Software licensing: how to handle a client with outsourced IT supplier? I work for a software supplier that licenses commercial software to clients. The license has various conditions - don't copy it, only use it for licensed purposes, etc. A lawyer has reviewed the agreement and identified a risk where a client has an outsourced IT provider. In this case, the software would be running on computers owned by the IT provider. Potentially the IT provider could copy the software. However, they are not signatories of the license agreement, so it would be more difficult to enforce against them. The lawyer has suggested making it a tripartite agreement (software supplier, customer, IT provider). This would fix the issue, but introduces other complexity. This must be an extremely common issue for commercial software. What other approaches can be used to deal with outsourced IT providers? Jurisdiction is England &amp; Wales, but interested in general approaches.
There are two common approaches. The first approach is simply to let copyright law apply. Under the default terms, the IT provider has no rights to copy your software. Running software is allowed, of course, and not a problem that you need to deal with vis-a-vis the IT provider. You still can sue them if they copy your software, even in the absence of a contract. That is the chief function of copyright, after all! The second approach is to allow the customer to subcontract third parties to act on behalf of them, while acknowledging that such subcontracting does not dissolve them from any responsibilities towards you. In other words, if the 3rd party would do something unauthorized, you have a claim towards the customer and they have a distinct but related claim towards their IT supplier.
The section you quote as clearly saying a thing is not clearly saying the thing. However: you cannot pass on or resell any license keys seems to say a thing clearly. However, one could argue that it's the sharer of the account who is in the wrong, and not the person receiving and passing on the account. I'd say that that piece of the agreement, combined with this: must not... let other people get access to anything we've made in a way that is unfair or unreasonable says that, yes, they are out of bounds.
Your GPL example detracts from the question: see this recent answer. Setting aside GPL-specific conditions, the legal underpinning of software licensing is copyright law, whereby copying source code or an executable is only allowed with the permission of the copyright holder. There are two partial exceptions: "fair use" (generally not relevant to software), and a specific statutory permission to copy software in particular ways (making a backup, plus the act of executing software which requires copying from disk to memory). The latter permission only applies if you have legally acquired a copy of the software. Which explains why nobody sells copies of software, they sell a license to use software (a subtle, legalistic distinction, which is essential to modern software qua business). The terms of the license say what you may and may not do: if you violate the terms, you do not have permission to copy the software, and are liable for copyright infringement. One limit on the terms is that they cannot take away a right that you already have by copyright law (e.g. "fair use" cannot be negated by a license term). Another limit is that the terms have to be consistent with contract law, hence the license cannot include a human centipede obligation – or, "all your stuff belong to us". When a contract is ambiguous, the ambiguity is construed against the writer, and that is also so with software licenses. Also like the situation with contracts, the terms have to be legal, that is, cannot deny some right or requirement encoded in law. There is a legal requirement that disclaimers have to be "prominent", and that holds of license terms. As for "tricking" a person, that's not supposed to happen, with a proper license. If you put stuff out there and say nothing, nobody has been given permission to copy the item. You can make it available to a specific named person, but that is limited to one person, thus a license includes language allowing anyone to copy, but also requiring that the license be retained with any subsequent copies. Hence B copies from A, and sees the license; B may share with C (assuming a decent license) but must include that or substantially equivalent license; and so on. A problem arises if B redistributes without original license, substituting a bogus license. When C copies, that copying is not done with the permission (implied or express) of A, and C could be open to legal consequences. B is also clearly open to consequences, since re-distribution with the self-perpetuating license is a violation of the terms of A's condition grant of permission. Ignorance of the true ownership of copyright is no excuse, and there is no general innocent-infringement exception to copyright law in the US. However, the part of copyright law that talks about remedies for infringement, 17 USC 504(b)(2) lessens the burden on the innocent infringer: In a case where the infringer sustains the burden of proving, and the court finds, that such infringer was not aware and had no reason to believe that his or her acts constituted an infringement of copyright, the court in its discretion may reduce the award of statutory damages to a sum of not less than $200. Still, not zero. I don't see how adding some NOPs would make it impossible to prove that you have a copy of someone else's IP. Perhaps it's not a trivial, but still quite possible.
