An EULA specifies the terms under which end users may access and use software products. This playbook guides counsel through critical clauses on license scope, restrictions, warranties, and limitations of liability.
Why This Matters: Vague grant terms can lead to unauthorized use or restricted exploitation, exposing both parties to liability and lost revenue.
Negotiation strategy
If you're the Licensor:
Ensure the license grant is specific and aligns with your business model. Clearly define the scope and limitations to protect your intellectual property.
If you're the Licensee:
Negotiate for a broad license grant that allows flexibility in use. Ensure the terms are clear to avoid future disputes.
Essential elements
1
Grant of License
Defines the license type.
2
Scope of License
Details permitted uses.
3
Duration of License
Specifies license term.
Action framework
ACCEPT
Propose edits if the scope is too narrow or unclear.
EDIT
Reject if the license terms are overly restrictive or vague.
ADD
Add specific use cases or industry compliance requirements.
PRO TIP
Always ensure the license grant aligns with your strategic goals and includes clear termination conditions.
Example clauses
FAVORABLE
Preferred License Grant
"The Licensor hereby grants to the Licensee a non-exclusive, non-transferable, revocable license to use the Licensed Materials solely for the Licensee's internal business purposes, subject to the terms and conditions of this Agreement."
NEUTRAL
Standard License Grant
"The Licensee is permitted to use the Licensed Materials only in the manner expressly authorized by this Agreement. Any use of the Licensed Materials outside the scope of this Agreement is strictly prohibited."
UNFAVORABLE
Overly Restrictive License Grant
"The Licensee may only use the Licensed Materials for a single, specified purpose, with no allowance for any modifications or adaptations."
Fallbacks
High-Risk Projects
In high-risk projects, ensure the license grant includes specific indemnities and limitations on liability to protect against potential claims.
Cross-Border Transactions
For cross-border transactions, consider jurisdictional differences in IP laws and ensure the license grant is enforceable in all relevant territories.
Joint Ventures
In joint ventures, ensure the license grant reflects shared ownership and clearly defines each party's rights and responsibilities.
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WEEK 2
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WEEK 3
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WEEK 4
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