(iii) Software licences

Software licences. In order to be authorised to use software (in object code form), a user must obtain a licence. In software licences, there are several points of attention:

  • The scope of the licence must permit the licensee to use the software in accordance with its requirements (and match its needs and expected use).
  • The licence can be limited to named users, a number of concurrently active users, an enterprise, a type or method of use (e.g. light users or for a specific subtask within a greater package of functionalities), the frequency of use, an installation on one device, or to any other licence criteria.
  • If parts of the software depend on third-party software, such third-party software must be licensed as well (or at least, an adequate licence can be obtained on reasonable conditions). For example, certain business applications may not only require the installation of a certain server operating system but also the (licensed) availability of applications for data processing or spreadsheets.
  • The software is likely to be accompanied by manuals, documentation and other materials explaining the functionalities. At least formally, a copyright licence to use the manuals, documentation and materials should be granted as well.

Common software licence restrictions. To modify the software, software programmers must have access to the source code. To obtain source code, the object code could be ‘decompiled’ or ‘reverse-engineered’. If the software has a complex structure, reverse engineering is often impossible or at least rather burdensome and does not result in the original source code. Despite its complications or impossibilities, software licence agreements typically prohibit copying and reverse engineering. An example of a ‘licence restriction’ is:

Except as expressly permitted in Article [2], Licensee shall not, and shall not permit any third party to:

(a)      copy, publish or disseminate the Licensed Software;

(b)      modify, translate or otherwise create Derivative Works of any part of the Licensed Software;

(c)      create its own version of the Licensed Software;

(d)      assign, sub-licence, lease, rent, loan, transfer, disclose or otherwise make available the Licensed Software; or

(e)      reverse assemble, decompile, disassemble or otherwise attempt to circumvent any protection of the Licensed Software.

Implementation and consultation. Often, software requires more than just a licence for use. It is important to identify the additional services necessary to launch the software or to make the software effectively operational. If the software is not very user-friendly, making it work might require impactful change-management projects (changing an organisation’s traditional way of working and adopting the software). The services accompanying software are often called ‘consultancy’ and these may include software programming work. Embedding the software in the existing software environment of the licensee is commonly referred to as ‘integration’ or ‘implementation’. Finally, a software application might require monitoring by a system administrator, who will most likely need specific training.

The impact of consultation, implementation and training services is often underestimated. At the same time, whilst the software industry matures, the impact of introducing new software solutions should not be overestimated either. These services are often a hidden cost element, the effect of which can remain unidentified in a licence agreement.