Most businesses in the 21st century employ contemporary software or apps to make work easier. It facilitates their ability to manage company operations and communicate with groups or customers methodically and economically.
As a company owner, you may also employ premium solutions to guarantee additional resources and security. It is necessary to get authorization before downloading, installing, or upgrading any paid software. That’s when a software license is needed.
There are several types of software licenses available in the market. Therefore, with this article, let’s understand the meaning of software licenses, their types, their importance, and how they can protect a company’s digital assets against cyber-criminals.
So, let’s start.
What is a Software License?
A software license is a legally enforceable contract specifying software uses and distribution parameters. The manual establishes user rights and ensures compliance with copyright laws for both software developers and users.
This document outlines the precise permissions provided to users, guaranteeing that their program usage does not violate copyrights. It also lays out everyone’s roles and provides precise instructions for using the program correctly.
A software license contains terms and conditions that address several topics, including warranties, disclaimers, permissible usage, and liability restrictions. It is a detailed roadmap informing developers and users what they can and cannot do with the program. According to a report, the software license will grow significantly and reach above 5 billion by 2030.
5 Essential Factors of Software Licenses
The importance of software licenses can be understood for the following reasons:
- Legal Protection – All software licenses specify the criteria and restrictions under which the program may be used and the users’ and developers’ rights and obligations. They stop illegal usage, distribution, and program modification while safeguarding the author’s intellectual property rights.
- Warranty & Liability – Disclaimers of warranties and liability limits are common in all types of software licenses. To be clear, they say that the program is given “as is” and that the creator cannot be held accountable for any harm from using it.
- Compliance & Accountability – Users and organizations may ensure they follow the law and ethical standards by following the software license terms. It creates responsibility and assists in averting legal problems arising from software’s unapproved usage or distribution.
- Long-Term Cost Saving – Buying licenses have an upfront cost. Still, it frequently saves money in the long term since it avoids dealing with legal ramifications, security breach recovery, or software instability that might reduce productivity.
- Technical Support – Licensed software typically includes technical support and customer care, which cuts down on downtime and troubleshooting time. Operational efficiency may be significantly increased by doing this.
Software licenses have a direct relationship with software companies & users. Let’s now understand how a software license protects both the developer & user.
Protection to Developer
- Based on copyright rules, they safeguard developers’ trade secrets and intellectual property.
- They restrict the use of the covered software code by third parties.
- They restrict the vendor’s responsibility.
Protection to Users
- They specify the uses of software code that users are not allowed to create.
- They specify how users should adhere to software licensing agreements, defend themselves against infringement allegations, and keep their legal liability to a minimum.
- They assist users in preserving a favorable rapport with suppliers and software developers.
- They do this by defining the precise number of licenses an organization needs, preventing overpayment.
Understanding the Types of Software Licenses
There are mainly 3 major categories of software licenses. Let’s understand each of them in detail.
- Public Domain
- Open Source
1. Public Domain License
One kind of public domain license is the epitome of freedom in the software industry. Software that is in the public domain is basically free of copyright restrictions.
There are various techniques to attain this status:
- Expired Copyright – Software that was formerly copyright-protected may ultimately exceed its duration, which varies by jurisdiction. When the time for this protection term expires, the program enters the public domain and can be used, altered, and distributed without restriction by anybody.
- Ineligibility for Copyright Protection – Some software may not be eligible for copyright protection because of its nature. For example, content that doesn’t meet the copyright law’s creative level or isn’t original could not be protected. As such, from the beginning, these works are regarded as belonging to the public domain.
- Intentional Dedication – A creator may consciously transfer their creation into the public domain by relinquishing copyright-protected rights. One way to do this is to use a Creative Commons Zero (CC0) license that waives all copyright protection and permits unlimited use, modification, and distribution.
The lack of copyright restrictions gives users unmatched power:
- Right to modify
- Freedom of sharing & distributing
- Commercial exploitation
Software in the public domain fosters creativity and cooperation by providing an environment conducive to technical progress and creative inquiry without the typical restrictions imposed by copyright laws.
2. Open-Source License
Open-source license allows users to view, alter, and share an application’s source code without needing express consent from the creator. However, they have certain limitations and regulations, debunking the myth that open source means unlimited use.
Open-source software licenses aren’t unrestricted even if you can alter the code. They depend on compliance with the conditions set forth by the software’s original creator, who owns the copyright. Users are required by law to abide by the terms specified in the specific open-source license linked to the program.
Violations of these licensing restrictions may result in heavy penalties, including the possibility of hefty financial fines via litigation. Businesses that ignore or breach these agreements risk incurring expensive legal fees, which might result in damages reaching the millions.
There are several open-source licenses, each with unique legal specifications.
Types of Open-Source Licenses
Like public domain licenses, permissive open-source licenses may have further restrictions on how the program is modified or distributed after purchase. Program creators can maintain ownership of their intellectual property while still having some influence over how the program is used, thanks to permissive licensing. This method supports the open-source philosophy and frequently permits unrestricted software sharing.
A permissive license affords users a great deal of flexibility. They can use the program and even build proprietary code to turn it into closed-source programming.
However, a critical condition still exists: crediting the original creator or author of the code is required.
These licenses usually contain a warranty disclaimer that releases the original creator from liability for modifications made by later users.
