Software as a service (SaaS) meaning

Checklist This Checklist is chiefly intended primarily for customers (licencees). It provides an overview of the key terms commonly and usually found in a supplier agreement to licence ‘on‑premise’ software installed on the customer’s own infrastructure. For issues related to the licensing and deployment of software as a service (SaaS), see Practice Note: Cloud computing—introduction and Precedent: Software as a service (SaaS) agreement—pro-customer, accordingly. For further reading and template documents relating to this Checklist, see the following: Practice Note: Key issues in software licence agreements Practice Note: Warranties and indemnities in software licence agreements Precedent: Software licence—pro-customer Precedent: Software licence—pro-supplier Negotiation guide—IT contracts Further information Notes (if any) Grant and scope of licence Is the software described clearly and adequately? The customer should be clear about what it is contracting for. There may also be warranties from the supplier that the software will perform as described. Who is permitted to use the software?...

Checklist This checklist identifies common issues that often arise when drafting both long-form and short-form software reseller agreements, and should be used alongside the Precedents: Software reseller agreement and Software as a service (SaaS) reseller agreement. For further detail on the topics highlighted here, consult Practice Notes: Key issues in software licence agreements and Key UK competition law issues in distribution/reseller agreements. The third column can be used to note observations or comments as you progress through the checklist. Consider the parties Consider party details and authority. Confirm each party’s full name, legal status, and the authority to grant the relevant rights and to comply with the corresponding obligations. Consider third party rights. Verify whether the contracting parties (particularly the supplier) hold the necessary intellectual property rights (IPRs) to grant the required rights and licences under the agreement. Also consider whether any licensor should be expressly identified as a third party able to enforce its IPRs directly against the reseller, and whether...

Checklist for end-user licence agreement (EULA) This Checklist aims to flag matters that often arise when drafting a business‑to‑business software end‑user licence agreement (EULA), particularly where the software is licensed through a reseller. For more general guidance on key issues in software licensing generally, see Practice Note: Key issues in software licence agreements. For illustrative EULAs, review the following Precedents: ‘Click-wrap’ software end‑user licence agreement (EULA)—business‑to‑business ‘Click-wrap’ software end‑user licence agreement (EULA)—business to consumer Online terms and conditions for the supply of digital content and end user licence agreement—business‑to‑consumer For example software reseller agreements, see Precedents: Software reseller agreement and Software as a service (SaaS) reseller agreement. As you work through the Checklist, the third column can be used to record observations or comments for reference. Checklist Further information Notes (if any) Take instructions ☐ Consider the service’s features and functionality that may affect the drafting of the EULA Consider the...

In this issue: New technologies Information technology Internet Data protection Media Advertising, marketing and sponsorship Reputation management Telecommunications Daily and weekly news alerts New and updated content Dates for your diary Trackers Latest Q&A Useful information New technologies Council of the EU approves Cyber Resilience Act The Council of the EU has approved the Cyber Resilience Act, setting security obligations for products featuring digital components. It brings in harmonised EU rules on the design, development, manufacture and placing on the market of hardware and software, including use of the CE marking to signal compliance with safety benchmarks. The framework covers any product that connects, directly or indirectly, to another device or a network, and is designed to help consumers identify items with appropriate cybersecurity characteristics. See: LNB News 10/10/2024 76. Information technology Is a SaaS subscription a ‘sale of goods’? (Kompaktwerk v LivePerson) In Kompaktwerk GMBH...

Kompaktwerk GMBH (a company incorporated under German law) v Liveperson Netherlands BV (a company incorporated under Dutch law) [2024] EWHC 2278 (Comm) What are the practical implications of this case? Kompaktwerk v LivePerson is the first judicial foray into whether the SaaS model can sit within the ‘sale of goods’ category. Historically, English law has not treated computer software as ‘goods’; however, after the Court of Justice decision in The Software Incubator v Computer Associates (Case C410/19), it remained a live issue how English law would characterise software—and, in particular, how it would address the now‑dominant SaaS model. The court determined that a time‑bound subscription to SaaS is not a ‘sale’ and does not concern ‘goods’, a conclusion with broad reach. Although the ruling concerned the Commercial Agents (Council Directive) Regulations 1993, SI 1993/3053 (Commercial Agents Regulations), it confirms that the wider EU and English law principles relating to the sale of goods do not apply to SaaS...

Antitrust Commission consults on commitments offered by Microsoft in ‘Teams tying’ investigation The Commission has opened a market test of voluntary measures proposed by Microsoft to resolve worries that it leveraged its dominant position by bundling its communications and collaboration service, Teams, with its widely adopted Office 365 and Microsoft 365 productivity packages. Teams is a cloud-based solution that brings together chat, voice calls, video meetings and file-sharing, and forms part of Microsoft’s enterprise SaaS productivity suites. Those suites combine several tools, including Word, Outlook and Excel. Since Teams’ debut in 2017, Microsoft has shipped it as the default component within its Office 365 and Microsoft 365 business plans. In July 2023, the Commission initiated a formal probe after complaints from Slack Technologies and alfaview GmbH. In June 2024, its preliminary view was that Microsoft holds a dominant position in the global market for SaaS productivity software for professional users. The Commission also provisionally found that, from at least April 2019, Microsoft tied Teams to its core productivity suites,...

