By Robert W. Gomulkiewicz


Article 2B promises to draw together contract principles for software and information licensing that, at present, are spread among various bodies of law. This Article argues that Article 2B must affirm industry standard licensing practices in order to prove beneficial. For example, Article 2B's affirmation of industry standard mass market licensing is important for both publishers and end users. Article 2B must also provide the flexibility to accommodate new distribution and licensing models that will arise as electronic commerce matures. Any other approach would fundamentally disrupt the software and information industries.

Moreover, this Article urges the drafters of Article 2B to resist remaining too wedded to the hard goods-centric rules of Article 2 in crafting default rules. Article 2B's default rules should be specifically tailored to the software and information industries. The Article 2B drafting committee has achieved varying degrees of success in formulating default rules that fit those industries for warranties, duration of contracts, and interpretation of exclusive license grants, at times imposing rules better suited to the sale of goods.











I. Introduction

A contract statute like proposed Article 2B of the Uniform Commercial Code holds great promise for software and information licensing. Licensing law can be chaotic for both licensors and licensees. To draft a license agreement for software or an information product, a lawyer must be conversant in numerous areas of law, including the common law of contracts, Uniform Commercial Code Article 2, state and federal intellectual property rules and overlays, bankruptcy law, and competition law, not to mention various electronic commerce, data privacy, and digital signature statutes. Article 2B, which draws from all these areas of law, could clarify licensing law and thereby promote commerce in software and information products. Doing so, however, will be difficult.

Despite its promise, both scholars and practicing lawyers have approached the Article 2B project with a degree of wariness, though for decidedly different reasons. Scholars tend to approach Article 2B with suspicion because it appears to "remake"1 the contract law they know from reported cases,2 existing contract statutes,3 and scholarly writings.4 For practitioners, Article 2B is not new5 law; it broadly accords with the law that is practiced today in the information and software industries. However, practitioners fear that a group of people unfamiliar with the customs and practices of the industry, or those with political and intellectual axes to grind, will create an ill-fitting contract regime.6 These practitioners would rather live with the un-codified, chaotic body of law they are working with today than have to cope with codified contract rules that do not make sense.

Many challenges stand in the way of creating a uniform law for software and information licensing. One challenge arises from the nature of the law-making process. Putting together a uniform law through the process sponsored by the National Conference of Commissioners on Uniform State Laws ("NCCUSL") and the American Law Institute ("ALI") is a slow moving exercise in consensus building.7 To further complicate matters, the drafting committee used as its starting point Uniform Commercial Code Article 2, a hard goods-centric, sales-oriented set of rules. Though some observers believe a license for software in packaged-goods-form resembles a sale of goods, these transactions differ in many ways from a sale of goods and represent only a fraction of licenses for software and information products.8

Article 2B also faces an additional challenge: digital convergence. While the initial focus of Article 2B was software, the Article 2B drafting committee soon realized that the software, data, fixed media publishing, on-line publishing, motion picture, television, and music industries and their products are converging. These industries are in the midst of convergence, not at the end of it. This means that Article 2B must meld the licensing practices of the different industries, account for their differences, or attempt to deny that convergence is occurring by focusing the statute upon a subset of these industries. Article 2B's attempt to meld and account for various licensing traditions can be viewed either as an important strength or a fatal flaw,9 or, in software parlance, as either a "feature" or a "bug."

This Article provides a perspective on how the authors of Article 2B have fared in their attempt to create a useful contract code for the licensing of software and information products. To do so, it first discusses mass market licensing, which has been a focal point of Article 2B. It concludes that codification of industry standard mass market licensing practices is the proper approach for Article 2B and that any other approach would fundamentally disrupt the software and information industries. It points out that licensors as varied as the Free Software Foundation (with its "copyleft" license),10 Consumers Union,11 and the University of California at Berkeley12 employ mass market licenses. The Article also points out that Article 2B's affirmation of mass market licenses has come at a cost for publishers: namely, the codification of new end user rights.

The Article then evaluates Article 2B's attempt to reshape current Article 2 default rules to fit software and information licensing and to account for different licensing practices among the converging information industries. The Article observes that, while the Article 2B drafting committee has made progress toward reshaping Article 2 default rules, in several fundamental ways Article 2B remains too wedded to Article 2 and thus threatens to remake licensing law by forcing hard goods-centric sales rules on software and information licensing. It also observes that Article 2B may need additional changes to accommodate varied licensing practices among the converging information industries.

II. Article 2B and Mass Market Licenses

Mass market licensing is not new.13 Software companies have been using mass market licenses, and legal commentators have been writing about them, for decades.14 The software industry is thriving in large part because of what mass market licenses enable: a diversity of innovative products provided to end users at attractive prices.15 For most software products, the license is the product; the computer program provides functionality to the user, but the license delivers the use rights.16

The court's ruling in ProCD v. Zeidenberg17 affirming the enforceability of mass market licenses may have surprised some legal scholars, but a contrary ruling would have devastated the software and electronic information industries. It is far better that the ProCD case merely provoked a few critical law review articles18 than forced a radical change in the way software and information publishers do business. Without an effective contracting method to license software and electronic information to the mass market, the value and choice of products would have diminished significantly, and some companies would have had no viable products at all.19 Today, a wide variety of organizations employ standard form contracts to provide software and information to the mass market,20 including Consumers Union,21 Consumer Net,22 University of California at Berkeley,23 Dartmouth College,24 Massachusetts Institute of Technology,25 Texas Classroom Teachers Association,26 Public Broadcast Service,27 Free Software Foundation,28 The Robert Woods Johnson Foundation,29 The Partnership For Food Safety Education,30 National Pediatric And Family HIV Resource Center,31 National Institutes of Health Library,32 National Kidney Foundation,33 Guggenheim Museum,34 Wisconsin Bar Association,35 First Baptist Church (Rochester, MN),36 and Catholic Online Webmail.37

