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Definition of Software Licensing

Software licensing is the legal Instrument governing the usage or redistribution of software. The Licensor authorizes the use of another individual or entity by having them agree to certain terms (usually via click-wrap or browse-wrap)

What rights do software licensing establish?

  • The original owner of the software (usually the Licensor)
  • The right to modify the software (alter, install, modify)
  • The right to redistribute the software and/or source code (to other users or install onto other computers)

Different types of Software Licensing

  • Feature Based: Enables or disables product features based on customer needs. (Sometimes time based software only allowing a certain number of uses before being disabled)
  • Rental: Software requires periodic renewal or licensee gets charged for applications.
  • Subscription : Licensor gets charged for upgrades to the software or newer versions.
  • Floating : Licensor gets charged based on how many users are currently using the software on a network (ex. software can be installed on as many computers as necessary but only a certain amount of users can be on the network at a given time)
  • Trail : "Try-Before-You-Buy" software, similar to Feature Based, Allowing minimal uses of a temporary version of the product until a full version is purchased.
  • Pay-per-use : The Licensor is charged for the number of times software is used (ex. Licensor can download 15 songs before having to purchase another license)


The following is an example of the software license agreement for Cisco VPN Client Software:


Intellectual Property
Software Licensing
Software Licensing Protection
Open Source Licenses

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