in october 2017 the company entered into a commercial license agreement (hereinafter- “cla”) with a canadian company (hereinafter- the licensee), pursuant to which the company manufactures and delivers the product to the licensee for resale by the licensee in the territory as defined in the cla. license agreement means any agreement between any borrower and a licensor pursuant to which such borrower is authorized to use any intellectual property in connection with the manufacturing, marketing, sale or other distribution of any inventory of such borrower or otherwise in connection with such borrower’s business operations.

subject to the terms and conditions of this agreement, hive9 will make the subscription available to customer over the internet for customer’s use in customer’s internal business only. customer and hive9 must agree in writing to any change proposal in the form of a written amendment to the applicable order form or sow before any such change is effective. unless specified to the contrary in an order form, fees for any renewal term may be increased by hive9 and will be invoiced on the same schedule as in effect for the billing period immediately prior to the expiration of the term. hive9 is not responsible for any damages resulting from customer’s failure to manage the confidentiality of its login id and passwords and customer is responsible for any actions arising out of use or misuse of customer’s login ids. as between customer and hive9, hive9 and/or its licensors are the sole owners of all right, title and interest in and to the hive9 technology.

a saas software license agreement is used when a company’s proprietary software is being licensed to a licensee which differs from a regular saas agreement.3 min read a saas software license agreement is used when a company’s proprietary software is being licensed to a licensee. why would a saas vendor prefer to grant a license versus authorized access to the software? when a software license agreement is used, the licensor maintains a legal interest in the intellectual property such as: a license grants rights in limited use. they can also be limited as to: this is predicated on the fact the software has to be locally installed or downloaded on the licensee’s computer, network, or platform. typically, this type of license doesn’t apply to saas agreements since the customer is not installing or downloading the software, but rather remotely logging into the vendor’s servers to use the software, typically online. in the event of bankruptcy, a vendor may cease the performance of contractual obligations, which includes any outstanding saas services.

the distinction is important because the rights and obligations of the parties can be significantly different depending upon what the true relationship is determined to be. our courts will look to the terms of the agreement to determine whether it is a license or a lease. while the distinction is sometimes difficult to discern, the consequences of getting it wrong can be significant.