SOFTWARE LICENCE AND SUPPORT AGREEMENT

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This Contract joins the principal terms of a Software License and separate Software Support Agreement in one contract, the effect of which is to incorporate software support as an integral part of the software license. Read moreRead more

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Description

This Contract merges the principal terms of Contracts 1 and 3, the effect of which is to incorporate software support as an integral part of the software licence Agreement.

As mentioned in the Explanatory Note to Contract 1, the true value of software is as an intangible intellectual property asset and it is this asset that the software licence is designed to protect often accompanied by the latest technological aids and measures built into software to ensure compliance with the licensing conditions.

 It is equally important to stipulate clearly the conditions of the grant and the rights and obligations of the Licensee/user. In particular, as it is commonplace for software to be used in a multi-user or network environment, it is relevant to specify in the licence precisely where, by whom, by how many and the manner in which the software may be used. For example, the licence may state that the software may only be used on one designated system (whether physical or virtual), and/or for use only at a particular location and/or by a single user or by a number of concurrent users, each of whom may use the software simultaneously.

 The importance of controlling the number of concurrent users is predominantly financial since a Licensee can, without much difficulty, pay only one licence fee for one copy of a software program and if unrestricted technically or by contract, use the same program within a network whereby there may be any number of users worldwide. Therefore, rather than each such user paying a separate licence fee, the Licensor receives only one fee. The financial loss attributable to not controlling such unlimited use is obvious.

 In order to further protect (beyond contractually) that the number of concurrent users does not exceed the permitted maximum included in the licence fee, some Licensors incorporate a specific additional software program within the software, sometimes known as an access control monitoring program which can automatically restrict any additional users beyond the maximum permitted by the Licence.

 Conversely to restricting use rights, it may be that a Licensor, in recognition of modern mobile laptop, tablet, “Android” and other current devices, may wish to extend the licence granted for the licensed user(s) to be able to use the software on any such devices. An example of such an extension to the grant is included in this Contract.

 In view of the continuous and widespread infiltration of viruses affecting thousands of software users at a time it is particularly relevant, certainly from the Licensee’s viewpoint, for the Licensor to warrant the integrity of the software, i.e. that it is virus free certainly at the time of delivery (see Commentary for nature and effect of viruses).

 Furthermore, with the use of disabling/“time-out” programs or devices which will render the software unusable which can be built into software by the Licensor to ensure compliance with (most often) a particular period of use (e.g. a 30-day trial period), it is relevant for the licence to specify whether or not there is such a program or device incorporated in the software (see Commentary for nature and effect of disabling devices).

Software Support

The extent of the support offered depends entirely upon the software owner, supplier or distributor, but it generally tends to include a variety of support services, typically in the form of an “Online Helpdesk” (where the customer can message software problems and receive a reply via a support portal), “Online Remote access” (where support staff can link to the customer’s computer) and perhaps additional options such as a “Telephone Hotline” and, as a last resort, “on-site” support if the customer is willing to pay for a premium support service.

 Customers with business critical software may also request further additional premium support options for which it will pay extra charges including having support services outside normal working hours including weekends or 24×7 and/or request on-site support as well as a “Guaranteed Response times” (i.e. the support contractor’s guarantee that support calls are responded to within X hours of a fault report/call being made). It must be noted that if response times to fault calls are agreed to form part of the support contract, failure to perform can be regarded as breach, so great care must be taken by the contractor when agreeing to include the same.

 Like Contracts 1 and 3, this Contract is a typical end-user, customer agreement, which should be signed and returned before receipt of the software or support. It should include, however, provisions for terminating support while continuing the software licence element of the agreement.

 Where software support provisions are included in the software licence, it usually implies that the support is being provided by the software owner/supplier and not by an independent third-party support organisation (as is the case in Contract 3). On the one hand, this may be more beneficial in that the software owner/supplier should be more knowledgeable in resolving problems with the software; but on the other hand, it may be that the software owner/supplier’s main business is software development and not support resulting in the latter being under-financed and/or support services being ancillary to the licensor’s main activity.

 If the software owner/suppliers prefer to sub-contract the support services to an independent third-party support organisation, it must disclose sufficient proprietary information about the software to enable the support contractor properly to provide such services to the software end-user customers. Such disclosure must be subject to an agreement not to further disclose such information and to use such information solely for the purposes of providing support (see Contract 47 and 48 for examples of Non-disclosure agreements). In addition, it is vital that the third-party support contractor diligently feeds back all information gathered during its support activity to the software owner/supplier so that the owner/supplier is kept informed of “bugs”, defects and customer requirements. (For an example of the type of agreement under which a third-party contractor may be appointed, see Contract 33.)