Protect Your Business’s IP With Software Licenses

Protect Your Business’s IP With Software Licenses

Your intellectual property (IP) can be protected by copyrights, trademarks, patents, and licenses.
You may have a product or service that calls for more than one of these IP rights. A software license is a legal instrument that governs the use or redistribution of software. These contracts transfer IP rights from the owner (licensor) to another party who wants to use them (licensee). They can be exclusive – allowing only one licensee – or nonexclusive – granting rights to multiple users. Besides protecting your business’s assets, licenses can generate significant revenue. If you have a product, website, application, or idea that needs to be licensed, Denver Small Business Attorney E.C. Lewis, P.C. will work with you to protect your intellectual property. This post will cover some basics of software licensing.

  1. Before Choosing Your Software License
  2. Ways to License Your Software
  3. Generating Revenue with a Software License

1. Before Choosing Your Software License

If you make your own software program or application, you likely want as many people to use it as possible – legally, that is. But, how do you decipher the billions of pages of information and laws about software copyrights, end-user license agreements (EULAs), other types of licenses, and so on? How do you know for sure what happens and how protected you are once your product is released? These are among the many major considerations, such as who holds the rights to your work, who gets to use it, how much access do they have to your design/code, and what type of license is best for your product. The last thing you want is to set yourself up for trouble. Simple protective measures regarding copyrights and licensing will go a long way, like going more restrictive than liberal in your terms from the start. As a developer, you may have some notion of how you would like the launch of your program or application to play out. The advice of a small business attorney with extensive experience in the information technology sector will help secure your IP and potential profits.

2. Ways to License Your Software

EULAs bind the end-user (licensee) with a valid contract and grant rights to use the software with terms and conditions. Some of these include limitation of liability of the licensor, disclaimer of warranties, choice of applicable law to the contractual relationship, venue for possible disputes, etc. Open-source licenses, like Apache 2.0, GPL, and LGPL, can be viewed as ready-made universal EULA formats. The open-source community is growing with more developers publishing their code online. Here are a few types of licenses.

  • MIT (Massachusetts Institute of Technology) License is an open-source license that allows the user to do as they wish with the software/code as long as they give you proper credit or attribution. You are not held liable if issues arise from the software.
  • Apache License 2.0 is similar to the MIT License, but the end-user cannot use any of the work under your trademark. This gives you patent protection.
  • GPL (General Public License), known as a viral license, is widely used. With this license, anyone can use, distribute, and modify the software. The Lesser GPL (LGPL) is a less viral type, permitting the use of a library in proprietary programs and protecting your code under similar rules to GPL. It does not force any code outside of your own to be released under the same license.
  • Artistic License 2.0 enables users to copy and distribute copies of the software, but changes are not allowed.
  • EPL (Eclipse Public License) allows people to use, modify, copy, and distribute the code and modified versions for free. With an EPL license, anyone distributing the work must grant every recipient a license to any patents that cover the modifications they have made.
  • BSD (Berkeley Software Distribution) Licenses are a series of licenses which have varying clauses. The Simplified BSD license and the New BSD license are two GPL compliant licenses. These licenses impose the minimal restrictions on the redistribution of covered software.

These are only a few of the major software licenses out there. Your small business attorney can go over all of the different levels of complexity, restrictions, and benefits among them to determine what is right for you.

3. Generating Revenue with a Software License

When it comes to protecting your IP, software is one of the most licensable. The key to the successfully commercializing your software is to choose the right license in order to generate revenue without giving up rights. Partnering licensing is a way to gain additional support, recognition, or marketing channels. A co-brand license can lend credibility and quickly raise awareness, leading to broader sales. Another partnering strategy is to license out rights to market and distribute your product. This could enable you to enter into global markets you would otherwise not reach. A third example is non-competing field, which is a good alternative if you do not intend to enter certain markets. In this case, you could partner with a larger, established software developer of another product and bundle yours with it. Whichever way you decide to go, it is essential to register with the U.S. Copyright Office. This reinforces your rights, especially if you find yourself in litigation. A small business attorney will be there with you if you ever have to take someone to court.

