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Sunday, 26 August 2007

Software licence reviews - some recommendations

Last week the IPKat published a cri de coeur from a young lawyer in need of a recommendation as to something to read on how to review a software licence.

Right: the IPKat is always happy to be of service.

So far, he has received three responses - for which much thanks.

Polish scholar and blogger Tomasz Rychlicki writes:

"Please tell your friend about these books: Computer Law Drafting and Negotiating Forms, which is available at Westlaw (database: CLDNF) and Computer Software: Protection, Liability, Law, Forms (COMPSOFT). Both include good explanations of "tech-stuff" related to licensing issues".
The Kat has also received an email from a correspondent who wishes to remain anonymous but says:

"I recommend the excellent, but expensive, legal resource, Practical Law for Companies, which we use all the time. It is a drafting note on software licences. I also attach the precedent that is the subject matter of the drafting note. It is drafted from the viewpoint of the supplier.

... obviously each precedent needs to be tailored to its specific requirements...

I think PLC is the best in the field, but as ... it is expensive. If she can put a business case to her employers they may go for it. I am an in-house lawyer, and find that, if I have saved myself the requirement to instruct outside/private practice firms, two or three times in a year by using the service, it has paid for itself.

As regards general tips for software licences, the key issues are of course liability, exclusions and capping liability. Unfortunately for UK lawyers, the combined effect of UCTA and the range of case law associated with it, makes this area a bit of a minefield for IT lawyers, but certain rules can be determined:
* Don't exclude death or personal liability for negligence
* Don't if possible contract on standard terms
* Put a cap on liability, but be realistic
* If you want to exclude consequential loss, call it direct loss, and
name the types of loss you want to exclude (ie, anticipated savings,
loss of data, loss of opportunity)".
Ayesha James (Pinsent Masons) adds:

"I would recommend both Morgan and Burden on Computer Contracts (7th ed) and (depending on what type of licence it is) any of the PLC Software Licences, because in both cases you benefit from drafting notes and a precedent so you can read the provisions along with the commentary. Hope this helps!"
Stop press: just as he was about to post this item, the Kat received an email from PLC's Roger Wesson who writes:

"The IPKat's friend need look no further than the helpful and practical drafting notes and related precedent published in the PLC IPIT & Communications online service (homepage at She should look at the Software licence agreement (pro-supplier): drafting note for the supplier perspective (which if she works for an IT company is what I imagine she will be after) or the Software licence agreement (pro-customer): drafting note ( for the customer perspective (always useful to understand the other party's negotiating stance). Each Drafting note contains hyperlinks through to precedents of these agreements and other helpful materials.

We can happily arrange a free trial if the company that IPKat's friend works for isn't already a subscriber so that she can evaluate these materials".

Thanks, all of you, for writing in!

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