Software licences are procured across all areas of the Company and take a number of different forms. Here are some FAQs and the associated considerations when negotiating a software licence.
Check that the supplier warrants its right to grant the licence and is indemnifying the Company against infringement of any third party's rights.
Check that, if the right to grant a licence is subject to a third party's consent, such consent has been received.
Is the term of the licence as agreed? Are there satisfactory provisions for a renewal following the expiry of the term? Suppliers will often look to include auto-renewal provisions whereas the Company would look to require an active renewal.
Licences use technical terms to describe the licence, which should be checked against the intended use. Here’s a short guide on what the terms mean:
Assess who needs access to the software i.e. which personnel. We usually look to ensure that both POL and POMS are covered, but in any event ensure that the licence covers all users who require access to the software.
Are there any restrictions on the use of the software, for example can it only be used on a particular processing unit or at a particular site? If so, check that such restrictions are acceptable.
Are there commercial reasons for limiting the supplier's ability to licence the software to other customers? If so, consider the exclusivity of the licence granted to the Company.