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How Do Big Companies Protect Their Rights To Software?

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Photo Credit: #WOCinTech Chat

Have you ever wondered how software developers and big companies maintain the hold they have on their products? Once you hold something like code, surely you can simply use it for free? Well, yes. Which is why developers and companies alike use clever systems to protect their assets. This post will explain a couple of the ways that this works.

Clever Contracts

When it comes to protection, a contract is everything. When a big company wants software made, they have to trust that their developers won’t simply write the code and run away with it. So, they make sure to stipulate that any work done on company time or equipment is the property of the business. Of course, this can be a double-edged sword. If a developer makes something for person use, at work, they may not own the rights to it. This means that the business can claim the software, and sell it as their own. This has happened to several developers in the digital age and probably won’t stop happening.

Software sellers also have to be clever with their contracts. Once a piece of software is licensed and distributed, the buyer could simply sell the software themselves. Of course, this would be considered stealing with other products. But, with software, you have to prove that the buyer doesn’t have the right to sell. This is done using the contract. Contracts of this nature will also include areas that stop the buyer from showing the software to other companies. And, will even limit the access that the buyer has to the code itself.

Software Escrow

To eliminate a lot of the issues above, without having to simply rely on a contract, a lot of transactions involve a software escrow. A software escrow is a complicated system. The software seller will provide a third party with the source code to their product. The buyer won’t have access to the source code unless the software seller relinquishes their rights to it. The buyer gets to use the software with confidence, but can’t sell the software on.

The company buying the software would want a system like this to protect their use of the software. If the seller goes out of business, they might not be able to supply the product anymore. This means that they buyer’s use of the software would be ended. Of course, this is a big problem, when it comes to certain software. So, the escrow protects the source code.

The software seller uses a system like this to protect their rights to sell the software. If they handover the code to another company, there’s no guarantee that it won’t be sold on. This means that they seller would lose out on future sales, and someone else would gain from their work. The third party organization who holds the source code is trusted by many others to provide the protection service. So, the developer can feel safe that their work is there’s.

This should give you a good idea of what companies and software developers have to do to protect their code. Of course, the law is different in every country, so it’s important to know the law of your land before setting up one of these systems.

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