License Agreements in IT/Computer Science

License Agreements in Computer Science.

• When customers buy software, they buy a copy and the right to use it in certain ways
• In certain ways means: there are different types of restrictions in place

      Single user license: allows the use of one copy on one machine for one user Example: computer game

• Server license: software can be run on a server providing it to any number (up to a maximum) of users on a certain LAN Example: database server
• Site license: covers all the users of a system Example: MyBirkbeck

Types of software licenses

1. Free software license– Also known as open source license, grants users of that software the rights to use for any purpose, modify and redistribute creative works and software.
2. Shrink-wrap license-Refers colloquially to any software license agreement which is enclosed within a software package and is inaccessible to the customer until after purchase. Typically, the license agreement is printed on paper included inside the boxed software.

Click-wrap license- this is a license that is     presented to the user on-screen during installation

Benefits of Software Licensing

• Allows you to legally distribute software within your organization as covered by the licensing agreement.
• Provides expert help and advice whenever you have a concern or query regarding your software licensing agreement.
• Preferential pricing and Volume discounts are available on most programs.
• Selected programs include technical support.
• Improves the manageability of your software assets.
• Volume licensing simplifies and streamlines all your software purchasing, re-ordering and accounting procedures.

Liability for Defective Software

• Almost all software contains some bugs
• You have probably seen statements such as “XYZ shall not be held liable for any damage  caused by the use of this software.”   Or   “. . . can only be held liable to a maximum of the  purchase price of this product.”
• Does this mean that suppliers are off the hook?

Not quite, enter the Unfair Contract Terms Act 1977

Unfair Contract Terms Act

• A supplier may only restrict liability if it’s reasonable to do so
• If a product causes death or personal injury, it’s not
• possible to limit the damages payable
• This refers to software as it does e.g. cars
• Assume for a moment that software for controlling air  traffic causes an accident in which people are killed and injured

     Any clause in the supplier contract restricting liability is null and void in this case

• Death and personal injury are quite extreme cases (most software is not that critical)
• In other cases it has to be reasonable for a supplier to limit liability
• What is reasonable in a particular case depends on the circumstances

Some disputes over reasonableness end up in court

Consumer Sales

• In the case of consumer sales (in contrast to business-to-business sales) a consumer has additional protection
• Sale of Goods Act 1979 and Supply of Goods and Services Act 1982 may also apply (and cannot be excluded)
• Sale of Goods Act states that a good must be fit for purpose

      It has never been established if software is a good

      General consensus: retail software or software sold under shrink-wrapped licenses are covered

• Tailor-made software, however, is not covered: Supply of Goods and Services Act applies

     This only requires that ‘reasonable skill and care’ has been used, which can be difficult to disprove in court