EULA Awareness

A EULA is an End User License Agreement.  It is the agreement that you are supposed to read, but don’t, before you click “I agree,” so that you can download software onto your computer from the Internet.  People don’t like to read EULAs because they’re tedious, especially when you’re anxious to download and use your software.  Another reason people don’t like to read EULAs is that EULAs tend to be long and complicated.  Someone recently wanted to save time and money and asked me to use an Internet legal document service to draft a EULA.  I declined.  I didn’t feel comfortable using agreement language when I had no way of verifying the reliability of the source.

All license agreements are contracts.  Contracts can be known by different names, such as commercial real estate leases or software licenses.  A EULA is a particular type of software license.  Licenses allow a rights holder to let other people use those rights without giving up complete control of the rights.

Every license covers an imaginary universe of what that license is about and things included in it.  This is called the “scope.”  The scope includes at least seven essential aspects:

  1. subject matter;
  2. activities permitted;
  3. field of use;
  4. exclusivity;
  5. territory;
  6. time; and
  7. sublicensing.

(Source:  Kenneth L. Port, Jay Dratler, Jr., Faye M. Hammersley, Terence P. McElwee, Charles R. McManis, Barbara A. Wrigley, Licensing Intellectual Property in the Information Age, Second Edition, Carolina Academic Press, 2005, pp. 12-14.)

It takes time to thoroughly discuss these seven areas of contract scope with a software developer.  Using shortcuts like stock forms available on the Internet does not do away with the need to discuss this important information.

Do lawyers use forms or model agreements to draft contracts?  You bet.  It happens all of the time.  For me, the reliability of the source is an important consideration in deciding what contract language to use.  When I am drafting a technology contract, I like to start with The Tech Contracts Handbook, by David W. Tollen, ABA Publishing, 2010.  This book does an outstanding job of describing various contract clauses and when to use them.  It is also written in plain English.  Non-lawyers appreciate that, but lawyers appreciate it, too.  The Tech Contracts Handbook website contains downloadable form contracts that aren’t in the book.

Someone also told me that EULAs have been around for awhile and that it should be a simple matter to get one off of the Internet.  EULAs have probably been around for a couple of decades.  What about commercial real estate leases?  Those have been around for hundreds of years.  It seems unlikely that anyone involved in negotiating a commercial real estate lease would suggest that her attorney just download one from the Internet.

Stuart A. Heller, a Seattle area attorney who calls himself, “The Leasing Lawyer,” recently gave an excellent presentation to the Solo & Small Firm Section of the King County Bar Association.  His presentation was called “Six Keys to Successful Lease Negotiation from Tenant’s Viewpoint.”  One of his main points was that the lease terms that are important to the tenant must be individually negotiated so that the tenant gets what she wants and needs to successfully operate her business from the leased premises.  The same is true for EULAs.  Each EULA must be individually tailored to the software provider’s unique situation to ensure that the software provider’s intellectual property is adequately protected.  An improperly drafted EULA is unlikely to achieve its objectives and is a wasted effort.

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