Technology Transactions & Licensing
Technology-driven businesses operate on a web of contracts — from software licences and SaaS agreements to complex multi-party technology transfers. The legal structure of these agreements determines risk allocation, intellectual property ownership, liability, and the rights of each party in the event of a dispute.
Key Areas of Practice
Software Licensing Agreements
Software licences govern the right of the licensee to use software and the obligations of both parties. Critical elements include the scope of the licence (number of users, deployment type, territory), restrictions on reverse engineering or modification, warranty and liability provisions, audit rights, and termination and post-termination obligations. Both proprietary and open source software raise distinct licensing considerations.
SaaS and Cloud Service Agreements
Software-as-a-Service (SaaS) agreements combine elements of a software licence with a service agreement. Key provisions include service level agreements (SLAs), data ownership and portability, data processing obligations under applicable privacy laws, uptime guarantees, liability caps, and exit and transition provisions. Cloud computing agreements also raise data localisation and jurisdictional considerations under Indian law.
Technology Service Agreements
Agreements for IT development, implementation, integration, and support services require careful attention to deliverable definitions, acceptance testing, change management, intellectual property ownership of developed works, and liability for defects or delays.
Open Source Compliance
Open source software (OSS) is licensed under a variety of licences — from permissive licences (MIT, Apache 2.0) to copyleft licences (GPL, AGPL) — each with different obligations. Copyleft licences in particular can impose obligations to release source code of derivative works. Organisations that distribute software must understand and comply with the OSS licences applicable to components they use.
Technology Transfer and Joint Ventures
Cross-border technology transfers and joint ventures require structuring to comply with Indian foreign exchange laws (FEMA), Foreign Direct Investment (FDI) policy, and applicable export control regulations. Agreements must address IP ownership, licensing-back of improvements, non-compete obligations, and governance.
Escrow Arrangements
Source code escrow arrangements protect licensees against the risk of a software vendor becoming unable to provide support. These arrangements require careful drafting to define release conditions, verification procedures, and obligations of the escrow agent.
Frequently Asked Questions
Who owns software developed by a contractor?
Under Indian copyright law, the author of a work generally owns the copyright unless it is a “work made for hire” (i.e., created by an employee in the course of employment). Software developed by an independent contractor does not automatically vest in the contracting party — ownership must be expressly assigned in the contract. This is a common and consequential oversight in technology service agreements.
What is a “copyleft” licence and why does it matter?
Copyleft licences (such as GPL and AGPL) require that derivative works or combined works incorporating GPL-licensed code be distributed under the same or a compatible licence. For proprietary software products that incorporate GPL-licensed components, this can create an obligation to release the entire product’s source code. Proper OSS licence compliance review is essential before distributing software products.
Does Indian law permit software to be patented?
Section 3(k) of the Patents Act, 1970 excludes computer programmes “per se” from patentability. However, the Indian Patent Office has, in practice, granted patents for software-related inventions that have a technical character or produce a technical effect. The patentability of software-related inventions in India remains a nuanced area of law.