Software Resale License Agreement: What You Need To Know

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Software Resale License Agreement: What You Need To KnowWhat Is A Software Resale License?

A software resale license agreement authorizes the purchaser (licensee) to sell copies of the software to third parties under certain terms and conditions. It’s also referred to as a “resell license.”

What Kinds Of Resale Licenses Are Available?

Although the terms can vary quite a bit based on the unique needs of licensors and licensees, these are the three most common types of app resale licenses:

  • Resale License
  • Master Resale License
  • Private Label Resale License

1. Resale License

A software resale license usually authorizes the resale licensee to sell software copies to buyers who receive an end user license agreement (EULA) to use the software. These EULA purchasers cannot in turn legally sell copies of the application to others.

2. Master Resale License

A master resale license typically permits the master licensee to sell resale licenses (see above) to purchasers. However, the master licensee will not have the right to sell master resale rights to others.

3. Private Label Resale License

A private label resale licensee can either have resale or master resale rights depending upon the language used in the private label license. What’s unique about private label licensing is that the licensee can rebrand/rename the software when selling it to others. However, the licensee likely will not have the right to resell private label rights to others.

What Are The Biggest Risks Of Software Resale Licensing?

First, many licensors do not know what rights they have to re-sell. As a practical matter, you can’t sell what you don’t have in the first place. For example, if a resale licensee tries to sell private label master resale rights, the scope of the license exceeds what the licensee actually owns and can legitimately sell to others. Whether you’re the seller or buy or resale rights, it’s essential that you know what’s being sold and whether it legally exists as intellectual property rights that can be sold by the vendor.

Second, do-it-yourself entrepreneurs try to create their own software agreements without the assistance of an experienced app attorney. They may even “borrow” another software’s license and misuse it for their own application. This type of shortcut leads to contradictory licenses, angry buyers, and lawsuits.

Related Article: Software Development Agreement – 10 Legal Issues To Cover

Third, many software apps are developed with code that is licensed from third parties. The code licensed may be restricted in such a way as to prevent sale of private label or master resale rights to anyone.

How Do You Avoid These Resale Licensing Dangers?

To reduce the risk of making these type of costly mistakes when selling or buying a software resale license, it makes sense to retain an experienced software attorney to handle the legal aspects. To speak with Software Lawyer Mike Young about about your app resale licensing needs, set up a telephone consultation with him.

Business Alliance With Your Competitor: When Does It Make Sense?

By | Business Contracts, Business Lawyer | No Comments

business allianceAn AI Business Alliance

Amazon and Microsoft have announced that their personal digital assistants Alexa and Cortana will be able to communicate with each other in the near future. On its face, this type of business alliance seems counter-intuitive between technology competitors who each want their AI-driven voice systems to grab larger market share.

Why Microsoft and Amazon Are Cooperating

However, the deal makes sense today where it wouldn’t have just a couple years ago.

Why?

Neither Microsoft nor Amazon were successful in cracking the smartphone market. As a practical matter, Apple’s Siri and Google Now are the two dominant players in the mobile phone personal digital assistant arena with Samsung’s Bixby struggling for adoption outside of South Korea.

Although the tentacles of intelligent personal assistants spread into many areas, Microsoft’s Cortana is primarily focused on its business software. In contrast, Amazon’s Alexa is a driving force in consumer electronics, particularly so-called “smart homes.”

This means the competition between the two companies’ digital assistants is minimal and it benefits both of them because it adds value for their customers.

In other words, your competition can become your ally when it’s mutually beneficial to do so.

Related Article: How To Use Business Contracts To Prevent A Single Point Of Failure

How To Structure The Business Alliance

Your deal should be properly documented with a professionally prepared agreement that does the following:

  • Defines the scope of the alliance, including each party’s deliverables;
  • Specifically excludes aspects you do not want to be part of the deal;
  • Identifies the parties’ respective rights to intellectual property (e.g. ownership and licensing) and other assets involved;
  • Apportions any income and expenses;
  • States the duration of the alliance, including any renewal and early termination provisions; and
  • Provides a dispute resolution process if there’s a disagreement.

