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Software Licensing Guidelines

The licensing of unmodified package software with the associated "maintenance". It includes an agreement template

Source: ITANZ
Jun 24, 2002
Reprinted by the courtesy of Information Technology Association of New Zealand. Please note that the article may be slightly country-specific when it comes to legal issues.

This paper is one of a series of guidelines relating to the acquisition of information technology or services prepared by the Information Technology Association of New Zealand (ITANZ). These guidelines are intended to provide advice and assistance to organisations considering technology acquisition and to set out a basis for development of a formal agreement.

Due to the convergence and inter-linking of computing and telecommunications, this guideline series applies equally to both these technologies (collectively referred to as Information Technology or "IT" below). For example, PABXs are increasingly computer like software-controlled devices integrating voice with data at a userís workstation. A user will take voice calls via a headset linked to the PC. The voice call may initiate the retrieval and display of data relating to the caller from a sales database. Voice and data are no longer separate parts of a system.

In this paper we discuss the issues relating to the licensing of package software and associated "maintenance" agreements. Note that in the context of this document, maintenance means the rights to future updates of the software and to receive corrections for any faults in the operation of the software. It does not include the modification of software to suit a specific purchaser, which was dealt with in the Software Agreement Guidelines.

In this paper packaged "software" has been taken to mean application software marketed as a standard package which may also include the right to use database, report writer or other utility software. It is not intended to include hardware or operating systems.

There are several different situations where the software originally licensed may be added to or replaced by the supplier. Within these guidelines the following convention has been adopted where it has been necessary to distinguish between these situations:
  • "upgrade" refers to the right of the licensee to move to more users and/or a larger processor. It is more a change to the license than to the software itself.

  • "update" refers to a new release of the software by the supplier that includes additional features or functionality.

  • "fix" refers to an interim release of all or part of the software to overcome one or more problems being experienced by the licensee.
Note that in some cases, such as most PC software packages, the purchaser does not have the option of negotiating a licence agreement as the software is supplied with a pre-printed licence agreement that the purchaser accepts by opening the packet or installing the software. These guidelines cover the situation where the terms of the licence agreement can be negotiated.

The person or organisation granting the licence, called the licensor in this guide, may be the original developer and/or owner of the software but could equally well be a distributor who has been authorised to licence the software by its developer/owner.

A sample agreement that may be used as the basis for a contract is included with this guideline. As with the other such documents in the series, it must be noted that each agreement must be tailored to meet the requirements of a particular situation.

This paper seeks to provide practical guidance and advice on general principles but it is expected that organisations undertaking contract negotiation will also seek legal advice as required.
Download Attached Document(s): l24062-08.pdf (98.2 Kb)