Licensing and the Stages of Legally Purchasing Software

Licensed software, and the legal purchase of it, has unique legal contract obligations. Generally, the consumer owns any product they purchase. Although the seller may maintain certain responsibilities after the time of purchase, the consumer still owns the rights to do with it what they wish. One prime example would be the purchase of a car.

However, the contract obligations for legal software, or software that has been licensed and legally purchased, is an entirely different story. While almost everyone is familiar with the term “end-user agreement”, since they agree to one just about every time they download software from the Internet, they’re less familiar with the specifics of the particular legal contract they just signed, and what it means to actually own software.

Of course, the contract issues related to ownership of software aren’t just of concern to the end-user. All parties involved in the distribution of software including developers, distributors, and so on are responsible When it comes to a legal battle, any party involved in the life-cycle of software may end up on the wrong side of a dispute when not fully aware of the legal issues involved.

Thus, it’s imperative to be familiar with issues of purchasing software legally, be aware of what constitutes a legal contract in the distribution of such software, and know what kinds of contracts are suitable to various stages of the life of a particular version of software. This preventative method will result in less worry and more security. After all, that’s what a good contract ought to be about.

When speaking of software and contracts, one is essentially discussing licensing. A license is the essential contract pertaining to the selling and/or distribution of software to the end-user. Without a license, a user is fundamentally in possession of illegal goods.

Fundamentals of a License

Some software differs from other consumer products due to the fact that ownership of the product is never transferred. When software is purchased from a company, the consumer is not buying the ownership of the software, but is instead purchasing the licensing that allows them to use that particular software. This is the heart of a legal contract when it comes to the legal purchase of software. However, there are circumstances when software is developed specifically for a company by an outside developer. That software then becomes their property, and a less customized version of the software may be owned by the developer. Understanding this concept will help in comprehending further issues related to licensing.

Licensing in effect is a tool used for manipulating the extent to which users pay for the initial product, continue to pay for use of the product, pay for various services related to the product, and to avoid paying someone else for a replacement product. Influence over all licensing options can often make or break particular software developers and distributors.

While many legal contracts for software may remain stable for long periods of time software consistently changes. Licensing arrangements are extremely flexible, and may alter at diverse stages throughout the lifetime of the software.

The First Stage – The Rise

The first stage of the life-cycle of software that can be purchased legally by a consumer essentially involves its initial introduction into the market place. This is where licensing becomes important – not only as a tool of legal ownership, but also as a tool of profitability.

At the beginning of the software’s life-cycle, the most important aspect of marketing the product is convincing enough users that the software is something they need. Thus, building a licensing strategy along with the marketing goal is of utmost importance. Consequently, the kind of licensing fitting for older software is divergent compared to licensing for software that’s just been designed.

Gaining the attention of the user is vital for new software, as consumer choice plays a life-sized role when software is first introduced into the market. The software company is able to get a foot into the door by allowing the user an opinion as to the kind of licensing desired. Then the company is able to create more limiting forms of licensing later on.

Utilizing licensing strategies in tandem with marketing strategies can lead to success in the world of software. This is in essence what legal contracts are about in the software world, and therefore, is a key component of licensing.

Once a software product has been introduced into the marketplace, users begin to learn it, gain an impression of its capabilities, and are then ready to build a more lasting relationship with the software company or distributor. Thus, the licensing strategy should reflect this aspect of the growth stage in the life of the software. While capturing user interest is central in the first stage, growing their interest in the product is part of the next stage.

The Second Stage – Maturity

Legal contract licensing at this stage should be focused on ideas such as non-perpetual licensing. With non-perpetual licensing the user must renew their licensing periodically based on their initial interest and demand for the product. Adjusting price comes into play at this stage, while adapting to volume licensing can maximize the length of relationship with the customer, and the profitability that comes with it.

It’s at the maturity stage of legal software where most of the crucial licensing issues occur, especially when it comes to maximizing a long-term and profitable relationship with the end-user. This stage determines the ultimate difference between a successful software product, and one that fails to maintain market share.

Non-perpetual licensing agreements become a requirement at this stage. Users are not only now interested with the software, but desire to keep using it for the anticipated future. Here is when licensing such as maintenance and enterprise distribution can be introduced and utilized to yield even more of a profit. Having legal contract licensing that maximizes all of these issues for a distributor is the essence of success in the industry.

Stage Three – Decline

Finally, once software has passed its maturity stage, and is ready for some degree of decline, it’s important to develop licensing strategies for legal software that preserve the maturity stage for as long as possible. Creating various innovative products to fit with the original software is one way many companies will extend the life of their product. Such things as supporting rights, courses, and backup licensing are all methods of generating income during the decline. Companies are advised to be careful at this juncture when changing licensing arrangements, as users may attempt to find a new product.

Today’s technological age requires the comprehension of all these legal contract issues. The sale of legal software can net a great profit simply due to the nature of its license arrangement. However, it’s important to utilize strategy with software development and distribution.

Changing Concept of Legal Service

The concept of high end legal service is changing drastically. As the business organizations are facing tremendous competition, legal disputes are increasing by leaps and bounds. Regulatory authorities are trying to enforce maximum control mechanism to make them accountable for the stake holders.  

To adapt with this situation, demand of high end legal service is increasing day by day. Keeping this situation in mind now some companies are offering complete legal solutions. They have veteran lawyers and huge networks to solve all type of legal problems with high efficiency in terms of quality, cost and time.

Maintaining a huge data base and very wide spread operational network is allowing them to address all disputes, irrespective of time and place in an efficient and effective manner. These companies are providing wide range of legal services. Laws relating to cyber, corporate governance, media and entertainment are serious matters of concern for modern day’s business entities. To maintain the smooth flow of business and hassles free competition, those companies are providing professional services.  

