Source Code License Agreements
In layman’s terms, source code may be defined as “a text listing of commands to be compiled or assembled into an executable computer program.”
Source code lays down the ground work for programs and websites, setting the exact rules and specifications for the computer in a manner that can be translated into the machine’s language.
In developing software, the process of creating source code require a considerable investment in terms of creativity, energy, time, and expense. For this reason, the source code of propriety software are copyright protected and cannot be distributed by a third party without permission.
While software developers are known to be zealous about keeping their valuable source code as trade secrets, there are circumstances that would require sharing or disclosing code to promote new alliances which would greatly benefit their business interests.
A Source Code License Agreement allows you to give another party permission to use your intellectual property in a particular way, for a certain period of time, and at a specific price.
It also carries provisions on how you can transfer your source code to this other party safely and in accordance with existing proprietary and copyright laws that cover the use of information technology.
Gaining the most value from your licensing agreement
A Source Code License is “any contract or contractual provision (whether or not denominated a ‘license’) that prescribes the terms, conditions and restrictions applicable to the possession and use of Source Code by a licensee of the Software to whom Source Code of any Software has been released.”
Simply put, it is a legal and binding contract between a developer and a user that is related to a software component, like source code, allowing its use for commercial applications under specified and restricted conditions.
This license agreement allows the developer (who is also the intellectual property rights owner) to profit from their proprietary work by charging a significant premium from the user for the use of their product under restrictive licensing terms.
In today’s digital economy, there is an upsurge in business transactions that involve the acquisition of software through purchase or licensing agreements. And while there are fundamental components that go into such agreements, contracting parties need to be aware that frameworks and laws within the IT industry are constantly changing and evolving.
Like most contracts, drafting a software license agreement is likely to involve long hours of negotiation before reaching a common ground and agreeing to mutually beneficial terms that satisfy both legal and commercial considerations.
Obtaining legal guidance from an experienced law firm like Veritas Global can provide you with valuable insights and practical advice throughout the entire negotiation process — from drafting to enforcing your software license agreement — making sure that your rights are protected and that you gain the most value from your transaction.
We speak the language of technology
Laws that govern new technology are frequently shifting and often complex. Thus, it is important that your licensing agreements are customized to your unique needs, as well as to the particular relationship you wish to create by entering into such a legally binding agreement with another party.
Among the checklist of items that need to be incorporated in a software license agreement are the following:
- Description of Software Covered
- License Fees
- Mode and Schedule of Delivery
- Grant and Scope of License
- Terms and Conditions
- Restrictions to the Agreement
- Confidentiality and Data Protection
- Warranties and Disclaimers
- Limitations of Liability
- Indemnity and Related Remedies
- Assignment and Transfers
- Term and Termination of Agreement
Agreements that involve the licensing and purchase of proprietary software are not only governed by federal and state laws, they are also influenced by industry-specific conditions.
Having Veritas Global by your side as your strategic partner will enable you to better understand and navigate the regulatory environment that shapes the software industry and ensure that all your agreements are commercially sound and legally compliant.
Safeguard your rights and maximize your opportunities with a legal team that speaks the language of technology. Schedule a consultation with us today.