Software licensing : principles and practical strategies / Michael L. Rustad.
2010
KF3024.C6 R87 2010 (Map It)
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Author
Title
Software licensing : principles and practical strategies / Michael L. Rustad.
Published
Oxford ; New York : Oxford University Press, 2010.
Call Number
KF3024.C6 R87 2010
ISBN
9780195376197 (pbk. : alk. paper)
0195376196 (pbk. : alk. paper)
0195376196 (pbk. : alk. paper)
Description
xxii, 785 pages ; 24 cm
System Control No.
(OCoLC)587229707
Bibliography, etc. Note
Includes bibliographical references and index.
Record Appears in
Gift
Purchased from the income of the Silver Fund
Gift
The Arthur W. Diamond Law Library
Purchased from the income of the Silver Fund
Table of Contents
Preface
xiii
Acknowledgments
xvii
About the Author
xxi
SECTION I
The Anatomy of a Software License Agreement
1
ch. 1
Software Licensing from 10,000 Feet
3
I.
Software in Everyday Life
3
II.
History of Software in a Nutshell
8
III.
The Software Industry from 10,000 Feet
15
IV.
Why Hardware is Hard and Software is Soft
16
V.
Introduction to the Software License: Commodifying Information
29
VI.
The Contract/Intellectual Property Law Junction
31
VII.
First Sale Doctrine of Copyright Act
31
ch. 2
The Nuts and Bolts of Software Licenses
48
I.
The Qualities of Software Licenses
50
II.
Software Licenses and the Intellectual Property Borderland
50
III.
Introducing Suffolk Software Company, a Continuing Hypothetical
52
IV.
Software as Trade Secrets
53
V.
SSC's Business Strategy
58
VI.
Hypothetical Software Product: Bulletproof Computer Security Software
59
VII.
Who May Use the Software? Identification of the Parties
61
VIII.
Parties Clause: The Who Question?
63
IX.
Single-User License Definition
64
X.
Specifically Named Users
66
XI.
Pay-Per-View: Single Use
67
XII.
CPU License
68
XIII.
Single Project License
69
XIV.
Multiple Users
70
XV.
Subscription-Based Licensing
71
XVI.
Concurrent Users
72
XVII.
Network Licenses
74
XVIII.
Site License
75
XIX.
Enterprise Licenses
76
XX.
Service Bureaus
78
XXI.
Affililates
79
XXII.
Mergers and Acquisitions
79
XXIII.
Authorized Users
82
XXIV.
Change of Ownership of License Clause
84
XXV.
Exclusive Software Licenses
85
XXVI.
Semi-Exclusive Licenses
86
XXVII.
Non-Exclusive Licenses
87
XXVIII.
Assignment and Transfer of Software to Third Parties
89
XXIX.
Outsourcers' Right to Use Software
91
XXX.
Third Parties' Special Purpose Licenses
92
XXXI.
Preventive Law Punch Lists
92
XXXII.
Granting Clause Provision of Licensed Software
95
XXXIII.
Backup Copies
98
XXXIV.
Proprietary Rights
99
XXXV.
Right to Maintenance
100
XXXVI.
Right to Updates
101
XXXVII.
The Inclusion of Source Code
101
XXXVIII.
What is Not Included in Licensed Software
103
XXXIX.
Documentation Clause
104
XL.
Revisions to Documentation
106
XLI.
Software Services
107
XLII.
Drafting Grantbacks Clauses
108
XLIII.
Grantback Clauses
108
XLIV.
Protecting Intellectual Property
109
XLV.
Key Definitions for Software Licenses
110
XLVI.
Acceptance Testing Definition
112
XLVII.
Affiliate Definition
113
XLVIII.
Defect Definition
114
XLIX.
Derivative Works Definition
115
L.
Documentation Definition
116
LI.
Effective Date Definition
117
LII.
Enhancement Definition
118
LIII.
Intellectual Property Rights Definition
119
LIV.
Modification Definition
120
LV.
Non-Exclusive License Definition
122
LVI.
Object Code Definition
122
LVII.
Proprietary Rights Definition
123
LVIIII.
Support Services Clause
124
LIX.
New Releases
124
LX.
Major Release Clause
125
LXI.
Software Product Definition
127
LXII.
