Question 1

Which of the following is true?&#10;A) A patent is a kind of copyright.&#10;B) Copyright protects the &#34;invention&#34; of an inventor.&#10;C) Patent protection applies to inventions.&#10;D) Patent applies to original works.

Accepted Answer

Copyright and patent are two different concepts. Copyright applies to the authors of original works. Patent protects the invention of an inventor.

Question 2

When commercial software is distributed, typically:&#10;A) the source code is withheld.&#10;B) the right of ownership to the source code transfers to the buyer.&#10;C) object code, executables, and source code are bundled and shipped together.&#10;D) the software becomes &#34;open source.&#34;

Accepted Answer

Generally, commercial software companies release and distribute the executable or object code for their software but hold back the actual source code as a trade secret.

Question 3

Using SaaS:&#10;A) software is sold directly to consumers and becomes their property.&#10;B) software is sold to consumers, who then have a license to use it.&#10;C) software applications are held by a vendor and made available to customers over a network.&#10;D) software resides on no media.

Accepted Answer

SaaS stands for "Software as a Service" and is a system in which the vendor holds the application and makes it available to customers over a network, usually the internet.

Question 4

When negotiating an agreement between a vendor and the HCO, which entity should write the second draft of the agreement? Which should write the third?&#10;A) Vendor; vendor&#10;B) HCO; HCO&#10;C) HCO; vendor&#10;D) Vendor; HCO

Accepted Answer

The vendor agreement's first draft is generally created by the vendor. By having the vendor also create the second draft, the HCO allows the agreement to move closer to the HCO's positions and desires before the HCO starts putting its own language in. Generally the HCO should write the third draft, as draft-writing is a mutual process with shared control.

Question 5

In a license agreement, the questions of who the users are, whether software can be distributed, and the number of copies that can be run all fall under the category of:&#10;A) scope.&#10;B) definition of terms.&#10;C) specifications.&#10;D) service level agreements.

Accepted Answer

Scope is a wide umbrella term in license agreements. It can be subdivided into "Who are the users?" "rights," "restrictions and license metrics" (in other words, whether or not the software can be distributed), "number of copies," and "environments and instances."

Question 6

In a software license, a &#34;response&#34; to a user problem:&#10;A) is another word for a &#34;solution.&#34;&#10;B) may, completely legally, never be forthcoming.&#10;C) is typically guaranteed to be 24 hours or sooner.&#10;D) is independent of problem severity.

Accepted Answer

An HCO should be extremely careful about the wording of the license with regard to vendor response to a user problem. "Response" does not mean "solution"-it means simply response. The time allowed for a response can vary widely. And the nature of the response can vary depending on the problem's severity. If the HCO is not diligent, it is fully possible for a license to be written so that a vendor does not legally need to respond to a number of problems that arise.

Question 7

A fee of 18% of the license fee per year for vendor maintenance and support would be considered:&#10;A) high.&#10;B) quite typical.&#10;C) barely acceptable.&#10;D) low.

Accepted Answer

The annual fee for maintenance and support by a vendor is most usually 15 to 22%, with a wider range of 12 to 24% being fairly typical.

Question 8

On the vendor's side, which of the following revenue recognition issues may drive or affect key provisions of the agreement? (Select all that apply.)&#10;A) Insufficient user uptake upon implementation&#10;B) Conditions on payment&#10;C) Delivery of software not existing at the time the agreement is signed&#10;D) Payment milestones&#10;E) Possible refunds

Accepted Answer

User uptake does not generally affect the vendor's pay-it is more an issue on the HCO's side with ensuring that its users actually make proper use of the software being purchased.

Question 9

Which kinds of code can a computer read? (Select all that apply.)&#10;A) Source code&#10;B) Executable code&#10;C) High-level code&#10;D) C++&#10;E) Interpretive code

Accepted Answer

Executable and interpretive code are two examples of code that has been turned into usable form by a computer. Source code (sometimes called high-level code) is written in a human-readable terminology that has to be translated into a form a computer can read. C++ is such high-level code.

Question 10

From a legal perspective, which of the following serve as contractually binding statements made by a vendor? (Select all that apply.)&#10;A) RFP material incorporated into the license agreement&#10;B) Statements by salespersons&#10;C) Marketing materials&#10;D) The license agreement&#10;E) A written memorandum of understanding that precedes the license agreement

Accepted Answer

Thanks to the "Entire Agreement" clause that vendors and their attorneys will insist on including in the agreement, only material that is explicitly written into the agreement will be legally binding. The HCO should not consider any statement, verbal or written, that doesn't appear explicitly in the license agreement as legally binding.

Deck 18: Contract Negotiations and Software Licensing