Is Software Licensed or Sold?

Share this article

software license
Selling software is a legal minefield. When you purchase a digital product, you’re not buying the CD/DVD and packaging, but a license to use the software. The license is a legally-binding agreement that determines how you may use that product. If software was “sold”, you would be the legal owner and could do what you wanted, e.g. install it anywhere, disassemble it, give it away or anything else that didn’t contravene copyright laws. However, what happens when you no longer need that product? Is it possible to re-sell your software license to another party in the same way that you can sell a second-hand book, music CD or movie DVD? It’s a legal grey area which has been highlighted by the case of Vernor v. Autodesk, Inc. A SitePoint forum post by Dan Schulz describes the full legal arguments in detail. In summary, Vernor attempted to sell legal copies of AutoCAD on eBay but had his account suspended following intervention by Autodesk Inc. Vernor sued Autodesk in federal court:
  • Vernor claimed he purchased the license from vendors who must have been the legal owners of the software. Therefore, the ownership transferred to him on purchase.
  • Autodesk contended that ownership was never transferred, Vernor’s sale infringed copyright, cited that its license was a “computer software agreement”, and the industry normally restricted ownership transfers.
The court disagreed with Autodesk and felt it had “little competent evidence of software industry practice” presented before it. The ruling therefore allows the licensed party to transfer software ownership and the copyright owner has no say in the matter. Software companies are selling a product that an end-user owns; if they receive the full value up-front, they cannot control that software once it’s in the stream of commerce. Autodesk may yet appeal, but at least a dozen copies of AutoCAD are currently available on eBay.com. Could the ruling be good news for web developers? End users rarely purchase web applications or “own” the software — they subscribe to a service. Many software companies will be re-considering their software distribution options.

Frequently Asked Questions on Software Licensing and Selling

What is the difference between selling software and licensing software?

Selling software implies transferring the ownership of the software to the buyer. The buyer gets full rights to the software, including the right to modify, distribute, and resell it. On the other hand, licensing software means granting permission to the licensee to use the software under certain conditions. The licensee does not own the software but has the right to use it as per the terms of the license agreement. The licensor retains the ownership and can control how the software is used.

Can I resell a software license?

Yes, you can resell a software license if the license agreement allows it. However, most software licenses have restrictions on resale to protect the software’s intellectual property rights. It’s crucial to read and understand the terms of the license agreement before attempting to resell a software license.

How can I securely license and sell my software?

To securely license and sell your software, you need to implement a robust licensing system. This system should include a unique license key for each user, encryption to protect the software from unauthorized use, and a mechanism to track and manage licenses. You should also have a clear and comprehensive license agreement that outlines the terms of use.

How do I start a software business?

Starting a software business involves several steps. First, you need to identify a market need and develop a software solution to meet that need. Then, you need to create a business plan, secure funding, and assemble a team. Once the software is developed, you need to license it, market it, and provide customer support.

What is involved in software and technology licensing?

Software and technology licensing involves granting permission to a licensee to use a software or technology under certain conditions. The licensor retains the ownership of the software or technology and can control how it is used. The licensing process involves drafting a license agreement, setting the terms of use, and managing and enforcing the license.

Can I modify the software if I have a license?

Whether you can modify the software depends on the terms of the license agreement. Some licenses allow modifications, while others do not. It’s important to read and understand the license agreement before making any modifications to the software.

What happens if I violate the terms of a software license agreement?

Violating the terms of a software license agreement can result in penalties, including termination of the license, legal action, and financial damages. The specific consequences depend on the terms of the agreement and the nature of the violation.

Can I transfer my software license to someone else?

Whether you can transfer your software license to someone else depends on the terms of the license agreement. Some licenses are non-transferable, meaning they cannot be given or sold to another person. Other licenses may allow transfers under certain conditions.

How do I protect my software from piracy?

Protecting your software from piracy involves implementing security measures such as encryption, license keys, and digital rights management. You should also educate your users about the importance of respecting intellectual property rights and the consequences of software piracy.

What are the benefits of licensing software instead of selling it?

Licensing software instead of selling it has several benefits. It allows you to retain control over how the software is used, protect your intellectual property rights, generate ongoing revenue through license fees, and reach a wider market by making the software more affordable and accessible.

