Does Your Company Use End User License Agreements To Protect Its Software?

While it is commonly understood that software is protected under U.S. copyright laws, when the software is distributed, the scope of that protection may vary greatly depending on whether the software is sold versus licensed under an End User License Agreement (EULA). The issues created by selling software versus providing it under an EULA are often overlooked, particularly in situations where the software is embedded in or provided with products or equipment that is sold. For example, when machinery containing embedded software is sold to a customer, the embedded software typically will be considered to have been sold along with the machinery to the customer, and the seller will have lost certain important protections in the software, unless there is a separate EULA governing the use of the embedded software. Companies wishing to protect their software and maintain control over the end-users' use of the software should consider licensing their software under an EULA