Should Your Software License Be Exclusive?

By | Software Agreements, Software Lawyer | No Comments

Software LicenseWhen you’re licensing software to someone else, you’ll want to the license granted by your software agreement to be non-exclusive so that you can license it to others too.

Naturally, a premium price should be paid for exclusivity because it eliminates your ability to sell licenses to others in the market.

However, it does make sense sometimes to offer limited exclusivity when software licensing. For instance, you may provide a license that’s exclusive by a geographic area and/or within a particular industry niche. These limitations are designed to protect the licensee from a competitor purchasing the application.

Of course, you may want to charge a premium for this limited exclusivity too because it does restrict your ability to sell to others within that area or niche.

And you can offer a time-limited exclusivity as well.

For example, let’s say you have a dental practice software application that you want to license by geographic area to dentists. But you don’t want it to be perpetually exclusive.

One possible solution would be an end user license agreement (EULA) to one dental practice in a single zip code that’s exclusive for 24 months. After the two years have passed, the license is nonexclusive so that you can sell licenses to other dentists in the same zip code.

An experienced software lawyer can craft a bespoke licensing agreement that meets your exclusivity needs. If you want help with this from Software Lawyer Mike Young, the first step is to set up a phone consultation with him.

Software Development And Liability For Glitches

By | Software Agreements, Software Lawyer | No Comments

software developerWhen you’re developing software for others, you want to make sure that your liability exposure is limited when there are glitches. After all, you don’t want to be legally responsible if an application you’ve developed isn’t running 24/7.

This is particularly true in Software-as-a-Service (SaaS) situations where a third-party cloud platform you’re using has downtime that prevents your software from running at times.

So, how do you handle the issue?

The easiest way is a professionally prepared software agreement that will reduce or even eliminate your liability for bugs and other glitches that prevent continuous use of your app.

Now, it’s not just a legal liability issue. It’s also setting user expectations up front about software performance.

An experienced software lawyer can address this and other important issues in the software development contract you’ll use with your customer who retained you to create the app. Or, if you’re developing the app for your own company to sell directly to users (e.g., your own SaaS), the software attorney can craft an end user license agreement (EULA) that meets your unique needs.

To get help from Software Lawyer Mike Young, your first step is to book a phone consultation with him.

How Much Of Your Software Is Open Source Code?

By | Software Agreements, Software Lawyer | No Comments

software developerWhether you’ve got employees or independent contractors developing your software, it’s important to know exactly what they’re using to create your application. This is true whether you’ve got a desktop app, mobile app, or SaaS.

Why do you want to know this? Because chances are you don’t own what you think you own, i.e., it’s not entirely your application.

Now it’s standard practice for software developers to recycle code they’ve used on other projects. Even more common is to legally “borrow” from open source code libraries rather than reinventing the wheel when it comes to your project.

Is that wrong to do? No, if the open source licenses are followed by the developer. However, that creates a licensor-licensee relationship when it comes to your application. It does not give you ownership of the licensed code.

In fact, if you don’t know what you own, don’t be surprised to find out 75% of your application is owned by someone else and only 25% of it is custom code tweaking it to meet your particular needs.

This can affect the value of your application, particularly if it’s easy for a competitor to clone what you’ve got using the same open source code.

That doesn’t mean open source licensing is bad. However, it’s just one of the many reasons you want to know exactly what you’re getting when it comes to software development for your business.

An experienced software lawyer can put together the right agreements for your development team that protects your rights when it comes to application ownership and licensing. Of course, this includes limiting what your developers can do with what they’ve created when it comes to projects for third parties.

Software Development, Subcontractors, and Application Ownership

By | Software Agreements, Software Lawyer | No Comments

software development agreementWhen you’re developing software for a client and use subcontractors, who owns the application?

Now the answer to that question isn’t a simple one unless you’ve got the right agreements in place with both your client and the subcontractors.

Because it’s common for the client, the software developer, and the subcontractors to all believe that they own the code. And the right to recycle that code on other projects, sell it to others, etc.

Yet if your agreements don’t clearly state who owns what, it can quickly become a mess that leads to infringement lawsuits that can bankrupt you even if you are the actual owner.

Ideally, each agreement will clearly state who is the copyright owner and if the other party is a licensee, the scope of the license that determines what can and cannot be done with the code (e.g., cannot be sold to a competitor).

What if you developed an application for a client using subcontractors but didn’t address intellectual property ownership before work began?

First, deal with the subcontractors. Most will assign over their rights to the work if you’ve paid them. A few will ask for a limited license to reuse parts of the code.

Second, talk with the client and reach an agreement in writing on code ownership and any licensing to the non-owner.

Regardless of where you’re at in the software development process, an experienced software lawyer can help you with the right legal paperwork that protects you on this project. And he can create agreements you can use in the future with clients and subcontractors that prevent IP ownership from becoming an issue down the road.

 

Where Should Software Development Disputes Be Resolved?

By | Software Agreements, Software Lawyer | No Comments

Whether you’re a software developer or the client who’s paying for an app to be created, it’s important to put into place a dispute resolution plan that protects you if things go wrong.

Now if the issue is intellectual property (IP) infringment, you’ll want the right to head to court and get injunctive relief to minimize the damage caused by the infringement.

However most disputes between developer and client are about performance issues instead of IP infringement. For these issues, ideally, you’ll want to have an alternative dispute resolution (ADR) plan in place before work begins.

If you’re based in the United States, an ADR plan might include:

1. Informal resolution between the parties;

2. Mediation (online or in person); and

3. Binding arbitration using the American Arbitration Association or JAMS.

Of course, choice of law and the location ADR takes place are important factors too, particularly if the developer and client are based in different cities, states, or countries.

Naturally, dispute resolution and other important legal issues can be properly addressed by an experienced software lawyer who prepares your software development agreement.