Benefits of Working With a Solicitor on Your Software Licence Agreements

The use of software can be pivotal for a business customer, and the licensing of software can be lucrative for a supplier who owns software. As such, software suppliers need to ensure that their software is adequately safeguarded with robust contractual terms.  Software licence agreements are vital documents specifying key terms to protect your business from significant risks. They can be complicated and require intricate drafting and knowledge.

Working with an experienced solicitor on software licence agreements can be extremely valuable to safeguard your software and business interests. This article will explore why you should work with a solicitor on your software licence agreements. 

Why Is Legal Advice on Software Licence Agreements Important?

As a software business owner, it is vital to ensure that you use robust and well-drafted software licence agreements. 

Software licence agreements are key documents that protect your software from harm and misuse. They also allow you to protect your business from the practical and commercial risks it could face—for instance, the risk of a customer not paying licence fees. 

By working with an experienced software licence solicitor, you can implement comprehensive and well-defined contracts to protect your software assets and safeguard your business when trading. 

Why Should I Work with A Solicitor on Software Licence Agreements?

Here are some key reasons why you should consider working with a solicitor on your software licence agreements:

1. A Solicitor Will Guide You on Which Type of Contracts You Need 

There are various ways a business can licence software. For example, you may seek to licence your software on a:

• one-to-many basis, whereby standard software is licenced to multiple customers on the same terms. Software-as-a-service models usually adopt this process; or
• a bespoke basis – this is where a software developer licences niche software to a customer, generally for a particular business and its specific requirements. 

The software licensing contract you need will depend on your business and how it deploys software. An experienced solicitor can help guide you on which contracts are fit for purpose for your business activities.

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The wrong software licence agreement document can cause various negative implications for your business. For instance, your software may not be protected adequately enough, and customers could complain or not work with you if your terms are unclear or unsuitable. 

2. A Solicitor Will Draft Licence Agreements to Protect Your Software and Business 

Software licence agreements are often niche and complicated. Drafting them correctly requires expert knowledge of software, industry terminology, unique licensing methods and intellectual property issues. 

These types of agreements are particularly niche, so generic legal terms are unlikely to protect your business. 

An experienced solicitor will be able to guide you on and draft robust terms to:

• protect your intellectual property rights in your software. For instance, by drafting clear restrictions on use by the customer and penalties if the customer breaches the licensing terms; 
• prevent disputes by including clauses to resolve disputes and explicit provisions to stop disputes from arising in the first place; and 
• where required, address data protection provisions to comply with the UK General Data Protection Regulation rules. 

3. A Solicitor Can Add Value and Help Generate Revenue by Negotiating Agreements 

Depending on the type of software and its value to a customer, software licence agreements can be heavily negotiated. 

Various complex legal issues can crop up when negotiating software licence agreements. 

For instance:

• a customer may try to negotiate extended warranty periods for the software; 
• a customer may request an onerous indemnity provision from your business, requiring you to compensate them for various losses; and 
• a customer may insist that your company’s liability for breaching your agreement with them is unlimited. 

Such requests could be extremely high risk for your business. Working with an experienced solicitor is a good idea and can add tremendous value when facing such challenging requests. 

A solicitor will be able to assist you in valuable ways, including:

• advising you on negotiation requests with your customers;
• negotiating terms on your behalf, pushing back on high-risk clauses where necessary, 
• advising you so you can make an informed decision on particular risk issues; and 
• helping you close deals quicker and more efficiently, using their industry expertise to help you negotiate contracts efficiently. 

Overall, there are various ways in which working with a specialist software licence solicitor can add value to your business. 

Key Takeaways

Software licensing can be complex, so software licence agreements can be complicated legal documents that require careful thought and attention. Working with a solicitor on your software licence agreements can offer many benefits and value to your business. 

An experienced solicitor will get to know your business and licensing models and advise you on which software licence agreements fit for purpose. They will be able to draft robust contracts to protect your business and help with negotiations to enable you to secure more business. Given how niche and high-risk software licensing can be, working with a solicitor is a valuable investment that will benefit your business significantly in the long term. 

If you need help with a software licence agreement, LegalVision’s experienced IT lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers who can answer your questions and draft and review your documents. Call us today at 0808 196 8584 or visit our membership page.