Licensing Agreements in a Changing Software World

A license is a right to use someone else’s property or enjoy a portion of their rights of ownership. Licenses may be for the use of another’s software, database, invention or process, property, or other property or rights. It is important to have an experienced licensing attorney prepare these licensing agreements for your company’s use, or review and negotiate another company’s version to your advantage prior to execution by your company.

A licensing agreement does not transfer title or convey ownership, in fact, once properly drafted, it should specifically disclaim the transference of title, it is only the limited right to use, and typically only under the specific circumstances and conditions set forth in the agreement itself, for the amount of money and duration of time detailed in the license.

A well drafted license by a knowledgeable attorney may, or may not, carry the right to sublicense the property to others, will state the length of time the license is valid, what territory the license applies to, detail any other rights or restrictions the parties have agreed to, enumerate any provisions regarding the acts of third-parties, and state how and when the license will be terminated. A non-exclusive licensing agreement enables the owner of the property to increase profits through multiple sales channels while still maintaining ownership.

Other factors to consider are whether or not, and under what circumstances, your property might be combined with other property, such as, for example, an embedded data base, what prohibited uses you need to stipulate in advance, any warranties you may want to make regarding your asset, any limitations of your liability should be carefully detailed, and whether or not your asset should be covered by a Services Agreement.

If you are considering letting another use your property, you may benefit by first consulting with a business attorney who can distinguish between the proper forms such allowances can take, as a lease, a license, or a rental. Even subparts thereof, such as Non-Disclosure Agreements, are not created equally and each document carries different considerations within.

Susan Larsen

Susan Larsen

Susan Larsen  has over 30 years of business law experience and has been a licensed attorney since 2002. She serves clients across the United States regarding legal issues including contracts, business law, technology, software licensing, healthcare and other aspects of business.