Big matters in the small print

ROBERTSON: Users should not only read terms of use agreements but also keep a copy of them for future reference.

End User Licence Agreements, euphemistically called EULAs, come in various forms.  It is important that corporations understand the terms they contain before using the software they acquire as each particular type can have its own particular attributes and drawbacks.

Proprietary software that is bought over the counter usually comes with what is called a "Shrink Wrap Licence".  The key matter in these licences is that you never own the copy of the software that is on your computer, you merely have a licence to use it.

Aside from this term, these licenses generally contain clauses that release the software company (and anyone else they may be affiliated with) from any liability for anything that happens as a result of the use of the software. They generally limit user numbers, totally prohibit alteration and ban you from commercially adapting their product for re-sale.

These licence agreements have been successfully challenged in some jurisdictions on a technicality of contractual law. However, as a corporation, you will not want to factor potential litigation into your software costs so compliance with the onerous terms is often the only option left available to you.

It is interesting to note that the restrictions placed in these licence agreements can often exceed terms of usual copyright law.  So the software's instruction manual can be read by anyone but only one person can use the software at any one time.

Software that is downloaded from the internet will require the clicking of a button indicating that you have read and agreed to the terms of use, which will have been set out on the screen and can usually also be printed.

I have seen this referred to as a "Click Wrap Licence" but this terms similarity to the phrase Shrink Wrap Licence may make it seem that the two contain similar terms. However, licences that are supplied with downloadable internet software can vary from the traditionally narrow proprietary software licence - sometimes substantially.

Open source" and "free software" are terms that are often used interchangeably, although they are in fact two similar products that are endorsed by different organisations.

The most striking legal difference between these licenses and a shrink wrap licence is that they permit you to own the copy of the software that you have on your computer.  The GNU General Public Licence, for example, is a popular software licence that allows end-users to adapt and modify the software but insists that the modified software is also made available under the same terms.

It is important to know this before you commence use of the product in question as your corporation may not want to share any software that you develop from the basis software package. You also need to know if the licence requires you to share not only the software but the source code that you have added to the basic package.

Another matter to consider is whether you are going to be using a combination of multiple open source/free software within your systems.  Often the licence terms are incompatible. Some may want to be credited in new systems while  others do not permit credits to be added.

There are times when I think that, if a software distributor just makes the "I Agree" button big enough on the page with the terms and conditions, it will always be clicked by end users without anyone reading a word. However, it is in the best interests of your corporation to ensure that everyone understands the importance of not only reading but retaining a copy of the licences for the software used in your business each day.

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