A license can be granted without any written agreement. It
happens more often than you might think. For example, a license by
verbal agreement and a "course of conduct" was granted by
one party in the case of
Planification-Organisation-Publications Systèmes (POPS)
Ltée and Elizabeth Posada v. 9054-8181 Québec
Inc., 2013 FC 427. In that case, the lack of a written
agreement was irrelevant. The court found that there was
an "implied" license. The next question was whether
that license could be revoked or terminated? The software
owner asserted it was entitled to revoke the licence that
it had previously granted, because that licence had been granted
for no consideration (or "à titre gracieux" -
sounds better in French).
The court disagreed. It's true that a license granted for no
value or no consideration can be revoked unilaterally. The B.C.
Court of Appeal came to this conclusion in Katz (c.o.b. Michael
Katz Associates) v. Cytrynbaum,  B.C.J. No. 2421 (C.A.),
where an architect revoked consent to the transfer of copyright
where it was given without any consideration. However, in the
Planification decision, the court found significant value
had been transferred over many years by the licensee, though it was
never documented in writing as "consideration" for
the grant of a license. This came in the form of
"conceptual contributions" to the software, software
testing, compensation for developers, contributions of macros
and other inputs for the software.
The lessons for business?
Be aware that a software license can be granted verbally or
through a course of dealing between the licensor and licensee. This
results in an "implied" software license.
Terminating or revoking such a license may be possible if the
grant is gratuitous and there is a complete absence of any value
flowing back to the licensor. However, consideration can also
be implied. In this case, it was pieced together from various
sources to make up valid consideration for the grant of the
Any "free" licenses - including licenses between
joint-venture partners, or licenses for beta or pre-release
versions of software - should be handled carefully to avoid these
Calgary -07:00 MDT
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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