Software Licensing: Is Your Company Exposed?

In this day and age, nearly all companies’ operations are completely dependent on the software they use. Whether it is Microsoft Office, graphics/animation scripts, or even websites, software applications have become an integral part of the working world. This is why software licensing has become so important in the world of business, so that companies may be protected from legal action as it pertains to their use of software. After all, no one wants to be sued or fined. In fact, software infringement is able to be fined up to $100,000 in the U.S. So why not do everything you can to prevent this, especially because it has to do with something as important as the software you use?

Well, a software license is simply a legal instrument controlling how you use copyright protected software. This means that a software license prevents software manufacturers from suing individual companies if they use the software in a way that qualifies as infringement of the manufacturers’ exclusive legal rights. Believe it or not, the majority of companies relying on software aren’t in compliance with software rights, whether they know it or not. While software vendors don’t go around suing everyone, the threat is always a constant one, and many companies are never prepared for an audit.

Software licenses most often come in either of two forms. One is that of a “proprietary software license.” This kind of license is one that is more limited for the end-user of the software. The ownership of the software remains with the producer of the software, and very specific, limited rights are given out to the end-user that restrict certain uses of the software. While this may sound initially undesirable, many of us have these licenses on our own home or business computers. For instance, programs like Microsoft Windows or Office feature clauses that restrict much activity for the end-user.

The second kind of license is an “open source license.” This license is more free for the end-user than the “proprietary software license.” In this, the ownership of the software transfers from the producer to the end-user, therefore transferring along with it all rights from copyright law to the copy owner. While the copy ownership is transferred, keep in mind that the copyright ownership still remains with the original publisher of the software.

Nearly every company in the world relies on its software to be productive, whether it’s something as unnecessary as a media organizer or as necessary as an operating system. Software licensing has the potential to become an essential issue, or even a problem, for many of those same companies.