Tuesday, February 27, 2007

One solution to software licensing issues

There is so much mis-information about software licensing, that I have figured out a way to side step at least one of the issues.

My employer, InterWorking Labs, makes a high end test suite (or tester) for testing the SNMP protocol. We call it SilverCreek, the official SNMP Test Suite (see www.iwl.com).

Often what happens when you license software is that the prospective customer's Legal/Purchasing Departments make some assumptions. They assume that the software is going to become a component of the company's manufactured products. Thus, they want guarantees, assurances, commitments, etc. about the licensed software, because of the risk of incorporating software from a third party on 10,000 or 100,000 units per month. From their point of view, if some aspect of the software is found to be infringing on some patent, they would be subject or at risk for millions of dollars of damages for all the products they shipped. It is a very valid concern and they are quite correct in being very vigilant. It is obviously a very serious risk and they should do everything possible to prevent it.

In our case, our software is installed on a Windows, Linux, or Solaris machine and used as a piece of test equipment in the lab. It sends pathological packets (tests) to the device under test and evaluates the results as a PASS, FAIL, UNINTIATED, etc. This way our customer can find and fix bugs in the protocol implementation of their product prior to shipping their product to the general public.

Our software, SilverCreek, is NOT incorporated in the customer's manufacturered product.

All the ideas in SilverCreek, all the software we developed was our own original work so we are not worried about patent infringement. However, the Patent and Trademark Office has issued patents for some questionable inventions, so it is always possible they will inappropriately grant a patent on something that is obvious or predates the application and then there will be a problem. However, if this happened, we would find a work-around and supply that to the customer. It is a very small risk.

Nevertheless, the Legal/Purchasing Departments demand $100,000 worth of insurance and contract negotation for a matter that is less than $5,000. So what is the solution?

Package the software on cheap hardware. Then, the purchase goes through a different route within the big company. It becomes a "commodity" purchase, and it drives home the fact that SilverCreek is, essentially, a piece of test equipment.

If you step back and look at the big picture, almost everything you purchase has software in it -- cars, trucks, watches, radios, kitchen range hoods, can openers, pencil sharpeners, etc. The purchasing department does not enter into a complex negotiation regarding the software licensing issues when they buy a pencil sharpener, so why should SilverCreek be any different? The answer is package it in a piece of hardware and then it is over.

IP Lawyers in our area charge about $300 per hour, so two hours of one is the equivalent of a Dell laptop.

Just a thought.

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