Business and Technology Law

In some instances, publishers who suspect their intellectual property rights are being infringed will not request an audit of the target’s network. Instead, the publishers will send a legal notice to its customer attempting to terminate their license agreement and prevent the customer from using the product. Publishers often have a contractual right to terminate the license and require customers to immediately stop using the software. A sample termination provision is below.

This Software License Agreement may be terminated (a) by your giving Altova written notice of termination; or (b) by Altova, at its option, giving you written notice of termination if you commit a breach of this Software License Agreement and fail to cure such breach within ten (10) days after notice from Altova or (c) at the request of an authorized Altova reseller in the event that you fail to make your license payment or other monies due and payable. In addition the Software License Agreement governing your use of a previous version that you have upgraded or updated of the Software is terminated upon your acceptance of the terms and conditions of the Software License Agreement accompanying such upgrade or update. Upon any termination of the Software License Agreement, you must cease all use of the Software that it governs, destroy all copies then in your possession or control and take such other actions as Altova may reasonably request to ensure that no copies of the Software remain in your possession or control. The terms and conditions set forth in Sections 1(g), (h), (i), 2, 5(b), (c), 9, 10 and 11 survive termination as applicable. See http://www.altova.com/order_license4.html.

If the software product at issue is an enterprise-wide product that cost millions of dollars, an unexpected termination notice can interrupt the business and will almost certainly escalate the dispute. Furthermore, if the businesses has unanticipated switching costs associated with identifying and researching replacement software, acquisition of the software itself, and training for employees using and supporting the software, the consequences of a termination could be devastating.