Our response: SmartInspect license WTF

We were surprised to see a rather negative posting on Joe White’s blog about the SmartInspect license agreement. We were especially surprised about his posting because we believe that our license is actually one of the more reasonable agreements out there.

We value Joe’s feedback and want to clarify some of his points (we also tried to post a clarification as a comment on his blog, but Joe hasn’t yet approved the comment, that’s why we are also posting it here). Joe highlights the following paragraph of our license agreement:

“6.1 When using the licensed programs, in order to avoid damage that may be caused to other programs or stored data being used simultaneously, the Customers shall in good time before using/utilising the licensed programs back up the programs and data involved, and not use programs of this kind in actual operation before he has verified the flawless quality of these programs by a test routine.”

Joe wrote that this paragraph, which is designed to ensure that customers backup critical data and test program interoperability before deploying our products, suggests that our software is not well tested and that our liability limitations are over the top. The contrary is actually the case; please read on.

If you carefully read typical license agreements, be it from Microsoft, Intel or most other software companies, you will find paragraphs such as the following (which is quoted from an Intel license agreement for some of their dev tools):

“LIMITATION OF LIABILITY: THE ABOVE REPLACEMENT PROVISION IS THE ONLY WARRANTY OF ANY KIND. INTEL OFFERS NO OTHER WARRANTY EITHER EXPRESS OR IMPLIED INCLUDING THOSE OF MERCHANTABILITY, NONINFRINGEMENT OF THIRD- PARTY INTELLECTUAL PROPERTY OR FITNESS FOR A PARTICULAR PURPOSE. NEITHER INTEL NOR ITS SUPPLIERS SHALL BE LIABLE FOR ANY DAMAGES WHATSOEVER (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION, OR OTHER LOSS) ARISING OUT OF THE USE OF OR INABILITY TO USE THE SOFTWARE, EVEN IF INTEL HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. BECAUSE SOME JURISDICTIONS PROHIBIT THE EXCLUSION OR LIMITATION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES, THE ABOVE LIMITATION MAY NOT APPLY TO YOU.”

This paragraph basically states that the vendor isn’t liable for ANY kind of damage whatsoever. Our license doesn’t contain such limitations, as limiting the liability to this degree is not possible in Germany (and probably shouldn’t be, I might add). That’s why our license actually contains LESS RESTRICTIVE limitations. In the quoted paragraph, we merely ask our customers to test SmartInspect in combination with their software before deployment (which we believe is pretty standard anyway). This does of course not mean that we are not testing the software ourselves (in fact, we use more than 5000 unit tests to ensure the quality of the SmartInspect libraries, have a test plan for the Console consisting of more than 100 pages which we execute regularly, offer beta releases for new major versions and take great care in general to make SmartInspect as robust and reliable as possible).

I’m not a lawyer, but formulating international license agreements and contracts is probably a lot harder than one would think. We really tried to come up with a license agreement that’s not too restrictive and is hopefully fair for both parties. For example, we explicitly state in the license agreement that our software can be installed on up to 3 machines per licensed user, a phrase that should probably be included in all dev tools EULAs, but is sadly missing from most.

One could probably argue that software licenses in general try to limit the liability of vendors too much, and this is definitely an important topic. However, I believe that our license is actually one of the better licenses in this regard. Again, we value Joe’s feedback and we are sorry to hear that our license sent a wrong signal, but I hope we could clarify some of Joe’s concerns. I also hope that our transparency on this issue is valued, too, as I’m not sure if any of our competitors would link to a negative product comment and even promote it on their community website.

We would love to read your comments on this topic!