what "limited" means in software license and other licens issues

[v235]

We are a consulting company and when we deliver the software to our clients the deliverables are divided into 2 parts:

a) client business specific soft which is considered 'work for hire' with all possible rights assigned to the client yada yada yada

b) generic software which remains ours but the clients gets a license to use it in its business. The current terms for the license are as follows:

We grant to Customer a perpetual, irrevocable, limited,
non-exclusive, non-transferable, worldwide, royalty-free license, without the
right to grant sub-licenses (except that Customer may grant sub-licenses to its
affiliates and/or subsidiaries), to use the Type B Deliverables in furtherance
of Customer's Business.


The client we talk to right now has 2 issues with it:

1) He objects to the word 'limited' in there and asks "what exactly does the 'limited' means" and wants to remove it.

2) Does this licensing limit him in any way to sell or merge his company?

 

[The Occultist]

What country are you in?

 

[v235]

Lets say US

The main question is what exactly "limited" means in the licensing clause like the one above. And what will be different if we just remove the 'limited' from it.

 

[Zigner]

Lets say US

The main question is what exactly "limited" means in the licensing clause like the one above. And what will be different if we just remove the 'limited' from it.

Let's say

US LAW ONLY -

 

[v235]

Well.. whatever. Any *real* answers?

 

[justalayman]

Lets say US

The main question is what exactly "limited" means in the licensing clause like the one above. And what will be different if we just remove the 'limited' from it.

what do you intend it to mean? It is your contract after all.

 

[v235]

Oh cmon. Can we get to the point? Its US. US Only.

 

[justalayman]

as I said; limited means what you intended it to mean.

a term in a contract that is ambiguous is defined by the writer. His/her intent is what the term means.



The bigger problem, for a contract to be enforceable, you and the other party must agree on what it means or it may be ruled to not mean anything.

 

[FlyingRon]

It means there are restrictions on the use. Just as everybody else told you, the word means NOTHING other than to indicate the licensee needs to read the rest of the license terms.

 

[v235]

Somehow I find it hard to believe.

If I don't know what 'royalty-free' means it doesn't mean I can redefine the meaning.

From googling I see the 'limited' included all over the place and so I assume there is a definite meaning attached to it when talking about software licensing.

 

[callie212]

what they're saying is limited means exactly what the definition says it means:

lim·it·ed
–adjective
1. confined within limits; restricted or circumscribed: a limited space; limited resources.

You, as the seller decide what those restrictions are and what you are going to "limit" the use of the software to.

Royalty free is the opposite, as it means that there are usually no royalty charges and buyer typically receives the right to use the license indefinitely with very flexible restrictions, again defined by the seller. Rights-managed is where the seller of the license specifically gives permission to the buyer to use the content in a certain way, which is more similar to selling software under a "limited" license.

I don't think that software is usually referred to in terms of royalty free, its almost always limited in some way and when not, its directly stated otherwise. Typically the limited part is used to restrict the amount of copies available for installation, the amount of users operating at a given time, or where they can be installed. But again, its up to you how you limit its use and you need to explain how its limited in your license agreement. Otherwise limited means nothing sitting in the title of your agreement and it might as well be removed.

 

[Zigner]

What state are you in?