Standard form contracts are not only ubiquitous in modern commerce; they are also regarded as an efficient method of distribution under the R ESTATEMENT (SECOND) OF CONTRACTS38 and universally upheld under Article 2 of the Uniform Commercial Code.39 There are, to be sure, some important differences between mass market software licenses and standard form contracting in other industries, but those differences benefit licensees. First, licensors have a strong incentive to draw the user's attention to license terms and to get a manifestation of assent. If the user is not aware of the contours of the license or does not feel bound by them, the licensor (who must rely largely on self-policing in the mass market) cannot count on the user to abide by the license. Second, software users are not a docile lot. They are particularly unforgiving of companies that try to license software on unreasonable terms, and the Internet has given them a powerful tool to express their views.40 Software end users have formed associations to monitor and influence software license terms.41 Information industry research organizations, such as the Gartner Group,42 as well as the trade press,43 keep a watchful eye on licensing practices, sounding the alarm when they see a change that they believe negatively affects end users.

Critics of mass market licensing try to paint a picture of software or information licensing as amounting to nothing more than a collection of me-too forms in which licenses simply mirror a copyright first sale. Nothing could be farther from the truth. Today's mass market licensing is characterized by contract variety and a variety of license terms.44 It is common for mass market licenses to provide users with more rights than the user would have acquired had the user simply bought a copy of the software, including reproduction, derivative works, and distribution rights. As new products have been developed and brought to market, such as multimedia software, client-server products, and web site "products," contract variety and customer choice have also flourished via mass market licensing.45

Innovative mass market licensing practices have played a key role in the success of many popular Internet products. The Netscape Navigator browser achieved early success because it permitted non-commercial users to freely use, copy, and distribute the software. Microsoft licenses free, unlimited copying and distribution of its Internet Explorer browser software. The Apache46 web server and the Sendmail47 e-mail router have become Internet standbys, and the Linux operating system has a strong following,48 based on "open source" licensing.49 Open source licensing is the practice of freely licensing the creation of derivative works and, in turn, requiring that the source code for these derivatives also be freely licensed for the creation of further derivatives.50 Netscape has recently implemented a variant of open source code licensing for its Navigator and Communicator software.

Critics of mass market licenses also argue that such licenses must be regulated because a few mass market licenses contain objectionable terms, and more such terms could, in the future, find their way into mass market licenses.51 That argument is misguided. It is no more appropriate to judge mass market licenses by their worst clauses than it is to judge all of literature by tabloid journalism or trashy novels. Just as free speech does not deserve to be regulated because some speech is objectionable, so mass market licenses do not deserve to be regulated because some publishers use them as a vehicle for objectionable terms. Mass market licenses should be judged on the basis of the tremendous benefits they provide to software publishers and users,52 not on the few provisions critics can find to ridicule. The market will punish those who employ harsh terms. Consumer protection laws and doctrines such as unconscionability,53 construing contract terms against the drafter,54 and copyright misuse55 provide powerful checks as well.56

Other critics of mass market licenses worry about the theoretical costs of mass market licenses that are attributable to the effects of (to use their misnomer) "private legislation."57 A critique of the "private legislation" theory is beyond the scope of this Article.58 Even if such costs really exist,59 however, they are far outweighed by the extraordinary costs that publishers and users alike could incur if Article 2B eliminates or overly encumbers mass market licensing.

Finally, critics complain that licenses can limit the user's ability to use the licensed software or information. That is, of course, true-indeed, it is the very essence of licensing. But it is overly simplistic, and usually wrong, to think that licenses are merely tools to take away rights.60 They are necessary to convey many affirmative rights as well.61

Critiquing mass market licensing is interesting as an intellectual exercise, but what are the real alternatives for Article 2B? Four alternatives exist: (1) provide that contracts are enforceable only if negotiated and/or signed; (2) force publishers to base their transactions solely on background rules of intellectual property law, such as the first sale doctrine, rather than contract; (3) dictate the specific terms that may or may not be included in standard form contracts; and (4) give courts greater leeway to strike contract terms. These four alternatives are not practicable.

The transaction costs associated with requiring negotiation or a signature would be prohibitively high.62 For this reason, standard term contracts are the norm in today's economy, not the exception,63 and contract law does not generally require a signature to create a contract. Contracting parties have always had the flexibility to manifest assent in a variety of ways, from nodding their head, to shaking hands, to making an "X," to clicking an "I agree" button.64

Background rules of intellectual property, such as copyright's first sale doctrine, provide woefully inadequate transaction models for software and information products. A copyright first sale is, in effect, a one-size-fits-all transaction model. As I have described in detail elsewhere, forcing a software publisher to sell software like a newspaper or book does not permit the publisher to provide various packages of rights desired by end users at attractive price points.65 If Article 2B constrains mass market software licensing, product prices will increase and product variety and choice will decrease.

