End User License Agreements
As part of our continuing series on basics of technology contracts, today we’ll take a look at end user license agreements.
What is an end user license agreement?
An end user license agreement is an agreement between a software provider and a software user. The provider allows use of the software, but retains ownership of the software.
What do end user license agreements do?
An end user license agreement should clearly explain the rights granted to the end user. Specifically, the agreement should address the permissible uses and the ability to reproduce the software.
For example, the provider may wish to limit use by subsidiaries or parent companies. Another approach is to limit the number of designated users (often called “seats”). And if the recipient is permitted to reproduce the software, the agreement should specify the number of copies that may be reproduced.
How do end user license agreements usually restrict end users?
Software providers often want to provide additional restrictions in end user license agreements such as prohibiting the distribution, modification, display or performance of the software. Generally, such actions can only be performed by the copyright holder unless a license provides or implies otherwise.
Software providers also often wish to clarify that the recipient gets no rights to share the software either through sharing the program with other users or using the software to process data for third parties (service bureau