Craig BucklerCraig Buckler
View Author

Craig is a freelance UK web consultant who built his first page for IE2.0 in 1995. Since that time he's been advocating standards, accessibility, and best-practice HTML5 techniques. He's created enterprise specifications, websites and online applications for companies and organisations including the UK Parliament, the European Parliament, the Department of Energy & Climate Change, Microsoft, and more. He's written more than 1,000 articles for SitePoint and you can find him @craigbuckler.

legalsoftware
Share this article
Read Next
How to Deploy Apache Airflow on Vultr Using Anaconda
How to Deploy Apache Airflow on Vultr Using Anaconda
Vultr
Cloud Native: How Ampere Is Improving Nightly Arm64 Builds
Cloud Native: How Ampere Is Improving Nightly Arm64 Builds
Dave NearyAaron Williams
How to Create Content in WordPress with AI
How to Create Content in WordPress with AI
Çağdaş Dağ
A Beginner’s Guide to Setting Up a Project in Laravel
A Beginner’s Guide to Setting Up a Project in Laravel
Claudio Ribeiro
Enhancing DevSecOps Workflows with Generative AI: A Comprehensive Guide
Enhancing DevSecOps Workflows with Generative AI: A Comprehensive Guide
Gitlab
Creating Fluid Typography with the CSS clamp() Function
Creating Fluid Typography with the CSS clamp() Function
Daine Mawer
Comparing Full Stack and Headless CMS Platforms
Comparing Full Stack and Headless CMS Platforms
Vultr
7 Easy Ways to Make a Magento 2 Website Faster
7 Easy Ways to Make a Magento 2 Website Faster
Konstantin Gerasimov
Powerful React Form Builders to Consider in 2024
Powerful React Form Builders to Consider in 2024
Femi Akinyemi
Quick Tip: How to Animate Text Gradients and Patterns in CSS
Quick Tip: How to Animate Text Gradients and Patterns in CSS
Ralph Mason
Sending Email Using Node.js
Sending Email Using Node.js
Craig Buckler
Creating a Navbar in React
Creating a Navbar in React
Vidura Senevirathne
A Complete Guide to CSS Logical Properties, with Cheat Sheet
A Complete Guide to CSS Logical Properties, with Cheat Sheet
Ralph Mason
Using JSON Web Tokens with Node.js
Using JSON Web Tokens with Node.js
Lakindu Hewawasam
How to Build a Simple Web Server with Node.js
How to Build a Simple Web Server with Node.js
Chameera Dulanga
Building a Digital Fortress: How to Strengthen DNS Against DDoS Attacks?
Building a Digital Fortress: How to Strengthen DNS Against DDoS Attacks?
Beloslava Petrova
Crafting Interactive Scatter Plots with Plotly
Crafting Interactive Scatter Plots with Plotly
Binara Prabhanga
GenAI: How to Reduce Cost with Prompt Compression Techniques
GenAI: How to Reduce Cost with Prompt Compression Techniques
Suvoraj Biswas
How to Use jQuery’s ajax() Function for Asynchronous HTTP Requests
How to Use jQuery’s ajax() Function for Asynchronous HTTP Requests
Aurelio De RosaMaria Antonietta Perna
Quick Tip: How to Align Column Rows with CSS Subgrid
Quick Tip: How to Align Column Rows with CSS Subgrid
Ralph Mason
15 Top Web Design Tools & Resources To Try in 2024
15 Top Web Design Tools & Resources To Try in 2024
SitePoint Sponsors
7 Simple Rules for Better Data Visualization
7 Simple Rules for Better Data Visualization
Mariia Merkulova
Cloudways Autonomous: Fully-Managed Scalable WordPress Hosting
Cloudways Autonomous: Fully-Managed Scalable WordPress Hosting
SitePoint Team
Best Programming Language for AI
Best Programming Language for AI
Lucero del Alba
Quick Tip: How to Add Gradient Effects and Patterns to Text
Quick Tip: How to Add Gradient Effects and Patterns to Text
Ralph Mason
Logging Made Easy: A Beginner’s Guide to Winston in Node.js
Logging Made Easy: A Beginner’s Guide to Winston in Node.js
Vultr
How to Optimize Website Content for Featured Snippets
How to Optimize Website Content for Featured Snippets
Dipen Visavadiya
Psychology and UX: Decoding the Science Behind User Clicks
Psychology and UX: Decoding the Science Behind User Clicks
Tanya Kumari
Build a Full-stack App with Node.js and htmx
Build a Full-stack App with Node.js and htmx
James Hibbard
Digital Transformation with AI: The Benefits and Challenges