If Article 2B dictates the specific terms which may or may not be in standard form software contracts, it will impinge on the important principles of freedom of contract and contract certainty. If Article 2B gives courts greater leeway to strike contract terms, it will likely freeze development of new contract forms, decrease contract certainty, and potentially increase litigation over licenses. Hence, these approaches should be pursued very cautiously. While there is a rightful place for some limits on freedom of contract, the better approach is to start by affirming the value of mass market licensing and then apply any regulation with care and precision. Regulation is always possible so long as those proposing it can convince lawmakers it is good public policy overall.66

What is Article 2B doing about mass market licenses? End users should be cheering.67 Article 2B contains protections against hidden license terms; it requires an opportunity to review the terms and a manifestation of assent to the terms.68 Article 2B does not enforce mass market license terms that conflict with expressly agreed terms.69 Section 2B-208 conditions enforceability of mass market licenses on the giving of a refund when contract terms are presented to the user after payment.70 It also allows the user to recover any costs associated with returning the software or for harm caused to the user's system in the event the user must install the software in order to view the terms of the mass market license.71 The addition of 2B-208 and other consumer protections to Article 2B prompted the co-chairs of the American Bar Association's Business Law Subcommittee on Information Licensing to observe: "The current draft of Article 2B affords more protections for consumers than any existing commercial statute."72 Not only do consumers receive enhanced protections for software and information licensed via standard forms in the mass market, but also Article 2B takes the unprecedented step of applying many of these protections to businesses.73

III. Molding and Shaping Article 2 Rules in Article 2B

Though Article 2B's treatment of mass market licenses has been a focal point of the drafting process, Article 2B primarily addresses other aspects of licensing. Fundamentally, Article 2B should provide sensible, industry standard default rules for day to day licensing transactions. In creating the Article 2B default rules, the drafters of Article 2B began with the default rules of Article 2. The utility of Article 2B will depend in large part upon how the drafters of Article 2B mold and shape the hard goods-centric rules of Article 2 to fit software and information contracting, and the default rules they add to resolve issues specific to license agreements. To provide a perspective on how Article 2B rates in this regard, I will briefly examine Article 2B's treatment of warranties, duration of contracts, and interpretation of exclusive license grants.

A. Warranties

A major failing of Article 2B to date is that the drafting committee has remained too wedded to ill-fitting rules found in Article 2. In other words, Article 2B actually threatens to remake software and information licensing law by imposing contract rules on it that are better suited to sales of goods. A good example of this is Article 2B's treatment of warranties.74

Representatives from both software publishers and end user groups have commented that the Article 2 merchantability and non-infringement warranties do not reflect software industry practice.75 In the case of the implied warranty of merchantability, a representative of consumer interests and this author collaborated on a re-drafted warranty, which was presented to the drafting committee.76 The drafting committee has yet to adopt this proposal, however, even though it knows that the current Article 2 formulation is flawed by the reckoning of software publishers and users alike.

The implied warranty of non-infringement that Article 2B carries over from Article 2 is a far cry from industry practice. Unlike licenses typically used in the software industry, Article 2B places the risk of infringement completely on the licensor. Some argue this is fair because the licensor is in the best position to know of and prevent infringement.77 Anyone who has negotiated a software license has undoubtedly heard this argument.

In practice, of course, this argument seldom carries the day-it is very common in negotiated transactions to allocate infringement risk between licensor and licensee, or for the licensee to assume all risk of infringement. The sheer number of issued patents, the difficulty of conducting patent searches, and the fact that any given patent can be interpreted dozens of ways, makes placing the risk on the licensor inequitable in many cases. Often the licensor cannot obtain insurance or will not receive enough income from the license to offset the risk of providing a non-infringement warranty (in many transactions, the licensee will receive much more income through use of the software than the licensor who supplied it). The smaller the software developer or publisher, the more likely the developer or publisher is to resist shouldering the risk of a full blown non-infringement warranty. Thus, in the case of the non-infringement warranty, the drafters of Article 2B have created a default rule that runs contrary to industry practice and to the expectations of the very parties (small developers and publishers) most likely to be subject to the default rule.

The warranty of non-infringement is also an area in which Article 2B may need to distinguish between the licensing traditions of the software industry and other information industries. Observers from the book publishing industry have informed the drafting committee on several occasions that a full-blown warranty of non-infringement is standard practice in their industry.78 If that is so, then melding licensing traditions may be the wrong approach. The drafting committee should consider an approach that incorporates different default rules for different industries or creates a mechanism79 that achieves the same result.

B. Duration of Contracts

In contrast to Article 2B's default rules for warranties, the Article 2B default rule for duration of contracts is a good example of the drafting committee's attempt to recognize the need to craft a different rule for software and information licensing than for traditional sales of goods.80 However, as described below, the default rule chosen by the Article 2B drafting committee ignores important nuances and, in the end, causes more harm than good.

Under Article 2, if the parties do not specify the duration of their contract, the term is a "reasonable" time in light of the commercial circumstances.81 The contact may be terminated as to future performances on reasonable notice to the other party. This rule works well for services contracts in the information industries, such as a contract to provide support services or develop software code.

A weakness of the Article 2 default rule in the software and information license agreement context, however, is the implication that certain grants of rights are terminable at will. For most off-the-shelf, mass market software products, the user expects a perpetual license subject only to cancellation for breach. The same expectation is true for licensed informational content that the licensee integrates or combines with other information to create a single product: the licensee does not expect to have to rip the combined product apart at the behest of the licensor. The default rule in section 2B-308 captures and melds these industry practices which are consistent across information industries. So far, so good.

However, in its present form, section 2B-308 does not work well for software source code82 licensing. Source code often contains highly valuable trade secret information. It is common for software publishers to license proprietary source code to other software companies (including competitors, on occasion), computer hardware manufacturers, customers, and other third parties. These source code licenses are seldom for a perpetual term. Under the present formulation of section 2B-308, if the software publisher neglects to specify a contract duration, the default rule results in a perpetual license grant.83 This "bug" in section 2B-308 is no small matter: it exposes unsophisticated licensors to inadvertent licenses of valuable technology in perpetuity.

C. Interpretation of Exclusive License Grants

One of the most important aspects of Article 2B is its ability to provide contract certainty by resolving license interpretation issues that are ambiguous in current licensing law practice. One basic meddlesome issue is whether an exclusive license grant means the grant is exclusive as to everyone including the licensor or simply everyone but the licensor.84 The careful licensing lawyer would take care of this in crafting the language of the license grant,85 but Article 2B, like Article 2, assumes a lawyer-free transaction. Article 2B resolves the current ambiguous state of the law by taking the position that an exclusive license grant means exclusive as to everyone, including the licensor.86 Thus, the Article 2B default rule for interpreting exclusive license grants shows how Article 2B can make a positive contribution to bringing order to the current disarray in licensing law.

