Issues in Software Licensing Agreements & Negotiations
By Peter John Frazza, Esquire
At a recent two-day software licensing seminar that I con-ducted, numerous issues were discussed in great detail. At the end of the seminar, attendees asked me to prepare a “Top 1O List” for their future reference. It is thus my great pleasure to present Peter Frazza’s “Unabashed Top 10 Software Licensing Issues List.”
- 1. The “Licensee” must be defined very carefully.
- 2. The permissible Scope of Use provision must be broad enough to cover all aspects of how your company transacts business in its ordinary course.
- 3. Insist that Addenda not be used. If modifications must be made to the base agreement (and I strongly sug-gest that all companies use their own form software license agreement) then incorporate those changes into the base agreement.
- 4. Procure all necessary Representa-tions and Warranties.
- 5. Make sure that all Maintenance and Support obligations of the Licensor are spelled out in detail in the soft-ware license agreement.
- 6. Make sure that the Indemnification provision is broad enough to provide your company with complete indem-nification for all intellectual property claims and all claims relating to bod-ily injury.
- 7. Make sure that the Limitation of Li-ability provision is not applicable to (a) breaches of the Confidentiality provision, (b) breaches of the repre-sentation that the software has no disabling device, and (c) the Indemnification provision.
- 8. Include an Internal Dis-pute Resolution provision which must be utilized before either party can commence and arbitra-tion or litigation proce-dure.
9. Make sure that the software license agreement is very clear as to how and when such agreement can be terminated.
- 10. Include as many definitions for key terms as possible. If you thoroughly address and discuss the above ten issues, they will necessar-ily lead to the other important issues that also need to be addressed.
Peter John Frazza is recognized as one of the top software licensing attorneys in the country and has spent more than 20 years representing companies in lawsuits involving software, copyright, intellectual property and license agreement issues
Budd Larner is a law firm of 100 attorneys with offices in Short Hills, NJ; Cherry Hill, NJ; New York, NY; Atlanta, GA; and Philadelphia, PA. Founded in 1934, the firm provides a full range of legal services to a diverse group of clients, both domestic and foreign.
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