Is it possible to purchase a software licence?
By Michał Paluszek
Posted: 1st December 2015 09:34In my professional career, I often meet with people who start the description of their legal problem with “I have bought some software...” – but when I ask them to present me with a copy of a contract for the software, the best I can get is an invoice. And then comes the surprise – such person has not “purchased”, but “leased” some rights.
“Software purchase” is usually regarded as a purchase of any tangible assets – just as purchasing a printer or a car (i.e. a one-time transaction, merchandise in exchange for remuneration). In the case of software, the issue is more complicated, as it is a subject of copyright.
The Polish Copyright and Neighbouring Rights Act stipulates three basic methods of proprietary copyright (as opposed to personal copyrights) disposal: granting an exclusive licence, a non-exclusive licence and transfer of property copyrights. Other possibilities are also known, but are not described directly in the act.
Transfer of proprietary copyrights is something closest to “sale” of software, as it transfers proprietary rights and entitlements related to such software; such transaction requires, however, a written form (i.e. a contract). The contract itself also has to include elements stipulated by the act, such as the so-called “fields of exploitation” – ways or methods in which the software may be used. The lack of proper form, as well as all the essential elements, causes the contract to be void in relation to copyright transfer. It is, however, possible to regard such agreement, in particular circumstances, as a licence agreement.
The written form is also restricted for the exclusive licence, i.e. a right that entitles the holder to use the software in a way detailed in the contract for a given time, with the exclusion of any other person. The software remains the sole property of the licensor at all times.
A non-exclusive licence is a right similar to commonly understood “lease”; under such licence, an entitled person may use the software in a determined way for a determined period of time. Such terms and conditions of using software, as well as the period of time are usually stipulated by the holder of proprietary copyrights, in the document of licence itself. If some elements are missing in the licence document, the aforementioned act will regulate the issue. It is necessary to point that the non-exclusive licence does not require a written form and in case of any doubts it is regarded that the copyright owner had granted a licence. What is important, granting a non-exclusive licence is also a contract between the licensor and the licensee, but it may be expressed in any way accepted by Polish law – in particular, but not limited to, written, oral, email or even consensual way.
Therefore, if a person pays for the possibility of using a piece of software, and receives only an invoice as proof of payment, is – at best – a non-exclusive licence holder.
In relation to forms of legal actions, Polish law does not treat equally “written” and “electronic” forms. In most cases, emails or scans of documents will not fulfil the requirements of a written form, which is restricted for old-fashioned paper and own signature.
It is also worth mentioning that Polish law does not allow the granting of "eternal licences”. Contracts concluded for an unspecified period of time may be terminated just as any other agreement – in accordance with the provisions of such contract. If there is no period of time specified, the licence contract shall be regarded as granted for an unspecified period of time and may be terminated with one-year notice. Also, a one-time payment does not modify the aforementioned situation (does not create any copyrights transfer).
Therefore, any licence agreement may be terminated and the licensee usually shall not be entitled to any remuneration for such termination.
The idea of licence as a limited entitlement also raises significant issues regarding the disposal of software by the licensee. Under the aforementioned act, in most cases the licensee may use the software only in ways the licensor has agreed to; thus, in regard to licences, “what is not directly allowed, is deemed to be forbidden” – as opposed to general civil law rules. This results in the impossibility of “re-sale” of licensed software, making copies or altering it. And, of course, the possibility of losing the entitlement to use it in the future.
What is interesting, the Polish Accountancy Act, more commonly known by company managers than the aforementioned Copyright Act, stipulates that the licences should be presented in accounting records as “purchases”; also, it is possible to purchase a PC game in a shopping mall just as any other commodity, without signing any documents. This causes most people, both private persons and professionals, to misunderstand the idea of copyright transfer and licences. Still, the aforementioned examples do not exclude the provisions of the Copyright Act and remain in conformity with it.
Therefore, if you have any doubts in the future whether you had purchased a piece of software, but hold no proper agreement, remember that the software has been “leased”, not “sold”.
Michał Paluszek, legal advisor, member of the Legal Advisor's District Board in Opole, graduated from the Law and Administration Faculty of Opole University. The author runs his own legal office, providing legal services mostly to entrepreneurs – both in terms of counselling as well as taking part in court proceedings. Focuses on legal issues related to telecommunications, IT and so-called high-tech law. Experienced with atypical legal problems and finding alternative solutions in corporate or SME reality. Michal runs workshops and training sessions on miscellaneous legal topics, such as personal data, copyrights, and contracts.
Michal can be contacted on 668/227/763 or by email at email@example.com