June 2011

Monthly Archives

  • Restrictions In License Agreements


    Restrictions and Keep Out Sign - Aber Law Firm

    Software Licensing Attorney’s View on License Agreement ‘Restrictions.’

    As you know, software license agreements contain restrictions (= things you cannot do with the software). As a software license attorney, I would say that these are examples of the most common restrictions (e.g. (1)  don’t reverse engineer or decompile the software and (2)  don’t let a third-party use the software). However, I would also say that there are unique restrictions out there too. Two very recent big name court cases demonstrate that even the unique restrictions are usually enforceable; let’s take a quick look.

    Case #1: In this case the Blizzard Entertainment (the folks that make World of Worldcraft) license agreement has a very unique restriction (see below).

    License Agreement Restriction - Aber Law Firm

    Without taking you through the whole boring details of the case (that is the stuff I do as a software licensing attorney), the court essentially said that this restriction was enforceable and MDY (the company that made a ‘bot‘ that allowed users to advance without actually playing the game) breached the license agreement. Oh yea, MDY also made around $3.5 million from selling the software that performed this task. So not only did MDY make software that violated this restriction, they also profited from it in a pretty big way. Court really don’t like this.

    Case #2: NEON Enterprises sued IBM regarding certain restrictions in the IBM license agreement (actually NEON was alleging that these restrictions did not exist). NEON made software that allowed IBM customers to move their …