If you need help with software licensing, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Business Attorney. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

Contact Us Today

Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney
501 S. Cherry St., Suite 1100
Denver, CO 80264
720-258-6647
Elizabeth.Lewis@eclewis.com

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Short & Simple Open Source Software Licenses

As part of our series on open source software licenses, we have already discussed the GNU General Public License, the GNU Lesser GPL, and the Apache License. This time, we will discuss two other popular open source software licenses that are much shorter and simpler. However, while these licenses are arguably the most unrestricted licenses available, they can still be important in protecting you from legal liability.

Both the MIT License and the BSD License discussed below, like the Apache License, do not impose any of the “copyleft” tactics found in the GPL and LGPL that restrict use of the software to only other open source and freely distributable software. Like Apache, MIT and BSD do not require the source to be distributed with the software, but unlike Apache, GPL, and LGPL, the MIT and BSD Licenses do not require notation of modifications or prevent people from acquiring patents based on your original work.

The BSD and MIT Licenses do still protect you by disclaiming warranties and limiting liability, as well as make sure you are credited for the original work.

BSD License

The newer BSD Licenses are short and come in two varieties, a three-clause or two-clause version. The three-clause version is seen below and the two-clause version simply eliminates clause three to allow for use of the copyright holder’s name in advertising of derivative works. If you do not wish to have your name associated with such works, you should use the three clause version and also avoid the MIT License below, since it does not offer such limitation.

Copyright (c) <YEAR>, <OWNER>
All rights reserved.

Redistribution and use in source and binary forms, with or without modification, are permitted provided that the following conditions are met:

1. Redistributions of source code must retain the above copyright notice, this list of conditions and the following disclaimer.

2. Redistributions in binary form must reproduce the above copyright notice, this list of conditions and the following disclaimer in the documentation and/or other materials provided with the distribution.

3. Neither the name of the copyright holder nor the names of its contributors may be used to endorse or promote products derived from this software without specific prior written permission.

THIS SOFTWARE IS PROVIDED BY THE COPYRIGHT HOLDERS AND CONTRIBUTORS “AS IS” AND ANY EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE DISCLAIMED. IN NO EVENT SHALL THE COPYRIGHT HOLDER OR CONTRIBUTORS BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO, PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES; LOSS OF USE, DATA, OR PROFITS; OR BUSINESS INTERRUPTION) HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, WHETHER IN CONTRACT, STRICT LIABILITY, OR TORT (INCLUDING NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY OUT OF THE USE OF THIS SOFTWARE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.

The MIT License (MIT)

The MIT License is an even shorter license, that is very similar to the two-clause version of BSD. The entirety of this license is seen below.

Copyright (c) <year> <copyright holders>

Permission is hereby granted, free of charge, to any person obtaining a copy
of this software and associated documentation files (the “Software”), to deal
in the Software without restriction, including without limitation the rights
to use, copy, modify, merge, publish, distribute, sublicense, and/or sell
copies of the Software, and to permit persons to whom the Software is
furnished to do so, subject to the following conditions:

The above copyright notice and this permission notice shall be included in
all copies or substantial portions of the Software.

THE SOFTWARE IS PROVIDED “AS IS”, WITHOUT WARRANTY OF ANY KIND, EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. IN NO EVENT SHALL THE
AUTHORS OR COPYRIGHT HOLDERS BE LIABLE FOR ANY CLAIM, DAMAGES OR OTHER
LIABILITY, WHETHER IN AN ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING FROM,
OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN
THE SOFTWARE.

If you have any questions about deciding on a license or creating specialized license for your software, contact the Law Office of E.C. Lewis, PC, home of your Denver Small Business Lawyer, Elizabeth Lewis at 720-258-6647 or email her at elizabeth.lewis@eclewis.com.