Research Handbooks in Intellectual Property series
Edited by Jacques de Werra
Chapter 3: ALI principles of the law of software contracts: some proposals for a global software licensing policy
The current law of software transactions in the United States is in disarray.1 Yet, software licensing, a multi-billion dollar industry, continues to grow in importance.2 As a result, the American Law Institute (ALI) commissioned a project that sought to unify and clarify this law.3 The result is the Principles of the Law of Software Contracts (ALI Principles), approved by the membership in May of 2009. As with other “Principles” and “Restatement” projects of the ALI, none of the software principles is law in any state of the United States until a court adopts the principle or a state legislature enacts one or more of the principles’ provisions.4 Our hope, as the principal drafters of this project, is that the ALI Principles offer efficient, fair, and practical approaches to the many issues of software licensing. In fact, although we admit that we set our sights on improving software licensing law in the United States, we believe several of our proposals could constitute core elements of a global software licensing policy.5 This chapter presents four such proposals. The first proposal governs the meaning of assent to electronic standard forms (see Section 1 below). Second, we discuss the ALI Principles’ warranty of no material, hidden defects (see Section 2 below). Third, we consider the ALI Principles’ treatment of automated disablement (see Section 3 below), and finally we discuss the ALI Principles’ implied indemnification against infringement (see Section 4 below). Of course, in our limited space, we can only offer preliminary guidance on the nature of these ideas
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