Are you abiding by the conditions of licence for all your software? Worth checking

Home Are you abiding by the conditions of licence for all your software? Worth checking

Are you abiding by the conditions of licence for all your software? Worth checking

You might think that having secured a licence to use software in your business, that’s the end of that story – and how your usage then evolves is immaterial.

It may not be so clear cut though, according to a recent case highlighted by our ICAEW Legal Alert team.

In fact, you need to keep an eye on this, and modify your use or renegotiate your licence if things change significantly.

‘Businesses using licensed software should beware extending its use over time,’ reads the Legal Alert headline, ‘or risk inadvertently breaching the licence terms’.

It’s something to be aware of.

Clear licence

The advice seems clear.

‘Businesses using licensed software should ensure the licence clearly defines their permitted uses of the software, and monitor and review their use of it periodically in light of technological innovation and business developments, or risk being in breach of the licence, a recent ruling makes clear.’

So what was the case that brought this to the fore?

One business, licensing two software products from a supplier, according to the Legal Alert.

‘The first helped the business manage its ops, finance and HR functions. The second enabled the first software to communicate with other software.’

Use and access

At the risk of getting too technical, the ‘breach’ seems to have concerned the reach of people accessing the original licensed software.

‘The licence for the first product provided that only named users could access and use it, whether directly or indirectly – although ‘access’ and ‘use’ were not defined.’

This meant, the company was ‘charged different fees for different categories of named user’. Meanwhile, licence fees for the second package ‘depended on the volumes of messages processed through it’.

Other software

The problem arose where the business also had other software enabling:

• Customers to access their systems to place orders and monitor accounts

• And to ‘help it manage customer visits and calls’

‘Both pieces of software’, says the Legal Alert, ‘had to periodically access or use the supplier’s software products in order to function as intended.’

More and other

The original supplier felt its customer’s use constituted something more and other than that agreed by the licence. It felt ‘the business had breached the licence terms’.

What’s more, the High Court ruled in its favour – the supplier’s. It felt ‘there had been both use of and access to the supplier’s software over and above that permitted by the licence’.

There’s more in the original account. See the Legal Alert.


One for all of us to be aware of though. Be clear from the outset, seems to be the advice, and then review access and usage over time.

Here are the Legal Alert’s two key recommendations:

1. ‘Ensure the licence clearly defines the permitted uses of the software, and what is chargeable’

2. ‘Monitor and review’ your use periodically ‘in the light of technological innovation and developments in the business’

See the full Legal Alert here.

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