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Ideal EULA for Custom Software?
Tiger4 asks: ""End User License Agreements (EULA) for custom developed software present a nasty problem for both developers and the customer. What rights does should the developer grant to the user, and what rights should be retained by the developer to capitalize on their effort? Similarly, the customer, who is paying for the work, wants all the rights possible to maximize their investment, but probably only needs a small subset of them, such as maintenance and upgrades. The developer probably wants to be able to re-use and resell chunks of the code; the customer doesn't want single source lock-in, so they want re-use and alteration rights too. The Open Source licenses don't solve all ills, because some processes and data may be trade secrets, or at least closely held in an industry. So what terms should definitely be in a EULA, to provide both maximum flexibility and protection for both developers and customers?"
You should make them agree to give up all rights to anything ever. You own them, their families, and their property. Nobody reads EULAs.
Hey, it worked for Sony.
Note to mods: I'm probably being sarcastic.
sheesh.
of the rights you want to retain, and what rights you'd expect a customer to want, then rank them from most important to least important. Then take these to an IP attorney. Seriously. There's too much case law around that deals with IP that you'll never get it right yourself. It gets harder when you sell software in other states.
None whatsoever, the client should retain the copyright. The developers have already capitalised on their effort by being paid. Rephrased, the question is more like "What's the most profitable way to avoid giving the client what they paid us to create?"
And what if they want to sell licenses to others to offset the cost they incurred?
The bottom line is if somebody pays you to create something to their specifications, then it's a work-for-hire, and they should get the copyright. If you want to re-sell the work that they've already paid you for, then you should pay them for a license.
Bogtha Bogtha Bogtha
A customer who pays for the development of custom software does not want to license it. They want to own it. So the idea that they "only want a subset of the rights" or should even consider the inherently nasty document known as a EULA (in general, a legal document designed to be a contract without negotiation) is wrong.
Btw, this is how IBM got screwed back in the 1980s. They only licensed DOS when they should have bought it. Agreeing to a EULA can be a very expensive and costly mistake.
I gather you are trying to figure out ways to get your customers to swallow this bitter pill.
Obviously you need to talk to a lawyer too. Open-source licenses aren't EULAs, and you don't seem to be talking about EULAs anyway, but contracts put in place before work begins. They don't need any EULA to install or use your software, at least in the USA (you didn't mention what country you are in, which 99% of the time means USA).
Bogtha Bogtha Bogtha
EULAs violate the doctrine of first sale. You can't license software any more than you can license a book. The GPL, BSD, and other such distribution agreements are not EULAs and are certainly fine.
Now, your only problem is to whom the copyright will go. The law says that a work for hire should go to the person who did the hiring. I don't agree with that, but its pretty much settled.
They don't need any EULA to install or use your software, at least in the USA
You're referring to 17 USC 117, correct? In practice, section 117 has been superseded by section 1201, which allows a copyright owner to attach arbitrary restrictions to the decryption of the encrypted install package.
This seems like exactly the sort of thing that should be negotiated when the contract with the client is made to develop the software in the first place. Tell the company what rights to the software you want when you're approached about the job, see what they want, and then proceed from there. There's no one right answer.
From 17 USC 101:
So yeah, good point there. As to EULAs though, they would indeed have to be contracts to be binding, but they fail so many tests of a contract they can't be that. Several attempts have been made to pass special legislation to make them binding, and I'm vague on this but I think a few states have? But trying to claim they're valid under contract law is just absurd.
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...nobody reads them anyway. Why don't you just copy the EULA off of a similar product? Make sure the lawyers read it first.
In addition to what the parent said, they're insulting to your customers. Do you really want to be a bully?
He who lights his taper at mine, receives light without darkening me.
Can be found by clicking here.
or would you rather admit that, since noone reads EULAs, this is all totally unenforceable from a legal standpoint and binds noone except the gullible.
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I had the idea of a sliding scale depending upon what they want. If they wanted to allow the code to be released under GPL then the cheapest rate If They wanted to walk away with the code, then the highest rate. Somewhere in between would be a middle rate with an annual maintainance fee to keep the GPL code non-releases... it would be released when the maintainance fee was dropped.
Readability.
If at all possible, use an established, recognized license. The GPL, something from Creative Commons -- hell, I love the Unreal licenses for simple brevity and readability, but chances are, you'll want something written in 20 pages of pure legalese, so make sure it's something I've seen before, so I don't have to read through it again.
It'd be so nice if there were only 5 or 10 licenses in the world, so that it's actually feasable to read them, and know what you're agreeing to when you see the license page of some random installer. Instead, every software company feels they have to reinvent the wheel -- even if the language is essentially the same, it's not obvious enough to avoid reading them -- unless, like me, you have no intention of following the agreement anyway.
That is the main right I want as a customer -- to know what rights I have.
