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Computer Software License Agreements

In the United States, it is possible to protect intellectual property associated with computer software via patent, copyright, and/or contract. While patent protection of computer software is not automatic, it requires a person to apply for and receive a patent from the United States Patent and Trademark Office (“USPTO”), copyright protection automatically inures to computer software1.

In contrast, to patent and copyright protection, which are granted by the U.S. Federal Government pursuant to the authority of the Copyright Clause (Article I, Section 8, Clause 8) of the U.S. Constitution, contractual protection of intellectual property associated with computer software requires that the person using such software agrees to the terms of a contract.

Why Does This Matter?

U.S. Copyright law generally confers, subject to limitations, the following exclusive rights upon copyright holders:

(1) to reproduce the copyrighted work in copies or phonorecords;

(2) to prepare derivative works based upon the copyrighted work;

(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;

(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;

(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and

in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.

17 U.S.C. § 106

While what is conventionally thought of as “use” of computer software may not seem to be included in the rights set forth in 17 U.S.C. § 106 above, because of the way that computers function, computer software or its copyrighted output must be duplicated, i.e. reproduced, at least partially, in order for software to function properly. As such, use of computer software is automatically an exclusive right of the software developer or software owner and any person who desires to use computer software must possess a valid license so as not to infringe upon such rights.

Because a valid license is required to use computer software, a copyright holder may impose contractual restrictions in the computer software license agreement, which are not include in the Copyright Act of 1976 and the other associated statutes in Title 17 of the United States Code, to which a person must contractually agree if that person wants to use such computer software. 

What Can or What Does a Software License Agreement Contain?

Some licenses are granted for free and provide few, if any, restrictions upon the use, reproduction, distribution, and modification of computer software, e.g. MIT license, while others require payment and impose substantial restrictions of the use, reproduction, distribution, and modification of computer software.

Depending upon the sensitivity of the intellectual property associated with computer software, a copyright holder may include provisions in the license agreement that impose confidentiality restrictions upon the licensee, prohibit reverse engineering of such software, and/or otherwise expand the limitations and protections associated with the software.

Some licenses disclaim liability for improper use of the licensed software and my also disclaim liability for damage to computers or associated networks. While blanket disclaimers of liability as to unrelated parties are sometimes held to be invalid by courts, because a user must agree to any disclaimer in a license agreement in order to use computer software, such disclaimers are more likely to be held as valid and binding by courts.

License agreements can also include a litany of other provisions, including but not limited to provisions about subscriptions, warranties, etc.

1Although U.S. federal copyright protection is automatic, U.S. federal copyright registration is required if a copyright holder wants to bring suit in U.S. federal court and/or receive statutory damages for infringement.

This brief overview of some important considerations associated with copyright law and computer software licenses is by no means comprehensive. Always seek the advice of a competent professional when making important financial and legal decisions.

Arizona Business AttorneyDouglas K Cook is an Arizona business attorney with over 40 years of experience as a practicing attorney. Although Douglas K Cook's office is located in Mesa, Arizona, he represents clients throughout the Phoenix, Arizona Metropolitan area including the following east valley cities: Scottsdale, Paradise Valley, Tempe, Chandler, & Gilbert.

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