Reinventing Software Licenses

Let’s start with the obvious. Almost nobody reads software licenses. You know why – they’re incomprehensible, too long, and in cases where you have to use the software anyway, you’re stuck with the license regardless. The only exceptions are the large corporations who have the lawyers, time and money to deal with them. Normal people don’t bother.

Unfortunately, this has some pretty serious side-effects. Aside from the obvious fact that millions of people are in effect agreeing to contracts they’ve never read, one of the common ways that spyware and adware are spread are by having users agree to them without realizing they are doing so.

I think it is time to completely revolutionize the way we deal with software licenses. To do so, I offer the following modest proposals.

  • A law should be passed that restricts the length of software licenses for consumer software to no more than 500 words. For comparison: the BSD Open Source license is 225 words, The Claria (formerly Gator) adware license agreement is over 6600 words (15 pages single spaced).
  • Software licenses must be written in plain language that can be clearly understood by the average 13 year old.
  • Security updates to software may not include any license terms that were not present in the original software.
  • No license for released (not beta) software may include any terms that restrict speech, review or benchmarking of the software. For a software publisher to restrict free speech and commentary on their products is shameful and unethical. I do think, however, it’s fair to require that any benchmarks include the source code of the benchmark so people can independently review the results.

My Challenge to Microsoft

As the software industry leader, I call on Microsoft to take the lead in coming up with creative and user friendly solutions to this problem. To start with, try taking the software licensing process out of the hands of your lawyers, and hand it to your user interface people. They’re good, and if they can’t figure out a way to revolutionize software licenses so they work, then we should all go to open source, because the situation will truly be hopeless.

My Challenge to the Government

Yes, I know – asking Congress (which is made up primarily of lawyers) to create laws that simplify license agreements seems like a long shot. But I can dream, right?

How else do you think software licenses need to be changed? Comments welcome.

10 Responses to “Reinventing Software Licenses”

  1. Mike Gale Says:

    Then there’s cost of badly written licenses. How many man years of effort have gone into establishing exactly waht an agreement means? I believe there’s no point in evaluating software till you’ve read some of the license. How often have you heard some-one say as far as I can figure you can use *** on any machine” only to find out later that they were wrong and have just poured a few hundred man-hours into development that won’t now be used.

    BTW. In writing this the text disappeared out right for a lot of the words!!

  2. Liron Says:

    That’s a good idea. I’d also apply it to terms of service and privacy policies, which are also contracts that most people never see.
    BTW. The disappearing text that Mike mentioned is due to the comment text field going out of its intended region and being partially blocked by the Google ads.

  3. Odi Says:

    I propose that someone create, say, 5 master license agreements that cater to the 5 most common types of software licensing needs. These agreements can be appended with a “Vendor Specific” section at the end where any special needs can be added by a software vendor. The master agreements are never more than 500 words and the special needs are never more than an additional 200. Language must be plain and simple.

    From a user’s point of view, they will generally deal with only 1-2 of the master agreements (since 2 of the 5 master agreements are for traditional software, 1 is for component licensing, 1 is for online applications, etc.) so it will be easy for them to agree to a license agreement just by recognizing the title… example: “ANSI Standardized Software Agreement Type 1”.

    Installation software license agreement pages would look like this: “This software is licensed under the ANSI Standardized Software Agreement Type 2, with no modifications by .” – Do you agree? YES / NO.

    From the software vendor’s point of view, they can still make modifications such as “Running this software after 7PM on weekdays will cost you $1 UDS per minute.” 🙂

  4. Al Borland Says:

    I have always liked the licence agreements that the old Borland compilers have used. The piece of software is like a book, only one person/computer can use it at anyone time.

    Everytime I buy a software product those are the terms that I choose to use with it. I will only use it on one computer, I will install it on as many computers as I might have the need to use it on, but I treat it like a book. If it is going to run on more than one computer/or have more than one user I buy two copies.