Licencing agreements The company producing these has successfully negotiated a licencing agreement with the IP holder to use the IP. These are extremely common. Subcontracting They have actually been commissioned by the IP holder to make these things for the IP holder e.g. for the IP holder to sell in their own outlets. As part of that agreement, they are also allowed to sell on their own behalf. Piracy They are breaking the law and hope they will be undetected, not worth prosecuting or operate out of pirate jurisdictions which will not enforce foreign judgements.
Unless you have a legally valid IP right related to the specification that statement is meaningless. When a software license is granted it is based on the copyright of the code. The copyright of the spec. just stops people from copying the spec - it does not protect the information in it. You can restrict copying of the spec. under copyright, you can make up a name for the spec (like USB or Bluetooth) and get a trademark and only allow the trademark use in limited cases(doesn’t stop implementation of the spec), or get a patent that would be necessarily infringed if something complying with the spec was created and used, sold, made, etc. or you can keep it secret and only show it to people who contractually agreed with your terms.
You can replace the software on the device The supplier does not have to help you to do so You are correct that because you own the device, you can do what you like with it. That means you can install whatever firmware or other software on it that you like. However, the supplier does not have to provide this to you or assist you in any other way.
Unfortunately the answer is a vague "it depends." Commercial versus non-commercial is not clearly defined in actual law, and is usually up to the specific license to define what it considers to be commercial use. If you were putting them on your business cards, then it's just being used for advertising and whether it's commercial use is a bit controversial. If the license explicitly prohibits the use of the work in advertising, then the license should explicitly mention that and should not rely on the term "commercial use" to cover or protect it. Creative Commons ran an excellent study on commercial versus noncommercial use back in 2009: Defining “Noncommercial” - A Study of How the Online Population Understands “Noncommercial Use” In the United States, for example, the Copyright Act does not define a copyright owner’s rights in terms of commercial or noncommercial use. Instead, copyright law sometimes attaches legal significance to whether a use is “commercial” or “noncommercial” or whether a user is deemed to be a commercial or noncommercial entity, However, rarely are the terms defined, and the law offers no specific guidance on how to differentiate between commercial and noncommercial uses or users of copyrighted works. If you were putting them on a business card you were making for the client, then that would be more clearly identified as commercial use because you're using it in something you are selling for a profit. What your client will be using them for is not relevant, because you're the one selling them to the client and you need to have the right to be able to do that.
If Client was foolish enough to pay Bad Contractor (BC) without obtaining a proper assignment of copyright in the source, or at least a sufficient license to allow Client to use the code and create modified versions, then BC owns the copyright to the source, and anyone who creates a modified version without permission from BC is a copyright infringer. The contract under which BC was hired should spell out what rights Client is to acquire, and when they will pass to client's ownership, but it might be that Client didn't get such terms into the contract. Or perhaps BC disputes that Client has fulfilled all its obligations. Yes, an infringement claim could be brought against an individual employee, although it is more likely that it would be brought against the employer, or against Client. It could be brought jointly against all three: programmer, new contractor (NC), and Client. Of course, BC's IP rights only matter if BC files an infringement suit. And it might be that a court would find an implied contract, in line with industry practice and the fees that BC was paid, and toss out such a suit. But courts are often reluctant to create contracts that the parties never agreed to. It would be risky for NC to depend on such an outcome of a possible suit. If you or NC are to work on this, you might want to have a contract in which Client explicitly indemnifies you for any copyright claims by BC, saying that they will take on and pay for the defense of any copyright suit BC may bring, and pay any damages that may be awarded to BC. That would largely remove the risk for NC and for NC's employees.