Gan Subramaniam, CISA, CISM, CCNA, CCSA, CIA, CISSP, ISO 27001 LA, SSCP
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I am planning to audit one of our subsidiaries, a company that develops software and sells packaged applications. Our organisation also buys certain software that we use as tools/platforms for development.
I would like to know the key clauses in licensing agreements that ought to be in place when licensing software to buyers. I am also keen to know the software licensing terms that we must have in place with our software providers.
Ideally, you should consult a legal expert regarding this question. However, I am responding to this from an auditor’s point of view. As always, this is an indicative list:
The next two important clauses relate to warranty and any potential liability that may arise.
Again, this is just an auditor’s indicative checklist. An intellectual property (IP) lawyer would be able to advise better on the terms and conditions for an ideal licensing arrangement. There have been multiple cases in various international courts, and judgements have appeared in favour of both software sellers and buyers.
Gan Subramaniam, CISA, CISM, CCNA, CCSA, CIA, CISSP, ISO 27001 LA, SSCP, is the global IT security lead for a management consulting, technology services and outsourcing company’s global delivery network. Previously, he served as head of IT security group compliance and monitoring at a Big Four professional services firm. With more than 16 years of experience in IT development, IS audit and information security, Subramaniam’s previous work includes heading the information security and risk functions at a top UK-based business process owner (BPO). His previous employers include Ernst & Young, UK; Thomas Cook (India); and Hindustan Petroleum Corp., India. As an international conference speaker, he has chaired and spoken at a number of conferences around the world.
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