Advice on Shrink Wrap License Contract – Intellectual Property Association of Thailand

Advice on Shrink Wrap License Contract

This Shrink Wrap License Contract is a model contract to be used as a format in making the contract for people who want to request permission to use copyrighted computer program or for the owner of copyright in the computer program.
2. This contract was made so that the people involved may act in compliance with the Copyright Act B.E. 2537 and other related laws such as the Civil and Commercial Code and current practice in trading business.

3. This contract is the outcome of the working group consisting of representatives of all parties involved from both government and private sectors including experts in various fields. Therefore, this contract is an appropriate and fair contract to all parties including the owner of copyright, licensee and the general public.

4. For the benefit of using the said model contract, please read the advice below.

Warning The licensor should type a warning on boxes or envelopes containing computer programs which are being sold so that the buyers or consumers can see clearly that the buyers should read and understand the contract before opening the envelope that contains the diskette. Once the buyer opens the envelope containing the diskette, it shall be deemed that the buyer immediately bound by the contract.

Clause 2 of the Contract

Clause 2.3 In the event that the computer program is expensive, the parties to the contract may prescribe special transfer condition(s) which are appropriate for such program.

…………………………………..

Department of Intellectual Property
May 1995

Shrink Wrap License Contract

……………………… Co., Ltd., which is a licensor of the computer program hereunder, hereby warn you to read the content in this contract thoroughly prior to opening the envelope that contains the diskette and therefore becoming bound by this contract.

When you have read the content of this contract, if you do not agree with the contract, please return the diskette in the unopened envelope and all attachment(s) (together with documents and document covers or other containers) to the place where you received such items within 15 days (fifteen days) from the date of receipt of the computer program. The Company will promptly return the computer program price to you.

Once you open this sealed envelope that contains the diskette and/or use this computer program, it shall be deemed that you are bound as the licensee of the computer program hereunder. The licensor and the licensee hereby agree as follows:

1. Permission to use Computer Program

1.1 The licensor is the owner of the copyright or is entitled to
permit the use of the computer program named ………… and the documents specified in this contract (hereinafter referred to as the “Computer Program”).

1.2 The licensor permits the licensee to use the Computer Program as
Specified in this contract in the following natures:

1.2.1 Not more than 1 user (one user) uses the Computer Program at one
time. This means that many persons can use the Computer Program but only one at a time.

1.2.2 More than 1 user (one user) can use the Computer Program at the
same time but the licensee shall enter into another contract with the licensor for permission to have more than one person using the Computer Program at the same time.

2. Right of the Parties

2.1 The licensee has a right to use the Computer Program and other documents specified in this contract.

2.2 The licensee has no right to lease the Computer Program or documents or any right given under this contract to other persons unless the licensee has received a written consent from the licensor.

2.3 The licensee has a right to transfer the Computer Program hereunder
together with this contract, all copies of the Computer Program and all documents supporting the use of the Computer Program to the transferee and the transferee shall agree to be bound by the terms of this contract.

2.4 The licensee has a right to make 1 copy (one copy) of the Computer Program in order to prevent the loss in using the Computer Program with such computer provided that the licensee has received the consent from the licensor to make more than 1 copy (one copy).

2.5 The licensee has no right to reproduce, modify, publish, translate, change the name, number, code or rewrite the Computer Program, unless the licensee has received a written consent from the licensor or the law allows such act.

2.6 The licensee represents and warrants that the licensee shall not, with intent or gross negligence, delete, destroy, damage or make the mark or symbol showing the ownership of the copyright or the trademark of the licensor unclear.

3. Limit of Liability and Warranty

3.1 The licensor warrants that the Computer Program will work as prescribed in all respects for a period of 90 consecutive days from the date of the licensee’s receipt of the Computer Program. If the Computer Program fails to perform as prescribed, the licensor shall proceed in any one of the following manners:

(1) The licensor shall refund to the licensee the amount paid by the licensee to the licensor;

(2) The licensor shall replace the defective Computer Program with
a new Computer Program of standard quality not later than 60 days from the date of the licensor’s receipt of the defective Computer Program;

(3) The licensor shall repair the Computer Program so that it is in a former good working condition without delay, but in no event shall exceed 60 days from the date of the licensor’s receipt of the defective Computer Program.

