Software Cross License Agreement

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Software Cross License Agreement

What Is the Software Cross License Agreement?

The software cross license agreement is a valid contract between two parties. Both entities grant the rights to each other.

This right is for the utilization and development of products of technology and software. The agreement provides the party with the license to use the technology.  Such could be the patent of the other or another entity either with or without the payment of royalty.

When Do You Need the Software Cross License Agreement?

Businesses enter into this agreement. This is for a significant sharing of the software property of the firm. This agreement is for cross licensing the patents of technology. The reasons for the software cross license agreements are quite advantageous. These include lowering of development costs. The business also benefits from the marketing ability. It shortens the time to the market. It also creates an economy of sharing software and more.

How to Draft the Software Cross License Agreement?

Only an attorney can draft this agreement. He has to include the appropriate terms and clauses of the contract. However, the important things to be included while drafting include

  • Identify the parties to the agreement.
  • Grant a license to use the software.
  • Identify the length of the license.
  • Identify the reasons you can terminate the agreement.
  • Decide whether to include a warranty provision.
  • Identify the licensee’s remedies, etc.

Key Benefits

The software businesses and organizations that opt for entering into the software cross license agreement are eligible for the following benefits and rights.

There is no requirement of spending valuable resources and additional time for the development of individual software technologies.

Development increases quickly for the business. So this agreement helps in making more profits.

This agreement is usually free of royalty. This implies that the business can save more on the company budget. It can prevent additional expenditure.

The benefits of this agreement eclipse the cons of costs, but it is of utmost importance to remember that these are legally binding agreements that the business organization enters into with the competitors. Because of this reason, every business must consult with an attorney of intellectual property rights for the drafting of the legal software cross license agreement.

Benefits of Software Cross License Agreement: Pros and Cons

The pros of the agreement are as follows.

  • To assist in the development of advanced software products.
  • For the interoperability between the products of networking.
  • The accessibility to new software markets.
  • The reduction in the cost of development and production.
  • The benefits from the manufacturing and marketing capabilities of the other party.
  • The ability of creation of a community that shares IP.

The cons of the agreement include the following. There are still a few negative aspects. Some of them are:

  • Additional expenditure to the software product for licensing royalty payment. This tends to subtract from the profit margin of the IP value.
  • A third party can take undue advantage of the sale
  • The business might run the risks of acquiring dependence upon the ability and skill of another company.
  • It is unwise to add to the technology patents of the company. However, one can add clauses. This reduces the direct contest between the partners.

Terms to Include in a Software Cross License Agreement

This Agreement  includes the following terms

  • A software cross license agreement necessitates extensive research and expert drafting for the avoidance of penalties of infringement of patent rights and laws.

The software cross license agreement should comprise of the following key terms and clauses:

  • Every detail concerning the platform of technology for which the software cross license exists
  • The extent of territory of application of the license agreement
  • The duration of the contract
  • The amount of royalty to be paid in association with the license
  • The conditions and terms that may cause the revocation of the consent
  • The penalty for infringement or violation of the statutory rights of the license
  • The rights of the involved parties to legal disputes. It also includes the consent for dealing with the breach of the agreement of the license.

What Happens When You Violate the Software Cross License Agreement?

Violation of the terms results in the payment of damages. There is also a revocation of the software cross license agreement.

Sample for Software Cross License Agreement

A sample of the agreement can be downloaded from below.

Software Cross License Agreement

Software Cross License Agreement Template


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