Software Licensing Overview
Simply put, software licensing provides the legal and regulatory framework for the use of a digital Intellectual Property. If an individual or a corporation intends to use a commercial software package, they must purchase a license to do so. It’s that simple. Using that software without a license i.e. illegally, may result in a heavy financial penalty, criminal charges, or both.
A software license is therefore an important tool that sets the rules and conditions for the use of a specific piece of digital media. There are various types of license (Proprietary, Free and Open Source, Hybrid, etc.), but the purpose is the same: To provide legal and regulatory clarity on how software can -and cannot- be used.
The key concept of licensing is that you don’t own the software itself. The license simply grants you the right to use the software, within the constraints set out in the terms and conditions of the agreement. The company that creates the software retains ownership of the code.
The Quandry: Legacy Off-Chain Software Asset Management
Software licenses need to be managed and tracked, a task that has led to the creation of the “Software Asset managment” department in most large organizations.
When you buy a software license from an Original Equipment Manufacturer (OEM), the OEM is aware that you are the purchaser, i.e. the licensee, because you paid with your credit card or purchase order. This transaction becomes the ‘Genesis’ ownership record for this license. If and when you decide to sell this software license, because you no longer need it or have decommissioned the equipment, the OEM is not aware of this circumstance and is thus unable to track this and all future changes of ownership for this particular license.
And thus, if any of the subsequent owners need warranty support for a software update, the OEM will not be able to validate their service entitlement.
The Multiven On-Chain Solution: Verifying License Ownership using blockchain
Having advocated for, and secured the legal authority for the transferability of software licenses in 2014, Multiven is developing the Multiven Open Marketplace (MOM) into the world’s premier platform for the legitimate sale and transfer of new and pre-owned software licenses. On the MOM, software licenses are assigned to a seller’s public Ethereum address and when it is sold, the ownership record is immutably updated with the new owner’s public address on the Ethereum blockchain, thereby creating the world’s first lifetime software license ownership history for all to see.
In this scenario, the MOM will serve as an ‘Oracle’ for OEMs to interrogate to validate service entitlement for post-Genesis owners of software licenses.
This will also help to eliminate counterfeiting in the software industry while transforming the MOM into a free software asset management platform for all owners of software licenses.
Think of the MOM’s software license repository of ownership history as the equivalent of a documented full service history of a vehicle. A car with a documented service history that you can view and validate carries more value and confidence than a car without one.
Equally, a pre-owned software purchased outside of the MOM will have less value than one purchased within it.
To summarise, the blockchain-based Multiven Open Marketplace not only provides owners of software licenses with the unprecedented ability to legitimately monetise their unwanted licenses, but it also enables OEMs and potential buyers to easily use the blockchain to validate the authenticity of software licenses.
The Multiven Open Marketplace thus becomes the world’s first public blockchain decentralised application (DApp) for software asset acquisition, management and monetisation.
-Peter Alfred-Adekeye and Fernando Sanchez