Licensor Performance Obligations
At bottom, licenses are about the transfer of information from a licensor for use by a licensee and authorized users. The licensor’s core obligation is to provide digital materials in a usable form to the licensee. Often licensors make no express representations concerning their obligations under the agreement other than the obligation to “provide the licensed materials to the licensee” or to “provide licensee with access to the licensed materials”. To the extent that license agreements contain any statements about the licensor’s performance obligations, such statements are often included in clauses relating to the scope of the licensee’s authorized use of the materials. It is in the interests of both licensors and licensees that the agreement expressly provides adequate details concerning the performance obligations of the licensor.
The licensor’s performance obligations may vary depending on how digital information is supplied. Generally, licensees access electronic information in one of two ways: (1) by on-line access to a licensor’s server or (2) by installing the electronic information (usually from a CD-ROM, DVD, digital tape, or floppy disk) on the licensee’s computer system.
When licensed information is provided on CD-ROM or other physical medium, the licensor’s chief (but by no means exclusive) obligation is to provide a properly working copy of the digital information, perhaps with adequate software for accessing and searching the database. In those cases, licensees may want licensors to provide documentation, training, and technical support for using the database and accompanying software.
When licensed information is maintained externally by the licensor, assuring licensees and their users with uninterrupted and complete access to the licensed materials becomes a major concern. In such cases, libraries can do little more than ensure that their computer terminals are working properly. Although licensors are unlikely to guarantee uninterrupted service, licensees should expect licensors to agree to take adequate steps to make service interruptions less likely. For example, licensors can be asked to agree to:
- have adequate backup servers in the event the main server crashes
- have appropriate hardware to handle a minimum number of simultaneous users
- designate downtime exceeding certain specified amounts as unreasonable or unacceptable
The agreement should further provide that subscription rates will be adjusted or rebates granted for unreasonable interruptions in service.
Another important licensor obligation is ensuring that the quality and quantity of the licensed materials is maintained throughout the life of the license agreement. While it is expected that many databases will be updated or modified to add new information and correct errors or omissions, it is important that licensees be notified of unexpected or significant modifications or withdrawals of information from the database. Again, where such changes significantly affect the quality of the licensed information, the agreement should provide for an adjustment to the licensee fees to account for any reduction in usability.
Some licensors require users to acknowledge their agreement to conditions on use of licensed information by clicking on a button or otherwise indicating their assent before gaining access to the information. The agreement should make clear that licensees be informed of the terms of these so-called “click-through” agreements and that licensees be given an opportunity to comment on their terms. Most importantly, the license agreement should make clear that any conditions on the use of the digital information in the “click-through” agreement must not materially differ from the terms of the license agreement, and that if there are any differences, the terms of the license agreement will apply—not the terms of the “click-through” agreement.
- Warranties; Indemnities; Limitations on Warranties
- Authorized Use; Specific Use Restrictions
- Licensee Performance Obligations
- Mutual Performance Obligations
Licensor Performance Obligations: Example Clauses
|1. Availability of Licensed Materials.Within [time period], Licensor shall make the Licensed Materials available to Licensee and Authorized Users.
Licensor shall use reasonable efforts to provide continuous service with an average of [percentage] up-time per month. The [percentage] down-time includes periodic unavailability due to maintenance of the server(s), the installation or testing of software, the loading of additional Licensed Materials as they become available, and downtime related to the failure of equipment or services outside the control of Licensor, including but not limited to public or private telecommunications services or internet nodes or facilities. Scheduled down-time will be performed at a time to minimize inconvenience to Licensee and its Authorized Users.
If the Licensed Materials fail to operate in conformance with the terms of this Agreement, Licensee shall immediately notify Licensor, and Licensor shall promptly use reasonable efforts to restore access to the Licensed Materials as soon as possible. In the event that Licensor fails to repair the nonconformity in a reasonable time, Licensor shall reimburse Licensee in an amount that the nonconformity is proportional to the total Fees owed by Licensee under this Agreement.
Where applicable, Licensor shall use reasonable efforts to ensure that the online content is at least as complete as print versions of the Licensed Materials, represents complete, accurate and timely replications of the corresponding content contained within the print versions of such Materials, and will cooperate with Licensee to identify and correct errors or omissions.
|Commentary: This example includes many common licensor obligations. Most are self-explanatory, and not all will be applicable to every license agreement.
Of particular importance where access to this licensed materials is over a remote network are the licensor’s obligations to ensure that users can gain access to the materials when they want it. Example 5 sets forth specific measures of expected performance, and provides that if the licensor fails to provide an acceptable level of service, it must provide a refund or a discount to the licensee proportional to the lost access.
Example 6 is designed to ensure that licensor maintains the same quality and quantity of licensed materials throughout the life of the agreement. Of course many digital databases will change over time, but it is important that licensees be informed of unexpected or significant changes in the materials, and that it have the power to terminate the agreement if there is a substantial decrease in the quality or quantify of the licensed materials before expiration of the agreement.
Example 11 recognizes that licensors may be obligated to remove from the licensed materials information that has been found to violate the law or is otherwise objectionable. Again, it is important that the licensee be informed when this occurs, and that it has the right to reimbursement proportional to the withdrawn materials.
Example 9 deals with those cases where licensors require authorized users to accept terms for using the licensed materials by means of clicking on a button or otherwise indicating their assent before they are permitted access to the information. This clause is designed to ensure that these so-called “click-through” agreements impose no obligations on users that are inconsistent with the licensing agreement. It requires licensors who use such agreements to notify the licensee of their terms and provide the licensee an opportunity to comment on them. Further, it prohibits licensors from requiring agreement to terms materially different from those in the license agreement, and provides that if there are any such differences, the terms of the license agreement will apply.