Software License
Take the complexity of technology and stir in the jargon of the legal system and what do you get? Software licenses! Software licensing is a complicated topic, but knowing a little about software licensing can help you make sense of all that fine print.
What Is a Software License?
A software license is an agreement between you and the owner of a software program that allows you to do certain things that would otherwise be an infringement of copyright law. The software license usually answers questions such as
- Where and how and how often can you install the program?
- Can you copy, modify, or redistribute it?
- Can you look at the underlying source code?
The price of the software and the licensing fees, if any, is sometimes discussed in the license agreement, but usually it’s described elsewhere.
Key Points About Software Licensing
We’ll cover these terms in greater detail below, but these are some basic things you should know about software licenses.
- Know what “free” means. In the context of software licensing, free doesn’t refer to price. It means free in the sense of “free speech” and refers to the rights and restrictions imposed on using software.
- Free or open-source software has fewer restrictions. Glossing over a lot of nuances, if a program is released under a free software license or an open-source license, you generally don’t have to ask anyone’s permission to use it. You can also copy and redistribute the software to your heart’s content.
- Proprietary software has more restrictions. If the software is proprietary or closed-source, there will usually be significant restrictions in the license that limit the ways you can use the software.
- Read the End User License Agreement (EULA). It’s always a good idea to review these agreements, but it’s especially important to do so for one-off or small software purchases from less well-known companies. The EULA spells out what you can and can’t do with software. It covers everything from how many copies you can install to what the software company can do with your data and what additional software the company can install on your computer.
- Pay attention to how long the license lasts. A perpetual license doesn’t expire. Once you purchase it, you have rights to use the software for as long as you like. A term license expires after a specified period of time (often one year) and must be periodically renewed.
- Look into volume licenses or site licenses whenever possible. These arrangements offer lower prices and often make administration tasks easier.
- You may get secondary or home use rights. You may be able to install copies of the software on more than one computer, with certain restrictions. For example, you may be able to install a copy of the software on a home or portable computer, as long as it is not used at the same time as the software is used on your primary computer. Some Adobe products include home use rights, as do some Microsoft Office products (see Office Suites for Home Use). The specific rights, if any, will be spelled out in the EULA.
- Keep your documentation. You should document the product name and version number. Keep all installation disks, original manuals, and other documentation. Where applicable, also document the product serial number (or SKU), proof of purchase, and license key.
How Does Software Licensing Work?
New users of a software will normally enter into an end-user license agreement (EULA) that constitutes a legal definition of the relationship between the licensor (provider) and licensee (user or business).
The EULA is a contract that establishes the rights of the purchaser for installing and using the software. Every EULA contains a clause that stipulates when its conditions are activated by an end user. This may be the moment the user opens the product packaging or, for example, when the user clicks on a button agreeing to accept the EULA’s terms to access it.
Cloud-based applications such as Software as a Service (SaaS) will often include license details in EULAs including:
- Monthly or annual charges per user
- Duration of the agreement
- Terms of cancellation of the agreement
- Recovery of any charges if canceled during the agreement
An additional use of software licensing is in cases where a software developer or firm grants authority for selling or distributing the software under the second party’s brand. The developer retains ownership, but the re-branding company is permitted to resell the software product. This method of licensing is called “white labeling.”
Types of Software Licenses
There are numerous sorts of software licenses, and disobedience with a license can result in serious consequences. Mainly, 5 software license categories are used to cover different kinds of software and various business arrangements.
1. Public Domain License
When software is defined as being in the public domain, anyone is free to use and modify the software without restrictions. This is a “permissive” license that allows adopting the code into applications or projects and reusing the software as desired.
For many reasons, businesses must exercise caution when adopting public domain software in projects or other important applications:
- Public domain software may not always adhere to best coding practices or may not be up to standards of secure software that the application requires.
- Software that does not fall under specific licensing terms is not always public domain code. Be sure the software is truly public domain before copying, reusing, or distributing it.
