Software License Agreements

Software licensing

agreements

A guide on how to license your software and how to choose the right type of licensing agreement for your software.

Your choice of license agreement for your software depends on what you wish to grant to a user.

A software license is an agreement between a developer and user on how a software product can be used.

What is a software license?

Some licensing agreements can be general and apply to all users or they can be more specific to particular users.

Other type of software licensing agreements allow users to modify the app’s code.

Clauses for a software licensing agreement

All licensing agreements for software contain similar provisions.

1 - Permitted use

The software license agreement must indicate whether the use of the app is exclusive to the one licensed user or it’s limited to particular purposes.

1 - Permitted use

2 - Restrictions

2 - Restrictions

The “Restrictions” clause in a software license agreement often overlaps with the “Permitted use”, but many include specific restrictions in the agreement such as:

No reverse engineeringLimiting the number of copiesNo derivative uses

3 - Intellectual property rights

3 - Intellectual property rights

If you want to keep your software closed-source, your licensing agreement will need a section explaining that the copyright belongs to you.

4 - Warranties and limitations

4 - Warranties and limitations

If you allow users to create derivative works with your software code, that has the ability to open you to liability if it doesn’t work for them.

5 - Redistributions terms

5 - Redistributions terms

If a user creates a profitable product using your software code, do you expect compensation? Any royalty requirements need to be indicated clearly to the user.

How to choose a software license

Choosing a license form depends on whether your

software is

free,

purchased or

contains open source code.

1 - Broad license

1 - Broad license

A “broad license” allows users to modify the software and use the code in their own proprietary products, including those products that are distributed for profit.

2 - GNU license

2 - GNU license

While using the GNU license for your software leaves your software open to being changed for personal preferences, there are still limitations on using it for proprietary products or distributing it.

Sharing is encouraged, but not for a price.

3 - EULA license

3 - EULA license

The EULA license for a software is used to limit use.

The EULA agreement does not allow for derivative products or reverse engineering either.

3 - EULA license

The EULA agreement can offer additional intellectual property protection that would not be present in other type of software agreements.

A GNU license encourages free distribution, but Microsoft’s own licensing and subscription agreement available through Microsoft products is more limiting:

The EULA agreement is normally enough if all you wish to authorize is use.

However, if you offer open source code, going to a GNU or modified GNU is likely a good way to go.

Disclaimer: Legal information is not legal advice

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Credits

The following icons are from The Noun Project: on slide 7 "programmer" by Gan Khoo, on slide 9 "code" by Brennan Novak, on slide 13 "Repair" by Arthur Shlain, on slide 15 "Allow Redistribution" and on slide 19 "Clean Code" by icon 54.