Do you Know — Software Licensing

By Vangie Beal | Posted November 19, 2004

Is software* ownership the same as licensing?

Simply put, no. Though you may have paid for the software, what you have actually done is licensed the application, essentially paying for the right to use the software according to guidelines determined by the owner (software manufacturer).

The owner of the software remains the person or entity that holds the copyright, giving them the sole legal authority to sell, distribute, copy and/or change the content of the software.

And unless the person or organization transfers ownership rights, the rights remain with the owner no matter how many times the owner legally distributes the software.

When you purchase software — or freely download software from the Internet — you're not buying the ownership rights to the software but rather a license to use the software according to the licensing agreement, or end user licensing agreement (EULA).

The agreement is a legal document between the two parties and is legally actionable if either party violates the terms of the agreement.

While no two EULAs are exactly the same, a typical licensing agreement — whether it comes in the boxed software from your local computer store or attached to an Internet download of an application — states that the person or organization licensing the software has permission to use the software and almost nothing else.

This ensures that the software cannot be copied and sold by anyone, nor can the fundamental programming of the software be changed to alter the performance of the application.

The licensing agreement also protects you from any legal liabilities incurred by the owner of the software's copyright. Typically, software that both individuals and organizations ca use have different licensing agreements that cover different issues (e.g., the EULA for software being distributed to an enterprise will specify how many individual workstations the software can be deployed on).

It's a good idea to actually read all the way through the licensing agreements of software you buy or download. One way that spyware has been able to proliferate over the Internet is by individuals not paying attention to the licensing agreements that state that along with the intended software the program will also install spyware on your system.

*It should be noted that the software referred to herein is proprietary software, not open source software, which follows its own set of rules.

Adapted from Webopedia.com.

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