2. GNU/LGPL — GNU Lesser General Public License (LGPL)
Under an LGPL license, developers have rights to link to open source libraries within their own software. Resulting code can be licensed under any other type of license — even proprietary — when projects are compiled or linked to include an LGPL-licensed library.
The caveat is that if any part of the library is copied into the code or modified, the terms of the original LGPL license will apply to the developed code that used the library.
3. Permissive
This type of license is one of the most common and popular among open-source software licenses. Under a permissive license — also referred to as “Apache” or “BSD style” — there are few restrictions or requirements for the distribution or modifications of the software. Another variation of a permissive software license is the “MIT” license.
Variants in permissive licenses include differences in requirements for preserving license notices and copyrights for the software, as well as how the software may be used (commercial or private), trademark requirements, and other stipulations.
4. Copyleft
This license’s terms are restrictive — known as reciprocal licenses. Under the terms of a copyleft license, the licensed code may be modified or distributed as part of a software project if the new code is distributed under the same software license.
This means that if the code included in the software product was specified to be for “personal use only,” the new product being distributed must carry that same designation/restriction.
Since the original software included with the new project allowed modifications and distribution, this may not be the best license for software developers because the resulting code must also carry the copyleft license type — including the availability of the source code.
5. Proprietary
These software licenses make the software ineligible for copying, modifying, or distribution. This is the most restrictive type of software license, protecting the developer or owner from unauthorized use of the software.
What Is a Software License Agreement?
A software license agreement is a legal document that stipulates several key conditions between a software company or developer and a user to allow use of the software.
These conditions are designed to protect the developer’s intellectual property rights and to limit claims against them for potential damage resulting from use of their software. In some cases, pricing and terms of payment may also be included, though this is often covered in a separate document. The primary purpose of the agreement, however, is to provide detailed ground rules for use of the software:
- Where the software may be installed and how many instances may be installed.
- How the software can be used.
- Whether the software may be copied, modified, or redistributed.
- Any copyrights that apply to the software.
- Ownership of the software — most often specifying that the provider retains all rights of ownership.
- Duration of the terms of the agreement.
- What constitutes correct usage of the software.
Installing and Activating Your Software
The process for installing software varies from product to product. You’ll need to read the specific instructions you receive in order to properly install and (for some products) activate your software.
A few terms it will be helpful to know are
- License Key (also known as a software key or product key) — This is usually a long string of letters and numbers that you enter at some point in the software installation process. The key helps ensure that the user is in compliance with software vendors’ or creators’ copyright restrictions and is authorized to use their software. Not all software requires a license key.
- Activation — This is the process of entering your license key to turn on the full set of features available in a software package. For example, if you download a free trial version of software, you may need to purchase and enter a license key to start using the full paid version. Not all software requires activation. Activation may be done offline or, more frequently, online.
- Deactivation or Transfer — If you want to stop using the software on one computer and start using it on a different computer, you may need to deactivate the license on the old computer before you can transfer it to a new computer.
Learn About Volume and Site Licensing
Most major vendors offer some type of bulk purchasing and volume licensing option for software. The terms vary, but if you order enough software to qualify, volume licensing can be cheaper and more convenient for your organization. Nonprofits sometimes qualify for volume licensing with very small initial purchases. Also, volume licensing often provides you with a central place to manage all your licenses for a particular product or group of products. Some volume licensing options can also help make installation easier with a single, organization-wide activation code for a particular product.
Learn more about volume licensing options from
- Microsoft: For general information Microsoft Volume Licensing, see its Volume Licensing Overview.
- Other Companies: If TechSoup doesn’t offer the product donation you need, or if you need more copies than you can find at TechSoup, check out A Quick Guide to Discounted Software Programs.
Site Licensing may be another option. A site license allows an organization to make multiple copies of a software package to use on multiple computers.
What You Can (and Can’t) Do with Software
As mentioned earlier, if the software is proprietary or closed-source, the license agreement will usually limit the ways you can use the software, copy it, alter it, and redistribute it. Also, you usually won’t have access to the underlying source code.
