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Principles of Licensing Electronic Resources

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1. Principles should be guided by ALA's [http://www.arl.org/scomm/licensing/principles.html]

2. A license should be negotiable.

3. The following points from the ALA principles should be emphasized:
   1. A license agreement should recognize and not restrict or abrogate the rights of the licensee or its user community permitted under copyright law. [#2] [and should refer to the specific section of the copyright law that covers fair use [US Code Section 107] and/or use the term "fair use" whenever possible.
   2. A license agreement should not hold the licensee liable for unauthorized users of the licensed resource by its users, so long as the licensee has implemented reasonable and appropriate methods to notify its user community of use restrictions. [#4]
   3. When permanent use of a resource has been licensed, a license agreement should allow the licensee to copy data for the purposes of preservation and/or the creation of a usable archival copy. [#10]
   4. A license agreement should require the licensor to defend, indemnify, and hold the licensee harmless from any action based on a claim that the use of the resource in accordance with the license infringes any patent, copyright, trade-mark, or trade secret of any third party.
   5. A license agreement should not require the licensee to adhere to unspecified terms in a separate document of any kind. All terms must be fully reiterated in the current license. [modified version of #14]

4. In addition, the following principles are important:
   1. A license agreement should NOT require the licensee to indemnify the licensor, particularly in cases of intellectual property infringement.
   2. A license agreement should have an exception to a cap on damages related to use of the product (usually at the level of the subscription fee) for cases involving intellectual property infringement.
   3. A license agreement should not include language that allows terms and conditions to change without warning and agreement by both parties. [similar to (or same as?) #11 of ALA]
   4. A license agreement should clearly define authorized users and authorized use.
   5. A license agreement should not commit the licensee to governing law outside the licensee's state, or outside of a mutually agreed-upon alternative (such as NY or CA).
   6. A license agreement should be countersigned.
   7. A license agreement should include the price of the product, or make reference to an attached schedule that includes the price of the product..
   8. A license agreement should not contain vague, undefined terms (such as "personal use" or "private LAN").

5. Some other principles to consider, of less importance but still significant:
   1. A license agreement should not impose unrealistic late payment fees
   2. A license agreement should not require termination for any but a serious (material) breach; see #8 of ALA for requirement that notice be given along with a reasonable cure period.
   3. A license agreement should not require that the defendant (licensee) give up the right to bring suit to his/her own state if plaintiff has presence in that state.
   4. A license agreement should not prohibit disclosure of its entire contents.
   5. A license agreement should not use the term "best efforts" with respect to the licensee's responsibilities, since this phrase assumes the availability of unlimited resources rather than a standard for behavior set by peer institutions [as is the case with "reasonable efforts"]