25. Nov 22

License agreements regulating rights to use software

Whether at home or at the office, many people encounter IT law in their daily lives, with one common point of contact being the use of software and the licenses required to this end.

Anyone who wants to use their computer needs the appropriate software for their requirements. However, they must first of all acquire the rights to use said software. We at the commercial law firm MTR Rechtsanwälte note that those who decide to use software without first obtaining any necessary licenses run the risk of being on the receiving end of injunction suits and claims for damages.

IT law leans heavily on copyright law when it comes to license agreements. An illustrative example of this is the automatic acquisition by the software developer of the copyrights to the program without them having to register their rights for these to be protected. One consequence of this is that anyone who wishes to make use of the software must have an appropriate license for it.

The parties to the sale or provision of the software are generally free to negotiate the scope of the rights of use, it being possible for the licenses to restrict both the use of the content and the territorial or temporal use of the software. It is necessary to make a distinction here between simple and exclusive rights of use.

If only simple rights of use have been transferred, then the author of the software can also grant the rights of use to others. The license holder is entitled to use the software in the manner agreed upon, which is why it is important for them to ensure that the rights of use as they have been granted are sufficient for their purposes and that they cover the intended use.

If, on the other hand, an exclusive license is acquired, the rights of use can no longer by transferred to third parties. Even the author is excluded from making further use of the software under these circumstances. The exclusive right of use also covers marketing and exploitation of the program in question.

If no arrangements are made regarding the scope of the rights of use when the license is granted, the type and scope of use are determined by the underlying contractual purpose in accordance with Section 31(5) of Germany’s Copyright Act (UrhG).

To prevent legal disputes from arising at a later date, the parties should always be mindful when drafting license agreements of the importance of ensuring that the scope of the rights of use as they have been granted are in line with what is required. Lawyers with experience in the field of IT law can provide counsel.

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