In everyday conversation, there’s not much difference between “free software” and “free and open-source software” (FOSS). However, the official definitions and underlying philosophies do differ. See how the official definition of free software differs from the official definition of open-source software. For a short description of the difference, read Live and Let License.
For a longer discussion from the “free software” perspective, read Why Open Source Misses the Point of Free Software. For the “open-source” perspective, read Why Free Software is Too Ambiguous. Categories of Free and Non-Free Software covers topics like copyleft and public domain software.
Other commonly used terms include
- Freeware — Free proprietary software, usually small downloadable utilities. You don’t have the right to view the source code, and you may not have the right to copy and redistribute the software.
- Shareware (also known as trialware or demoware) — Trial software that you can use free of charge for a limited time (usually 30 or 60 days). After that, you’re expected to pay to continue using it.
- Not for Resale (NFR) — Versions of software that are usually distributed for testing, preview, or donation purposes. They may include different features than the regular retail product. NFR versions usually don’t include the same technical support options as the retail product.
What is Copyright Law?
Copyright Law protects original works of authorship fixed in any tangible medium of expression from which they can be perceived, produced, or otherwise communicated, either directly or with the aid of a machine or device. An original work of authorship that can receive copyright protection extends to:
- literary works
- musical works
- dramatic works
- pantomimes and choreographic works
- pictorial, graphic, and sculptural works
- motion pictures and other audiovisual works
- sound recordings, and architectural work.
How does Copyright Law apply to Software Licenses?
According to the legal dictionary, a license allows for permission to be granted by a competent authority to exercise a certain privilege that, without such authorization, would constitute an illegal act, a trespass or a tort. A license granted by a copyright holder on literary or artistic work gives the license holder a limited right to reproduce, sell, or distribute the work. Intellectual Property licenses usually require that the licensee pay a fee in exchange for use of the property. This can be seen whenever a person purchases and installs a product. For example, when a person installs a piece of software (like a game or other program), there is a licensing agreement that the user must agree to.
We made a scale in order to show how certain software licenses are more restrictive than others in terms of user freedom. To get a detailed explanation about the different types of Software Licenses, visit our Types of Software Licensing section.
From left to right, we have pointed out how restrictive certain licenses are for you, the user. Commercial licenses are most of the licenses mentioned previously that come with the user licensing agreements on most software products. These are very restrictive, but will provide you with a list of what you can and cannot do in the licensing agreement that you sign (or agree to). Open Source licenses are less restrictive but not as much as software for public domain use. In the public domain, software can be placed there by the government, by owners of a copyright that expired, or by an author purposely choosing to have his/her work in the public domain. This is the least restrictive in terms of users’ freedom to do what they want with the respective public domain software.
Ownership vs Licensing
When you purchase software, you receive a copy of the software and a license to use it. You don’t actually own the software — ownership rights belong to the software company, and you’re still limited by the terms and conditions of the license.
A software license gives you the right to use a software product. It also governs the use of the software along with the copyright laws, which prevent the unauthorized distribution or reproduction of the software. A license might also specify, among other terms and conditions, whether or not you may install the software on more than one computer and whether or not you can create backup copies of the software.
Even free software, otherwise known as freeware, might come with a license that dictates its use. This is generally in order to prevent a user from altering the software in an attempt to resell it.
Before you install an application, always read the license. Most vendors won’t negotiate or modify a software license; if it includes unfair or unreasonable terms, your only recourse might be to return the software to the vendor.
Usage of Licensing
Software licenses spell out the terms of the licensor’s and licensee’s whole agreement. The purpose is to clarify the relationship from a legal and technological standpoint so that there are no surprises or guesswork about responsibilities while the agreement is in effect. The cost of a software license varies greatly based on the type of software, how it is delivered, and the cost of development for the supplier.
References
https://en.wikipedia.org/wiki/Software_license
https://www.techsoup.org/support/articles-and-how-tos/making-sense-of-software-licensing
Thank You for reading!!!
