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The Scope of Rights in Software Licenses

Licenses

One of the most important provisions in a software license establishes the scope of the rights the licensee acquires from the licensor. The license should delineate precisely which of the licensor's intellectual property bundle of rights are being transferred and to whom, and how many computers or users may access the software simultaneously. If the licensee goes outside of that scope, he risks copyright infringement claims.

Representations and warranties are among the most significant provisions in a software license, development agreement or sales representative or distributor agreement. They usually relate to ownership and performance issues.

For example, a reliability warranty specifies the minimum percentage of time during which an on-line system must be operational in order to satisfy its intended purpose. A response time warranty specifies the acceptable timing for an on-line system to accept a transaction and communicate its result to the licensee. Typically, both types of warranties require the licensee to test the system for adherence to these standards prior to making a claim.

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