The following are some fundamentals on software licensing. This is not meant to be legal advice.
What is a software license?
A license is a grant of limited rights and the limited use of a copyright, trademark, patent, or other intellectual property right.
The licensor keeps ownership of the software, and can tell the licensee what can and cannot be done with the intellectual property. This makes a license different from a sale.
Copyright
A copyright protects expression. It does not protect independent creation thus allowing another to get to algorithm and create its own software).
Data may not be protected by copyrights if they are not original creations, but if the arrangement is original, there may be copyright protection. In Europe, a European Union database directive protects data even when it is not original.
Trade Secret
Trade secret laws protect secrets such as source code. License agreement clauses on no reverse engineering and confidentiality protect trade secrets.
Patent
A patent protects ideas, and bars independent creations.
Trademark
Trademark laws protect names and logos. For instance, using a licensor's name may be useful or valuable for a licensee for marketing.
Development Tools
Development tools are used to create applications and content. They are used to develop software so that there is no need to rewrite, create codes each time. When licensing development tools, the licensee should make sure that the license that allows for the development tools to be used internally allows for the product in development to be externally used and sold.
Customer Types
Types of software licensees include: original equipment manufacturer (OEM), value added reseller (VAR), distributor, reseller.
The OEM absorbs the licensor's product to the OEM's product. When distributed, the end user does not know that the licensor's product is included with OEM's product unless otherwise negotiated.
The VAR does not modify the licensor's product, allowing the licensor to maintain its identity.
A distributor passes a licensor's product to the retail market. A reseller passes a licensor's product to end users.
Comment Preview