Legal Definitions - proprietary license

A proprietary license is a legal agreement that grants an individual or entity permission to use a specific product, technology, or creative work, while the original owner retains all intellectual property rights and maintains significant control over its use, modification, and distribution. These licenses typically come with strict terms and conditions, often requiring payment, and prohibiting actions like copying, reverse engineering, or redistribution without explicit authorization from the rights holder.

Here are some examples to illustrate how proprietary licenses work:

• Commercial Software: Imagine a small business purchasing a license to use a popular customer relationship management (CRM) software, such as Salesforce or HubSpot. The business pays a subscription fee or a one-time purchase price to access and utilize the software's features for managing its client interactions.

  This illustrates a proprietary license because the business does not own the software itself; it only has permission to use it according to the terms set by the software developer. The license agreement typically restricts the business from copying the software, modifying its source code, or reselling it to other companies. The software developer retains all intellectual property rights and dictates the conditions under which their product can be used.

• Digital Content Streaming: Consider an individual subscribing to a video streaming service like Netflix or Disney+. The subscription allows them to watch a vast library of movies and TV shows on various devices.

  This is an example of a proprietary license because the subscriber is granted access to stream the content for personal viewing, but they do not own the films or series. The license prohibits them from downloading the content permanently, making copies, distributing it to others, or using it for public performances. The production studios and content creators retain their intellectual property rights, and the streaming service provides access under its own proprietary licensing terms.

• Patented Technology in Manufacturing: A smartphone manufacturer might license a specific patented camera technology from a specialized optics company to integrate into its new phone models. The manufacturer pays a royalty or a licensing fee for each phone sold that incorporates this technology.

  This demonstrates a proprietary license because the smartphone manufacturer gains the right to use the innovative camera technology in its products for a defined period and within agreed-upon production volumes. However, the manufacturer does not own the patent for the camera technology itself, nor can it sublicense that technology to other phone makers without the original optics company's explicit permission. The optics company retains full ownership of its patented invention, controlling its application through the proprietary license agreement.