2008 BYU L. Rev. 1103 (2008)
The Software Licensing Dilemma

handle is hein.journals/byulr2008 and id is 1119 raw text is: The Software Licensing Dilemma

Nancy S. Kim*
Is software licensed or sold? Software licensing occupies a unique
position at the intersection of contracts, intellectual property, and
commercial law doctrines. The difficulty in analyzing software
licensing issues directly results from the suigeneris nature of software
that leads to the construct of what I refer to as the software
licensing dilemma-if software is sold and not licensed, the
licensor's ability to control unauthorized uses of its product is
significantly curtailed; on the other hand, if software is licensed and
not sold, the licensee's rights under the agreement are unduly
Currently, the use of contract law to evaluate software license
agreements is problematic not because the doctrine is inadequate but
because those who use the rhetoric of contracts have tended to
impose an artificially static view of what contract law demands-a
view that wholly ignores the philosophical objectives underlying
contract law. In this Article, I propose adopting a dynamic
contracts approach to resolving the software licensing dilemma. A
dynamic contracts approach aims to effectuate the intent of the
parties while balancing their intent against policy considerations. A
determination of the parties' intent would include examining both
the nature of the transaction and the terms of the written document
or license agreement. This Article argues that the validity of a license
grant should not be inextricably tied to the validity of the contract.
Contrary to what is suggested by the first sentence of this Article-is
software licensed or sold?-software transactions are not a binary
* Associate Professor, California Western School of Law and Visiting Associate
Professor, Rady School of Management, University of California, San Diego. Earlier versions
of this Article were presented at the Fifth Annual Works-in- Progress Intellectual Property
Colloquium at American University, Washington College of Law and the Southern California
Junior Faculty Workshop at Southwestern School of Law, and the author thanks participants at
both presentations for their helpful comments and observations. Special thanks to Seth Burns,
Tom Barton, Deven Desai, Michael Dorff, and Gary Rowe for their comments on earlier drafts
of this Article. The editors of the BYU Law Review were exceptionally well-organized and
professional. In particular, I would like to thank Natalie Banta, Kenneth Pike, and Josh
McLane for their excellent editorial assistance.


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