Software Licensing: The Intersection of Technology & Law

By June 30, 2014 November 27th, 2014 Ideas For Your Business

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Have you ever taken something relatively simple and decided to make it complicated? No, I’m not talking about giving up being single to get married. I’m talking about software licensing. Software licensing documentation is dense with legal jargon and tech-speak and can literally make your head spin. If I tried to explain everything at once, you’d likely close this window and go look at your friend’s recent check-in at some divey and ironically-named bar. So we’ll keep this software licensing legal overview at an introductory level.

The Basics

A software license (SA) is an agreement between an end-user and the owner of a certain piece of software, which allows or prohibits the end-user from doing certain things. An SA lays out rights and restrictions surrounding where and how often the software can be installed, whether or not it can be copied, modified, distributed/redistributed, or if the source code can be accessed. So to avoid fines, serving possible jail time, and to retain your soul, ALWAYS read the End User License Agreement (EULA).

software hell

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The Types

1. Proprietary Software

Proprietary software (PS for short and “Pretty Straightforward” as an awesome pneumonic), also known as “closed-source” or “commercial software”, is software that is copyrighted and has limits to its use, distribution and modification. PS almost always remains the property of its owner and is usable under predefined conditions.


  • Microsoft Windows
  • Adobe Flash Player
  • Adobe Photoshop

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2. Shareware

Shareware, despite its name, does not mean it is sharable at all. In fact, Shareware is typically a version of software that a user can test drive without a fee, but is usually limited to a period of time (e.g., thirty days). Once the trial period ends, the hope is that the user will be so impressed by the software that they purchase it to continue using it. Pretty sure this has never happened to me.


  • Adobe Photoshop Elements
  • Linux XP
  • WinRAR

3. Not for Resale (NFR)

Most people would see NFR and think “I guess I can’t sell it.” Astute observation, but there’s more. The name is more of an identifier than a warning as NFRs are designed not to be sold, even by their own creators. NFRs are usually distributed without a fee for testing, previewing, or just to be donated. NFR versions may include less robust features or simply just have less features than their retail counterparts. Since these versions aren’t sold for profit, don’t expect any real technical support either. NFRs are a great option for non-profits if you need software but do not have the means to buy expensive software or volume licenses.

4. Freeware

Easiest of the bunch. Often called “free software” (though inaccurately so) because it is free to download or acquire. Freeware is Proprietary Software (see above) with the benefit of being free o’ charge. This should not be confused with Free Software and you’ll see why as you read further.


  • Evernote
  • AVG Antivirus
  • VLC Media Player

5. Free Software and Open Source Software

Free Software

When discussing software licensing, more specifically Free Software and Open-Source Software, you must resist your human and capitalist instinct to equate “free” as meaning free of charge. “Free software is a matter of liberty, not price. To understand the concept, you should think of free as in free speech, not as in free beer.”

Remember when I mentioned taking something simple and making it complicated? Well, here it goes. Free Software can actually… drumroll…be sold for a fee. Remember, not “free beer” but “free speech”.  Free software is software for which everyone has the right not only to inspect and study the source code but also to use it for any desired purpose without monetary or other restrictions. The Free Software Foundation states that for “Free Software” to truly be free, the end user must have the following four essential freedoms when it comes to the software:

    1. The freedom to run the program as you wish, for any purpose
    2. The freedom to study how the program works, and change it so it does your computing as you wish (Access to the source code is a precondition for this)
    3. The freedom to redistribute copies so you can help your neighbor
    4. The freedom to distribute copies of your modified versions to others. (Access to the source code is a precondition for this)

So in non-legal jargon, that means the end user can make copies until they are blue in the face, install it on EVERY computer in the world, modify the code for any purpose, or redistribute it as-is or as-modified. Let this marinate while we shift to Open-Source and then we’ll reconcile it together.

Open Source

Save for a few nuances, the terms “open source software  and free software are being used interchangeably quite regularly these days. Those nuances can be found at However, it is important to note that:

Free Software is always open source while open source software is not always free software.

How is that possible you ask? Well, open source software can grant the end user access to the source code yet not grant the user the freedoms associated with Free Software, such as distribution. This of course would require more of a loose interpretation of open source where “open” only refers to the accessibility of the source code. What is important to understand is that when it comes to free software and open-source software, one should not get bogged down in the idea of fee vs. no fee, but concentrate more on what can be done with this software?


  • Linux
  • LibreOffice
  • PuTTy
  • The Proliferation

Now that you know the different types of software licenses, let’s look the key things to look for when determining if the software you are using is free and/or open source or what to do if you are planning on developing your own.

In the early 1980’s a gentleman named Richard Stallman left MIT and began the GNU Project, a free software mass collaboration project . Shortly thereafter, Stallman created the GPL or General Public License. The GPL is the most widely used free software license in existence. What makes the GPL so popular is that it grants users the protection of free software as discussed above through the use of a concept called Copyleft. Here’s the rundown. Copyright ensures that others don’t steal or use protected material while Copyleft ensures that others can use the material and have all of the freedoms granted by the GPL. Awesome right? It gets better. Copyleft ensures the freedoms are preserved and passed along whenever the work is redistributed, even if the work is modified. Since the GPL is a Copyleft license, any derivative software or other works can only be distributed under the same license terms, thereby ensuring that it remains free software. That way everyone gets to use it, everyone gets to modify it, and everyone wins.


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If you are unsure about what rights you have under any software that you have in your possession, contact an attorney. If that isn’t an option, or you just don’t like attorneys, then visit Much like this article, they don’t offer legal advice, BUT, they do a great job of summarizing some of the most popular software licenses in circulation.

by Gino Emanuels



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Gino Emanuels

Gino Emanuels

Manager | Product Management - Gino is a SaaS product manager, strategist, and leader with a passion for solving complex problems through collaboration and action in the technology space.