This Practice Note considers the following commercial and legal issues arising from the use of free and open source software: What is free and open source software? History Upstreaming and forking Free and open source licences Distribution of modified works (and the reciprocal effect) Linking and incorporation Software as a service (SaaS) Compliance requirements Licence incompatibility Bare licence or contractual licence Patents Trade marks Corporate transactions Software bill of materials Software licensing to the end user Enforcement Free and open source software (sometimes called ‘FOSS’) is a collective term for software released under a licence granting recipients the rights to use, adapt, and share it—whether unchanged or modified—without fees or royalties, with the source code made available. In contrast, the software licences most familiar to lawyers may seek to stop the licensee from accessing source code, using the software across multiple users, locations or computers, and from making and...

This Practice Note provides a concise, at-a-glance overview of the fixed line telecoms industry for commercial lawyers. Fixed lines Section 32(1) of the Communications Act 2003 defines an ‘electronic communications network’ as: a transmission system conveying signals of any description by electrical, magnetic or electro-magnetic energy; and associated items used by the provider, in association with that system, for the conveyance of the signals, comprising: apparatus forming part of the system; apparatus for switching or routing the signals; software and stored data; and other resources (except for the purposes of sections 125 to 127), including network elements that are not active. For fixed lines, this encompasses electrical energy in standard conducting cables or wires; electro-magnetic energy within coaxial cables, which can be treated as a kind of waveguide; or light photons for the laser light employed in fibre optics cables. The most common form of telecoms cable...

Overview This Practice Note examines core considerations in SaaS and hardware/software maintenance SLAs. It centres on availability (uptime) and break/fix fault resolution, and covers: scoping and defining the service levels absolute versus endeavours obligations customer responsibilities exclusions service credits termination rights It also flags common drafting and negotiation issues shaped by the service model (eg supplier‑hosted SaaS or a customer’s on‑premise system). It should be read alongside these Precedents: Service Level Agreement (Availability (uptime) service level for SaaS) Service Level Agreement (hardware/software fault resolution support services) Where SLAs are required for other categories of service levels, much of the approach remains consistent—particularly around absolute versus endeavours commitments, service credits and termination rights. The general Precedent: Service level agreement provides a suitable foundation... Scoping and setting the service levels Availability Where the supplier delivers supplier‑hosted SaaS, offering a defined availability commitment is typically standard practice...

Software escrow Escrow is the arrangement by which two or more parties lodge property or instruments with a dependable third party (an ‘escrow agent’). The escrowed materials are passed to one party once a pre-agreed release condition or trigger occurs, such as that party meeting its obligations or another party failing to meet theirs. Software escrow is a widely used way to protect both software licensors and licensees. Licensors are often unwilling to part with source code and commercially sensitive details about the design of their software. Yet a licensee may feel exposed to the risk of being unable to maintain or support the software if, for example, the licensor becomes insolvent or defaults on its obligations. Depositing those materials with an independent third party in...

This Agreement is entered into on [ date ] Parties [ insert name of SaaS Supplier company ], a company registered in [ England and Wales ] with company number [ insert registered number ], whose registered office is at [ insert registered office ] (the SaaS Supplier); and [ insert name of reseller company ], a company registered in [ England and Wales ] with company number [ insert registered number ], whose registered office is at [ insert registered office ] (the Reseller). Each of the SaaS Supplier and the Reseller constitutes a party, and collectively the SaaS Supplier and the Reseller are the parties. Background (A) The SaaS Supplier intends to appoint the Reseller as an authorised reseller for certain of its online software applications within the United Kingdom. (B) The Reseller agrees to promote and supply the SaaS Supplier’s online software applications in accordance with this Agreement...

PLEASE READ THE TERMS OF THIS AGREEMENT CAREFULLY This is a legally enforceable contract (the AGREEMENT) between you (the Customer) and [ INSERT SUPPLIER COMPANY NAME ], whose registered address is [ ADDRESS OF SUPPLIER ] (being the Supplier, we or us). It grants to you the right to use and to access [ INSERT NAME OF SOFTWARE (INCLUDING THE VERSION AND LATEST RELEASE NUMBER AND A BRIEF DESCRIPTION IF REQUIRED) ], along with any Updates, Upgrades, patches, fixes or workarounds made available by us, as well as any data, media or documents connected with it (together, the Subscribed Services). By selecting ‘ACCEPT’ at the end of this AGREEMENT, you agree to and accept the terms set out below, which will be binding on you and on any of your Authorised Users when they access or use the Services. Please note, in particular, the limitations on liability imposed at clause 15 of this AGREEMENT. This is a business‑to‑business AGREEMENT and is not to be entered into by consumers....