It is usually to your advantage to license copies of your software rather than to sell copies. United States copyright law allows the owners of the physical objects that contain copyrighted material, for example, books, compact discs, or floppy disks or CD-ROMs containing a computer programs, to resell the physical objects that they own. This phenomenon explains the legality and proliferation of used book and used compact disc stores. Unfortunately for the copyright owner, each sale of a used book or CD potentially represents a lost sale that the copyright owner might have been able to consummate with the consumer. By licensing the software rather than selling a physical copy to the user, the user does not "own" a copy of the software, and the copyright owner is able to prevent the user from appropriating the subsequent sales. Federal law prohibits the "owner" of a copy of a computer program from leasing, renting or otherwise lending that copy of the program to another. However, the owner is not prevented from reselling the copy. Therefore, it is to your advantage to license the use of your software rather than to sell copies to users. By creating an End User License Agreement rather than a sale, the owner is able to define the terms and the limits of the use of the copyrighted software. In defining the terms and limits of use, the copyright owner is also able to set forth limited warranty information and disclaimers of liability. You may or may not want to include such provisions in your license agreement. |