There are many different types of software and many different licensing approaches. These posts are intended to provide a basic understanding of software licensing starting with a simple license of a program for internal use. For internal use these are the common terms that would be defined:
Licensor means the individual or company that is providing the license grant to use the software and documentation.
Licensee means the individual or company that is paying the licensing fee to use the software and documentation
Derivative Work is something that is prepared based upon the underlying code or documentation that would infringe the Licensor’s copyright in the work unless authorized.
Designated Installation(s) would define the physical location where the software will be installed. It could be an individual computer or CPU, a cluster of CPU’s, a network, a cloud. In SAAS (Software as a service) it could even be maintained at the licensor, with the licensee being provided access to the software.
Internal Use means software that is used by the licensor, their employees, contractors or consultants on the licensee’s computer.
Licensed Product means the software and associated documentation.
Licensed Software mean the software only
Object Code is code primarily in binary form that can be executed by a computer
Source Code is code that is readable and understandable by a programmer
Documentation means user manuals or other materials provided by the licensor
Material Errors are errors in code that affect the operation or use of the program that must be corrected.
Minor Error or Bugs are errors in the code that do not affect the operation or use of the code that the licensor may, but is not obligated to correct
Enhancements are changes or additions to the code or documentation that improve the licensed product. Depending upon the licensor enhancements may be provided without charge for licensed products that are under warranty or have a maintenance agreement in place. Other licensors may have separate charges for enhancements.
Upgrades are enhancements of the licensed product that add substantial value and must be licensed for an additional charge.
Escrowed Materials would define what materials would need to be placed in escrow with an escrow agent if the license agreement requires the licensor to hold the materials in escrow.
