Negotiating and Drafting Software Contracts

Audience

Software developers, Software publishers, Software distributors, VARs, OEMs, integrators, licensees, buyers, purchasing/procurement agents, contract managers, contract administrators, contract negotiators, MIS managers, directors and vice presidents, software exporters, users and independent consultants will all benefit from this practical seminar/workshop.

This seminar requires absolutely no prior legal knowledge and is designed for anyone involved in the process of negotiating software license agreements or making decisions regarding their content.

Skills Gained

This high-value three-day programme will help you:

• Understand the major types of software contracts and the legal background to them
• Evaluate the rights you have to possess, use, modify, reproduce, distribute, reverse engineer and otherwise deal with a copy of software provided under a licence agreement
• Recognise negotiating opportunities in various types of software licensing situations
• Prepare for software contract negotiations
• Learn which terms are absolutely necessary in software licence agreements and which are negotiable
• Determine your options in the negotiation of important issues in a software licence agreement, and analyse the risks and advantages of each option
• Examine opening and fall-back positions commonly used by your opponents on key issues
• Use creative problem-solving techniques

Course Outline

Understanding software licence agreements

• What is a software licence agreement?
• Goals and purposes of parties to a software contract
• Types of agreement and conditions

Appreciating computer laws

• Patents
• Copyright
• Trade Marks
• Registered designs
• Databases
• Trade secrets
• Moral rights
• EU Directives and Regulations
• Competition law
• US laws
• Other laws and regulations

Heads of agreement/memorandum of understanding

• Are they useful?
• Do they work?
• How do they relate to the final contract?
• Review letters of intent and comfort letters

Examining licence grant clauses in software contracts

• Review of sample clauses
• Discussion of use, reproduction, distribution and modification rights
• Analysis of limitations on these rights
• Consequences of exceeding your licensed rights
• The burdens on licensees in negotiating licensed rights
• Licensing terminology that limits or expands licensed rights or payment obligations - non-exclusive, exclusive, non-transferable, perpetual, irrevocable, paid-up, source code, executable code or binary code

Distinguishing between straight-forward and difficult issues

• Analysing issues prior to negotiations
• Successfully negotiating both straightforward and difficult to resolve issues
• Recognising which issues cannot be agreed upon

Negotiating tough issues in software licence agreements

• Ownership of the intellectual property rights in software
• Royalties
• Performance requirements and incentives
• Acceptance tests and the payment code
• Most-favoured customer clauses
• Expressed and implied warranty disclaimer provision
• Limitation on recoverable damages clauses
• Consequential damages exclusion clause
• Date and EMU warranties
• Service warranties
• Systems warranties

Analysing essential contract terms

• The licensor's analysis
• The licensee's analysis
• Checklist
• Inter-relationship of clauses

Negotiating styles, ethics and elements of a 'win-win' deal

• Negotiating styles prevalent in a number of countries
• Ethics in negotiations
• Interactive analysis of the key elements in a 'win-win' deal

Examining software provider negotiation strategies and tactics

• The common software licensor's strategy
• Profit orientation
• Responsibility v control
• Licensee flexibility v cost
• Standard contracts and pricing
• The bigger the deal, the more potential for concessions to the licensee
• Tactics commonly employed - the stone wall, the reluctant retreat, the company policy, tabling tough issues, horse trading, minimising customer concerns, pending price increase, time is of the essence, acceptance combined with back-door protection, challenging the customer's orientation, going around obstacles, good guy/bad guy approach, the old 'lawyer-approval ploy'

Examining software licensee negotiating strategies and tactics

• Three common strategies - 'strong attack', 'intelligent attack' and 'selected target strategy with red herrings'
• Strategies in some foreign cultures
• Mixing elements of common strategies
• Tactics commonly employed

Mastering the essential negotiating skills

• Silence as a negotiating tool
• Body language
• Personal space

Interactive case study

• Negotiation of a software contract - a consolidated software licence agreement for a combination of off-the-shelf software, bespoke software, maintenance service for both, and a distribution agreement for the bespoke software
• Guidelines for preparing for extensive negotiations of identified issues with your negotiating team members
• Gain 'hands-on' experience as you apply your strategy and tactics toward negotiable issues. You will also learn to resolve conflicts in a mutually acceptable manner
• You will receive a summary of the real-life outcome of negotiations in your case study so that you can compare your team's results with actual results. Negotiation strategies, tactics and results will be critiqued, and the strengths and weaknesses of each team's approach will be analysed. For future use, you will learn about positions and tactics that could have been used to improve your results

Negotiating and Drafting Software Contracts / CM024949