After analyzing the nature of disputes and clients requirements the legal service providers are customizing their services. This type of services also helping the clients to get relief from day to day legal hassles and allowing them to concentrate on their core business.  

These companies are also helping their clients to frame strategies regarding advertisement and all other societal norms so that they will not take any missteps which can raise legal actions against them.  

Thus in present society the concept of legal service has changed from reactive quality service to proactive customized time efficient quality service.

The Legal Hurdles of Adapting A Novel or Book

Here’s a question I recently received from a student:

The Question:

Given that I have very few connections to the industry, how would you best recommend moving forward if I have a novel in mind I’d like to adapt? Is it necessary to have a literary agent? Is it best to go through the publishers to find out about the rights? What would help me to get my foot in the door?

My Answer:

Most likely, novels by major authors will have already been snapped up by people with much deeper pockets than you have. However, older or lesser known novels and non-fiction books by less famous authors may very well be available. And some very old novels even exist in the public domain, which means you can use them without optioning anything!

Contacting The Subsidiary Rights Department

The way to start is by contacting the Subsidiary Rights Department at the book or novel’s publisher. You can usually find the contact information for the Subsidiary Rights Department down in the fine print at the bottom the publisher’s website, or by calling the publisher directly.

Break Out Your 1990′s Technology

Believe it or not, many Subsidiary Rights Departments still require contact via fax, so unless your publisher accepts email requests, go ahead and crank back the calendar to 1994, break out your old fax machine, and get ready to rock.

The fax (or email) you send should include the following:

Your Name

Your Company Name (if Applicable)

Your Address

Your Fax Number

Title of The Novel

Author’s Name

Publisher

Publication Date

ISBN Number

A Request To Know Who Controls The Film Rights For The Novel

A Blank Space For Them To Write That Person Or Company’s Contact Info

Make sure your return fax number is printed clearly on the form, so they know who to send it back to!

Contacting The Rights Holder

Once you have the name of the person, company, or agent that controls the film rights, you can go ahead and reach out to them (usually by phone or email) about optioning the novel or book.

What The Heck is An Option?

Essentially an option is a legal agreement that gives you the right to buy or sell the film rights for a book or novel at an agreed upon price. Most options last for a year, and give you an option to extend for a second year for a fixed additional payment. Depending on the perceived value of the book or novel you’re optioning, an option can cost a fortune, or as little as a dollar.

The option is the thing that gives you the right to actually SELL the screenplay you write based on somebody else’s book or novel.

It’s not your job to know the ins and outs of options. When the time comes, you will hire a lawyer to walk you through the option agreement. For right now, just concentrate on contacting the rights holder, finding out if the film rights are available, and asking if he or she would be willing to work out a “free” (technically $1) or inexpensive option with you so that you can adapt the book or novel into screenplay form.

Your Pitch

If you’re like most writers, you probably don’t have a ton of money to spend on an option. If the novel’s been sitting on the shelf for years, the rights holder may simply be delighted to know that someone is interested. But the chances are, you’re going to have to do a little bit of selling of yourself in order to convince the rights holder that it’s in their best interest to put their project in your hands.

So that means before you pick up the phone, you want to have a clear take on the material, and an exciting pitch for how you’d transform it into a marketable screenplay, and maybe some ideas for big stars who could play the lead role once your screenplay is finished, and how your version of the adaptation would be perfect for those actors.

Remember, You Are Bringing Real Value To The Project

Generally, if the film rights for a book or novel are still available, it means the rights holder has already done everything in their power to sell the project as a film and failed. That means your script could give them a second chance to show someone how this story really could make a great movie and turn it from another project sitting in their files into a hot commodity that can bring them lots of money.

If you’re going to risk a year of your life writing that script for them with no upfront compensation, it’s reasonable to expect them to give you a year long option and the rights to extend for a second year for a reasonable amount of money.

What If They Want You To “Audition”

If the rights holder asks you for a short treatment or a writing sample, it’s probably worth your while go ahead and send it. But don’t under any circumstances start writing a screenplay until you legally control the option on the material.

I can’t tell you how many writers I’ve known who have “auditioned” by writing a script with the hopes that a rights holder would like it, only to have the rights holder sell the book or novel out from under them- often for reasons that have absolutely nothing to do with the quality of the script.

Why You Need A Lawyer

Remember that you only control the rights as long as you control the option, which means that once the option expires, you can’t sell your script without the author’s approval. That means you want a real entertainment lawyer to draw up your option agreement for you (even if you’re optioning the story for a dollar).

Think about the time you’re going to invest in this project. Do you really want to stake everything on an option agreement you pulled off the internet? You need an expert to protect your investment, and make sure you can do something with it when it’s finished.

Public Domain Books And Novels

As you can tell, when rights holders are involved, optioning a book or novel can be a challenging process for a young writer. However, if the book you’re interested in adapting was published in the United States prior to 1923, most likely you don’t have to go through ANY of this! Because most likely that book is in the public domain.

For this reason, if you’re interested in adaptation, one of the best places to start is with old books that you can use as you like without any option agreement.

The rules of public domain can be complex, so make sure to double check that the book is in the public domain before you start writing.

Writing Your Adaptation

Of course, optioning the book or novel, or discovering the public domain book you want to adapt is just the beginning. The process of making your adaptation is an art in itself.

Legal Disclaimer: I am a screenwriter and not a lawyer. Though I hope that this information will be useful to you, please be aware that no part of this article should be considered legal advice. For such advice please consult an entertainment attorney.