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Software Resale License Agreement: What You Need To Know

By Software Agreements, Software Lawyer

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.”

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What Kinds Of Resale Licenses Are Available?

If you’re unsure which type of resale software license agreement you need, here’s some information that may help. 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 types 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 your app resale licensing needs, set up a telephone consultation with him.

Private Labeling Profits For Your Small Business

By Business Contracts, Business Lawyer

private labelingAfter acquiring the online shoes and clothing retailer Zappos a few years ago, it should come as no surprise that Jeff Bezos’ Amazon is now expanding by private labeling of clothing.

According to KeyBanc Capital analyst Ed Yruma, there are at least seven private label Amazon brands for over 1,800 items.

Many people do not understand how far Amazon has expanded beyond being a mere online bookstore and retailer of miscellaneous goods.

In fact, Amazon is a logistics and distribution powerhouse backed by cutting edge software and commercial warehouse facilities that include robots.

Related Article: Licensing Agreements For Your Products And Business Systems

3 Important Private Labeling Lessons

Texas Internet Lawyer Mike Young says that small business owners can learn three important lessons from Amazon’s new private labeling venture.

1. If there is profit to be made in the distribution of products on a national or international scale, Amazon may become your private label competitor in addition to being a means to sell through the company’s online marketplace. This may adversely affect profit margins because Amazon can afford to run a new venture at a loss while driving the competition out of business.

2. Small business owners can profit by private labeling too. According to Attorney Young, entrepreneurs should find products and services to private label and sell in addition to their existing lines. “There are always opportunities to upsell and cross-sell products and services that complement what you’re already selling,” he said.

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

3. Private labeling should expand upon your existing business model rather than going off into unrelated areas, both as to what is being sold and the price points. If you sell electronics, private label power cords, batteries, chargers, and even extended warranties may be a natural fit because they logically flow from the original reason customers are buying from you in the first place. However, trying to sell a private label suit to a customer who came to your pet store to buy a dog collar makes no sense because there is no logical connection between the two items and the suit is at a significantly higher price point than basic pet accessories.

Related Article: Licensing Agreements – How To License Products In 3 Easy Steps

Naturally, if you expand your venture through private labeling you’ll want to protect yourself with written contracts with your private-label manufacturers and suppliers. According to Attorney Mike Young, an experienced business lawyer can prepare or review private label agreements to ensure you’re minimizing your legal risks as you create and grow your own brands.

Private Label Rights and the Law – Attorney Mike Young Audio Interview

By Internet Lawyer

Mike Ambrosio recently interviewed me for 45 minutes about how to protect yourself when buying, selling, and creating PLR content. If you don’t know the source of what you’ve bought, chances are you’re creating a legal mess. If you don’t know what you’ve bought, you can’t really determine how to use the content you’ve purchased…or whether you’ve got the right to resell it. And if you’re creating content, unless you know what you’re doing from a legal standpoint, you’re leaving money on the table with the rights you’re selling and/or inviting others to steal your content without providing you a way to get what you’re owed.

Here’s a link to the Ambrosio interview. It is in MP3 format to make it easy to download and listen to at your leisure.