Buyers don’t automatically get software licenses…

BVWireIssue #96-4
October 29, 2010

IP Spotlight reminds us of the importance to M&A due diligence and valuations of the 9th Circuit decision that a software user is a licensee NOT an owner of a copy of the software (Vernor v Autodesk), where the copyright owner 1) lays out the fact a license agreement is in force, 2) significantly restricts the user’s ability to transfer the software, and 3) imposes notable use restrictions.  The software licenses held by the to-be-acquired entity may not automatically transfer in the transaction; the acquirer may need to get written consent from the copyright owner.
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