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socrateaser, Attorney
Category: Business Law
Satisfied Customers: 39172
Experience:  Retired (mostly)
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Do I need to include any clauses regarding export laws in software

Customer Question

Do I need to include any clauses regarding export laws in software license agreements?
Submitted: 6 years ago.
Category: Business Law
Expert:  socrateaser replied 6 years ago.

As someone with considerable expience in protecting intellectual property rights, I believe that limitations on expert is an imperative in a software license. Some technology, especially related to encryption, if exported from the USA, will violate federal law, and can result in huge penalties (in some cases, criminal penalties) -- if the software has some potential for being used by a hostile nation against the USA's sovereign interests.

Also, many jurisdictions pay "lip service" to haveing any meaningful intellectual property protection (e.g., China). Exporting software to such jurisdictions is practically a guarantee of having your intellectual property rights pirated/infringed, without any recourse.

So, you may want to hold the licensee joitnly and severally liable for any export of your software, without your express written consent.

Hope this helps.

Customer: replied 6 years ago.
Thank you -- this is very interesting... are the export laws I see (and I have seen several examples lately) used for every kind of agreement -- sales, license, employment agreement? Do I need an export license for sending quotes and correspondence overseas (via email)?
Expert:  socrateaser replied 6 years ago.
The export laws are generally used to prohibit techology from being used for military or political purposes by hostile foreign powers. The law can apply to employees who travel to sensitive locals (e.g., if you send an employee who is a nuclear physicist to Iran, you are in seriously hot water -- same thing if your employee-physicist sends an email explaining how to improve the process of enriching plutonium to an Iranian engineer).

If you are really getting ready to do something that could be exploited by a hostile nation, then you will need the assistance of an export compliance expert -- either as an employee, or a consulting firm.

Here is a link to the U.S. Export Administration regulations. It's very complicated -- and, while most businesses don't fall within the scope, if your software contains encryption elements that go beyond http, SSL, into some area where not even the federal government could break your cyphers with a supercomputer, then you could have a big problem, unless you're very careful about who gets hold of your technology.

Hope this helps.