Distributors of software tend, typically, to want the right to market software which is compatible with either other software or computer systems which they are already marketing and distributing.
The Distributor may wish merely to “pass-on” the Software Owner’s own end-user licence to customers so that any problems will flow directly back to the Software Owner, who may also provide support directly to the customer.
On the other hand, if the Distributor undertakes to distribute particular software to run in combination with other software and/or hardware which the Distributor is marketing, the Distributor must ensure the compatibility of that software with the system as well as its reliability. (See also Contract 7).
In addition, the Distributor must ensure that after investing in the advertisement and marketing of the software, the Distributor will be able to supply and, if need be, ensure the continued support of the software once the Distributor’s customers have it installed on their systems. The one sure way to ensure this continued supply and support of software is by the Distributor holding a copy of the source code. However, for the reasons indicated in the Explanatory Notes to Contracts 12 to 15, it is highly unlikely that the Software Owner will permit the release of the source code and thus the necessity for the escrow provision in Clause 3(c) of this Contract and the Escrow Agreements forming Contracts 12 to 15.
The most beneficial and flexible type of agreement for Distributors is one which:
- grants an exclusive right to distribute in as wide a territory as possible;
- permits the Distributor to hold a master copy of the software and generate copies of the software as and when necessary;
- permits the Distributor to license or sub-license the software to end-users in the manner it deems appropriate and
- ensures the owner supports the software either direct with the end-user or via the Distributor where the Distributor has a “first-line” support HelpDesk for its customers and the Software Owner provides prompt and professional back-up support.
This Contract is drafted for the distributor’s benefit and provides for such requirements.