Source Code Definition
127
LXIII.
Specifications Definition
128
LXIV.
Third Party Definition
129
LXV.
Upgrades Definition
130
LXVI.
Restrictive Covenants & Conditions
140
LXVII.
Geographic and Territorial Restrictions
141
LXVIII.
Gray Market and Arbitrage
143
LXIX.
Litigation Risk
143
LXX.
Export Administration Regulations (EAR)
144
LXXI.
Foreign Corrupt Practices Act
147
LXXII.
The When Question: Effective Beginning and End Date
150
LXXIII.
Effective Date
150
LXXIV.
The Why Questions: Recitals of Purposes
156
LXXV.
Recitals: The Question of Why
157
ch. 3
Indemnification and Warranties: Concerns and Realities
160
I.
Introduction to Warranties
163
II.
Warranties of Authority to Enter License Agreement
164
III.
Infringement & Intellectual Property Indemnification Clause?
165
IV.
Express or Implied Indemnifiacation
167
V.
Implied Indemnification and Noninfringement
167
VI.
Notice and the Vendor's Duty to Defend
168
VII.
Asserting Control of the Litigation
169
VIII.
Disclaimability of Implied Indemnification
170
IX.
The Nuts and Bolts of Indemnification Agreements
172
X.
Indemnification Given by Licensee
173
XI.
Open Source and Indemnification
173
XII.
Alternative Noninfringing Code
175
XIII.
Warranty of Title to Intellectual Property
175
XIV.
Retention of Intellectual Property Rights
176
XV.
Intellectual Property Issues
177
XVI.
Protecting Trade Secrets in Software Licenses
181
XVII.
Uniform Trade Secrets Act
183
XVIII.
Nondisclosure Agreements
187
XIX.
Trademarks and Software Licenses
188
XX.
Express Warranties of Software Performance
190
XXI.
Express Warrantles
191
XXII.
How Software Are Created by the Vendor's Activities
192
XXIII.
Warranties for Service
216
XXIV.
Software Disclaimers and Limitations
217
ch. 4
Breach, Termination, and Remedies; A Field Guide
233
I.
Introduction
233
II.
Tender, Acceptance, Rejection, and Revocation
236
III.
Delivery
236
IV.
Acceptance Clause
238
V.
Acceptance in Software Contracts
239
VI.
Acceptance Testing
239
VII.
Licensee's Duty to Pay Royalties
243
VIII.
Notice of Software Defect
246
IX.
Risk of Loss, Performance, and Delivery Issues
247
X.
Licensor's Right to Cure
248
XI.
Error Correction or Cure
248
XII.
Hardware Requirements Clause
250
XIII.
Source Code Clause
251
XIV.
Software Performance Standards
251
XV.
Limited Remedies
254
XVI.
Limitation of Liability
256
XVII.
Excuses or Force Majeure
260
XVIII.
Forces of Force Majeure
260
XIX.
Dispute Resolution
262
XX.
Dispute Resolution Clause in B2B License Agreements
262
XXI.
Term and Termination of the License Agreement
264
XXII.
Term and Termination Clauses
265
XXIII.
Termination with and Without Cause
267
XXIV.
Licensor's Right to Terminate Clause
267
XXV.
Dispute Resolution
273
XXVI.
Construction and Interpretation
273
XXVII.
Obligations that Survive Termination
277
XXVIII.
Tort Causes of Action and Software Licensing
278
XXIX.
Negligent-Enablement Lawsuits
282
XXX.
Computer Malpractice
284
SECTION II
Specialized Software Agreements
289
ch. 5
Standard-Form Licenses: Yada Yada Yada
291
I.
Quickwrap Software Licensing
294
II.
Choice of Forum and Mandatory Arbitration Agreements
304
III.
The Future of Shrinkwrap
308
IV.
Shrinkwrap Punch List
308
V.
Browsewraps
314
VI.
Clickwraps or Clickstream
323
VII.
Clickwrap Punch List
327
VIII.
Installwraps
328
IX.
Drive-by Licensing
332
X.
Easy to Read Documents
333
XI.
Troublesome Terms in Consumer Software Licenses
333
XII.
Mandatory Consumer Protection Issues
341
XIII.
Magnuson-Moss Consumer Warranty Act
342
XIV.
