Most businesses use software to manage their processes and communicate with vendors, customers, employees, and other purposes. Software licenses typically define user rights, including warranties, installation, responsibilities, and intellectual property protection. Software products often require you to accept terms and conditions of use or activate licenses before downloading, installing, and accessing the programs.
Different software licenses have different support agreements, terms, costs and restrictions. You must understand the basics of software licensing and familiarize yourself with the responsibilities while complying with the legal terms and limitations. Here are six types of software licenses you should understand.
1. User License
User licensing is a software licensing solution that requires vendors to set fees based on the number of users using the software in an organization. You can use named or concurrent user licenses. Employees cannot exchange named user licenses. However, they can be transferred between team members permanently, one at a time. Concurrent user licenses require a specific number of users in an organization to share consumer licenses.
2. Copyleft licenses
Also called restrictive or reciprocal licenses, copyleft licenses are regularly found in the GPL (General Public Licenses) class. This license allows users to copy, modify and distribute the licensed program under the same software project. The revised version should be released under a copyleft license to ensure that others can access and use it wherever possible, provided they adhere to the same terms.
Exposing your source code to competitors or users is not in the best interest of your business. This is why developers who make commercial applications usually avoid copyleft software licenses.
3. Permissive licenses
A permissive license gives users an agreement that contains requirements to modify, redistribute, and use the software. It is similar to a public domain license, but more restrictive because it may have stipulations about protecting intellectual property.
Free and open source licenses developers use permissive licenses to maintain intellectual property while controlling how users use the software. They are a common choice for FOSS developers in support of open source development and maintain copyright protections.
4. Public Domain License
Public domain software can be used and modified by anyone without any restrictions. The public domain license is permissive and supports adopting code into projects or applications and then reusing the software. Before adopting public domain software in your business, be careful because it doesn’t always adhere to coding best practices or may not meet application secure software standards.
5. Ownership license
A proprietary license is one of the most restrictive types of software licenses. Most of these licenses reserve all publisher or developer rights upon release of the software. Proprietary licenses state that a user may not redistribute or modify the software or its code. They require end users to accept the EULA agreement to use the software. Proprietary licensing protects the owner or developer from unauthorized use of the software.
6. Perpetual license
A perpetual software license allows users to use the program permanently, usually for a one-time fee. They reduce lifetime ownership costs, meaning you can use the software forever by purchasing a perpetual license. This license generally applies to a specific version of a software product.
Final note
Software licenses are intended to safeguard a software developer’s intellectual property rights while limiting any claims against them arising from its use. Familiarize yourself with these licenses before adopting any software into your business.