Understanding Your Subscription/Licensing Contract 

With the growing complexity of pharmaceutical software projects and the increasing popularity of Software as a Service (SaaS) solutions, subscription/licensing contracts have become commonplace. This agreement between the software product developer and the user is intended to prevent abuse and theft of the proprietary software. When well designed, it should protect the interests of the developer without hindering the customer’s ability to use the product as designed.  

A subscription/licensing contract is typically used in conjunction with a Master Service Agreement (MSA), which will contain many of the overarching terms of the relationship. For that reason, this contract will focus on terms and conditions specific to the use of the software product in question. Some of the things you should expect to see defined in the subscription/licensing contract include: 

• User party identification 

• Software pricing model 

• Access terms  

• Update/upgrade services 

• Guaranteed system availability  

• Service/support availability 

• Issue reporting and resolution process 

• Compensation for failure to meet service level agreements 

• Non-transferability clause 

• Warranty limitations 

• Breach of contract provisions 

• Cancellation policy 

When these terms are clearly defined in the contract, the customer will understand how to successfully use the product and get the support they need, while the product developer can feel confident that their software is protected from abuse. In this way, a good subscription/licensing contract supports a strong and healthy collaboration between the software vendor and their users.