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Do You Make This Software Licensing Mistake?

Whether it’s part of a software development agreement or a standalone software license, it’s a common mistake to not address exclusivity. Or, even worse, cover the issue incorrectly.

Here’s a couple of examples.

Example 1 – Missing Language: A company contracts for a mobile app agreement to be developed. The software developer retains ownership of some code but licenses it to the client. However, the license doesn’t even mention exclusivity. The developer believes the license is non-exclusive, i.e. the code can be licensed to the third parties (even the client’s competitors) on similar projects. On the other hand, the client believes the license is exclusive.

Example 2 – Wrong Language: To save money, an entrepreneur “borrows” parts of software licenses he finds online and patches them together for his new software application as an end user license agreement (EULA). Unfortunately, the license mistakenly identifies the EULA as exclusive to each software customer who purchases it, i.e. each customer receives an exclusive license to use the software…but there’s more than one customer.

Needless to say, these common exclusivity errors in software agreements are a recipe for disaster (e.g., expensive lawsuits).

Don’t guess about the rights being licensed. When in doubt, seek the advice of an experienced software lawyer. If needed, he can prepare an app development agreement or standalone software license that meets your business requirements.


Mike Young, Esq.

Author Mike Young, Esq.

Mike Young has been practicing business and technology law since 1994 and is an angel investor in startups. He's been an entrepreneur since 1988. To get legal help from Attorney Young, click here now or call 214-546-4247 to schedule a phone consultation.

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