The Importance of Licensing and Contracts in the Software Industry

For the software professional, the industry can oftenyou transfer software to someone else, not only are
be a quagmire of software license agreements,you transferring a physical good in the form of a CD
copyright issues, and a whole range of legalor Internet download, there are ideas and even words
complexities that can make you wonder if a lawcreated which are owned by someone and can be
degree is necessary to develop software these days.protected by a software contract involving copyright.
However, that's why a software contract is soTaking this into account will help in resolving legal issues
important in helping to address some of thesewith software down the road.
complexities. While the international status of things likeThe range of software license agreements needs
software license agreements can make things morealso to be taken into consideration, as well as what
difficult than necessary, a contract can still be yourcan be done to them after the initial development is
best solution for getting all the terms on the table andcomplete. A license agreement can be unique to one
creating an environment of mutual trust betweenindividual or company. This is called custom or bespoke
buyer and seller.software. Getting a license agreement hammered out
In essence, software licensing exists in order to try andwith one entity can make things smoother, but is
protect those who designed the software andobviously less common. Standard license agreements
distribute it. Obviously, if you designed something, youaccompany software which you can buy off the shelf,
don't want one person to buy it and then make a copyso that every person who ends up using it ends up
for all their friends. Perhaps even more importantly, yousigning onto the same software license agreements.
don't want that person to make a buck selling what isThis leads to yet another distinction in this quagmire of
rightfully yours. Good software license agreementssoftware contract issues. Shrink-wrap end user
protect the interests of software developers whileagreements are those that users don't even get to
delivering high-end product to the end consumer. This issee until they open up the product. While common in
what a good software contract should be about.off-the-shelf software, they obviously limit the extent
Complicating the issue even further is the extent toto which the end user has any choice before making
which software can change hands from start to finish.purchase. Click-wrap end user agreements allow end
A developer can design the software. A distributorusers to essentially read the agreement before
can sell it at various different levels, which can lead toaccepting the product. Anyone who has downloaded
further distribution of the software, and so on. Eachsoftware on the Internet is familiar with these types of
step of the way creates the need to determine thesoftware license agreements.
status of software license agreements: who ownsBecause the world of software licensing is so
what, and when they do own it, the terms of use theypotentially complex, sorting out the terms before
accept with that ownership. A good software contractdistribution can only help to protect your interests and
takes all these factors into consideration.even your profitability. The last thing you want is for
Another issue to consider with respect to softwaresomeone else to profit from your hard work and
license agreements is copyright, which gets into thecreativity. It's why you should consider software
question of whether software is a good or a service,license agreements as an integral part of a good
and whether or not an intellectual property issoftware contract for your business.
associated with the software. In other words, when