IV. Conclusion

The software and information industries are thriving and fueling significant economic growth, despite the chaotic state of contract law for licensing transactions. A uniform contract law for software and information licensing could provide significant benefits to providers and users of information products. To be truly beneficial, however, the law must affirm the basic principle of freedom of contract, increase contract certainty, be attuned to the unique practices of the affected industries and the coming digital convergence, and allow for innovative products and methods of distribution. A regulatory statute, a statute based on antiquated rules and distribution methods, or a statute which provides even less contract certainty than today's world of licensing law chaos, is probably best left unwritten.

V. Appendix of Selected License Terms87

A. 3Com

1. PalmPilot Pro End User Software License Agreement

Multiple Copies: "With respect to the PalmPilot Desktop Software, you may reproduce and provide one (1) copy of such Software for each personal computer or PalmPilot product on which such Software is used as permitted hereunder. With respect to the PalmPilot Device Software, you may use such Software only on one (1) PalmPilot product."

B. 3G Graphics, Inc.

1. Art à la Carte

Derivative Works; Distribution: "You may use the contents of your 3G Graphics product as illustrative or decorative material that is included as part of a total graphic design for print or multimedia communication, produced for you, your employer, or a client."

C. Adobe Systems, Inc.

1. Acrobat Reader 3.01 Electronic End-User License Agreement

Unlimited Copies and Distribution: "You may make and distribute unlimited copies of the Software, including copies for commercial distribution, as long as each copy that you make and distribute contains this Agreement, the Acrobat Reader installer, and the same copyright and other proprietary notices pertaining to this Software that appear in the Software."

Install on Network or Multiple Computers: "You may ... install and use the Software on a file server for use on a network for the purposes of (i) permanent installation onto hard disks or other storage devices or (ii) use of the Software over such network."

2. PageMaker 6.5 End User License Agreement

Home Use: "The primary user of each computer on which the Software is installed or used may also install the Software on one home or portable computer. [So long as there is no concurrent use]."

Copying and Distribution Rights for Font Software: Rights include the ability to download the fonts to a printer, take a copy of the fonts to a commercial printer (if the commercial printer also has a license for the fonts), and "convert ... the font software into another format for use in other environments, subject to [additional] conditions." For example, this section would allow TrueType fonts to be converted to Bitmap fonts.

3. Type on Call Electronic End User License Agreement

Authorized to Use Unencrypted Software: "Notwithstanding anything else in this Agreement, you acknowledge that although Type On Call contains Software for a number of typefaces and other product(s), you agree that you will use, and that the licenses set forth below apply to, only that Software which has not been encrypted or for which you have received access codes from Adobe."

Choice in Network Configuration: "Provided the Software is configured for network use, [you may] install and use the Software on a single file server for use on a single local area network for either (but not both) of the following purposes:

(1) permanent installation onto a hard disk or other storage device of up to the Permitted Number of Computers; or

(2) use of the Software over such network, provided the number of different computers on which the Software is used does not exceed the Permitted Number of Computers. For example, if there are 100 computers connected to the server, with no more than fifteen computers ever using the Software concurrently, but the Software will be used on 25 different computers at various points in time, the Permitted Number of Computers for which you need a license is 25."

Home Use: "The primary user of each computer on which the Software is installed or used may also install the Software on one home or portable computer. However, the Software may not be used on the secondary computer by another person at the same time the Software on the primary computer is being used."

Copy Fonts to Printer: Licensee may "[d]ownload the font software to the memory (hard disk or RAM) of one output device connected to at least one of the computers on which the font software is installed for the purpose of having such font software remain resident in the output device."

Allows Conversion of Font to Different Format (limited right to create derivative works): Licensee may "[c]onvert and install the font software into another format for use in other environments, subject to the following conditions: A computer on which the converted font software is used or installed shall be considered as one of your Permitted Number of Computers. You agree that use of the font software you have converted shall be pursuant to all the terms and conditions of this Agreement, that such font software may be used only for your own customary internal business or personal use and that such font software may not be distributed or transferred for any purpose, except in accordance with Paragraph 3 below."

D. Apache Group

1. Apache Web Server (Distributed as Freeware)

Unlimited Distribution: "Redistribution and use in source and binary forms, with or without modification, are permitted provided that the following conditions are met: [maintain copyright notice, acknowledge in all advertising that distributed product contains software developed by the Apache group, and not use Apache name]"

E. "Artistic License" 88

1. Alternative Free Software License

Copying and Distribution: "You may make and give away verbatim copies of the source code form of the Standard Version of this Package [collection of software files covered by the license] without restriction, provided that you duplicate all of the original copyright notices and associated disclaimers."

Modification: "You may otherwise modify your copy of this Package in any way, provided that you insert a prominent notice in each changed file stating how and when you changed the file and provided that you do at least ONE of the following [place modifications in the Public Domain, use the modified Package only within your organization, rename non-standard executables so that they do not conflict, or make other distribution arrangements with the copyright holder]."

F. Asymetrix

1. Pocketbook License Agreement for Daybook+ for Windows 3.0

Derivative Works: The agreement allows you too make derivative works if you are a licensed user of "ToolBook." Modifications are only for internal use unless a separate distribution license is obtained.

G. Autodesk, Inc.

1. General Shrink Wrap License Agreement

Concurrent Use: "[I]f this Software is being licensed to you for use on a networked system (certain products only), you may operate the Software as a multiple-user installation with either: [the maximum use being one person at one time, or the maximum number of concurrent users being the number of people authorized by additional licenses]."