3.2 The licensor agrees to be liable for compensation of any damages
to the computer and peripheral equipment or other programs or any other thing which are caused by the defects of the Computer Program hereunder, if the licensee has normally used and maintained the Computer Program within the period of 1 year (one year) from the date of delivery of the Computer Program, in the amount of …….. times of the price of this Computer Program or not exceeding …………Baht (………………). However, the damage shall not be the result of accident, the wrong or unintended usage of the Computer Program.

4. Trade Secret

The licensee shall not disclose to other persons the data or techniques relating to the Computer Program that he knows or should have known that it is a trade secret of the licensor in the manners that will cause damage to the licensor.

5. Assurance

The licensor assures and confirms that the licensor has full and complete right, without any encumbrance that will prejudice the right in the Computer Program, documents relating to user manuals or any other thing relating to the Computer Program hereunder and the licensor has authority and power to lawfully permit the licensee to use the Computer Program.

6. Defence of Action

6.1 In the event that other persons take an action or exercise the right to take an action against the infringement of right in the Computer Program hereunder, the licensee shall notify the licensor within 10 days from the date that the licensee becomes aware of such action and the licensor is entitled to be a joint defendant in a civil action or a joint plaintiff in a counterclaim. The licensor shall assist in providing information or documents that are useful in defending the action and appropriate for each case.

6.2 The licensor shall be responsible for all expenses and damages incurred to the licensee as a result of the infringing action hereunder.

7. Dispute Resolution

In the event of any dispute, conflict or claim arising from or relating to this contract including breach of the contract, termination of the contract or validity of the contract, both parties shall discuss and agree on the resolution in order to cease the dispute within 30 days from the date that the claiming party notifies the other party in writing. If both parties cannot agree within such prescribed time, they shall submit the dispute to the Department of Intellectual Property, Ministry of Commerce for conciliation. If an agreement cannot be reached through the conciliation within 60 days, the dispute shall be submitted to an arbitration for ruling under the Arbitration Rules of the Arbitration Office, Ministry of Justice, which are in force at the time of submission of the dispute for the arbitration and shall be managed by the said institute, or the court shall make a ruling.

If you have any query, please contact
Company………………………………………………….
Address……………………………………………………
Telephone………………………Fax…………………….

Advices on Contract of Computer Program License Contract (signed by both parties)

This Computer Program License Contract (signed by both parties) is a model contract to be used as a format in making the contract for people who want to request permission to use copyrighted computer program or for the owner of copyright in the computer program.
2. This contract was made so that the people involved may act in compliance with the Copyright Act B.E. 2537 and other related laws such as the Civil and Commercial Code and current practice in trading business.

3. This contract is the outcome of the working group consisting of representatives of all parties involved from both government and private sectors including experts in various fields. Therefore, this contract is an appropriate and fair contract to all parties including the owner of copyright, licensee and the general public.

4. For the benefit of using the said model contract, please read the advice below.

Clause 1 of the Contract The parties may define words used in the contract so that such words have clearer meanings or have the same meanings as the parties’ understanding or the parties may prescribe words as a result of the parties’ desires for specific meanings for such words.

Clause 1.2 The parties may specify the number of the computers in any one of the in order to specify that the licensed computer program shall be used with which computer. However, the specification of the number of the computer may make the contract inflexible. For example, in the event that the computer whos number has been specified is out of order and it is necessary to use another computer, there might be a problem due to the computers having different numbers.

Additionally, the parties may check any one or more of according to the intent of the parties.

Clause 3 of the Contract

Clause 3.1 The parties may agree on the amount of the royalties as appropriate. The amount of the royalties will depend on the value of such computer program.
Clause 10 of the Contract

Clause 10.2 It is a general principal that the parties should prescribe training on the use of the computer so that the use of the computer will be efficient. However, if by nature of the use of such computer program, it is necessary to have a special training, the parties may make a special training contract which shall be annexed to the Computer Program License Contract prescribing the duty of the licensor with respect to training, period of training, number of trainees, etc.