Digital Transformation with AI: The Benefits and Challenges
Priyanka Prajapat
Quick Tip: Creating a Date Picker in React
Quick Tip: Creating a Date Picker in React
Dianne Pena
How to Create Interactive Animations Using React Spring
How to Create Interactive Animations Using React Spring
Yemi Ojedapo
10 Reasons to Love Google Docs
10 Reasons to Love Google Docs
Joshua KrausZain Zaidi
How to Use Magento 2 for International Ecommerce Success
How to Use Magento 2 for International Ecommerce Success
Mitul Patel
5 Exciting New JavaScript Features in 2024
5 Exciting New JavaScript Features in 2024
Olivia GibsonDarren Jones
Tools and Strategies for Efficient Web Project Management
Tools and Strategies for Efficient Web Project Management
Juliet Ofoegbu
Choosing the Best WordPress CRM Plugin for Your Business
Choosing the Best WordPress CRM Plugin for Your Business
Neve Wilkinson
ChatGPT Plugins for Marketing Success
ChatGPT Plugins for Marketing Success
Neil Jordan
Managing Static Files in Django: A Comprehensive Guide
Managing Static Files in Django: A Comprehensive Guide
Kabaki Antony
The Ultimate Guide to Choosing the Best React Website Builder
The Ultimate Guide to Choosing the Best React Website Builder
Dianne Pena
Exploring the Creative Power of CSS Filters and Blending
Exploring the Creative Power of CSS Filters and Blending
Joan Ayebola
How to Use WebSockets in Node.js to Create Real-time Apps
How to Use WebSockets in Node.js to Create Real-time Apps
Craig Buckler
Best Node.js Framework Choices for Modern App Development
Best Node.js Framework Choices for Modern App Development
Dianne Pena
SaaS Boilerplates: What They Are, And 10 of the Best
SaaS Boilerplates: What They Are, And 10 of the Best
Zain Zaidi
Understanding Cookies and Sessions in React
Understanding Cookies and Sessions in React
Blessing Ene Anyebe
Enhanced Internationalization (i18n) in Next.js 14
Enhanced Internationalization (i18n) in Next.js 14
Emmanuel Onyeyaforo
Essential React Native Performance Tips and Tricks
Essential React Native Performance Tips and Tricks
Shaik Mukthahar
How to Use Server-sent Events in Node.js
How to Use Server-sent Events in Node.js
Craig Buckler
Five Simple Ways to Boost a WooCommerce Site’s Performance
Five Simple Ways to Boost a WooCommerce Site’s Performance
Palash Ghosh
Elevate Your Online Store with Top WooCommerce Plugins
Elevate Your Online Store with Top WooCommerce Plugins
Dianne Pena
Unleash Your Website’s Potential: Top 5 SEO Tools of 2024
Unleash Your Website’s Potential: Top 5 SEO Tools of 2024
Dianne Pena
How to Build a Chat Interface using Gradio & Vultr Cloud GPU
How to Build a Chat Interface using Gradio & Vultr Cloud GPU
Vultr
Enhance Your React Apps with ShadCn Utilities and Components
Enhance Your React Apps with ShadCn Utilities and Components
David Jaja
10 Best Create React App Alternatives for Different Use Cases
10 Best Create React App Alternatives for Different Use Cases
Zain Zaidi
Control Lazy Load, Infinite Scroll and Animations in React
Control Lazy Load, Infinite Scroll and Animations in React
Blessing Ene Anyebe
Building a Research Assistant Tool with AI and JavaScript
Building a Research Assistant Tool with AI and JavaScript
Mahmud Adeleye
Understanding React useEffect
Understanding React useEffect
Dianne Pena
Web Design Trends to Watch in 2024
Web Design Trends to Watch in 2024
Juliet Ofoegbu
Building a 3D Card Flip Animation with CSS Houdini
Building a 3D Card Flip Animation with CSS Houdini
Fred Zugs
How to Use ChatGPT in an Unavailable Country
How to Use ChatGPT in an Unavailable Country
Dianne Pena
An Introduction to Node.js Multithreading
An Introduction to Node.js Multithreading
Craig Buckler
How to Boost WordPress Security and Protect Your SEO Ranking
How to Boost WordPress Security and Protect Your SEO Ranking
Jaya Iyer
Understanding How ChatGPT Maintains Context
Understanding How ChatGPT Maintains Context
Dianne Pena
Building Interactive Data Visualizations with D3.js and React
Building Interactive Data Visualizations with D3.js and React
Oluwabusayo Jacobs