Multiple Versions: "If the software Package contains versions designed for use on more than one operating system, ... you may install all versions of the Software but only on one computer at one location at any one time ...."

License Packs: "If the Software is licensed to you as a Lab Pack (certain products only) and you have paid the Lab Pack license fee, then you may make four copies of the enclosed Software and Documentation. The Software may be used on a maximum of five computers simultaneously."

Copies: "You may make unlimited copies of the .DWG files and other associated parts data contained in the Software for the exclusive purpose of incorporation into your own engineering drawings and designs."

2. Kinetix™ Software (division of Autodesk)

Multiple Installations: "[Y]ou may install 3D Studio Software on more than one computer for the exclusive purpose of network rendering of your files.

Modifications and Copies: "You may modify and make unlimited copies of the source code examples contained in the Software (3D Studio Max™) and any resulting binary files for the exclusive purpose of incorporation into your own works and you may treat the User Works as your own creations with [some restrictions.]"

Distribution: "You may distribute the resulting binary files of the Source Examples in User Works that are commercially distributed software applications only if [programs require 3D Studio Max to operate and you have increased the functionality]."

Other Programs: Autodesk provides for unlimited copying, modification, and distribution rights similar to the above for its Hyperwire™, 3D Props™, and Texture Universe™ products.

H. Blizzard Entertainment

1. Starcraft End User License Agreement

Concurrent Use: "[T]he Program has a multi-player capability that allows up to eight players per registered version of the Program to play concurrently."

Multiple Copies: Allows installation of "Spawned Versions" (copies made from a registered version). "You may install Spawned Versions of the Program on an unlimited number of computers. However, Spawned Versions of the Program must be played in conjunction with the registered version of the Program from which they were spawned."

Create Derivative Works: "The Program also contains a Campaign Editor (the 'Editor') that allows you to create custom levels or other materials for your personal use in connection with the Program ('New Materials')."

I. Berkeley Systems-style licenses89

Unlimited Copying and Distribution Allowed: "Redistribution and use in source and binary forms, with or without modification, are permitted provided that the following conditions are met: [maintain copyright notices and include 'as is' disclaimer]."

J. Free Software Foundation

1. GNU General Public License90

Copying and Distribution: "You may copy and distribute verbatim copies of the Program's source code as you receive it, in any medium, provided that you conspicuously and appropriately publish on each copy an appropriate copyright notice and disclaimer of warranty ... [and provide a copy of the GPL license]."

Modifications: "You may modify your copy or copies of the Program or any portion of it, thus forming a work based on the Program, and copy and distribute such modifications [so long as you note the modified files, license the modifications at no charge under the GPL, and provide a conspicuous copyright notice]."

2. GNU Library General Public License ("LGPL")

Use, Copying and Distribution: The LGPL is intended to promote the same "freeware" software ideals contained in the GPL. The LGPL, however, allows a software product to use an unmodified "free" library without requiring the software product to be licensed as "freeware." Software licensed under the LGPL may be copied and distributed in combination with a "non-free" product, but the distribution must include both the object and source code of the LGPL-covered software.

K. Id Software, Inc.

1. Quake II

Derivative Works: "ID grants to you the non-exclusive and limited right to create additional levels (the 'Levels') which are operable with the Software. You may include within the Levels certain textures and other images (the "ID Images") from the Software." [Such Levels may only be used for personal use but may be distributed to others at no charge.]

L. Info Electronics

1. Postal Union/SMTP™

Multiple Copies: "[Y]ou are permitted to: Non-exclusive use of the enclosed software and install one copy of the service on a single machine and 3 copies of the configuration control panel."

M. Inprise (Borland)

1. License Terms for Development Products

Compiled Programs: "If you are the licensed, registered user of this product, you may use, reproduce, give away, or sell any program you write using this product, in executable form only, without additional license or fees, subject to all of the conditions in this statement."

Redistribution: "Under Borland's copyright, and subject to all of the conditions in this statement, Borland authorizes the licensed, registered user of this product to reproduce and distribute exact copies of the files designated as 'Redistributables' for this product, provided that such copies are made from the original disks in this package."


1. CompareRite 7.0 Software License Agreement

Network Use Authorized: "You are authorized to make available on a network the LEXIS®-NEXIS® Research Software for Microsoft® Windows® 95 and Windows NT™ version 7.0, CheckCite™ version 7.0, [and others]."

Home Use: "You may make a single extra copy of the Software for each Authorized Use of the Software acquired by you under this Agreement for incidental use on a secondary portable or home computer while away from the primary computer or workstation upon which the Software resides ... [so long as there is no simultaneous use]."

O. LogoExpress, Inc.

1. LogoWorks

Modifications: "You can ... [u]se the logos or logo elements as is, modified, or combined with other logo elements to create a derivative logo or graphic design."

Distribution: "You can ... [u]se the derivative logo design as your own, in print or electronic form, in the normal course of business as you would any logo."

P. Lotus Development Corporation

1. Lotus Software Agreement-Communication Products (includes Lotus Notes and related products, Lotus cc:Mail and related products) [1997]

Home Use: "The Software may also be installed on a home and/or laptop computer, but only the authorized user may access the Software."

Additional Copies: "You may copy the Software and use it freely for creating additional cc:Mail post offices, running multiple instances of cc:Mail Router, or for creating mailboxes used for administrative purposes or by gateways or network-based agents."

Install on Additional Computers [for Adobe Type Manager Software]: "If your Software contains Adobe Type Manager ('ATM') you may install and use ATM software on up to three (3) computers."

Modifications [for specified Lotus Domino products]: "You are authorized to modify, adapt or customize the Software to suit your needs ...."