Clause 12 of the Contract The parties may agree by specifying in the contract that which of the terms of the contract is deemed substantial by the parties so that if any party intentionally breaches the contract, the other party has a right to terminate the contract, for example, it shall be deemed that clauses 2, 4, 5 and 9 are substantial.

……………………………………………..

Department of Intellectual Property

May 1995

Computer Program License Contract
(signed by both parties to the contract)

Made at………….…………………………
Date………..Month…………Year……….

This contract is made between …………………………………………… residing at ..….. Road……………………. Kwang/Tambon…………………. Khet/Amphur…………….. Province………………. hereinafter referred to as the “Licensor” of the one part and…………………………………………….……. residing at ……… Road……………………… Kwang/Tambon ……………………. Khet/Amphur……………………..Province……………………. hereinafter referred to as the “Licensee”, of the other part.

Both parties hereby agree as follows:

1. Permission to use Computer Program

1.1. The Licensor is the owner of copyright/has the right to grant permission for the use of the computer program named …………………………………….…………
and the document specified herein (hereinafter referred to as the “Computer Program”).

1.2 The Licensor agrees to permit the Licensee to use the Computer Program as specified in this contract in the following manners:

This contract permits use of the Computer Program with …………… computers containing the Computer Program (volume license)

This contract permits the use of the Computer Program with the main computer in the network system so that ……. computers are capable of using the Computer Program at any time (network license)

Others…………………

(Please cross out the unused items.)

2. Right of Parties

2.1 The Licensee has a right to use the Computer Program and other documents specified in this contract.

2.2 The Licensee has no right to lease the Computer Program or documents or any right given under this contract to other persons unless the Licensee has received a written consent from the Licensor.

2.3 The Licensee has a right to make 1 copy (one copy) of the Computer Program in order to prevent the loss in using the Computer Program only with such computer unless the Licensee has received the written consent from the Licensor to make more than 1 copy (one copy).

2.4 The Licensee has no right to reproduce, modify, publish, translate, change the name, number, code or rewrite the Computer Program, unless the Licensee has received a written consent from the Licensor or the law allows such act.

2.5 The licensee represents and warrants that the licensee shall not, with intent or gross negligence, delete, destroy, damage or make the mark or symbol showing the ownership of the copyright or the trademark of the licensor unclear.

3. Royalties and Term of License

3.1 Payment of Royalties

The Licensee agrees to pay the Licensor for the use of the Computer Program in the amount of ……………………………Baht (………………………….).

The Licensee agrees to pay for the use of the Computer Program for ……….. set of computers at ………… Baht per set, totaling…………..Baht (…………………).

3.2 Term of License

Term of the license of the Computer Program under this contract is ……….year(s), starting from Date………..Month…………….Year…………and ending on Date………..Month…………….Year……….

When the term of the license under this contract ends, it shall be deemed that this Computer Program License Contract is renewed for a term of 1 year by implication, unless there is a written notification of termination in advance no less than 30 days by either party.

Where there is a permission for the continuous use of the Computer Program after the contract term, the Licensee shall pay the Licensor annually the amount of …Baht per annum (………………).

( Please cross out the unused items)

4. Limit of Liability and Warranty

4.1 The Licensor warrants that the Computer Program will work as prescribed in all respects for a period of 90 consecutive days from the date of the Licensee’s receipt of the Computer Program. If the Computer Program fails to perform as prescribed, the Licensor shall proceed in any one of the following manners:

(1) The Licensor shall refund to the Licensee the amount paid by the Licensee to the Licensor;

(2) The Licensor shall replace the defective Computer Program with
a new Computer Program of standard quality not later than 60 days from the date of the Licensor’s receipt of the defective Computer Program;

(3) The Licensor shall repair the Computer Program so that it is in a former good working condition without delay, but in no event shall exceed 60 days from the date of the Licensor’s receipt of the defective Computer Program.