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Just because the end user doesn't read a contract doesn't mean they're not enforceable. You're propogating the Slashmyth that EULAs aren't binding because nobody reads them. All the court says is that if you have the terms RIGHT IN FRONT OF YOU and you choose to ignore them, you're SOL.
Advice: Get a lawyer friend, or purchase one, then research Clickwrap, Gateway, etc.
People know or should know that any software, etc, is going to have licensing terms. Courts know people should know. Thus, courts say people can be held liable.
I'm facing a similar situation myself right now and read with interest the comments to this post - I saw lots of issues raised and opinions debated, but very few concrete responses. Obviously, contacting a software licensing attorney at some stage of the process is pretty much unavoidable, but does that mean that we can't have a substantive exchange of ideas on a public forum?
I'm a contractor who's been developing customized versions of a simple application for an agency who uses it with client after client. We're at the point where we've decided to create a more generalized, user-configurable version, so I can move on to other things and they can simply sell the shrinkwrapped app to their future clients, splitting the proceeds with me. My employer and I are on the same page with respect to all main points of the arrangement, but have no idea how to even begin to put stuff on paper. We do plan to retain legal services eventually, but I'd really appreciate any pointers to some broad-based overviews of the process, information about some of the issues to consider and/or pitfalls to avoid, etc. We don't even know the legal difference between 'licensing' and 'selling' software, just that there is one, for example, and the more we look into this the more confusing it seems to get.
Perfectly Normal Industries
How about "All your base are belong to us"?
I think that's what Sony is using on CDs nowadays.
Lost at C:>. Found at C.
"consumer has no rights after accepting this agreement"
---- Booth was a patriot ----
You get payed to develop custom software for people, then you go ahead and develop it, keep ownership, and graciously provide the customer with a restrictive license to use your code?
In case you hadn't noticed, you are not Microsoft. Fucking over your customers is probably not a very good business plan when there's a million other companies that would be glad to actually give them what they payed for.
Haven't done it many times but I use the GPL. Reasoning thus:
Look Mr Client, I ain't writing a work for hire, at least not unless you add a zero to the check. Because I'll be cutting and pasting code in from my own stash and from other Free/Open code under normal conditions and I priced this job on the basis that I'd be doing likewise with the new code written for this project on the next one, and it is a lot simpler to use one uniform license. Now, the benefit to YOU is that I'm giving you the source code. This means that WHEN it needs modifications you can get anyone to fix it. Sure I will understand it best and I hope to get that future work but I might move or get hit by a bus. You can mark the boundaries around what you consider your 'business logic' that gives you an advantage and I'll agree not to disclose that part, although I will still mine it for code fragments. Since you got it under the GPL though, YOU are still be free to do as you please with it, even resell it so long as it is under the terms of the GPL.
The only grey area is that by a strict reading of the GPL I can't waive my right to redistribute the modified work if it incorporates GPL code from other projects, but since I do pass full GPL rights to the customer I don't think my reasoning would fail even a FSF zealot's test.
Democrat delenda est
Use a Free Software license. It is unethical for the developer to take away the rights and freedoms of his users.
That's not really what it's about. I know nobody will see this at this point, but I just wanted to point it out to you Bogtha.
Our company never sells the copyright for custom software we produce. If we didn't retain copyright ownership to all the code we produced, it would be an absolute nightmare, from both a legal and technical standpoint.
We have internal libraries we reuse constantly. We have techniques we discover while working for one client that we can apply to make better software for our other clients. These things would require 100% cleanroom implementations at each step of the way if we didn't own the copyrights. We might also license third party code for inclusion that fits the project needs and budget, which we simply couldn't transfer to the client, since it isn't ours. (Yes, this includes BSD and MIT licensed code). Without retaining the rights, each project would be longer and more expensive for the client.
Typically the only clients who want the copyrights are very small shops (usually a few people, none with any intellectual property experience) or random posters on Slashdot, who wrongly feel they're being "screwed" if they don't get the copyrights. We're usually talking about one off scripts and people who post for projects on rentacoder or something. We're not talking about serious software that's expected to help businesses do their jobs, software the requires teams of developers, hundreds of hours, and benefits from the fact that we've done this before.
The issue is more complex than "I pay for it, I own it."
We certainly would never place any use restrictions on the software we develop for clients. You get full source, unlimited rights to modify and use, and so on. We regularly agree to exclusivity arrangements where we promise not to resell the completed custom software to others (competitors, for example) or retool the solution into shrinkwrapped software for X number of years or indefinitely. These clauses are more than enough to protect the investment and rights of the client. And we'll go to whatever lengths, short of selling the copyright, to ensure the client can do what it needs to do and has as many rights as it needs to have in order to accomplish its goals for the project.
But it's simply pedestrian to expect a modern custom software shop to operate without rights to what it produces. The expense and legal risk alone would inflate our rates to the point that very few companies could contract us to build software for them, and certainly not the small shops that typically demand the copyrights (at the rates they demand them, no less).