Software Licensing

[NightHorn]

Company B buys Company A.

Company A will continue day-to-day operations under Company B's leadership and company name.

Is there anything that could be an issue regarding software that is licensed to Company A?

I have read some EULA's of the major software licenses and it would appear to me that all the licensing would just transfer over to the property of Company B.

 

[B]

It depends on what the license says regarding assignment and whether (or under what circumstances) a change of control is considered an assignment.

Did Company B buy Company A's assets, buy Company A's stock, or merge Company into Company B or a wholly-owned subsidiary of Company B?

Edit: If software was an important asset, I would expect Company B's lawyers to have performed adequate due diligence on assignability and either structured the acquisition properly or required Company A to obtain the licensor's consent to assignment as a condition to close the deal.

 

[NightHorn]

Yes to the assets, no stock to be bought.

Company A merges into Company B.

 

[AkakHorn]

NightHorn,

With rare exception, all software purchased by company A for the purposes of conducting business, used as an enabling technology, etc. would transfer to company B upon acquisition. those software companies with exceptions will VERY clearly specify that licenses are not transferrable upon acquisition, and those are generally only licenses subject to annual renewals.

 

[NightHorn]

Thanks for the responses so far. They are confirming what I was thinking.

 

[B]

If B purchased A's assets, there would have to an explicit assignment of the license from A to B, which may or may not require the licensor's consent. If A merged into B or B's subsidiary, generally no assignment is necessary but the license may have specific language regarding this situation.

 

[NightHorn]

Thanks B and Akakhorn.

 

[bigbevo76]

Depends on the line of SW, I an in that business and if you let me know why type it is I will tell you what you need to do.

 

[AkakHorn]

Nighthorn,

Don't know why I didn't do this sooner, but here's the standard assignment language I use in the contract for my company. Hope it helps - feel free to email me if you have further questions.

In reply to:

---

---