Distribution [for Lotus Notes HiTest Tools for Visual Basic]: "You may modify the source code versions of the Sample Files, if any, included with the Software and redistribute such modified source code versions in compiled, object code form only. You may also redistribute, as part of your application(s), files designated as 'Redistributable Code.'"

2. Lotus Software Agreement-Desktop Products

Home Use: "The primary user of the computer may also use the Software on a home and/or laptop computer, provided the Software is used on only one computer at a time."

Q. McAfee Software, Inc.

1. VirusScan (OEM version) Product License Agreement

Grants Rights in Upgrades: "If the PC hardware with which the SOFTWARE was received was purchased for individual or home use, then you are further entitled to download and use all upgrades of the SOFTWARE (including virus signature files (DAT files)) released during the three month period following purchase."

R. Microsoft Corporation

1. FoxPro

Unlimited Copies of Software: "You may install copies of the SOFTWARE PRODUCT on an unlimited number of computers provided that you are the only individual using the SOFTWARE PRODUCT."

Modification Rights: "Microsoft grants you the right to use and modify the source code version of those portions of the SOFTWARE PRODUCT identified as [sample code] for the sole purpose of designing, developing, and testing your software product(s), and to reproduce and distribute the SAMPLE CODE along with any modifications thereof, only in object code form." [Note: The above license grant is subject to complying with a series of conditions that depend on the type of redistributable code that the user wishes to distribute.]

2. Microsoft BackOffice Server

Choice of Software Version: "The CD or diskette(s) on which the Server Software and the Connector Software reside may contain several copies of the Server Software and the Connector Software, each of which is compatible with a different microprocessor architecture (such as the x86 architecture or various RISC architectures). You may install the Server Software and the Connector Software for use with only one of those architectures at any given time."

Multiple Types of Software Programs: The Server License for Microsoft Server Products defines the following three types of software: Server Software, Connector Software, and Client Software. The Grant of License designates specific usage rights for these different types of software, with many such rights going beyond the statutory "first-sale" rights. These rights include:

Distribution: "Microsoft hereby grants to you a limited nonexclusive, royalty-free right to reproduce and distribute those DB-Library, Net-Library, and ODBC files required for run-time execution of compiled applications ("Run-Time Files") in conjunction with and as part of your application software product that is created using the Microsoft SQL Server Software ("Application"), provided that you comply with the Distribution Requirements listed below. ... You may freely copy and distribute the Client Software accompanying Microsoft Internet Information Server for your use or (for entities) use within your organization."

Modification: "Microsoft grants you the additional right to modify the source code version of the Source Extractor programs."

Reproduction Rights Dependent on License: "License Pak-If this package is a License Pak, you may install and use additional copies of the Server Software up to the number of copies specified above as 'Licensed Copies.'"

3. Microsoft BackOffice Client Access License

Allows Different Licensing Options: The Client Access License for Microsoft Server Products (CAL) is closely related to the Server License described above. It specifies the terms by which users access the Microsoft server products. For specified server products, the license provides two licensing options: Per Seat, or Per Server. Per Seat mode requires the purchase of a CAL for each workstation used to access ther server. The Per Server mode requires the acquisition of a number of CALs equal to "the maximum number of computers or workstations that will access or otherwise utilize the services of that Server at any given point in time."

4. Microsoft Encarta and 3D Moviemaker

Network Use: "[Y]ou may install the setup/install program on any or all computers on your network, [so long as you only allow access to the number of people that you have a license for]."

5. Microsoft Office and Publisher

Home Use: "The primary user of the computer on which the SOFTWARE PRODUCT is installed may make a second copy for his or her exclusive use on either a home or portable computer."

License Pak: "If you have acquired this EULA in a Microsoft License Pak, you may make the number of additional copies of the computer software portion of the SOFTWARE PRODUCT authorized on the printed copy of this EULA ...."

6. Microsoft Visual Basic 4.0

Unlimited Copies: "[Y]ou may install copies of the SOFTWARE PRODUCT on an unlimited number of computers provided that you are the only individual using the SOFTWARE PRODUCT."

Modifications: "Microsoft grants you the right to use and modify the source code version of those portions of the SOFTWARE designated as 'Sample Code' ('SAMPLE CODE') for the sole purpose of designing, developing, and testing your software product(s), and to reproduce and distribute the SAMPLE CODE, along with any modifications thereof, only in object code form provided that you comply with [redistribution requirements]."

Distribution: "Microsoft grants you a non-exclusive royalty-free right to reproduce and distribute the object code version of any portion of the SOFTWARE listed in the SOFTWARE file README.HLP ('REDISTRIBUTABLE SOFTWARE')."

7. Microsoft Visual C++ Version 5.0

Unlimited Copies: "[Y]ou may install copies of the SOFTWARE PRODUCT on an unlimited number of computers provided that you are the only individual using the SOFTWARE PRODUCT."

Distribution: Subject to specified restrictions, "Microsoft grants you a nonexeclusive, royalty-free right to reproduce and distribute the object code version of the following portions of the SOFTWARE PRODUCT (collectively, the 'REDISTRIBUTABLES')."

Dual Media software: "You may receive the SOFTWARE PRODUCT in more than one medium. [You may only use the medium appropriate for your computer.]"

8. Microsoft Win32 Software Development Kit

Modifications: "You may modify the sample source code located in the SOFTWARE PRODUCT's 'samples' directories ("Sample Code") to design, develop and test your Application."

Distribution: "You may copy and redistribute the Sample Code and/or Redistributable Code, (collectively "REDISTRIBUTABLE COMPONENTS") as described above provided that ... [specifies eight requirements for distribution]"

9. Microsoft Windows 95, North American End User License Agreement

License Pak: "If you have acquired this EULA in a Microsoft License Pak, you may make the number additional copies of the computer software portion of the SOFTWARE PRODUCT authorized on the printed copy of this EULA ...."

