Software licensing
Under a software license, the licensee is permitted to use the licensed software in compliance with the specific terms of the license. If there is a breach of the license, depending on the license it may result in termination of the license, and potentially the right of the owner to sue.
A software is licensed by owners in a variety of ways, including: shrink wrap contract accompanying the software, free software license accompanying open-source software which is typically made freely available in source code form, and enterprise software licenses which are agreements the terms of which are specifically negotiated between the licensee and licensor.
Licenses vary greatly depending on what the licensor choose to grant (or, in the case of a negotiated license, negotiate) as permissions, rights and what restrictions on the licensee are imposed. License prices may also vary by customer, application, license scope, and the like.
In addition to granting rights and imposing restrictions on use of the software, software licenses typically contain provisions which allocate liability and responsibility between the parties. In enterprise and commercial software transactions these terms (such as limitations of liability, warranties and warranty disclaimers, and indemnity if the software infringes intellectual property rights of others) are often negotated by attorneys specialized in software licensing. The legal field has seen the growth of this specialized practice area due to unique legal issues with software licenses, and the desire of software companies to protect assets which, if licensed improperly, could diminish their value.
Examples
Example of shrink wrap contract: an example of a license for which the originators maintain strict control over the software component is the Microsoft Windows Operating System software. This has helped Microsoft successfully gain a dominant position in the software market: Microsoft Licensing.
Example of free software license: The GNU GPL is aimed at providing licensees with significant permissions and rights. There are restrictions in the license -- the licensee must pass on the received permissions and rights to anyone to whom they provide the software. Once a piece of software is distributed under the GPL that released copy will always be available with the permissions and rights received.
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