JavaScript vs Python: Which One Should You Learn First?
JavaScript vs Python: Which One Should You Learn First?
Olivia GibsonDarren Jones
13 Best Books, Courses and Communities for Learning React
13 Best Books, Courses and Communities for Learning React
Zain Zaidi
5 jQuery.each() Function Examples
5 jQuery.each() Function Examples
Florian RapplJames Hibbard
Implementing User Authentication in React Apps with Appwrite
Implementing User Authentication in React Apps with Appwrite
Yemi Ojedapo
AI-Powered Search Engine With Milvus Vector Database on Vultr
AI-Powered Search Engine With Milvus Vector Database on Vultr
Vultr
Understanding Signals in Django
Understanding Signals in Django
Kabaki Antony
Why React Icons May Be the Only Icon Library You Need
Why React Icons May Be the Only Icon Library You Need
Zain Zaidi
View Transitions in Astro
View Transitions in Astro
Tamas Piros
Getting Started with Content Collections in Astro
Getting Started with Content Collections in Astro
Tamas Piros
What Does the Java Virtual Machine Do All Day?
What Does the Java Virtual Machine Do All Day?
Peter Kessler
Become a Freelance Web Developer on Fiverr: Ultimate Guide
Become a Freelance Web Developer on Fiverr: Ultimate Guide
Mayank Singh
Layouts in Astro
Layouts in Astro
Tamas Piros
.NET 8: Blazor Render Modes Explained
.NET 8: Blazor Render Modes Explained
Peter De Tender
Mastering Node CSV
Mastering Node CSV
Dianne Pena
A Beginner’s Guide to SvelteKit
A Beginner’s Guide to SvelteKit
Erik KückelheimSimon Holthausen
Brighten Up Your Astro Site with KwesForms and Rive
Brighten Up Your Astro Site with KwesForms and Rive
Paul Scanlon
Which Programming Language Should I Learn First in 2024?
Which Programming Language Should I Learn First in 2024?
Joel Falconer
Managing PHP Versions with Laravel Herd
Managing PHP Versions with Laravel Herd
Dianne Pena
Accelerating the Cloud: The Final Steps
Accelerating the Cloud: The Final Steps
Dave Neary
An Alphebetized List of MIME Types
An Alphebetized List of MIME Types
Dianne Pena
The Best PHP Frameworks for 2024
The Best PHP Frameworks for 2024
Claudio Ribeiro
11 Best WordPress Themes for Developers & Designers in 2024
11 Best WordPress Themes for Developers & Designers in 2024
SitePoint Sponsors
Top 10 Best WordPress AI Plugins of 2024
Top 10 Best WordPress AI Plugins of 2024
Dianne Pena
20+ Tools for Node.js Development in 2024
20+ Tools for Node.js Development in 2024
Dianne Pena
The Best Figma Plugins to Enhance Your Design Workflow in 2024
The Best Figma Plugins to Enhance Your Design Workflow in 2024
Dianne Pena
Harnessing the Power of Zenserp for Advanced Search Engine Parsing
Harnessing the Power of Zenserp for Advanced Search Engine Parsing
Christopher Collins
Build Your Own AI Tools in Python Using the OpenAI API
Build Your Own AI Tools in Python Using the OpenAI API
Zain Zaidi
The Best React Chart Libraries for Data Visualization in 2024
The Best React Chart Libraries for Data Visualization in 2024
Dianne Pena
7 Free AI Logo Generators to Get Started
7 Free AI Logo Generators to Get Started
Zain Zaidi
Turn Your Vue App into an Offline-ready Progressive Web App
Turn Your Vue App into an Offline-ready Progressive Web App
Imran Alam
Clean Architecture: Theming with Tailwind and CSS Variables
Clean Architecture: Theming with Tailwind and CSS Variables
Emmanuel Onyeyaforo
How to Analyze Large Text Datasets with LangChain and Python
How to Analyze Large Text Datasets with LangChain and Python
Matt Nikonorov
6 Techniques for Conditional Rendering in React, with Examples
6 Techniques for Conditional Rendering in React, with Examples
Yemi Ojedapo
Introducing STRICH: Barcode Scanning for Web Apps
Introducing STRICH: Barcode Scanning for Web Apps
Alex Suzuki
Using Nodemon and Watch in Node.js for Live Restarts
Using Nodemon and Watch in Node.js for Live Restarts
Craig Buckler
Task Automation and Debugging with AI-Powered Tools
Task Automation and Debugging with AI-Powered Tools
Timi Omoyeni
Get the freshest news and resources for developers, designers and digital creators in your inbox each week
Loading form