IPR on purchase of Software
Perumal Prabhu
(Querist) 05 May 2010
This query is : Resolved
Sir/Mam
We are about to purchase a software for our accounts department. The vendor is having intellectual property on his product. Can we use the same product for other department without paying him any additional amount towards IPR. Pleas give your suggestions with regard to IPR on software products.
R.R. KRISHNAA
(Expert) 05 May 2010
If you are using the same software in a modified form for other departments (which is without the express authorization of the vendor) then it may amount to infringement of the vendor's rights. You may first look into the software licence/sale agreement/conditions of sale of the said software whether the sale of software is expressly prohibited to be modified/altered or its use for other purposes is prohibited.
In case if there is no prohibition clause you may use the software otherwise it is safe to take the vendor's permission.
ESTHERPRIYA
(Expert) 05 May 2010
Taking vendor's consent to use the product is essential and it must be in writing with any consideration to be paid to them for such usage.
A V Vishal
(Expert) 05 May 2010
“Shrink Wrap” and “Click Wrap” Licenses: Unlike a purchaser, a
licensee of a copyrighted material does not possess full ownership rights to the
copy. The licensee’s rights are limited to the terms of the licenses. In order to
exercise some control over the distribution of software by users, manufacturers
have attempted to characterize the mechanism of distribution as a licensing
arrangement rather than a sale. In distributing software by conventional means,
on disks or CDs, sold at retail in a shrink-wrapped box, manufacturers would
include a written “license” in the box, - a so-called “Shrink-Wrap” licenses. The
manufacturers would argue that the license was an agreement between the
manufacturer and the consumer, the terms of which were accepted by the
consumer’s actions of purchasing, retaining and using the software. The courts
have been inconsistent in their willingness to enforce “Shrink-Wrap” licenses,
chiefly because the buyer is not aware of the terms prior to purchase. Compare
ProCD, Inc., v Zeidenberg 86 F.3d 1447 (7th Cir. 1996), enforcing a “Shrink-Wrap”
license, with Sterp-Saver Data Systems, Inc. v Wyse Technology, 939 F.2d 91
(3d Cir. 1991), denying enforcement.
Online distribution of software avoids the chief objection to the “shrink-wrap”
license, by permitting disclosure of the terms of the license to the consumer
before distribution of the software. Prior to downloading the software, the user
can be presented with the license terms and required to designate acceptance
of these terms in order to activate the downloading process. This type of licensing
agreement is characterised as a “Click-Wrap” license. See, Hotmail Corp. v Van
Money Pie Inc. No.98-20064 (N.D. Cal, April 20, 1998}.
