Software licensing

Software licensors are confronted with some specific problems. The ownership rights are one of these and warranty obligations needs also to be looked into carefully.

The ownership rights of the licenser

The licenser must have sufficient rights to the software to be able to grant the licensee the user rights he is entitled to. If the licenser has acted ultra vires he would be liable to pay damages to the licensee. It is certainly advisable to avoid this situation.

The specific legislation on software protection gives an answers to some of these questions.

The risk that e.g. an employee claims property rights on software that he has developed for his employer has been mitigated by the European Directive of 14 May 1991. This directive was the basis for the European national legislations. It has introduced the rule that the employer is the owner, unless otherwise agreed upon in the employment contract. 

The warranties of the licenser

In each type of licensing agreement the division of the warranty obligations is one of the most difficult items to be addressed. Warranties should be thought over carefully and no party should take up any obligation without having evaluated the possible consequences. These consequences can be very onerous: the stories about product liability processes have become the most popular horror stories in many board rooms. 

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