On Premise Software License Agreement Template for the Philippines
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What is a On Premise Software License Agreement?
This On Premise Software License Agreement is designed for use in the Philippine market where software providers need to license their software products for installation and use on customers' local infrastructure. The document is essential when software companies want to maintain ownership of their intellectual property while granting specific usage rights to customers. It incorporates requirements from Philippine legislation, including the Intellectual Property Code, Data Privacy Act, and E-commerce Act, making it suitable for both domestic and international software providers operating in the Philippines. The agreement covers critical aspects such as license scope, installation requirements, maintenance services, warranties, and compliance obligations, while addressing specific local legal requirements and business practices.
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About the On Premise Software License Agreement
An On Premise Software License Agreement is a legal contract that allows software providers to grant specific usage rights to customers while maintaining ownership of their intellectual property. This agreement is particularly important when you're licensing software that will be installed and operated on the customer's own servers and infrastructure, rather than through cloud-based delivery.
When do you need this document?
You need this agreement when your software company is licensing proprietary software to enterprise customers for installation on their premises. This includes situations where you're providing business management software, database systems, manufacturing control software, or specialized industry applications. The agreement is essential when customers require local installation for security, compliance, or performance reasons. You'll also need this document when licensing software to government agencies, financial institutions, or healthcare organizations that mandate on-premise deployment. Additionally, this agreement is necessary when your software integrates with existing customer systems or when you're providing customized software solutions that require local installation and configuration.
Key legal considerations
The license grant section must clearly define the scope of permitted uses, number of authorized users, and any restrictions on modification or reverse engineering. Intellectual property clauses should explicitly state that you retain all ownership rights while granting only specific usage rights. Include comprehensive warranty provisions covering software performance, compatibility, and defect resolution timelines. Address liability limitations and indemnification clauses to protect against potential damages or third-party claims. Data handling provisions must specify responsibilities for personal data protection, especially when the software processes customer or end-user information. Termination clauses should outline conditions for license revocation and requirements for software removal or destruction. Consider including audit rights to verify compliance with license terms and usage restrictions.
Legal requirements in Philippines
Under the Intellectual Property Code of the Philippines (Republic Act No. 8293), software licenses must clearly establish copyright ownership and define permitted uses to prevent infringement claims. The Data Privacy Act of 2012 (Republic Act No. 10173) requires specific provisions for personal data processing, including consent requirements and data subject rights when the software handles personal information. The Electronic Commerce Act of 2000 (Republic Act No. 8792) governs electronic delivery and acceptance of license agreements, ensuring legal validity of digital transactions. Consumer protection under Republic Act No. 7394 mandates clear warranty terms and quality guarantees for software products. The Civil Code provisions on contracts require mutual consent, lawful object, and consideration for valid agreements. Local business registration and tax obligations may apply depending on the software provider's Philippine presence. Include governing law clauses specifying Philippine jurisdiction and dispute resolution mechanisms compliant with local court procedures.
GOVERNING LAW
Applicable law
This On Premise Software License Agreement is drafted to comply with Philippines law. Key legislation includes:
Data Privacy Act of 2012 (Republic Act No. 10173): Regulates the collection, processing, and storage of personal data. Relevant for any user data handling aspects of the software.
Consumer Act of the Philippines (Republic Act No. 7394): Protects consumer rights and interests, including warranties and quality guarantees for products and services.
Electronic Commerce Act of 2000 (Republic Act No. 8792): Governs electronic transactions and provides legal recognition of electronic documents. Important for license delivery and acceptance.
Civil Code of the Philippines (Republic Act No. 386): Provides general principles of contract law, obligations, and remedies applicable to license agreements.
National Internal Revenue Code: Relevant for tax implications of software licensing, including VAT and other applicable taxes.
Rules on Electronic Evidence (A.M. No. 01-7-01-SC): Guidelines for admissibility of electronic documents and signatures, important for agreement enforcement.
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