Different purposes and means of enforcement are listed by a number of well-known permissive open-source licenses:
- Apache License 2.0
- MIT License
- ISC License
Strong Copyleft aka Restrictive
Restrictive licenses, sometimes vital copyleft licenses, are essential to the ‘free software movement’ philosophy. They grant end users the following four core freedoms: the capacity to distribute, view, alter, and access the software’s source code.
But to maintain the continuity of freedoms intended by the author, this distribution is conditional and requires that any changed versions be distributed under the same license as the original.
Copyleft licenses do not prevent commercial software from being developed, in contrast to limiting its development. Instead, their goal is to stop proprietary software from developing. Moreover, unlike copyleft projects, permissively licensed code cannot be incorporated. As a result, a copyleft license is usually the recommended option for licensing for people who support the ideals of the free software movement.
Some of the most notable robust copyleft licenses are:
- GNU General Public License v2.0 (GPL 2.0)
- GNU Affero General Public License (AGPL)
Weak copyleft licenses allow incorporation into proprietary software while striking a balance with open-source principles. They guarantee that the essential open-source features are still available and shareable while allowing for adjustments and integration into private solutions under specific guidelines.
Here are some weak copyleft licenses that are often used:
- LGPL 3.0 (GNU Lesser General Public v3)
- Eclipse Public License 1.0 (EPL 1.0)
- 3-Clause BSD License
- Mozilla Public License v2.0 (MPL 2.0)
- CDDL 1.0 (Common Development and Distribution License 1.0)
3. Proprietary Licenses
A proprietary license is a type of software license that allows businesses to protect their software as their intellectual property. The license protects the ownership and management of the source code inside the business that created the program, in contrast to open-source licenses that offer greater freedoms.
Proprietary software owners use copyright protection to prevent users from copying, changing, or distributing their products. By maintaining exclusive control over the code, functionality, and usage of the program, this control guarantees the company’s rights.
When using proprietary software, users must comply with the terms and conditions of the product’s End-User License Agreement (EULA), a legally enforceable contract. Generally speaking, it is forbidden to modify the terms of this software license.
Proprietary licenses provide businesses total control and security over their software, guaranteeing that use fully complies with the stated terms and conditions.
Here are some of those proprietary licenses that most businesses use:
- Perpetual Software License
- Subscription-based Software License
- Named User Licensing
- Concurrent User Licensing
- Device Licensing
- Network/Floating Licensing
- Consumption-based/Metered Licensing
However, before integrating any software license, it’s crucial to have a code signing certificate. It verifies the identity of a developer or publisher. This helps to inform the user that the software or app is authentic and has not been tampered with since it was initially signed. Developers can ensure the integrity and authenticity of their applications using a code signing certificate from CheapSSLShop to digitally sign their software, scripts, or executables.
When installing code from an unknown publisher, users are alerted by their firewall or antivirus software. This code indicates that the software has been tampered with since the signing procedure or originated from a malicious source. Companies rely on cheap code signing certificate to protect their digital assets from hackers.
How Does Software License Management Help Secure Digital Assets?
Sometimes, users can purposefully engage in content piracy by ignoring licensing requirements by digital asset holders or not fully understanding digital asset rights. This can often lead to accidental exploitation of such rights.
For this reason, it’s essential to control and restrict access to all technological gateways that allow users to print, share, modify, and save protected digital assets and files. This is good rather than informing them of their rights and restrictions around intellectual property.
Digital software license management and content owners make granular control over user behaviors possible. They can define the actions that are allowed, restricting them to comply with copyright or licensing requirements. These include:
- Software license management systems can block screen snatching and screenshotting capabilities, protecting sensitive content.
- Removing inherent browser and system features that may be used to illegally copy or capture content (such as the text selection and copying features and the “Save As” option from the right-click menu).
- With the software license management system, content owners may limit who can access their digital assets by limiting access based on IP address, country, or device type, limiting the audience that can access contact sources.
- Imposing limitations on web bots that may be utilized to analyze and steal material from websites automatically.
Best Practices for Users to Protect Digital Assets
Here are some of the best ways by which a user can protect its digital assets:
- Full & complete understanding of digital assets. These include websites, social media presence, client & customer data, proprietary business processes, photos, videos, apps, and intellectual property.
- Now, establish ownership and valuation of these assets using a software license management system.
- This is a fundamental step where limiting access to digital assets and systems to only authorized persons is critical. This helps reduce the risk of any type of loss & theft.
- Use non-disclosure agreements (NDAs) that help protect digital assets against third parties.
- Ensure to use trademarks registered so that no one can copyright the company’s domain name. However, it’s crucial that a company’s website has a secure encryption connection. A user can secure the website using a high-end SSL certificate and secure a company’s website domain from prying eyes.
- Use enterprise-level applications, including two-factor authentication, that offer secure protection against hackers. Moreover, ensure a secure Wi-Fi connection is used.
- Have a reliable backup plan that can safeguard the company’s digital assets when required.
Choosing the best software licensing model takes a lot of research into your long-term plan. You need to consider your needs, the financial and security requirements, and how you intend for them to utilize it. But the task doesn’t end there when you’ve chosen a license model.
You will maintain software tracking even after licenses are issued. Not only does it allow you to ensure that you are getting paid for it, but also allows you to collect data that may help you enhance your product and boost sales.