Inventors & entrepreneurs: 2 tips to protect your software

Software licenses provide the maker with protection against the use and redistribution of their product. Inventors can better protect their product by having a basic understanding of these two common issues that trigger software disputes.

Common issue #1: Stealing your idea

Software license disputes often arise when a company decides to terminate software agreements with another company because they are developing a similar product inhouse. A recent case out of Michigan provided an example. In that case, third-party vendor-provided software for Ford Motor Co. Ford Motor Co. stated it was terminating their agreement of more than twenty years because it was developing its own software. The third-party vendor filed suit, stating Ford’s software violated their license agreement.

Part of the case hinged on the definition of reverse engineering. The business holding the software license argued that Ford had reverse-engineered their software. In its holding, the court reviewed the definition for the term within the software license agreement. Within its opinion, the court specifically stated inventors should review any “boilerplate-ish” language within their software license agreements to avoid similar instances of confusion.

Common issue #2: Overuse

Virtualization is another problem. New technology has resulted in increased efficiency. As a result, software licenses that were originally intended to serve a small number or on a per-core basis may now be serving many. Companies that then attempted to exercise their software license protections and limit use may find that the agreement is too weak to enforce.

Take-away lessons: Protect your product

These common software license disputes provide two key lessons for business leaders. First, take the time to regularly review software license agreements and update as necessary to better ensure protection. Second, keep up with changes in the marketplace. These changes can have a direct impact on your agreement and may warrant additional changes.