What should you be looking for when you read software licensing agreements?

Netflix, Amazon Prime, Hotstar are certainly the center of everything we do in our free time these days. 

Needless to say every millennial today is addicted to at least 2-3 such mobile applications to get through the day. Be it for entertainment or generating business- technology and the internet have us wrapped around its fingers. 

We don’t ask ourselves any question when we do the simplest of things like click “I Accept” on a huge web document of terms and conditions without batting an eye or go on submitting our e-mail ids on random websites to gain momentary access. 

By this time, we’ve become so confident that there’s probably nothing in these documents that would be either interesting enough to pay attention to, or deal-breaking enough to pause for.

But have you ever wondered what is the worst that could happen out of agreeing to such documents that you never read?

Most probably, not.

Here is the thing. Tech companies hire lawyers with a functional knowledge of technology law to write such long agreements and pay lots of money. A lawyer would easily ask for anything between 30k to 1 lakh for drafting the terms and conditions of a website or an app. A law firm could charge several lakhs also. Why spend so much on documents that people agree to blindly, without even reading?

To understand and benefit from this secret, you need to know some technology laws, especially regarding tech contracts. You won't find the answers in provisions of Information Technology Act of 2000, or in a cyber law textbook.

But before I get into the details of technology law as an emerging career opportunity and prospects of becoming a technology lawyer, I will take a little time to introduce you to a couple of interesting clauses in agreements by various entities that you surely wouldn’t have read. So here goes:

PC Pitstop rewarded 1000$ to a customer for reading its license agreement!

An End-user license agreement is a legal contract between the manufacturer and/or the author and the end-user of an application. The EULA details how the software can and cannot be used and any restrictions that the manufacturer imposes.

If you want to understand what a EULA looks like, go through EULA’S of Apple’s here, or Amazon’s here. These are the most prominent ones you surely would have “Accepted” some time in your life. 

Let’s be honest, no one reads EULA’s (End User Licensing Agreement) – we all just scroll down to the bottom and click “I Accept”. 

EULAs are full of confusing legalese to make them incomprehensible to the average person. 

So, taking advantage of the scenario, in 2005, PC Pitstop, an antivirus software company inserted a clause to reward $1,000 to anyone who contacted them on reading the EULA and the clause, of course.

Interestingly, it took five months and more than 3,000 sales before the first person dropped them a line asking about the clause!

Amazon’s Zombie Apocalypse clause in terms and conditions!

Remember Amazon’s motto of finding everything from A-Z in their platform?

Looks like they took it pretty seriously.

In one of the clauses relating to Amazon Lumberyard (a game engine), Amazon mentioned that developers can't use its materials for "life-critical situations”.

But the restriction will not apply in the event of the occurrence of a widespread viral infection transmitted via bites or contact with bodily fluids that causes human corpses to reanimate and seek to consume living human flesh, blood, brain or nerve tissue and is likely to result in the fall of organized civilization!

So you can do whatever you want with the Lumberyard when the zombies come!

Inserting such clauses is a great trick to know if your counterparty is reading your draft properly or whether their lawyer or your boss is slacking.

Over 7000 shoppers sold their souls to an online gaming store on April 1st!

Gamestation, a gaming store, decided to add a clause in its terms and conditions on April 1st, 2010 that made over 7000 of its customers accepting to sell their soul to the game store!

The clause read:

“By placing an order via this Web site on the first day of the fourth month of the year 2010 Anno Domini, you agree to grant Us a non-transferable option to claim, for now, and forevermore, your immortal soul. Should We wish to exercise this option, you agree to surrender your immortal soul, and any claim you may have on it, within 5 (five) working days of receiving written notification from gamestation.co.uk or one of its duly authorized minions.”

Interestingly, less than 100 people who signed up for the services were able to identify the clause and clicked the option to nullify the ‘soul transfer’/

Technology contracts include contracts like website development agreement, services agreement, music license agreement, privacy policy, technology transfer agreement, to name a few.

Over time, technology contracts have become complex. It is not possible to work in a key management or leadership position in a technology company or startup without knowing how to understand, draft and negotiate technology-related agreements in accordance with the organization’s needs and goals.

The key factors that are taken into consideration for a technology transaction or consultation are background in the relevant industry segment, expertise with the type of intellectual property rights involved, familiarity with the implicated technologies and their evolution, and experience with the party on the other side of the deal. 

Ideal technology lawyers can be expected to quickly develop an understanding of what assets are most valuable to a client, what synergies the client expects to achieve through the deal and a negotiation strategy that takes all these into account.

This knowledge is critical whether you are outsourcing the creation of software, obtaining cloud-based services, preparing terms of service and privacy policy for a platform, granting a license or even uploading your own content.

A lot of legal and contractual work needs to be undertaken if you are setting up an e-commerce website, a wallet for your startup or a fintech startup. Cross-border legal risks need to be managed. Data protection and consumer-related concerns need to be kept in mind. These concerns need to be incorporated while designing business processes.

The demand for technology lawyers as well as managers who understand technology law and regulation is massively on the rise. It is foreseeable that this demand will remain high in the coming decades as revolutionary technology continues to change the face of human civilization.

Why is it important to read the terms and conditions of the software licensing agreement?

What are the things you must consider in end

Which of the following are common parts of software licensing agreements?

What should be included in a software agreement?