0203 1266 584

Software Development, Licensing and Distribution

Software Development, Licensing and Distribution

Software Development, Licensing and Distribution Solicitors in London

Software Contracts


Software and technology firms contribute to the UK economy like never before, engaging hundreds of thousands of digital economy workers and raising venture capital investment measured in the billions of pounds per annum.

Our software licensing solicitors can provide both start-up and more established software firms with product commercialisation solutions. They specialise in drawing up and negotiating the contractual documents that a software firm requires to effectively develop, license and further commercialise its software IP.

Software Development Agreements

The software design and development stage is crucial to the overall success of a software project or technology venture. Our IT lawyers know that agreements in this field must include:

  • What programs the developer is in fact being commissioned to write – a common way of spelling this out clearly is by referring to the intended functionality of a program. The agreement should also set out an agreed procedure where the developer’s brief changes mid-project (sometimes known as a “change request” procedure).
  • How the developer will be paid. Options for payment include an hourly or daily rate, milestone payments, payment on completion, or a combination of these.
  • When is the developer’s work considered complete? For developers on hourly or day rates, this question may not be so crucial, but for milestone payment contracts, it can be prudent to set out a testing and acceptance procedure as a means of determining whether the developer has written the programs in accordance with the contract.

Invariably, firms will also want to ensure that the software development agreement vests all IP rights in the firm rather than the developer. This is vital where the developer is not an employee but engaged under a consultancy arrangement.

Software Licensing Agreements

Once software is released, firms may wish to licence it to users on clear and commercially advantageous terms. It is generally wise for software licences to provide a clear and precise set of rules on things like:

  • The extent of the licence rights being granted – will the licence be exclusive or non-exclusive?
  • The duration of the licence – a common arrangement is for a licence to renew annually, for payment of an annual licence fee.
  • How the proprietary owner will provide the licensee with access to the licensed software – commonly the owner will make the software available for download over the Internet.
  • Is it just the software being delivered under the licence agreement, or will additional materials and services be provided such as training, user manuals and support and maintenance?
  • Are there to be any restrictions on the number of copies of the software that the licensee may make, or the number of machines / devices that the licensee may use the software on?

Software Distribution Agreements

Software firms may wish to appoint distributors of their product as a cost effective means of developing sales channels and gaining market share. It is important that a robust software development agreement is entered into with the distributor which covers essentials such as:

  • Whether the distributor is appointed on an exclusive or non-exclusive basis
  • Whether the right to distribute will be confined to a particular country or territory
  • The precise form of end user licence agreement that the distributor will be required to use
  • Whether the distributor will be responsible for delivering and installing the licensed programs and if so, the mechanics of that process
  • How the distributor may market the software and who will pay for that marketing
  • What the distributor’s commission or royalty will be for each software licensee it procures.


For a confidential discussion with a software licensing solicitor, please get in touch with South Bank Legal today.