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Business customers increasingly rely on software solutions for their everyday operations. This can mean big questions for software suppliers. Given the software’s high value and critical importance, you must be ready to face several vital legal queries as part of the contracting process with your customers. This article explores some key legal questions your business could face from customers and explains why addressing these legal issues sufficiently can help you keep customers happy.
Which Legal Questions Could You Face About Your Software?
Your customers may invest significantly in software and naturally need assurance that your software and any services will meet their expectations without unforeseen risks. Software can play a critical role in your customers’ business operations, and legal risks could have enormous repercussions for them.
Here are some fundamental legal questions your customers may ask your business:
Intellectual Property (IP) Questions
Customers may often have queries and concerns about IP rights and issues related to them. They may need clarity on the IP rights to the software they are licensing. Specifically, customers may want to know that you have the right to grant them a software licence and that it does not infringe on the rights of any third party.
Additionally, your customers will want to know which rights they have. This reassurance is crucial for customer confidence in using your software without worrying about legal challenges such as third-party IP claims.
The right to grant sub-licences can also be a necessity for many businesses. Customers may typically want to grant sub-licences to group companies or certain consultants. However, a software supplier usually intends to restrict the customer’s ability to grant sub-licences.
Data Protection Questions
Data protection is often a critical concern due to the stringent rules under the UK General Data Protection Regulation (UK GDPR) and the UK Data Protection Act 2018. Compliance with these rules is vital for processors with personal data access.
Customers want to know if your software complies with relevant UK data privacy laws. This may include ensuring your software has appropriate technical and organisational measures to protect personal data.
Customers often ask how your software handles personal data belonging to their business. They may want details about data, including its use, retention periods, and parties aware of it.
In the event of a data breach, customers will want to understand your procedures for notifying them and mitigating the impact. They will need assurance that you have robust incident response plans to handle such situations effectively.
Transparency in your data practices will help build trust and ensure compliance with data protection law rules. Note that these considerations will only be relevant if your business processes the customer’s personal data under software licence agreements. If you are unsure whether your company acts as a data processor, you should take advice from a data protection solicitor.
Support Questions
Another major area of concern is the level of support your business provides. Customers will often need clarity on what type of support is included in the price to access your software.
For instance, they may want to know what type of support is available (e.g., phone, email, online), how quickly they can expect a response, and what issues are covered. Clear terms on support services can help set customer expectations.
Customers also want to understand if there are any additional charges for support. Being upfront about potential costs can help avoid shock invoices and develop a transparent relationship.
Another critical question is the process for reporting and resolving software bugs or issues. Customers will need to know how to report problems and the expected timeframe for resolution. Clear procedures can help handle issues and ensure that problems are addressed promptly and effectively, minimising customer operations disruption.
How Can Software Licence Agreements Help Address Customer Concerns?
As a software supplier licensing your software products to customers, you will likely encounter the questions above during your business journey. For instance, customers may raise them during the contract negotiation process when you seek to enter into software licence agreements with them.
Your software licence agreements should clearly define IP rights, ensuring customers understand their use rights. You can reassure customers that they will be protected against IP claims by including warranties or contractual promises. Your agreement can further set out the scope of the licence and rules around sub-licensing and permit users to pre-empt customer concerns and questions.
Comprehensive data processing clauses can demonstrate your compliance with UK GDPR and outline security measures. These clauses should be UK GDPR compliant and detail how you will handle and secure customer personal data. This will reassure customers that their data will be safe and that you take data protection seriously.
This factsheet sets out how your business can become GDPR compliant.
Detailing your support services, including the level of technical support, maintenance schedules, and training provisions, can help you set clear expectations. Your agreement should specify response times, support channels, and additional costs associated with your services. By clearly setting out these details, you can ensure customers know exactly what support they will receive and under what conditions.
Addressing these critical legal issues in a comprehensive software licence agreement can help your business navigate the complexities of software contracting. It can also speed up the contract agreement process by providing clear and concise terms that help resolve these types of customer queries from an early stage.
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Key Takeaways
As a software supplier, you should prepare for customer questions about your software and services. Key questions could relate to IP rights, data protection, and the level of your support services. A well-drafted and robust software licence agreement can help clarify these points, offering comprehensive provisions and answering the right questions.
Addressing these concerns proactively can help you build trusting customer relationships. They can also encourage a smoother and more transparent contract negotiation process.
If you have questions about customer licensing of your software, LegalVision’s experienced Data, Privacy and IT lawyers can assist you as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
Frequently Asked Questions
1. Which Legal Questions Could a Customer Ask About My Software? Customers may ask about various issues like IP rights, data protection compliance, and support services. They may need feedback on the software’s IP ownership, how their data will be protected, and what support they can expect if issues arise.
2. How Can a Software Licence Agreement Help My Business? A well-drafted software licence agreement can help by clearly defining IP rights, setting out UK GDPR data processing clauses, and specifying your support services. This proactive approach can set clear expectations and help preempt and answer common customer questions.
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