20 August 1998: An abridged version of the Software
Licence Code drawn up by Computer Weekly with law firm Hammond
Suddards.
Plain English
All software licences
should be written in plain English, particularly the restrictions
on the scope of use and any schedule or order form in which the
software is listed. Suppliers should seek to obtain "crystal mark"
approval from the Plain English Campaign.
Restrictions on location
Provided the
software is being used within the European Union, the supplier's
consent should not be required and there should be no charge to
change the physical location of the use of the software. Access by
users located overseas should not be restricted.
Hardware restrictions
If the supplier's
licence fee structure is based on size of hardware rather than the
number of users, the supplier must explain in advance the pricing
structure and how changes in hardware affect licence fees. Subject
to the payment of any additional licence fee the consent of the
supplier should not be required.
User restrictions
Where the use of
software is restricted to a number of users, the supplier should
make it clear whether that is concurrent users or named users (see
full guidelines for definitions). Where it is named users,
restrictions (if any) on changing named users should reflect normal
staff turnover within any organisation.
Price structure
Whether the price structure depends upon number of users
(concurrent or named) or hardware sizing, the pricing structure
should be clearly set out so that a user is aware at which point
they will be liable to pay additional licence fees.
Employee restrictions
Use of the software
should not be limited to employees only, as many companies now
"employ" contractors who should be entitled to use the software for
the benefit of the user.
Intragroup use
Where the user is
effectively a group of companies, the software may be used by other
members of the group of which the named customer is a member. A
group relationship exists where the companies in the group are
subsidiaries or holding companies of the others as defined in the
Companies Act.
Intragroup assignment
The named customer should be entitled to assign the licence to any
member of the group of companies of which it is a member.
Outsourcing
If a user outsources its IT services the supplier must agree to the
assignment of the licence to the outsourcing supplier unless the
outsourcing supplier is a direct competitor of the software
supplier or if the outsourcing supplier has in the past committed a
serious infringement of the software supplier's intellectual
property rights.
Testing
Where testing of the software is necessary on a separate platform
(for example, millennium or Emu compliance), such testing shall be
permitted subject to the software supplier being notified.
Disposals
The user should be permitted on an interim basis (a period not
exceeding 12 months) to use the software to provide an IT service
to any business or company which was formerly part of its group
which has been sold unless the purchaser is a direct competitor of
the software supplier or has in the past committed a serious
infringement of the software supplier's intellectual property
rights.
Maintenance
The continuation of a licence should not be dependent upon the
continued payment for maintenance. Where maintenance is provided,
the supplier should explain in advance what the maintenance service
is, the structure of maintenance payments and how maintenance fees
may vary over time.
Integration work
Where access to the supplier's source code is required for the
purposes of integration work, the supplier should either provide
the source code or agree to do the integration work at a reasonable
fee.
Automatic renewal
Where a licence agreement is renewed automatically at the end of a
licence period (unless notice to terminate is given in advance by a
user), the renewal term should not be greater than one year.
Term and termination
Given that substantial sums are paid for the right to use the
software, minor breaches of the software licence should not permit
the software supplier to terminate the licence. Only breaches which
represent serious infringements of the software supplier's
intellectual property rights or non-payment of licence fees which
are undisputed should justify termination of the licence.
Disputes over charges
In the event that a dispute of charges cannot be agreed, the
parties will submit the dispute to an independent expert for a
decision.
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