The Scope of the Magnuson-Moss Act
342
XV.
The Path of the Magnuson-Moss Act
342
XVI.
Labeling of Consumer Warranties
344
ch. 6
Managing Open Source: The Key to Your Success
347
I.
Introduction
348
II.
Does Your Company FLOSS?
349
III.
An Open Source Eye-Opener
352
IV.
Types of Free and Open Source License Agreements
355
V.
Copyleft vs. Copyright
358
VI.
License, Contract, or Both?
362
VII.
OSI as Private Attorney General
371
VIII.
Risk Factors with Open Source
372
IX.
Open Source Anti-Patentistas, Trolls, and Patent Litigation
375
X.
The Future of Open Source Law
377
XI.
Minimizing Risk Factors for Intellectual Property Infringement Lawsuits
383
ch. 7
Software from Scratch; Development Agreements
393
I.
Why Software Development is a Boulevard of Broken Dreams
396
II.
Software Failure is Not an Option
400
III.
Software Project Managenment: An Overview
401
IV.
Methodologies for Reducing Software Failure
402
V.
Requests for Proposal (REP)
406
VI.
The Requests for Proposal and Statements of Interest
406
VII.
Why Software Development Agreement Are Necessary
409
VIII.
An Anatomy of the Software Development License Between SSC and Haute
410
IX.
Why are the Parties?
410
X.
What Software Product is Being Developed?
411
XI.
Why is the Software Being Developed: Recitals or Background
413
XII.
Definitions
415
XIII.
Affiliate
415
XIV.
Development Contracts: Sales or Service?
415
XV.
License Granting Clauses
417
XVI.
Exclusive, Semi-Exclusive, Non-Exclusive
418
XVII.
Sublicensing of Software Product
419
XVIII.
Subcontracting Clauses
420
XIX.
What's Your's is Mine: Assignments
420
XX.
The When Question: Term of the Development Software Agreement
421
XXI.
Customer to Licensor
422
XXII.
Term, Renewal, and Termination
424
XXIII.
Extension or Renewal Term
424
XXIV.
Fees and Payment Terms
424
XXV.
Pricing the Development Project
425
XXVI.
Milestone Payments
426
XXVII.
Updates and Modifications
435
XXVIII.
Warranty of Performance and Reliability
436
XXIX.
Express Warrenties Clause
436
XXX.
Express Warranties in Softwar Licenses
437
XXXI.
Express Warranties as to Software Performance
437
XXXII.
Services Provisons Unveiled
451
XXXIII.
Proprietar and Intellectual Proerty Issues
455
XXXIV.
Ownership of Customised Software
455
XXXV.
Preserving Proprietary Markings on Code and Documentation
456
XXXVI.
Preventive Law for Works Made for Hire
458
XXXVII.
Copyright Law for Works Made for Hire
458
XXXVIII.
Granback Clauses
460
XXXIX.
Noncompetition and Copyright Misuse
461
XL.
Reverse Engineering
461
XLI.
Mutual Confidentially Obligation
465
XLII.
Can You Keep a Trade Secret?
468
XLIII.
Nondisclosure Agreements
469
XLIV.
Patent Infringement
471
XLV.
Dueling Indemnification Clauses
473
XLVI.
Indemnification as a Matter of Law
474
XLVII.
Enhancements
475
XLVIII.
Anti-Reverse Engineering
476
XLIX.
Written Acceptance of the Licensed Work
480
L.
Reasons for Rejection
480
LI.
Commissioning Party's Rights to Cancel for Delay
481
LII.
Failure to Deliver Conforming Software
481
LIII.
Insolvency of Either Party
482
LIV.
Developer's Right to Cancel
482
LV.
Rejection and Commissioning Party's Duties Upon Rejection
482
LVI.
Developer's Right to Cure
485
LVII.
Cure as Error Correction Procedure
485
LVIII.
Liquidated Damages for the Developer's Failure to Correct Errors
488
LIX.
Limitations on Developer's Right to Cure
490
LX.
Cancellation Procedures
490
LXI.
Termination Without Cause
491
LXII.
Termination for Cause
491
LXIII.
Effective Date and Obligations in Termination
492
LXIV.
Miscellaneous Provisions
492
LXV.
