Thursday, 11 March 2010

How long does a perpetual licence last?

According to Sales J in BMS Computer Solutions Limited v AB Agri Limited [2010] EWHC 464 (Ch) a perpetual licence can be one that continues without limitation of time, or one that is never-ending. It’s not something that I had ever really thought about, I have to confess, though I have used the expression many times. However, in the BMS case it assumed an importance that it doesn’t usually have, because of the effect of variations of the agreement. The upshot was that the licence had to be construed as meaning without limitation of time, allowing for the possibility of termination. It was the only interpretation of teh words that was consistent with the rest of the contract.
The parties also got into a mess with the provisions about where the software in question could be used. Again, the judge had to interpret the wording in the manner that was compatible with the rest of the conract. It all serves to remind us of the importance of making sure that these things are thought through, of course, but most importantly that variations to the agreement are carefully considered.

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