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  • Defining Cases on Software Licensing
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Court cases cause software licenses to evolve and adapt.

They test the validity of the terms within software licenses and how these terms are applied to real world disagreements.

There are several defining cases that have impacted software licenses starting with Digidyne v. Data General.

Digidyne v. Data General

In this court case, the Supreme Court set a precedent which “forced [Data General] into licensing the Operating System software because it was ruled that restricting the license to only DG hardware was an illegal tying arrangement”. The Supreme Court’s decision enabled software to be given a value and also allowed for the purchasing of software patents. This was the first major encounter with the issues that would cause a company to want to license software and essentially started the practice of software licensing [1][2].)

ProCD v. Zeidenberg

Zeidenburg purchased ProCD’s telephone directory database software, made copies of the company’s software and sold the copies at a lower price. The words “license enclosed” was printed on the outside of the shrink-wrapped box that Zeidenburg received from ProCD. Inside the package, ProCD’s full license agreement was displayed on their software. By opening the shrink-wrap package, Zeidenburg technically agreed that there would be a license inside. He therefore agreed to the terms and committed a crime against the company. Software licenses are valid unless their terms "are objectionable on grounds applicable to contracts in general", like unconscionability. The court treats "the licenses as ordinary contracts accompanying the sale of products, and therefore as governed by the common law of contracts and the Uniform Commercial Code"  [3][4].

Specht v. Netscape

In Specht v. Netscape the plaintiff argued that he was not subject to Netscape’s “terms of service” agreement due to two reasons: one -- being that the plaintiff had to scroll to the bottom of the page to even  notice the license agreement, and two – Netscape didn’t require customers to click on anything that stated the customer agreed to their terms of service agreement. This case made other software companies aware of making sure to provide an “I agree” clickable button in their software contracts [5].    

Bowers v. Baystate

In Bowers v. Baystate, the court decides that the provision of a software vendor's contract prohibiting reverse engineering is valid [6].


M.A. Mortenson Co. v. Timberline Software Corp., et al.

In M.A. Mortenson Co. v. Timberline Software Corp., et al., the court decides that the provision of a software vendor's contract disclaiming liability is valid [7].








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