Paul Idornigie SAN C.Arb

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Practical Guides in Drafting and Negotiating Software Licensing and Software Development Agreements


A computer is essentially made up of hardware and software.  The term ‘hardware’ describes the physical aspects of computers and related devices.  A software can be seen as the variable part of the computer and hardware the invariable part.  Softwares are often divided into application software (programmes that do work users are directly interested in) and system software (which includes operating systems and any programme that supports application software. The term middleware is sometimes used to describe programming that mediates between application and system software or between two different kinds of application software (for example, sending a remote work request from an application in a computer that has one kind of operating system to an application in a computer with a different operating system).[1]

General kinds of application software include:

  • Productivity software – word processes, spreadsheets and tools for use by most computer users
  • Presentation software
  • Graphic software
  • CAD/CAM software
  • Specialized scientific applications
  • Industry specific software – banking, insurance, retail, manufacturing

software license is a legal instrument, usually by way of contract law, governing the use or redistribution of software. Under Nigerian copyright law, software is copyright protected, in both source code and object code forms.  Section 1 of the Copyright Act[2] lists works eligible for copyright protection to include: literary works, musical works, artistic works, cinematograph films, sound recording and broadcast.  The Act also contains some provisions concerning protection of some other categories of works generally classified as neighbouring rights.  These include right of performers and protection of expressions of folklore.  Protection has been extended to gramophone records, films, sound and television broadcasts and computer programmes.[3]

Copyright law essentially confers on authors and creators of creative works, exclusive rights to control the exploitation of such works for a limited period.  At the same time, the law recognises the need to ensure that such control does not hamper other activities which may be in public interest or which does not prejudice the normal exploitation of the right of the author.[4]   There are several exceptions in the Act for example, fair dealing, ephemeral use of artistic works, use for educational purposes, public interest and for archival purposes.  However, our purpose here is how to allow a user a legitimate right to use the software developed by others.

A software development agreement, on the other hand,  is a contract where one party (the Developer) agrees to develop a software application for another party (the Client). Whilst design and development processes can vary, depending on the complexity of the  project and the team  employed, there are a number of key questions that are universally valid and should be considered when negotiating and drafting the contract.

In this presentation, we shall focus on how to draft and negotiate software licensing and software development agreements.

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