4.2 The Licensor agrees to be liable for compensation of any damages
to the computer and peripheral equipment or other programs or any other thing which are caused by the defects of the Computer Program hereunder, if the Licensee has normally used and maintained the Computer Program within the period of 1 year (one year) from the date of delivery of the Computer Program, in the amount of …….. times of the price of this Computer Program or not exceeding …………Baht (………………). However, the damage shall not be the result of accident, the wrong or unintended usage of the Computer Program.

5. Trade Secret

The Licensee shall not disclose to other persons the data or techniques relating to the Computer Program that he knows or should have known that it is a trade secret of the Licensor in the manners that will cause damage to the Licensor.

6. Assurance

The Licensor assures and confirms that the Licensor has full and complete right, without any encumbrance that will prejudice the right in the Computer Program, documents relating to user manuals or any other thing relating to the Computer Program hereunder and the Licensor has authority and power to lawfully permit the Licensee to use the Computer Program.

7. Defense of Action

7.1 In the event that other persons take an action or exercise the right to take an action against the infringement of right in the Computer Program hereunder, the Licensee shall notify the Licensor within 10 days from the date that the Licensee becomes aware of such action and the Licensor is entitled to be a joint defendant in a civil action or a joint plaintiff in a counterclaim. The Licensor shall assist in providing information or documents that are useful in defending the action and appropriate for each case.

7.2 The Licensor shall be responsible for all expenses and damages incurred to the Licensee as a result of the infringing action hereunder.

8. Upgraded Computer Program

8.1 The Licensor has a duty to offer to the Licensee the Computer Program that has been upgraded from the Computer Program hereunder or other computer programs relating to the Computer Program hereunder. The Licensee shall have a right to use such upgraded computer program and shall pay royalties to the Licensor at the agreed amount.

8.2 When the Licensee legally upgrades the Computer Program or is granted in writing by the Licensor to upgrade the Computer Program, the Licensee shall have a right to use or assign only such part of the computer program that has been upgraded to other people. The Licensee has a duty to offer the computer program that has been upgraded from the Computer Program hereunder to the Licensor and the Licensor shall pay royalties to the Licensee at the agreed amount.

9. Delivery and Inspection

9.1 Delivery of Computer Program

The Licensor shall deliver the Computer Program as specified in Clause 1
which has all qualifications as prescribed in this contract and is ready for work as prescribed in the document specified in this contract to the Licensee at ……………………. within ……….days from the date of execution of this contract.

When the Licensor is required to install the Computer Program hereunder, the Licensor must complete the installation so that the Computer Program is in a good working condition and has working qualifications as specified in this contract or the documents specified herein within……….days from the date of delivery of the above Computer Program.

In the event that the Licensor cannot deliver or install the Computer Program hereunder within the prescribed period, the Licensor shall notify the Licensee in writing in advance.

9.2 Inspection

The Licensor shall provide staff to advise and test the efficiency of the
operation of the Computer Program for the Licensee free of charge.

In the event that the delivered Computer Program delivered does not have qualifications or is not efficient as prescribed in this contract, the Licensee has a right not to test and accept delivery of the Computer Program and the Licensee shall notify the Licensor to perform any one of the acts specified in the clause 4.1.

10. Services

10.1 Services

The Licensor has a duty to promptly provide services or rectify any errors relating to the Computer Program that the Licensor delivers or installs hereunder free of charge to the Licensee during the warranty period.

10.2 Training

The Licensor has a duty to provide staff who have knowledge and skill in the Computer Program to provide training one the operation of the Computer Program to the Licensee for a period of ……….days or as the Licensor and the Licensee shall later agree.

11. Dispute Resolution

12. Termination of Contract

If either party intentionally beaches substantial terms of the Contract, the other party is entitled to take legal action seeking compliance with the contract or immediately terminate the contact without any advance notice.

This contract is made in duplicate having identical contents. The parties have thoroughly read and understood the contact and have singed and affixed the Company seal (if any) before witnesses and have retained one copy each.

Signed …………………………….. Licensor
( )

Signed …………………………….. Licensee
( )

Signed …………………………….. Witness
( )