Your business may license many different types of software and technology in the ordinary course. These licenses range from software installed on your internal network to use-rights in software-as-a-services (SaaS) models, where the programs reside on the vendor's host systems and are accessed via the Internet (or in some other manner).
In each case, you are granted use-rights that define how the licensed materials can be used (for example, there may be a limit on the type of business for which the materials can be used), where they can be used (i.e., a territory or facility restriction), and who can use them.
Ensuring that the technology can be used by the appropriate people is one of the most overlooked items in a technology license.
Do not just assume the vendor understands your needs and that the use-rights extend (as required) to your affiliates and/or end users. Often, the use-rights are limited to the licensing entity itself and do not extend to others. For many organizations, limiting the use-rights to the licensing entity is okay and meets the business needs. However, for an entity that expects affiliates and/or some (or all) of its customers to be able to access / use the technology, this limited scope can create a problem.
Clarity on this point is especially important because vendor pricing is often dependent on the scope and breadth of use by the licensee. If the vendor is pricing based on a different model of use-rights than you think you are getting, this can lead to a dispute.
Consequently, it is always important to ensure the vendor and you are on the same page, and the use-rights you are getting match your need in all facets – who, how and where.
This article is presented for informational purposes only and is not intended to constitute legal advice.