  5. Dan Says:

    Karsten Schneider commented on his blog that Congress should also ban license requirements that restrict license transfers. I concur.

  6. Just Don't Know Says:

    Congress should form a Software License Rating organization that would rate licenses similar to how movies are rated. For example, a software license that is overly restrictive on use would be rated R for usage restriction. Another license that let’s you use it however you please, but installs spyware on your PC, would be rated G for usage, R for privacy. And so on. This way, users don’t need to read it, they just have to see the rating and get a picture of what they are agreeing to. Then they can just pick the software package sitting on the shelf next to it that provides better licensing terms.

  7. Tim Says:

    If you allows a license to be transferred to a new user, the vendor loses. The time and effort that went into getting the original user up to speed now has to be repeated for the new user without additional revenue to offset the new cost. I’m guessing it doesn’t happen that frequently, but for small ISVs where every sale counts, it can become an issue.

  8. Dalibor Topic Says:

    What’s even worse is that most proprietary software vendors prefer to leave their customers unclear wrt to their rights regarding the software they obtain. While you can find a lot of material from free software vendors like the FSF on the precise meaning of their licenses, you can rarely find such documentation on legal documents like EULAs from established proprietary software vendors.

    Given that more and more governments, businesses and private customers crucially rely on software to perform their work, I expect that powerful customers, in particular governments, will in future increasingy look to reduce their ligitation risks by using free software with its well-defined terms, rather than untested works of legal fiction. As SCO’s example in the Autozone case shows, a failing proprietary software vendor can be so desperate to turn around to use misunderstood clauses in their license agreements to try to extract money from customers long after they stop using their software and having business relations with the vendor.

    The easiest legal protection against such risks is using software with clear legal side effects, i.e. open source software. I doubt that the congress will actually pass laws against bad licenses. I assume the market will wipe out software that contains legal poison pills for the customer with a push coming from above, from governments demanding licenses that secure them from being held hostage by their former vendors. Vendors come and go, software in governments and businesses tends to stay around for a long while.

    dalibor topic

  9. David Lamb Says:

    Want to see this happen? That’s easy. 3 simple words:
    Pester your representative.

  10. Jeff Loucks Says:


    You might be surprised to know that there is a legal term that describes this type of contract. THey are called contracts of adhesion and judges are supposed to look out for the little guy. The idea is that consummers have no say and therefore must agree to the contract. Software is not the only type of contract that people cannot influence the terms or is difficult to read. Insurance, most warranties for products you buy and several different types of agreements you sign/agree to daily. You might also be surprised how weak all these strongly worded contract actually are.

    The problems is you have to go to court in order to have someone rule in your favor. That is both the strength and the weakness of these contracts. Really the contract only tries to establish a basis for the company to establish business policies. For example, Microsoft says that you cannot remove XP from an OEM box and put it on a new box even if you have sent the old box to the trash/garbage. They establish business policies through the activation process that won’t allow you to do this.

    Before consummers could just do it and say “sue me”. That was the weakness of the contract becasue MS couldn’t sue everyone of its clients, both practically and politically. So they had to establsih the business policy to enforce their contract.

    Here is another weakness. You may find that what MS is doing is wrong. A judge or series of judges may agree with you and that agreement could be changed because it is deemed to overly restrict the rights of consummers. We could be allowed to isntall it where ever we want and MS could be forced to remove the activiation process. The problem is you have to sue them.

    In the end, the contract is almost irrelevant as the process to get consummer rights upheld are generally unattainable for individual users. You would have to spend your life savings and several years of your life to challenge MS.

    So why are they complicated? The more complicated they are the less likely some hot shot lawyer fresh from law school is going to take up the challenge while trying to make a name for themselves. That is how we all know Ralph Nader, because he took on GM.
    Lawyers like to see loop holes right away. THey don’t like reading long contracts either.

    So surprisingly, no need to read the contract because the real obligation that MS is putting you under is the business policies it establishes and enforces.

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