A software license is a legal instrument governing the use or redistribution of software. Under
United States copyright law all software is copyright protected, except material in the
public domain. A typical software license grants 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.
In addition to granting rights and imposing restrictions on the use of software, software
licenses typically contain provisions which allocate liability and responsibility between
the parties entering into the license agreement. In enterprise and commercial software transactions
these terms, such as limitations of liability, warranties and warranty disclaimers, and indemnity
if the software infringes intellectual property rights of others.
Software licenses can generally be fit into the following categories: proprietary licenses
and free and open source. The significant feature that distinguishes them are the terms
which the end-user's might further distribute or copy the software.
Software licenses and copyright law In the United States, Section 117 of the Copyright
Act gives the owner of a particular copy of software the explicit right to use the software
with a computer, even if use of the software with a computer requires the making of incidental
copies or adaptations. Therefore, the owner of a copy of computer software is legally
entitled to use that copy of software. Hence, if the end-user of software is the owner of
the respective copy, then the end-user may legally use the software without a license
from the software publisher. As many proprietary "licenses" only enumerate
the rights that the user already has under 17 U.S.C. § 117, and yet proclaim to take
rights away from the user, these contracts may lack consideration. Proprietary software
licenses often proclaim to give software publishers more control over the way their software is
used by keeping ownership of each copy of software with the software publisher. By doing
so, Section 117 does not apply to the end-user and the software publisher may then compel
the end-user to accept all of the terms of the license agreement, many of which may be
more restrictive than copyright law alone. The form of the relationship determines if
it is a lease or a purchase, for example UMG v. Augusto or Vernor v. Autodesk, Inc.
Proprietary software licenses
The hallmark of proprietary software licenses is that the software publisher grants the
use of one or more copies of software under the end-user license agreement, but ownership
of those copies remains with the software publisher. This feature of proprietary software
licenses means that certain rights regarding the software are reserved by the software
publisher. Therefore, it is typical of EULAs to include terms which define the uses of
the software, such as the number of installations allowed or the terms of distribution.
The most significant effect of this form of licensing is that, if ownership of the software
remains with the software publisher, then the end-user must accept the software license.
In other words, without acceptance of the license, the end-user may not use the software
at all. One example of such a proprietary software license is the license for Microsoft
Windows. As is usually the case with proprietary software licenses, this license contains an
extensive list of activities which are restricted, such as: reverse engineering, simultaneous
use of the software by multiple users, and publication of benchmarks or performance tests.
The most common licensing models is per single user or per user in the appropriate volume
discount level, while some manufacturers accumulate existing licenses. These open volume license
programs are typically called Open License Program, Transactional License Program, Volume
License Program etc. and are contrary to the Contractual License Program, where the customer
commits to purchase a certain amount of licenses over a fixed period. Licensing per concurrent/floating
user also occurs, where all users in a network have access to the program, but only a specific
number at the same time. Another license model is licensing per dongle which allows the owner
of the dongle to use the program on any computer. Licensing per server, CPU or points, regardless
the number of users, is common practice as well as Site or Company Licenses. Sometimes
one can choose between perpetual and annual license. For perpetual licenses one year of
maintenance is often required, but maintenance renewals are discounted. For annual licenses,
there is no Renewal, a new license must be purchased after expiration. Licensing can
be Host/Client, Mailbox, IP-Address, Domain etc., depending on how the program is used.
Additional users are inter alia licensed per Extension Pack, which includes the Base Pack.
Some programs are modular, so one will have to buy a base product before they can use
other modules. Software licensing also includes maintenance.
This, usually with a term of one year, is either included or optional, but must often
be bought with the software. The maintenance agreement contains Minor Updates, sometimes
Major Updates and is called e.g. Update Insurance, Upgrade Assurance. For a Major Update the
customer has to buy an Upgrade, if not included in the maintenance. For a maintenance renewal
some manufacturers charge a Reinstatement Fee retroactively per month, in case the current
maintenance has expired. Maintenance normally doesn't include technical support. Here one
can differentiate between e-mail and tel. support, also availability and reaction time
can play a role. This is commonly named Gold, Silver and Bronze Support. Support is also
licensed per incident as Incident Pack. Many manufacturers offer special conditions
for schools and government agencies. Migration from another product, even from a different
manufacturer is offered. Free and open-source software licenses
Free and open-source licenses generally fall under two categories: Those with the aim to
have minimal requirements about how the software can be redistributed, and those that aim to
preserve the freedoms that are given to the users by ensuring that all subsequent users
receives those rights. An example of a copyleft free software license
is the GNU General Public License. This license is aimed at giving all user unlimited freedom
to use, study, and privately modify the software, and if the user adheres to the terms and conditions
of GPL, freedom to redistribute the software or any modifications to it. For instance,
any modifications made and redistributed by the end-user must include the source code
for these, and the license of any derivative work must not put any additional restrictions
beyond what GPL allows. Examples of permissive free software licenses
are the BSD license and the MIT license, which give unlimited permission to use, study, and
privately modify the software, and includes only minimal requirements on redistribution.
This gives a user the permission to take the code and use it as part of closed-source software
or software released under a proprietary software license.
Free Software Foundation, the group that maintains The Free Software Definition, maintains a
non-exhaustive list of free software licenses. The list distinguishes between free software
licenses that are compatible or incompatible with the FSF license of choice, the GNU General
Public License, which is a copyleft license. The list also contains licenses which the
FSF considers non-free for various reasons, but which are sometimes mistaken as being
free.
See also Comparison of free software licenses
Copy protection Copyright licenses
Digital rights management Dual-licensing
License-free software License manager
Product activation Product key
Rights Expression Language Software metering
References
External links "Relationships between different types of
licenses Free and Non-Free". Free Software Foundation
"Various Licenses and Comments about Them". Free Software Foundation.
Software licensing for a small ISV and the issue of open source by Dan Bricklin
Definition of software licensing at the Wayback Machine at knol.google.de
Why product activation for software is becoming widespread at the Wayback Machine at knol.google.com
The Challenges of Licensing The Knowledge Net of Software Licensing
Open Source and Freeware best practices