FC: License-drafting lawyer replies on Borland move: It's entirely common

[Declan McCullagh <declan () well com>]

Previous message:

"A defense of Borland's license saying auditors may inspect your PC"
http://www.politechbot.com/p-03029.html

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From: "Schultz, Mark F" <Mark.F.Schultz () BakerNet com>
To: "'declan () well com'" <declan () well com>
Subject: RE: A defense of Borland's license saying auditors may inspect your PC
Date: Mon, 14 Jan 2002 09:34:33 -0600

As one of those evil lawyers who has drafted hundreds of software licenses,
I read this and then the linked freshmeat commentary with some amusement.
Before the posse gets the rope and heads over to the Borland ranch, I
suggest they order several more tons of rope-they will need it.  Good luck
finding a commercial software end user license that was written in the last
couple of decades that does *not* contain an audit clause.

Software pricing is often based on the number of users.  The audit clause is
the lawyer's shoulder-shrugging answer to the difficult question of how you
enforce these limits.  (The techies have better, technical answers (which
often don't make it into the product for various reasons) and the business
people have business model answers-like ASP delivery).

It is better than nothing, rarely invoked, and probably never really used.
The first line of defense for the vendor if it suspects you are exceeding
the scope of your license will be something far more pesky and persuasive
than lawyers:  Lots of calls from annoying salespeople offering an upgrade.

If they think you are worse than usual, a scary letter from the BSA or SPA
may come.  If they think you are outrageously bad or an actual pirate, don't
worry about that audit clause:  They will be showing up at the door without
warning with US marshals to enforce their rights under copyright law.

As for the Constitution prohibiting this, sigh.  When will people learn that
the Constitution restrains government action (sometimes all too feebly), and
not private action?  The market restrains private action far more
effectively-if you don't like it, don't buy it.  Too bad the same principle
doesn't work for government.

Regards,

Mark Schultz

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From: Sameer Parekh <sameer () bpm ai>
Subject: Re: FC: A defense of Borland's license saying auditors may 
inspect  your PC
In-Reply-To: <5.1.0.14.0.20020114095057.009d1910 () mail well com> from Declan 
McCullagh at "Jan 14, 2002  9:51:34 am"
To: declan () well com
Date: Mon, 14 Jan 2002 07:40:42 -0800 (PST)
Cc: politech () politechbot com

        Allow me to add that 'audit' clauses like this are rather typical
in enterprise software licenses. The only thing 'strange' is that in this
case they are including it for consumer software. Many software packages
charge based on the type of computer or the # of users, and the only way
that restriction is 'enforced' is through audit, and the 'fear of audit'
is a sufficient deterrent in many cases to prevent large companies from
violating the licenses to their enterprise software.
        This is kind of new, but not really.

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