A common type of case that arises in representing software clients is the situation where a current company (ex. Speedy Architect & Design) claims a software license is valid due to its being purchased and registered at an old company (ex. Smith Engineering Co.). For example, let’s say you were using a CAD product while working for Speedy’s and you had a copy of the software loaded on your laptop. Then, you leave the company one day to go open your own company. You figure the software was paid for and properly licensed, and that you should just be allowed to use the software for your new company. Well, as nice as that would be in real life, many times you will find that the software licensing agreement prohibits that. This blog discusses the general topic of transferability of software licenses.
Listen to Attorney Steve discuss this software law topic on Vondran Legal Hour
PODCAST: Listen in to hear some general legal information about whether or not software licenses are transferrable to new entities such as when there is a merger or acquisition of a company.
Common grounds to be able to transfer your software licenses to another company
In the area of software compliance and licensing, your rights will normally derive from your licensing agreement. This usually comes with your product, and if it is a Saas product (software as a service) you might find the terms of the licensing agreement online. But’s let’s take a look at a couple of the bigger companies, and how they might handle it.
According to Autodesk website there may be times when an Autocad or Revit license, for example, can be transferred from one entity to another. Here is what their website says current as of 9/19/16:
- The merger of two or more companies
- The divestiture or acquisition of a company by another company
- Transfers between subsidiaries of a single company
- Dissolution of a partnership
- Privatization of a government entity
- Transfer from private entity to US Government Organization
- Donations to a non-profit organization
- Transfer to another country* – In most cases the licenses and subscriptions must be registered for at least 12 months to transfer to another country.
Regarding transfers of Autodesk products from ex-employer to departing employee (was told not transferable unless the Employer upgraded).
B. MICROSOFT [OEM]
According to Microsoft’s website:
The Microsoft Software License Terms is granted to the end user by you, the system builder. It is related to the OEM System Builder License for the PC on which it was originally installed. You are required to support the license on that original PC, but you cannot support a license that has been moved from a PC that you manufactured to one that you did not. This is one of the key reasons why an OEM System Builder License can’t be transferred. PC transfer to another end user The entire PC, however, may be transferred to another end user, along with the software license rights. When transferring the PC to the new end user, the following must be included: Original software media Manuals (if applicable) Certificate of authenticity (COA) It is also advisable to include the original purchase invoice or receipt. The original end user cannot keep any copies of the software.
There is also more information from a document I found on their website entitled:
“The Principles of Transferring Licences:”
- You can transfer perpetual licences, abiding Microsoft’s transfer guidelines for the appropriate agreements.
- Split payment Volume Licence Agreements eg Mutli Year Open (MYO), Open Subscription Licence (OSL), Open Value (OV), Enterprise Agreement (EA) – you cannot transfer until final payment
- Licences acquired through Subscription agreements cannot be transferred as customer does not own the licences. Transfer can only take place if the customer has chosen to buy out the licences
- OEM licences cannot be transferred, unless the PC and the licences are transferred together.
- FPP licences can be transferred to another PC or organisation providing they are removed from the original PC and are transferred with the End User Licence Agreement (EULA) Certificate of Authenticity (COA), media and all documentation.
To be sure, always contact the software vendor to make sure what the requirements are before getting started.
Here is what Adobe says about the ability to transfer a software license:
License transfer policy If you sell or give your Adobe software to an individual or business, you can transfer the license accordingly. Transferring the license allows the new owner to register the software in their name. Important: Educational versions of Adobe-branded products are not eligible for a transfer of license. You can, however, transfer educational versions of Macromedia-branded products to a new owner. If you transfer a license for a product suite, then the license applies to the entire suite of products. Individual products within a product suite are not eligible for a transfer of license. The transfer of a license includes all versions of that product. If you sell or donate your registered copy of an Adobe product license, then you transfer your rights to all versions of that license as well. Support contracts that are attached to a license do not transfer to the new licensee. Support contracts are legally nontransferable as specified in the terms and conditions of the contract. Except in Germany, Adobe does not permit transfers for OEM (Original Equipment Manufacturer) versions of software.
“License Rights. Subject to Your compliance with the terms and conditions of this License Agreement, Symantec grants to You a non-exclusive, non-transferable license to use five copies of the Licensed Software solely in support of Your use of Symantec Validation and ID Protection Services (“Services”). “Licensed Software” means the Symantec software program, in object code form, accompanying this License Agreement, including any associated program documentation included in, or provided for use with, such software.”
Contact a software law attorney
We can help businesses with work-for-hire agreements, copyright infringement mediation and litigation, software licensing, and audits with the business software alliance (BSA), Adobe, Autodesk and the SIIA trade group. We have helped many companies across the United States handle claims of software piracy, non-compliance with licensing agreements, and other technology law legal matters. We offer low flat rate fees for many non-litigation cases. Call us at (877) 276-5084 or send us an email to the email address on the right sidebar of this page.
Latest posts by Vondran Legal - Business, Real Estate, Insurance, Technology & Civil Litigation Counsel (see all)
- Did your company receive an email about an “Autodesk Software Review” - February 20, 2017
- Malibu Media Lawsuit Updates – Defendant wins! - February 14, 2017
- “Back off buddy” – Intentional interference with prospective economic relations under California law explained - February 1, 2017
- Did Trump sue Alec Baldwin for $445 billion for Copyright Infringement? - January 28, 2017
- ADA Website Accessibility Compliance Litigation on rise in Arizona? - January 25, 2017