We have also dealt with various software licensing disputes relating to alleged breach of the contractual terms and where there have been disputes with the suppliers who implement the software.
The licensing landscape appears to be changing – there is an increase in user-centric licensing so users and their employees can have access to software applications not only from their desk but also remotely via a variety of devices. In addition, there appears to be an increase in subscription licensing which provides licences as a service rather than “goods”. Software as a service can involve the major components of the software residing on the supplier’s servers rather than on the user’s computer and being accessed through a generic piece of software such as a web browser. It is critical for users, particularly large organisations, to have a mechanism to ensure they do not unwittingly exceed the licenses purchased leading to under-licensing. This often happens where user firms expand or merge rapidly or where there is a re-organisation of a company structure.
We have dealt with disputes arising when large companies have inadvertently been under licensed and who are then subject to an aggressive audit by software providers leading to an excessive claim for licensing fees and further charges. Fairly recently we assisted a high profile company with a licensing dispute with a well-known software house involving significant sums of money. The client was faced with excessive claims for alleged under licensing, initially in excess of $100M. The sums were vastly inflated by the software house in question due to factual inaccuracies, pure mathematical errors and incorrect application of fundamental principles of the English law which governed the licence. By working closely with an IT expert, we managed to help the customer steer a course through the negotiations and succeeded in reaching a good resolution, without recourse to the English Courts. This shows that negotiations can succeed, especially between commercial entities where there are important ongoing relationships.View less