Outgrowing your software license |
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| Technology | |
| Written by Gordon Peilow, Consultant, Cubism Law | |
| Tuesday, 01 September 2009 | |
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A detailed insight into how software licensing works and the implications of a growing SME may change things. Rights in software in the UK, are most commonly protected by the assertion of copyright in the code and material that comprise the software. The “copyrighted” material is the invention, knowledge, skill and its expression in the working and functionality of the software. The ultimate or intermediate Licensor or License holder will seek to assert or enforce rights in the software through agreements creating Licenses and by specific license terms.The Agreement granting the Licenses will usually specify the fees to be paid. This is done usually on two bases; the size of the Company given the numbers of employees and anticipated users or on the actual usage, and copies that are made or used; both on a sliding fee-scale or tariff. Likely usage should be within the License terms, or there is a risk of an infringement or becoming under-licensed, as over time more copies are made and user numbers grow. There will usually have been no review or re-negotiation of payment rates and terms. Such reviews should be made regularly. Large commercial organisations routinely do this anyway; smaller enterprises, clubs and member’s and trade associations often run the risk of allegations of breach of license and infringement, as the recent “ Soho House” case showed. Intellectual property rights are normally enforced through the mechanisms of damages and injunctions in the civil courts, but in important areas there is also a significant overlap with the criminal law. Both infringement of copyright and trade-marks and related activities of counterfeiting and piracy all carry criminal or quasi-criminal sanctions. In copyright, offences which are summary and indictable have been created- the latter giving rise to penalties of imprisonment for 2 years and with commensurate fines. There are numerous industry bodies which act to police licensing and uncover significant infringement. For the media and entertainment industries there is FACT, ( The Federation Against Copyright Theft). The software industry has the BSA, (the British Software Alliance). There is ELSPA ( the Entertainment and Leisure Software Publishers Association) for video and computer games. Where these associations or their members have been affected by infringement or piracy then they can support or seek prosecution or launch the appropriate civil proceedings. These measure are not exhaustive and do not supply a perfect overlap, and often both forms of remedies may be pursued ether concurrently or consecutively. There are other areas of the criminal law which will apply to the same subject area, for example the Trades Descriptions Act will cover mis-descriptions that arise from “ pirating” or counterfeiting, usually of trade-marks or registered designs. Powers to issue “ stop “ orders or of seizure are available. Conspiracy to defraud, or deception may also be alleged. Companies should review from time to time their software Licences with their provider and should in particular consider or at least familiarise themselves with terms of their license and the way it works. At home, we all click on the “agree” part of the License for software without further consideration. In business, we have to be more organised, and consider how the software is being used and whether there are requirements for extra users or (legitimate) copies to be made. In practice, FACT and the BSA are unlikely to seek prosecutions of a company which has a few more users than contemplated under the license, but evidence of wholesale borrowing, copying, or a cavalier disregard of the terms of any license is a different matter. If this is done on a large scale or with an apparent disregard, then it is easy to draw inferences of greed or gain and criminal sanctions also become more likely.
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