

  3. Delivery

  4. Charges

  5. Acceptance testing

  6. Intellectual property rights

  7. Record keeping and audit rights

  8. Warranties and indemnities

  9. Limitation of liability

  10. Escrow

  11. Support

  12. Export controls

  13. Termination

  14. Geo-blocking and prohibited discrimination

It focuses primarily on deployed software installed on an end user’s computer system as opposed

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