Software Agreement: Can You Be Sued For Using An Old Software Version?

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software agreement licenseUsers of Adobe’s Creative Cloud were apparently told this spring that they couldn’t use older versions of the software. To do so, would violate the end user license agreements they agreed to when purchasing a license to use this software-as-a-service (SaaS).

If Adobe is correct, that leaves the users with two options:

(1) stop using the older version of Creative Cloud; or

(2) upgrading to a new SaaS version.

Of course, when one upgrades software to a newer version, there may be an upgrade fee for the new license.

When you sell or buy a software application license, it’s important to understand what’s being sold (and what’s excluded) from the transaction. Be sure to read the fine print of the application’s license agreement.

If it’s your app that’s being developed or sold, a good software attorney can prepare a software agreement that’s right for you. If you need help, schedule a phone consultation with Software Lawyer Mike Young.

Mobile App Development Contract: Why It’s Important To Have One

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mobile app development contract - wireframingThe $300 million lawsuit by a mobile app developer against Kim Kardashian is an excellent example of why you should have a written mobile app development contract in place for your protection before any work begins (including wireframing). This is true whether you’re the app developer or the business owner who hires the developer for the project.

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

And don’t try to wing it with a do-it-yourself contract or amateur app development work orders because you’ll miss something or include provisions that will hurt you in a dispute. Retain an experienced software lawyer to prepare an agreement that’s designed to protect your legal rights.

Related Resource: Software Development Legal Protection

Where To Get A Mobile App Development Contract

If you need help with an app development contract or other software agreements (e.g. software licenses), you’ll want to book a phone consultation with Software Lawyer Mike Young.

 

4 Things You Should Know About SaaS Agreements

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SaaS agreements - software as a service contractsCloud computing has taken over the IT industry. Within the next few years, most business workloads will be hosted in the cloud per SaaS agreements between providers and customers.

As a business owner, it is likely you already utilize some apps that are considered “software as a service” (SaaS). It is worthwhile to know what to look for as you negotiate and enter into SaaS agreements so that you can give your business every advantage in the industry.

You may be wondering, “will I even have any chance to negotiate these contracts or am I just destined to sign whatever the SaaS providers require?”

As an experienced software lawyer, my answer is an emphatic, “Yes! You can (and should) negotiate better SaaS Agreements!”

Read on to learn the ins-and-outs of SaaS contracts, including how to ensure you’re getting the best possible terms for your business.

1. What are the Pros and Cons of Software as a Service?

The key difference between SaaS programs is that SaaS apps are stored on a cloud platform and not hosted on a local server, desktop computer, or tablet at your place of business.

Updates and upgrades are usually included in SaaS subscriptions (and more affordable than paying a trained technician to come to your office and make changes to your software internally).

SaaS providers also typically bear the brunt of disaster recovery. Because they host the software, they may be responsible for data breaches or losses (unless disclaimed in your SaaS contract).

On the other hand, it is a little easier to extract data from an internal server or desktop computer’s hard drive if you decide to make the switch to a different software provider.

Also, internally-hosted software is usually more customizable to your needs. SaaS subscribers have to rely on the service, uptime, and bandwidth of the provider (which could be great or poor, depending on the provider). Ultimately, SaaS programs are more affordable, but you will give up some degree of control over your business’s software by utilizing this type of service.

2. Is SaaS intellectual property? Who owns what?

Since SaaS is becoming ubiquitous in the software industry, the agreements have grown as varied and diverse as the software itself. SaaS agreements always involve a licensing of the software (granting you the right to use someone else’s intellectual property), but the terms vary widely from provider to provider.

Many SaaS providers offer a subscription (paid monthly or annually) and your access to the software terminates when your subscription ends. You may also pay a single license fee for permanent access to the software as long as you wan to use it. There are also hybrid SaaS agreements, which include one-time licenses for selected products and a subscription for others. If you are considering a hybrid SaaS contract, make sure your agreement clearly identifies which products or services are subject to which terms (license or subscription) to prevent confusion.

Naturally, SaaS providers want to maintain ownership over the code that makes the software function, but you’ll want to make sure you retain ownership over data you add to the software in the event you want to transition to a different service provider down the road.

3. Will You Have Any Bargaining Power?

Yes! Whether you are negotiating a SaaS agreement with a software provider or your business will be providing SaaS to other subscribers, you will have room to tailor contracts that can protect your company.

These agreements are not one-size-fits all and will vary greatly depending on the needs of both providers and users. Of course, the larger your business, the more negotiating power you’ll have for customizing the SaaS contract.

Providers may want to negotiate contracts to stay competitive and keep large enterprise clients satisfied, while users have an interest in negotiating contracts that are most customized to their specific businesses.

Even software as a service providers will likely find themselves in a position where they need to utilize SaaS from another provider. No matter what position you find yourself in, you will need to know the basics so that you can negotiate software as a service contracts that meet your needs.

4. What Should You Look for in a SaaS Agreement?

Your SaaS agreement should detail all costs, including whether payments will be upfront, monthly or by some other method. You will also want to cover whether updates will be included, and if they will come at an additional cost.

