Reasonable is in Eye of the BeholderVendor, Customer, & Litigator Perspectives on

Software License Provisions

Aaron BrodskyGreg Leibold Peter Gergely

Agenda

• IP Infringement Indemnification

• Warranties on Software

• Custom Software Ownership/Residual Rights

• Acceptance, Warranty & Maintenance Periods & Remedies

• Questions

Cast of Characters

The Vendor . . . . . . .

. . . . . The Customer

And The Litigator. . . .

IP Indemnification ProvisionsNotice of Claim

Licensee’s rights under this paragraph shall be void unless Licensee provides written notice to Licensor within ten calendar days from the earlier of: (a) filing of the Claim; or (b) Licensee learning of the reasonable possibility of the Claim.

IP Indemnification ProvisionsControl of Litigation & Settlement

Licensee agrees to allow Licensor to control solely the defense and settlement of any Claim.

IP Indemnification ProvisionsExclusions for Combinations

Licensor has no obligation under this paragraph for any Claim based on a modified version of the Program(s) or their combination, operation, or use with any product, data, or apparatus not provided by Licensor.

IP Indemnification ProvisionsDifferent Standards for Patent, ©,

Trade SecretsAs used herein, “Claim” includes . . . copyright infringement, trade secret misappropriation, or infringement of a United States patent of which, as of the Effective Date, Licensor had knowledge that the Program(s) infringed.

IP Indemnification ProvisionsReverse Indemnity for Customer-Provided Info

If Licensee discloses to Licensor or provides Licensor access to, or use of, any documents, information, software or other materials in which third parties claim Intellectual Property rights (collectively, “Third Party Materials”), Licensee will indemnify Licensor as follows. . . .

IP Indemnification ProvisionsInterplay with Limitation of Liability

THE CUMULATIVE LIABILITY OF LICENSOR TO LICENSEE FOR ALL CLAIMS RELATING TO THE PROGRAM(S), IN CONTRACT, TORT, OR OTHERWISE, SHALL NOT EXCEED THE TOTAL AMOUNT OF ALL LICENSE FEES PAID TO LICENSOR FOR THE RELEVANT PROGRAM(S) WITHIN THE THREE MONTHS PRIOR TO THE FIRST SUCH CLAIM BEING ASSERTED IN WRITING TO LICENSOR.

Software WarrantiesScope of Performance Warranty

Licensor warrants for a period of thirty (30) days after initial delivery of each Program, that (a) the physical media used to deliver such Program is not defective; and (b) such Program, when operated with the equipment configuration and in the operating environment specified in Appendix B, will perform materially in accordance with the technical specifications in Appendix C. Licensor does not warrant that the Program(s) will be error-free in all circumstances.

Software WarrantiesWarranty as to Open Source

Licensor warrants that the Program(s) contain no Open-Source Code or other Third-Party Code other than the Open-Source Code and Third-Party Code listed in Schedule D.

Custom Software OwnershipResidual Rights

Notwithstanding anything to the contrary in this Agreement, Contractor and its personnel shall be free to use and employ its and their general skills, know-how and expertise, and to use, disclose and employ any generalized ideas, concepts, know-how, methods, techniques or skills gained or learned during the course of any work for Company.

Acceptance/Warranty/MaintentanceAcceptance Period/Remedies

Acceptance of the Program(s) set forth in Program Description shall be complete upon the earlier of: (a) when a copy of such Program(s) has been installed in Licensee’s Environment and the executability of such Program(s) has been reasonably demonstrated; and (b) thirty (30) days following delivery of the Program(s) (“Acceptance Deadline”) unless Licensee rejects the Program(s) for Cause in writing and returns the Program(s) to Licensor prior to the Acceptance Deadline.

Acceptance/Warranty/MaintentanceWarranty Period/Remedies

Licensor warrants for a period of thirty (30) days after initial delivery of each Program, that [SUBSTANTIVE WARRANTY]. . . . As Licensee’s exclusive remedy for any defect or error covered by such warranty: (a) Licensor will correct such error or defect at Licensor's facility by providing Licensee with corrected instructions, a restriction, or a bypass; and (b) if Licensor is unable to remedy such error or defect after a reasonable opportunity, Licensor will refund the license fees paid for only such Program and Licensee will return all copies of such Program to Licensor.

Acceptance/Warranty/MaintentanceMaintenance Period/Remedies

The term of this maintenance agreement shall commence on the Effective Date . . . . Licensor shall be responsible for using commercially reasonable diligence to correct verifiable and reproducible Errors as and when reported to Licensor in accordance with its standard reporting and response procedures as established by Licensor from time to time. . . . Licensor shall provide you with one (1) copy of each new Release for each copy of the Program(s) being maintained under this Agreement, without additional charge. . . .

Questions?