Ensuring Digital Signature Lawfulness for End User License Agreement in United Kingdom

How to eSign a document: digital signature lawfulness for End User License Agreement in United Kingdom

hello everyone welcome to remote lawyer today we are going to talk about reviewing software licensing agreements now software licensing agreements are bulky agreements with lots of complex clauses so we are going to discuss a few clauses which may seem apparently innocent but when you look through them in detail you may find things which are not conducive for you or your client the first thing which we should pay attention to is what is being licensed if you are a licensee you need to see what is being licensed to you now a software license agreement many would say that as the nomenclature suggests a software is being licensed but what constitutes that software now look at this clause this clause defines the software as a company's software programs applications and electronic documents now the customer may download access audios now on an apparent reading you may think that yes this does capture almost every aspect of a software but does it so the certain red flags we can find in this kind of clause are firstly what are these software programs and applications are they web software and applications are they mobile applications and software what exactly are these so for example if i have a web application which i am licensing i may also have a mobile counterpart for the same is that also being licensed or is it only the web application so these specificities need to be mentioned clearly now the second point is associated documentation so a software would typically come with a user manual now is that manual also being licensed because the licenser would have the copyright over that documentation so if someone else gets the software would they also get the license over the documentation that's a very important question that you need to keep in mind while reviewing software licensing agreements now download or access as part of using the services so again you can download or access a software or an associated software but you have to do such download and access only pursuant to your use of the services that is the software that is being licensed to you so therefore you need to keep in mind these small things and these specifics while reviewing the definition of a software under a software licensing agreement the second thing is usage of the license now you would typically see these terms limited non-exclusive irrevocable non-transferable royalty-free used right behind the grant of the license clause so typically it said that subject to xyz or limited non-exclusive irrevocable non-transferable and your ilp free license is being granted to the licensee now you should always read what exactly do these mean so non-exclusive as in they can grant the same license to someone else as well irrevocable it means that they cannot cancel it so if you are the licensers and you see an irrevocable uh suffixed right behind the grant of license that's immediately should ring a bell because that's a red flag you are the licenser and you should have the right to revoke or cancel the license an irrevocable license is going to be damaging to your interests similarly a non-transferable license now what if you are a big conglomerate who is licensing something from another license it's a non-transferable license so make sure that all your affiliates your subsidiaries they also have access to the license so like you know because it's a non-transferable license so those things need to be kept in mind when you are reviewing a software licensing agreement now who would have access to the software would it be certain named users or is it an organization white access those things should be clearly mentioned in the agreement and if it is not then by reviewing it you should bring that up as an issue with the license now and run and use the software so for example if a usage of the license says that you are allowed to run and use the software is that sufficient on an apparent reading you may think yes it is but what about the documentation am i also allowed to use the documentation and again the term use the software is a very broad term so should that be qualified so those things should be kept in mind when you are reviewing a software licensing agreement now update now typically this clause is not paid much attention to but there are certain very critical issues that arise out of the updates clause now if you look at the clause mentioned here it's it says company shall provide customer with timely updates error corrections bug fixes modifications additions and or enhancements to the software at any time as required now again it seems like an innocuous clause providing updates and error corrections and changes to the licensee but there are issues with this clause first red flag is timely updates now what do you mean by time key updates are there any service levels agreed to what are the typical timelines which a licenser needs to comply with to provide timely updates so if you see language like this mentioned the first thing you should check is are there any service levels are there any timelines or turnaround times that are being provided if not then agreeing to timely updates could be agreeing to a very vague and ambiguous thing now second is modifications additions and enhancements now support and maintenance is acceptable providing the licensee with updates is also acceptable and so is error corrections and bug fixes but should you be pro as a licensor should you be providing modifications additions and enhancements if you have agreed to do so then are they going to be charged separately if not then what would be these modifications and changes would they be substantial would they be as substantial as to create a new kind of software or a new functionality or feature also who is going to own the the end product of these modifications and changes so these are the typical details that need to be kept in mind the third red flag i saw in this clause was that the language any time is required again typically when you are providing updates support maintenance error corrections etc there should always be a turnaround time agreed upon or mutually acceptable timelines that should be there also the support team if it's available 24 7 you should mention that clearly otherwise even the timings of the support team and when they are available should be mentioned there the most important and critical clause in a software licensing agreement typically is the software escrow clause now what happens is that what if the licenser goes out of business what if the license transfers its business what if it shuts down there are various events that may occur and that may affect the usage of the licensees software so the licensee is using a software and the licenser goes out of business who is going to provide the support the maintenance the updates etc and typically it is for this reason that a software escrow clause is included in a software licensing agreement now the licenser deposits the source code object code related documentation into an escrow account the source code object code and the related documentation shall be released post termination of this agreement or in the event of non-renewal of the agreement now again a typical software escrow clause but there are issues associated with it the first and foremost thing to look out for when you are reviewing a software escrow clause are the trigger events the trigger events are the events when the source code or the object code or the documentation would be released and these trigger events should be very narrowly defined and not broadly defined especially if you are from the licensure side the second is the when you are writing that the licenser shall deposit the source code does it mean the basic original source code or the source code at that point of time with all the updates built in so that should also be defined when you are defining uh when you are drafting an escrow clause also this can cause intellectual property issues so if a lie sensor did come up with the software and they deposited the source code in an escrow account now tomorrow the licenser goes out of business and the escrow is released their ip is lost so if you are the lawyer representing the licensor uh make sure that this clause is drafted very tightly and in no event is it causing more than required damage to your like to your client because sometimes a licensee would be would you know would be very obstinate about not having the escrow clause so you have to arrive at a mutual ground where your party is also protected and so is the licensee thank you i hope this was informative and uh like a software licensing agreement is extremely complicated complex and sometimes looking at all the computer jargon also makes it difficult but make sure that you know what exactly is being licensed what what is happening in the entire scenario is something that you should know about and then go on to review the agreement make sure to look at each and every minute detail because even one thing misplaced can cause you great harm hope this was useful to you if you have any doubts you can reach out to me on linkedin or you can connect to us via our website the link has been given below thank you have a nice day