Software Licensing Agreements
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Los Angeles Licensing Agreement Lawyer

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Wex Law often quotes the old adage, “An ounce of prevention is worth a pound of cure,” when advising clients on the need to be cautious and conservative when drafting and formalizing software licensing agreements.

When you have a distributor for your software or app, you should consult with a Wex Law attorney before drafting or formalizing a licensing agreement.

Well-crafted licensing agreements may take up to nine months to negotiate and finalize. Others may be simpler, perhaps only six pages or so in length. The drafting of licensing agreements requires a balanced understanding of business and law. An insightful attorney is prepared to help clients avoid giving away too much flexibility in a licensing agreement.

Software License

A software license is a legal instrument (usually by way of contract law, with or without printed material) governing the use or redistribution of software. Under United States copyright law all software is copyright protected, in source code as also object code form. The only exception is software in the public domain. A typical software license grants the licensee, typically an end-user, permission to use one or more copies of software in ways where such a use would otherwise potentially constitute copyright infringement of the software owner's exclusive rights under copyright law.

The software's license gives the user the right to use the software in the licensed environment, and in the case of free software licenses, also grants other rights such as the right to make copies.

Proprietary Software

Proprietary software can be divided into two types:

  • Freeware, which includes the category of "free trial" software or "freemium" software (in the past, the term shareware was often used for free trial/freemium software). As the name suggests, freeware can be used for free, although in the case of free trials or freemium software, this is sometimes only true for a limited period of time or with limited functionality.
  • Software available for a fee, often inaccurately termed "commercial software", which can only be legally used on purchase of a license.

Open source software, on the other hand, comes with a free software license, granting the recipient the rights to modify and redistribute the software.

Free and Open Software

FOSS stands for "Free and Open Source Software". There is no one universally agreed-upon definition of FOSS software and various groups maintain approved lists of licenses. The Open Source Initiative is one such organization keeping a list of open-source licenses. The Free Software Foundation maintains a list of what it considers free. FSF's free software and OSI's open-source licenses together are called FOSS licenses. Due to some seldom conflicting corner cases technically not synonymous, for all practical considerations they are identical and widely used interchangeably.

Free Software definition focuses on the user's unrestricted rights to use a program, to study and modify it, to copy it, and redistribute it for any purpose, which are considered by the FSF the four essential freedoms. The OSI's open-source criteria focuses on the availability of the source code and the advantages of an unrestricted and community driven development model. Yet, many FOSS licenses, like the Apache license, allow commercial use of FOSS components.

An open-source license is a type of license for computer software and other products that allows the source code, blueprint or design to be used, modified and/or shared under defined terms and conditions. This allows end users and commercial companies to review and modify the source code, blueprint or design for their own customization, curiosity or troubleshooting needs. Open-source licensed software is mostly available free of charge, though this does not necessarily have to be the case. Licenses which only permit non-commercial redistribution or modification of the source code for personal use only are generally not considered as open-source licenses. However, open-source licenses may have some restrictions, particularly regarding the expression of respect to the origin of software, such as a requirement to preserve the name of the authors and a copyright statement within the code, or a requirement to redistribute the licensed software only under the same license (as in a copyleft license). One popular set of open-source software licenses are those approved by the Open Source Initiative (OSI) based on their Open Source Definition (OSD).

Free Software Foundation

The Free Software Foundation has a related but distinct criteria for evaluating whether or not a license qualifies software as free software. Most free software licenses are also considered open-source software licenses. In the same way, the Debian project has its own criteria, the Debian Free Software Guidelines, on which the Open Source Definition is based. Open-source license criteria focuses on the availability of the source code and the ability to modify and share it, while free software licenses focuses on the user's freedom to use the program, to modify it, and to share it.

There are also shared source licenses which have some similarities with open source, such as the Microsoft Reciprocal License (MS-RL). They are mainly used by Microsoft and can range from extremely restrictive to comparable with free open-source software.

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