Software license

A software license is a type of proprietary or gratiuitious license as well as a memorandum of contract between a producer and a user of computer software — sometimes called an End User License Agreement (EULA) — that specifies the perimeters of the permission granted by the owner to the user.

Table of contents

1 Introduction 1.1 Copyright 1.2 Product liability 1.3 Patent 1.4 Trade secret 1.5 Access to network services 1.6 Enforceability

Introduction

Software licenses are primarily written to deal with issues of copyright law and product liability law. Sometimes the license touches on issues of patent law, trade secret law, and laws pertaining to access to services. Software licenses generally fall into two categories, proprietary software licenses and free software licenses, depending on whether or not the user may modify and redistribute the software.

Software licenses tend to work in conjunction with software source code escrow agreements.

This article deals primarily with the licenses of proprietary software distributed in the United States of America.

See also: Uniform Computer Information Transactions Act, Open source licenses

Copyright

The amendment of the United States Code, Chapter 17, codified as 17 USC 117, permits the owner of a copy of a computer program to make copies necessary for the use or backup of a computer program. Until 117 was enacted, the very act of copying computer software from a storage device into temporary memory may have been prohibited in the United States. Typically, a proprietary software license will interpret 117 in plain English. For example: "You may use the software on one computer, and you may make an additional copy to be used only for backup or archival purposes. You may not otherwise copy, modify [...] the software." However, a growing number of such licenses are using a loophole in 117 that exploits a distinction between the "owner" of a copy and one who merely "possesses" a copy by creating a rental agreement in which the publisher of the software retains ownership of the medium on which the software is shipped.

Product liability

Most licenses for software sold at retail disclaim (as far as local laws permit) any warranty on the performance of the software and limit liability for any damages to the purchase price of the software.

Patent

Some countries, such as the United States, allow the patenting of a generic computer that runs a novel algorithm. A software license may grant limited non-exclusive rights under applicable patents that the publisher holds.

Trade secret

Some software licenses prohibit users from reverse engineering the software. Publishers claim to use this to protect their trade secrets embodied in the software, but some have a different motive, namely making it much more difficult to create software that interoperates with the licensed software. Other licenses prohibit users from releasing data on the performance of the software.

Access to network services

Some proprietary software acts as a client for a network application and requires users to give up rights in consideration for access to a service. For example, the license of versions 4.0 and later of the AOL Instant Messenger client software prohibit users who have installed the software from ever accessing the service through third-party software such as Trillian, Gaim, or Everybuddy.

Enforceability

Assuming that publishers follow the correct procedures (such as giving the user the right to return the software for a refund), EULA licenses are generally enforceable. See ProCD v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996)

Recently, publishers have begun to encrypt their software packages to make it impossible for a user to install the software without agreeing to the license or violating the Digital Millennium Copyright Act and foreign counterparts.