Software licensing disputes are the obvious manifestation of a breakdown in the relationship between licensees and licensors. They tend to be pervasive and are often played out against a high-stakes backdrop.

The software market is extremely lucrative.  The ‘Gartner Worldwide IT Spending Forecast’ (2017) predicts the market will grow by 8.6 percent in 2018, reaching £381bn. Given these sums, disputes in the software space, especially over licensing, are somewhat inevitable.

In terms of the pervasiveness of software licensing disputes, the International Data Corporation’s (IDC) ‘Key Trends in Software Pricing & Licensing Survey’ (2014) provides some background, stating that 85 percent of the approximately 2000 organisations surveyed admitted using more software that they had paid for – one of the most commons reasons for a dispute.

“Since most of these disputes are both raised and resolved privately, we cannot rigorously track their number,” points out Adam J. Kessel, a principal at Fish & Richardson. “That said, anecdotal evidence points to an uptick in activity in this area over the past year, both from licensees facing increased licence compliance and audit pressure from their software licensors, as well as licensors interested in tightening up their software licence agreements, and their policies and programmes for enforcing them.”

For those software licensing disputes that wind up in court, the tone of the disagreement is usually hostile rather than merely adversarial, as cases such as the bitter and hard-fought Oracle v. Rimini Street and Versata v. Infosys bear out. Both sobering lessons in the cost of non-compliance, damages run into the tens of millions in each instance (Oracle v. Rimini Street has seen damages in excess of £100m awarded to Oracle).

Jan-Mar 2018 issue

Fraser Tennant