Dispute Resolution
495
LXVI.
Choice of Law in Development Agreements
496
LXVII.
Injunctive Relief
497
LXVIII.
Waiver, Severability, Integration, and Amendment
498
LXIX.
Integration Clause
498
LXX.
Appendix A: Source Code Escrow Agreement
500
ch. 8
Source Code Escrow in Development Contracts
511
I.
The Case For and Against Software Escrow
512
II.
Recitals of Escrow Agreement
518
III.
Preliminary Clauses
520
IV.
Appointment of Escrow Agent
521
V.
ABC's Right to Cure
524
VI.
Green Mountain's Right to Make Copies
524
VII.
Limitation of Green Mountain's Liability
524
VIII.
Termination of the Software Escrow Agreement
525
IX.
Dispute Resolution
525
X.
Compliance With Orders of Court
525
XI.
Addresses of Licensor and Licensee for Purposes of Notice
526
XII.
Governing Law
526
XIII.
Integration Clauses
526
SECTION III
The Commercial Law of Software transactions
531
ch. 9
A Practitioner's Guide to the UCITA MInefield
534
I.
UCC Article 2 as a Template
535
II.
UCITA's Software Licensing Rules
538
III.
When UCITA Applies
539
IV.
Parties Choice of Law and UCITA
540
V.
The Path of Software Contracting Law
541
VI.
The Uniform Computer Information Transactions Act (UCITA)
545
VII.
Why Study UCITA?
545
VIII.
UCITA Definitions
547
IX.
UCITA's Key Definitions
547
X.
Scope of Application
548
XI.
Opting Out of UCITA
549
XII.
Hybrid Transactions
549
XIII.
UCITA Exclusions
550
XIV.
UCITA and Open Source
550
XV.
UCITA's Choice of Law Principles
551
XVI.
Fundamental Public Policies
553
XVII.
Terms Prohibiting Public Comment
554
XVIII.
Enforceability of Mass Market License Agreements
555
XIX.
Precontractual Disclosures in Terms of Service
557
XX.
Reverse Engineering for Interoperability
557
XXI.
Modification of the License Agreement
569
XXII.
Transfer of Interests and Rights
578
XXIII.
Acceptance
581
XXIV.
Software Performance Standards
583
XXV.
Mass Market Performance Standard
583
XXVI.
Revocation of Acceptance
586
XXVII.
Assurance of Performance and Anticipatory Repudiation
588
XXVIII.
Risk of Loss in License Transactions
588
XXIX.
Limitations on Contractual Modifications
593
XXX.
UCITA Litigation
599
ch. 10
The Principles of the Law of Software Contracts are you Ready?
605
I.
History of Software Contracting Law
607
II.
The Principles and the Digital Law Merchant
611
III.
Overview of the Chapters and Road Map
612
IV.
Part II: What Software Lawyers Need to know About the Principles of the Law of Software Contracts
614
ch. 11
Understanding Secured Credit and Bankruptcy Issues
636
I.
Software and Secured Transactions Under UCC Article 9
639
II.
Protecting Software Collateral
647
SECTION IV
International Issues in Software Transactions
691
ch. 12
Software Licensing Goes Global
694
I.
Protecting Intellectual Property Rights Globally
695
II.
Divergent Patent Regimes
698
III.
Divergent Copyright Laws and Enforcement
699
IV.
Moral Rights Clause
702
V.
CIG's Sphere of Application
709
VI.
CISG's Application to Business-to-Business Contracts
710
VII.
CISG's Application to Business-to-Business Computer Contracts
710
VIII.
CISG Divergences
711
IX.
Choice of Law Clauses
717
X.
European Consumer Protection
720
XI.
Unfair Contract Terms Directive
722
XII.
Consumer Sales Guarantees
724
XIII.
Distance Selling Directive
725
XIV.
Open Source Risks in Europe
742
XV.
Nightmares for Microsoft
742
XVI.
Cross-Border Privacy Issues
746
XVII.
Foreign Currency Risks
750
ch. 13
Avoiding Licensing Lost in Translation: Think Globally, Act Globally
753
I.
Know Your Jurisdiction: Practice Pointer / Anne Buckingham
755
II.
Latin America's High Context Culture
762
III.
European Cultural Faux Pas
765
Index
771