Dual Media Software: Manufacturer may provide User with multiple copies of Software on different media, but only authorizes User to install one of these copies.

10. Microsoft Windows 98

Systems Software: "You may install and use one copy of the SOFTWARE PRODUCT on a single computer, including a workstation, terminal or other digital electronic device ("COMPUTER"). If the SOFTWARE PRODUCT includes funcitonality that enables your single COMPUTER to act as a network server, any number of COMPUTERS may access or otherwise utilize the basic network services of that server. The basic network services, if available, are more fully described in the printed materials or electronic documentation accompanying the SOFTWARE PRODUCT."

Multiple Monitors: "If the SOFTWARE PRODUCT includes functionality that enables your COMPUTER to make use of additional displays such as additional monitors or a television: (i) any additional display must be physically and directly connected to your COMPUTER and (ii) your COMPUTER must be the only source of inputs utilized by the SOFTWARE PRODUCT."

Storage/Network Use: "You may also store or install a copy of the SOFTWARE PRODUCT on a storage device, such as a network server, used only to install or run the SOFTWARE PRODUCT on your other COMPUTERS over an internal network; however, you must acquire and dedicate a license for each separate COMPUTER on or from which the SOFTWARE PRODUCT is installed, used, accessed, displayed or run. A license for the SOFTWARE PRODUCT may not be shared or used concurrently on different COMPUTERS. Additional display devices described in the Multiple Monitors section above do not require an additional license."

License Pak: "If this package is a Microsoft License Pak, you may install and use additional copies of the computer software portion of the SOFTWARE PRODUCT up to the number of copies specified above as 'Licensed Copies.'"

Application Sharing: "The SOFTWARE PRODUCT may contain Microsoft NetMeeting, a product that enables applications to be shared between two or more computers, even if an application is installed on only one of the computers. You may use this technology with all Microsoft application products for multi-party conferences. For non-Microsoft applications, you should consult the accompanying license agreement or contact the licensor to determine whether application sharing is permitted by the licensor."

S. Netscape Communications Corporation

1. Netscape One SDK End User License Agreement

Unlimited Copies for Internal Use: "You may copy and use internally ... [the source code, object code, graphic files, header files, and Java classes]."

Distribution: "[Y]ou may reproduce and redistribute the Redistributable Elements in object code form only (if the Redistributable Element is software), and only when incorporated into your software product which adds substantial and primary functionality to the Redistributable Elements."

2. Client and Server Software End User License Agreement91

a) Terms Specific to Client Software End User License Agreement

Unlimited Copying for Personal Use: Licensee may "[r]eproduce the Standard Software for personal or internal business use, provided any copy must contain all of the original Standard Software's proprietary notices." [Applies to Netscape's no-cost software.]

Home and Work Use: Licensee may "[u]se the Professional Software on a single computer, except that (i) it may also be used on a second computer if only one copy is used at a time, and (ii) if the Professional Software is Netscape Communicator Professional Edition and was licensed by a company or organization for use by an employee, then Licensee may allow that employee to use a copy of Netscape Communicator Professional Edition at home." [Applies to Netscape Client Software that costs money, "Professional Software."]

b) Terms Specific to Server Software

Number of Authorized Copies Dependent on Number of Users: "Install the Server Product(s) on only one computer on a single platform unless Licensee has paid fees for use by additional Users. In that case, Licensee may install one additional copy for every 50 additional licensed Users, except that if the User Table provides different information, Licensee may make the number of copies indicated in the User Table."

Provides Logo License: Licensee may "[u]se 'Powered by Netscape SuiteSpot' logo ... on its website [with some restrictions]."

Distribution: "If the Server Product(s) contain header files, [the Licensee may] copy and use the header files solely to create and distribute programs to interface with the server APIs ... [and] copy and use the Sample Java Classes solely to create and distribute programs to interface with Netscape products."

Modifications: "If the Server Product is Netscape Messenger Express ("ME"), [the Licensee may] modify ME to meet Licensee's needs."

3. Netscape, Public License v1.0 and Mozilla Public License v1.0 (there are two licenses for the Source Code for Netscape Navigator)92

Broad Right to Copy, Modify and Distribute Source and Object Code: "The Initial Developer hereby grants You a world-wide, royalty-free, non-exclusive license, subject to third party intellectual property claims: (a) to use, reproduce, modify, display, perform, sublicense and distribute the Original Code (or portions thereof) with or without Modifications, or as part of a Larger Work; and (b) under patents now or hereafter owned or controlled by Initial Developer, to make, have made, use and sell ('Utilize') the Original Code (or portions thereof), but solely to the extent that any such patent is reasonably necessary to enable You to Utilize the Original Code (or portions thereof) and not to any greater extent that may be necessary to Utilize further Modifications or combinations."

Distribution Restrictions: Requires future contributors to grant a license identical to the above. Distributors must also make their modifications available in source code form and describe the modifications that were made.

T. Novell, Inc.

1. IntranetWare™ Software License

Differing License Rights: [The product] contains various software programs with different license rights. Some of the programs are licensed for use on a single computer (network server), whereas some are licensed for use on several machines (workstations). The type of license that applies depends on the following definitions and the permitted uses specified in the documentation accompanying the Software.

Copies: The License lists and defines the following six types of software: Client Software, Host Software, Gateway Software, MPR Software, NLM Software, and Connection Management Software. The license grant describes the uses permitted for the above types of software and allows the licensee to distribute an unlimited number of copies of the Client Software so long as the simultaneous use of the Client Software is limited to the "User Count" specified on the product packaging. The license grant also specifies that the MPR Software is licensed for one port and the Gateway Software may be used by 250 users.

U. New Vision Technologies, Inc.

1. Task Force Clip Art

Copying and Distribution: "You can use TASK FORCE images in just about any application you want, as long as you are not reselling the images as 'clip art' that someone else can use and apply as clip art."

