In an age where technology permeates nearly every facet of business, the importance of having a general understanding of Information Technology (IT) contracts is crucial. This article provides a high-level guide for lawyers who don’t regularly practice in this area who are tasked with reviewing and negotiating IT contracts, including contracts for Artificial Intelligence (AI) related services.

‘Purchase’, ‘License’, or ‘Right of Access’

Though a customer may have paid for software, this payment is most likely in exchange for a license rather than a purchase. The software provider retains ownership of the intellectual property (IP)  rights in and to the software. Software-as-a-Service (SaaS) agreements are often viewed as service agreements (rather than license agreements) under which the customer obtains remote access to the software services, and not a license under the provider’s IP rights in the SaaS services. Thus, providers may refer to the use of SaaS services as a “right of access” or “authorization” rather than a “license.”

License Scope