Does Anyone Know What Netscape Is and Who Reads Click Wrap?

In a modern world where you are able to get a license to do just about anything including that means driving, carrying a concealed weapon, or kill, thinking about licensing has changed.  Licensing has also changed with regard to intellectual property. Licensing is the subject of today’s post. It explains what a license is, how software licenses have changed in terms of subscription versus buying a perpetual license, and the liability and risk involved.

So, what is a licensing agreement?  It has to do with intellectual property. It allows a person who created a software product, photograph, song, or movie to give other people the ability to buy that product without giving up the full rights (ability to sell, receipt of royalties, etc.) to that product.  In other words, it allows someone to use buy a product but not ALL of the rights that go along with it. If you would like a more detailed explanation of licenses and how they work (including the portions of rights they protect), look at this website.

Licenses allow you to use stuff like copy righted material without getting in trouble.
(Image available through Creative Commons)

“Back in the day” when Netscape was a “big deal,” license agreements were something that people were much less familiar with. That unfamiliarity bore Specht v. Netscape Communications Corp.. That case is why you now see that little pop-up with the “I accept” button before you download a new product. The little pop-up is click wrap and all that writing that you likely didn’t read before clicking “I accept” is the license agreement for the product that you are downloading or installing on your computer. (FYI, you should read that click wrap or you might accidentally surrender your immortal soul. Don’t believe me? Look at this.) That license agreement gives you the ability to use the software. However, may places are moving away from buying a perpetual license (like when you buy a computer program at the store and install it on your computer) and instead buying a subscription to the software. That means that instead of being able to use that software for as long as they want because they own it, they are able to use it only as long as the subscription is valid. So, rather than owning the product, you only have the right to use it.  While that comes with some risks, which will be discussed later, it also means that you don’t have to buy the new version every time there is an update.

Imagine always having the newest version of Microsoft Word rather than still having the 2003 version because buying the new suite is too expensive.  Sounds good, right??
(Image available through Creative Commons)

With this new wave of options, lawyers are needed more than ever. As the reference site I linked to earlier points out, people have needed lawyers to draft and explain license agreements for a long time. People need to understand exactly what they are signing and the creators of the software want to ensure that their rights and property are protected. With this new trend of software subscription, however, there is a whole new group of questions that lawyers need to help answer. Think about trying to figure out the following without a lawyer:
♠   How do I deliver the service so that it allows full use of the product while the subscription is valid, but blocks use when the subscription is up?
♠   Exactly what kind of license do I have if I subscribe rather than buy the product outright?
♠   What rights come along with that license?
♠   What risks do I have in terms of data that I save with that program? Can someone else access it?
♠   What kind of warranty do I get with a subscription?

Answering these questions is really important and only a well-versed lawyer will be able to help. That lawyer will also be able to help with the question of managing risks and liabilities.  Risks (for everyone, including a lawyer) include (1) losing access to your data if the provider’s site or server goes down, (2) a lack of control over the product you are buying, (3) the possibility that a feature of the product that you have come to rely on, and (4) the possibility that the provider may use or copy your data. As great as always having the new version of a program may be, these are large risks for any person to consider. The option of a subscription service may benefit the provider more than the subscriber. They get to keep all of the rights to their product AND get more of your money because you are unable to simply keep an old version forever or obtain it through a free source.  Sound like any one else we might know? (If you don’t know what I am referring to, you might “get it” by watching the following video available on YouTube: https://www.youtube.com/watch?v=e-ORhEE9VVg.)