Legal Writing

Granting Language in a Software License Agreement

By Ken Adams

Here’s a generic bit of granting language from a software license agreement:

Acme hereby grants Widgetco a nonexclusive, perpetual, irrevocable, royalty-free, fully paid-up, worldwide license to the Software (that license, the “License“).

I’m not a licensing guy, so it is with some trepidation that I ask the following question: Are such adjective-heavy formulations really the best alternative?

As with any such string, you run the risk of redundancy. For example, “fully paid-up” would seem unnecessary, given that the consideration for the license would be stated in the contract.

You also run the risk of confusion. Describing a license as “irrevocable” could mean that it can only be termined if the licensee breaches the terms of the license. Or it could mean that the only remedy is damages, even in the event of breach. It would seem a best idea to address this explicitly in a separate provision.

And doesn’t one grant a license to do something, rather than grant a license to a thing?

So how about saying something along the following lines:

Acme hereby grants Widgetco a nonexclusive license to use the Software in perpetuity without restrictions as to territory (that license, the “License“).

Widgetco is not required to pay Acme royalties in connection with its use of the Software under the License.

Acme may terminate the License only in the following circumstances: …

And might there be any benefit to being explicit as to what “nonexclusive” means? Is that something anyone ever fights over? How about “exclusive”?

Full post as published by AdamsDrafting on August 18, 2008 (boomark / email).