How Does Your Carefully Negotiated Software License Become a Complete Waste of Time?

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Your negotiated software license is useless when it's been superseded by that shrinkwrap or clickwrap license your employees never read. We constantly warn professional software asset managers and their companies to steer clear of acquiring either shrinkwrap or clickwrap licenses for any purpose. (Let's call them SCLs.) Read on to discover just one more reason to avoid these common software license scams.

Shrinkwrap & Clickwrap are the most costly & onerous licenses your company can possibly buy or use. And the suppliers would dearly love it if you accidentally locked yourself into one—or more.

This brief review covers a little-known risk of SCLs. Below are the methods used to bind you to hidden clauses within the unread license—clauses that can spell disaster for your company. Even worse, the powerful lobbying interests of the software industry have managed to ensure that this SCL binds you to a license you were never able to read and it's 100% legal.

You should be feeling concerned…

Simple Answer to Our Title Question: Either of these licenses could easily void every previous license you own—including those that you invested a great deal of time and money in carefully negotiating beneficial terms and conditions.

Here's How They Get You: When one of your employees, or a contractor, or a consultant, or any other individual with access to your computers, decides to download an unauthorized product, they can immediately bind you—legally—to the unread virtual license. Within the SCL—the licenses that copyright holders are perfectly aware you will never read—is a clause that automatically voids all previous licenses when the SCL becomes active. The next several clauses in the license will further limit your use and rights in relation to the new product—even support & maintenance coverage—as well as all preceding releases or versions of the product.

Real World: For many software applications, every time you update, patch, or fix there is a carefully hidden check-box that installs a new software product. The default for the box is “accept”. Only by consciously denying that check-box can you eliminate the unauthorized download. Failure to do so places a literally invisible software audit threat on the device.

Instant Solutions: From today forward, EVERY license and agreement you make with every technology supplier must contain a clause that very specifically and very clearly states that the agreement will NOT be superseded by any subsequent agreement or license. You can permit future modifications but only upon activating a clearly written agreement that must be mutually approved and signed by both parties.

Next, you absolutely must ensure that anyone with access to any of your systems is well aware that they are not authorized to acquire and or install any products covered by shrinkwrap or clickwrap agreements—period. This includes the necessity of informing (in written form) all suppliers of software-related goods that THESE are your rules of engagement. If they choose not to comply, they should also be choosing not to provide goods and services to your company and will be removed from your vendor list.

Finally? Enforce the rules—now—and ensure that they continue to be enforced. No exceptions. Not you. Not your CIO. Not your mom. Nobody. Sorry folks, but this is business and you are a prime target for sharp practices that could cost you enormous sums of cold hard cash.

But don't listen to us. It's neither our job, nor our intent, to provide either legal or accounting advice. You pay good money to professionals in those fields. Our task is merely to make you aware of some of these costly little minor details so you can check them out.

If you need any additional information, let us know. The Institute for Technology Asset Management is here to help you cut the costs and risks of business technologies—not to ensure that you pay even more.