Determine whether there will be any restrictions on the software, such as how many people will be permitted to use the SaaS, whether any user actions will invalidate warranty, or there are any actions that could lead to termination of the contract (like copyright infringement, for instance).

Last, but not least, don’t forget to address ownership of intellectual property as previously discussed.

Bottom line: you do not have to let tech giants and SaaS providers dictate the terms of your SaaS agreements. Getting informed is the first step to making savvy software choices for your business.

If you would like more assistance or customized advise, speak with an experienced software lawyer who can prepare the right SaaS agreements for your unique needs.

4 Keys To Successful Software Development Agreements

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software development agreementsWhether you are a software developer, or your business outsources app development, you’ll need software development agreements to protect your legal interests. Many business owners think they can simply copy and paste agreements they find online, but this is a recipe for disaster.

Why is it risky to “borrow” a Software Development Agreement Template?

Borrowing an agreement drafted by and for another company can lead to serious legal repercussions. App development contracts are considered intellectual property and can only be used under license from the copyright owner (usually the lawyer or firm who drafted the contract). If you have not paid for the right to use the agreement (or worse, if the legal form generator you are using doesn’t explicitly own the forms), you could face hundreds of thousands in legal damages.

Also, legal agreements are unique and will vary depending on your (and the other party’s) needs. Even if you download a template with legal permission, you could unintentionally omit clauses which you require or subject yourself to unnecessary obligations.

There are four essential things you should know before creating a software development contract:

  1. the standard items you need to include in your agreement;
  2. how to handle ownership of intellectual property;
  3. when you’ll need additional contracts; and
  4. how you will handle maintenance of the app after development.

1. Standard Items You Must Include in Your Software Development Contract

While your contract should be tailored to your unique situation, there are some common issues you’ll want to address in any Software Development Agreement. Be sure to discuss the scope of work you will be performing for the agreed-upon cost and how you will handle change orders. You also want to outline key milestones and deliverables.

If the client is not satisfied with a deliverable, will you agree to any edits? If so, describe how much time your client has to request a change and how many changes you will make.

If you plan on outsourcing work to third-party coders or programmers, make that clear in your contract.

Also, detail payment expectations and any warranties you are willing to provide for your client.

2. Intellectual Property Ownership: How to Balance Competing Interests

One of the most important aspects of your contract will be defining ownership of the intellectual property you are creating. Consider whether you or the client will maintain ownership rights or if you will be granting a license to use your software.

Software developers often want to keep ownership of the code used to create a client’s software so they can recycle the code for future projects. Clients, on the other hand, often want to own the intellectual property subject to a software development agreement to prevent the developer from re-selling the software to potential competitors.

Fortunately, there are creative ways to balance these two competing interests by creating a software license with non-competition provisions. This enables the developer to retain ownership over intellectual property while also restricting the purposes for which the code can be recycled.

3. If You Are Developing Multiple Apps for a Client, You Need a Master Service Agreement

A Software Development Contract is typically utilized for a single project only. However, if you are anticipating an ongoing relationship and multiple projects for a single client you will also want to execute a Master Services Agreement.

This Agreement should outline the essential terms that apply to all apps being developed and additional agreements for each project should be attached as “work orders.”

Related Article: How To Modify A Software Development Agreement

With each work order, you can reference the key terms used in the Master Agreement or you can make exceptions to certain provisions based on the unique needs of each project.

4. You Need to Plan for Maintenance, Support, and Upgrades

Virtually any form of software application will require bug fixes and upgrades to keep the program up-to-date and functioning properly. A well-written software development agreement will detail who is responsible for maintenance of the application, additional costs involved (if any), and how to request support for bugs and glitches.

Developers who maintain ownership over the intellectual property and merely license the software to the client often take responsibility for ongoing maintenance, support, and upgrades: but it is imperative that these details are clearly outlined in your contract. Ironing out all of the details of your agreement will go a long way toward preventing disputes, ensuring a good working relationship, and keeping clients satisfied.

Software development agreements are highly detailed, unique legal documents. It is wise to seek the counsel of an experienced software attorney to prepare development contract templates that you can use repeatedly while still protecting your best interests.

Our software attorneys prepare app development agreements on a flat fee basis. To learn more, check out our Software Development Legal Protection Package.

Software Licensing Agreements

By | Business Law Book, Software Agreements, Software Lawyer | No Comments
software licensing handbook

The book “Software Licensing Agreements – What You Need To Know About Software Licenses” by Software Lawyer Mike Young has just been released.

How The Software Licensing Agreements Guide Helps You

Part of the Quick Legal Guides series, this new guide reveals…

  • What is a software license (the answer may surprise you).
  • How to define the scope of a license to get what you want.
  • 11 common software licenses (and when you should use them).
  • What is open source licensing.
  • 7 popular open source software licenses.
  • One license you should never use for open source software.
  • What is public domain software.
  • How to create software licenses that are right for you.
  • And why you should never “borrow” a license.

Plus, there’s a Quick Start Checklist and a Resources section for you to take practical steps right away to get the software license(s) you want…whether you’re licensing your software to others to getting a license to use an application.

Where Can You Get This Software Licenses Guide?

This business law book is available at Amazon.com in print as a paperback and in Kindle electronic format. Claim your copy today.