EULA-Look before You Leap!

Ever wondered what is the never ending excruciating agreement that pops up just before you are all set to make an e-mail account, install an application or download software? Apparently, all of us click the “I agree” option without paying much heed to what the agreement says. But, this seemingly impenetrable legal jargon is much more than just a worthless set of pages. End User Licensing Agreement or EULA as it is called is a legal contract between you and the software publisher that spells out the terms and conditions for using the software. It defines the relationship between the provider of software and the end user. Usually, the EULA delineates the amount of computers a user can use the software on,restricts the way a user can use software, such as prohibiting the redistribution of the software or reverse-engineering it andany legal rights that are given up by agreeing to the EULA. Accepting the terms of EULA might even expose a userto third-party monitoring, i.e. allowing other users to access parts of your computer.While the original purpose of EULA was to protect software developers and distributors from having their products unlawfully distributed, that goal has now unfortunately, fizzled out.

Research shows that the average time spent on the EULA by people is 6-8 seconds. Obviously, people don’t understand its implications and just blindly scroll down to save themselves from monotony. You might agree to the EULA’s terms by:

  • clicking an “I accept” button during the installation process
  • opening the shrink wrap software packaging
  • breaking the seal on the software CD
  • mailing a registration card to the software publisher
  • installing the application
  • using the application

You can refuse to accept the terms and conditions of the EULA, but then you can’t legally use the software! Many big names like Facebook, Microsoft, Adobe, Apple to name a few, have some preposterous terms and conditions. Facebook for instance, amended its Terms of Service in 2009 to claim broad rights to users’ content, such as photos and videos. Adobe tried to do the same with Photoshop Express in 2008. An extract from Facebook’s EULA reads, “You grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook.” Another one from AT& T reads, “You agree that, by entering into this Agreement, you and AT&T are each waiving the right to a trial by jury or to participate in a class action.”

In general the following points should be noted about EULA:

  • ELUA is legally binding.
  • EULA restricts how you can use the software.
  • EULA may force you to agree to certain conditions when using the software.
  • EULA can limit your ability to sue for damages.
  • ELUA might impose terms and conditions that affect your online security and privacy.
  • The software you purchase or download might be bundled with third-party software, i.e. EULA covering primary software might ask you install third-partysoftware bundled with it.

EULA is always drafted in a manner to afford maximum protection to the interests of the Licensor (or Software Developer). The following points are clearly set out in the agreement:

  • Product Specifications
  • Type of License – In case of multiple versions, specific version-wise licenses must be given
  • Duration of License – the exact time of commencement and termination
  • Grounds of termination – on what grounds can the Licensor terminate the license
  • Specifications of the Limited Warranty to be provided by the Licensor
  • Legal Jurisdiction

A sample EULA can be viewed here.Following are the most important four parts of an EULA:

  • Licensing: The usersare only being “licensed” to use the software and do not have any intellectual rights over the software installed.
  • Warranties: Contains a Disclaimer of Warranty.
  • Laws: What laws control or apply to the license agreement that the user agree to.
  • Liability: Limitation of Liability section that states the extent to which the licensor can be held financially responsible for any mishaps that might incur as a result of the use of the software.

In M.A. Mortenson Co. v. Timberline Software Corp. the plaintiff was a construction company, who used software from Timberline to prepare a bid only to discoverlater that the software led them to underbid by more than a million dollars.It was held that in case EULA seeks to reduce the liability of a company, even to the extent of the software itself being faulty, the company would not be responsible. The court affirmed an order of summary judgment, clearing Timberline of any damages.

Another important aspect to be understood is that download of software gives the user only a “license”to use that software and does not confer ownership, i.e., a software is never sold but the user merelypurchases the license to use it according to the terms and conditions attached with it. The software publisher retains all rights, including copyrights, to the software and accompanying media. The EULA document outlines the terms of the software license, enunciating all rights and restrictions relating to the ownership, use, distribution, and warranty of the software product. In Timothy S. Vernor v. Autodesk, Inc. Vernor was not allowed to sell some old copies of AutoCAD on eBay brought from an architect’s office. The US Court of Appeals for the Ninth Circuit held that the US “first sale” protections didn’t apply to Vernor, because he had not bought the software from a legitimate “owner”,since the architecture firm had only “licensed” the software, and that license could allow a software company to prevent resale, lending, etc. of the software.

Your way out:

  • Read EULA before you install the software.
  • Consider the software publisher.
  • Beware of firewall prompts when installing software.
  • Beware of “free” software, especially peer-to-peer (P2P) file sharing software.
  • Scrutinize and evaluate any EULA that requires you to allow monitoring of your online activity.

Conclusion:

Awareness and only awareness is the right way to be protected from this trap and the ambush that lies within. Even though the law surrounding EULA continues to evolve, the need of the hour is that the users of software contemplate what impact EULA might have on the security of their computer and personal information and make an informed decision. However irksome it might seem but skimming through the provisions of EULA might not after all be such a bad idea!

About the Author: Mr. Anirudh Sarin, Trade Mark Intern at Khurana & Khurana and can be reached at: Anirudh@khuranaandkhurana.com

0 thoughts on “EULA-Look before You Leap!”

Leave a Reply to Gitika Makker Cancel reply

Categories

Archives

  • March 2024
  • February 2024
  • January 2024
  • December 2023
  • November 2023
  • October 2023
  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • September 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010