Jan Leidö

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Realizing the single software market

THE INTERNET HAS revolutionized the software industry, one of the world’s largest businesses. A single software market is emerging, independent of national borders, where products and services are digitally distributed. But the legal framework for software transfers is not geographically independent; relevant underlying law varies substantially between different legal systems. In this doctoral thesis, cross-national validity of certain standard software license agreements is examined as a solution to overcome national differences and improve the emerging single software market. Cross-national validity is mapped, explained, and improved under American and German law. The United States and the European Union collectively dominate the single software market. Within the EU, Germany is the most relevant legal system, and many conclusions reached under German law can be extended to the entire EU. The study identifies many current issues, caused by inter alia inherent limits of law, fundamental differences between German and American law, and problematic transferor choices. Current issues exist regarding formation, substantive content, and interpretation of software license agreements on a cross-national level. This leads to increasing legal and practical problems for the industry and individual transferors. Major and minor improvements in software license agreements and business models are suggested to achieve cross-national validity. Simple advice includes better assent mechanisms, prior disclosure, clear notice, and translating software license agreements. More comprehensive advice includes focusing on provisions that are essential from a business or technical perspective, rethinking certain business and technical choices that might lead to legal problems, making compromises over certain provisions that have only minor legal advantages but clear legal disadvantages, and choosing a way to bridge or avoid national differences regarding central provisions and practices from among available suggestions adapted to different business models. Making such improvements is becoming increasingly important as lawmakers and consumer associations in different countries become ever more active, and as developing countries become increasingly important. Improving cross-national validity will enhance legal certainty and bring us one step closer to realizing the single software market.

THE INTERNET HAS revolutionized the software industry, one of the world’s largest businesses. A single software market is emerging, independent of national borders, where products and services are digitally distributed. But the legal framework for software transfers is not geographically independent; relevant underlying law varies substantially between different legal systems.In this study, cross-national validity of certain standard software license agreements is examined as a solution to overcome national differences. Cross-national validity is mapped, explained, and improved under American and German law. The United States and the European Union collectively dominate the single software market. Within the EU, Germany is the most relevant legal system, and many conclusions reached under German law can be extended to the entire EU. The study identifies many current issues, caused by inter alia inherent limits of law, fundamental differences between German and American law, and problematic transferor choices. But cross-national validity can be achieved through major and minor improvements in software license agreements and business models. This becomes increasingly important as lawmakers and consumer associations in different countries become ever more active, and as developing countries become increasingly important. Improving cross-national validity will enhance legal certainty and bring us one step closer to realizing the single software market.

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