An experienced business lawyer can paper your alliance with the right legal documents so that you get what you want from the transaction.

Do You Make This Starbucks Mistake In Your Business Agreements?

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business agreementsAre your business agreements really protecting your interests? Here’s a cautionary tale to learn from.

Starbucks wanted to distribute its coffee in grocery stores. Because Kraft already had the distribution network in place for its food, Starbucks signed a contract to have Kraft handle its coffee too.

What was Starbucks’ mistake?

Since the contract was designed to last forever, Starbucks had to pay Kraft almost $3 billion to walk away from the deal.

Related Article – B2B Contracts – How To Avoid 4 Common Mistakes

Times change, people change, and so do your business needs. Plan accordingly.

That’s why the business agreements our firm prepares are designed to protect clients now and give them options in the future when circumstances change. To learn more, check out our Business Contract Legal Protection Package.

Can A Job Interview Form A Verbal Employment Agreement?

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Can A Job Interview Form A Verbal Employment Agreement?The Alleged Verbal Employment Agreement

A woman claims she was offered and accepted a position during an interview. In other words, there was a verbal employment agreement.

She gave notice at her two existing part-time jobs and quit both of them.

One week after the interview, she showed up to complete paperwork at what she thought was her new employer. However, she was told to go away, there was no job, and the company was not hiring.

Related Article – Business Contracts: Why You Should Avoid Email Deals

The Breach of Contract Lawsuit

Unable to get her old part-time jobs back, the woman sued the company for breach of an oral employment contract and related claims.

It remains to be seen who will win this dispute: the alleged employee or the company.

However, even if the company wins the lawsuit, the legal fees and expenses will likely cost more than a couple years of paying the woman a salary.

How To Minimize This Risk

How do you avoid this type of mess with job applicants?

First, have a policy of only making your job offers in writing, making the offer contingent upon signing an employment agreement, and don’t deviate from that policy.

Related Article – Does Your Business Lawyer Draft Contracts That Encourage Dispute Resolution Or Lawsuits?

Second, use a professionally prepared employment agreement that identifies the respective rights and responsibilities of the new employee and you as the employer. If you don’t have one you regularly use with your workers, check out our firm’s Business Contract Legal Protection Package.

Yes, it takes a little time to do this right. But it costs a lot less than a lawsuit because you cut corners in your hiring process.

Software Development: Who Really Owns A New App?

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Software Development: Who Really Owns A New App?Whether you’re a developer or you’ve contracted with one to create a new application, there’s often a big misunderstanding as to who owns the intellectual property at the end of a software development project.

If you paid to have the app developed, naturally you expect to own it. On the other hand, if you’re the developer, chances are you recycled some code on the current project and plan to use it in the future on other projects.

Open Source Code?

And then there’s the open source issue.

Was any of the code added per a GNU General Public license, Creative Commons license, or other open source license?

As you can see, there’s plenty of room for disagreement about who owns what intellectual property.

Related Article – Software Development Agreement : Who Really Owns The Intellectual Property?

Written Software Development Agreement

Of course, the solution to this problem is to having the project done per a comprehensive app development contract that covers ownership, licensing (including type of license), and any open source issues.

Related Article – Software Development Agreement: 10 Issues To Cover

Your written contract can provide not only for intellectual property issues but also prevent other problems from arising during all phases of development and testing.

Where Should You Get An App Development Contract?

By having your agreement professionally prepared by an experienced software lawyer, you’re likely to get what you want rather than leaving it to chance.

For example, our firm prepares a Software Development Legal Protection Package that’s designed to favor our client’s legal rights while offering a fair deal to the other side. Often the agreement is reused by our client on future app development projects with minimal changes.

Regardless of what you decide to do, whether you’re a developer or paying one, don’t just wing it when it comes to software intellectual property ownership, licensing, and related legal rights. That’s not only bad for business relationships but also an invitation to a lawsuit to sort things out after the fact.