License agreement

Since software is considered intellectual property and is protected as a literary work, its use is allowed only with the permission of the owner.

To legitimately use someone else’s software product, you must conclude a license agreement

Pursuant to the license agreement, one party grants the other party a license or a permission to use its intellectual property rights (including rights to software), on terms set by mutual agreement of the parties, taking into account the requirements of the law. The license agreement is concluded in writing. Notarization and state registration are optional and may be carried out at the request of the parties.

When concluding a software license agreement, it is nessesarry to indicate:

  • clear definition of the subject of the contract – specific software, the right to use which is transferred (the indication of characteristics, software version);
  • provision on how to use the software – methods of use that are not defined in the license agreement are considered not licensed. Use outside the scope of the license is considered a violation of the owner’s rights and may entail negative consequences for the licensee;
  • type of license – exclusive, non-exclusive, single.

– An exclusive license is issued to only one licensee and excludes the licensor’s ability to use the software in the area that is limited by this license, and grant licenses to use such property in the specified area to others.

– A non-exclusive license does not impede the licensor from using the software in an territory of the license and granting licenses to use this item in that area to others.

– A single license is issued to only one licensee and precludes the licensor from issuing licenses to use the software in the area that is limited by this license to others but does not exclude the licensor from using this property in the specified area. If the type of license is not specifically specified in the agreement, it is considered that the license is non-exclusive.

  • the term of the agreement – if the term is not specified in the agreement, it is considered concluded before the expiration of the exclusive property rights to the property, but not longer than 5 years (in other countries the term may differ);
  • territory of licence;
  • remuneration for using software;
  • the procedure for transferring intellectual property;
  • the right to issue sub-licenses;
  • applicable law – the law that regulates the relations between the licesee and the licensor, if the parties are residents of different countries;
  • confidentiality – the agreement should include provisions on nondisclosure of confidential information or trade secrets (Non-disclosure agreement).

Depending on the specific type of software, the license agreement may have its specifics, so for the agreement to be legally competent and take into account the interests of the parties, professional IT lawyers must be involved in the process of preparation, signing, and execution of the agreement.

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