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.

Example Clauses

See also:

Last updated: April 25, 2012

Comments are closed.