V. Open Software Foundation (also The Open Group) (members include Hewlett Packard, IBM, Sun, and others)

1. X11R6.4, CDE, and Motif (Unix User Interfaces)

Unlimited Copying and Modification: "Licensor grants to Licensee ... a non-exclusive, non-transferable, worldwide license: (i) to use, display, copy, modify and prepare derivative works of the Licensed Programs in source code form for Licensee's internal business purposes."

Distribution: "Licensor grants to Licensee ... a non-exclusive, non-transferable, worldwide license ... (ii) to use, display, copy, modify, prepare derivative works of and distribute the Licensed Programs and such derivative works thereof in object code form."

W. PhotoDisc, Inc.

1. End User License Agreement for PhotoDisc Starter Kit93

Copies: The End User License Agreement ("EULA") specifies that low resolution images may be used for "PERSONAL, INTERNAL, COMPANY and TEST or SAMPLE USE, including COMPS (i.e., rough or draft layouts for client review), and for BROWSING only."

Distribution: The high resolution images can be used for all of the above and also for advertising, any online, broadcast, or other electronic distribution, and in any product except printed books, music/video/software product packaging, and products produced in quantities of 100,000 units or larger.

X. PointCast Inc.

1. PointCast Network

Allows for multiple copies: "The Software may be installed only on (a) computers controlled by you, or (b) a network server allowing only you and other persons who have agreed to the terms and conditions of this Agreement to access the Software and the Information."

Y. ProSoft Corp.

1. Carpe Diem Products (timekeeping products) Software License Agreement

Home Use: "You may also install and use network-based Software on a standalone, home or portable computer that is used by, and that remains under the custody and control of, a single Licensed User."

Indemnity for Infringement: ProSoft will indemnify user and defend against any claims by third parties to the extent that they allege that the product infringes upon the intellectual property rights of a third party.

Z. RealNetworks, Inc.

1. RealPlayer 5.0

Home Use: "You may ... use the Software on a second computer so long as the first and second computers are not used simultaneously."

AA. The Santa Cruz Operation, Inc.

1. General Software License Agreement [1997]

Multiple Users: "You may load, copy or transmit the Software in whole or in part, only as necessary to use the Software on a single personal computer or workstation, unless the Software is designated on the registration document as being for use on a multiuser or multiple system configuration, in which case You must take reasonable means to assure that the number of Users does not exceed the permitted number of Users."

BB. Sun Microsystems, Inc.

1. Free Solaris™ Promotion for Non-Commercial Use, Binary Code License Agreement

Non-Commercial Use: Software is provided free of charge, but may be used for non-commercial purposes only. "'Non-commercial' means personal and not use for commercial gain or in connection with business operations (such as MIS or other internal business systems)."

2. Java™ Workshop™ 2.0 and Java™ Studio™ 1.0

Development and Distribution: License allows user to develop applications and incorporate specified binary runtime modules that are included with the Product. To do so, user is to required comply with certain restrictions such as not modifying the modules, not removing copyright or other proprietary notices, and prohibiting users from modifying, decompiling, disassembling, and reverse engineering the module.

3. SunOS™ Year 2000 Pack™

Development and Distribution Rights: "This License authorizes Customer to develop software programs utilizing the Software [with some restrictions]. ... [provided that] incorporation of portions of Motif® in Developed Programs may require reporting of copies of Developed Programs to Sun Microsystems."

CC. Sybase, Inc.

1. Software License Agreement

The Software License Agreement provides three different licensing options: Networked License, Stand-alone Named User License, and Standalone Seat License.

Multiple Copies: "If the license is designated as a Standalone Named User License, the Program may be Used only by one Named User, but such Named User may copy and Use such Program on more than one Machine. ... Customer may make a reasonable number of copies of each Program exclusively for Inactive back-up or archival purposes."

Modifications: "Customer may modify data file portions of the Program as described in the user manuals."

DD. Symantec

1. Standard End User License (used for virtually all of their products, including Norton Anti-Virus and Norton Utilities)

Home Use: "[I]f a single person uses the computer on which the Software is installed at least 80% of the time, then after returning the completed product registration card which accompanies the Software, that person may also use the Software on a single home computer."

EE. T/Maker Company

1. ClickArt!, Art Parts

Modifications: "T/Maker ... gives you permission to copy and modify the Images for your own internal use."

Distribution: "T/Maker ... gives you permission to incorporate and distribute duplicate or modified Images as an incidental part of any non-electronic product or collection of products which are distributed commercially (i.e., distributed for profit, such as a newsletter)."

2. ClickArt!, Famous Magazine Cartoons

Distribution: "This license entitles you, without additional payment or permission, to use the artwork only in: personal correspondence, slide shows, charts and diagrams, printed forms, sales brochures, in-house newsletters, annual reports, direct-mail advertising of less than 100,000 pieces, and periodical publications with circulation under 30,000 readers."

Modification: "You may personalize the captions accompanying the artwork by changing the name of a character, company or location ...."


FF. WinDEU 5.24

1. Doom Level Editor License Agreement

Modifications: "You are allowed to modify and distribute modified versions of this program (free of charge or not) under ... conditions [including a requirement that credit is given to the developers]."

Distribution: "You are granted the rights to copy and distribute verbatim copies of this software package, under the following conditions: [distribution at no charge]."

GG. WP Corp

1. WordPerfect Office

Home Use: "You are authorized to use a copy of the Software on a home or portable computer as long as the extra copy is never Loaded at the same time the Software is Loaded on the primary computer on which you use the Software."

HH. Ziff Davis

1. PC Magazine Utilities

Use: "[L]icense to use the source code distributed with PC Magazine Utilities for educational, non-commercial purposes only.