Proprietary software licence: what Dutch law allows and requires

With a proprietary software licence, the supplier keeps the copyright and the source code and gives you only a limited right to use the program, as set out in the licence agreement. Whatever that agreement says, Dutch and EU law give a lawful user a few rights that cannot be excluded, such as making a back-up copy and studying how the program works.

Because a computer program is protected by copyright, you have no right to use it without a licence. The licence therefore defines everything: who may use the program, on which systems, for how long and what happens when the relationship ends. For the mechanics of licensing in general, see our article on how software licensing works, and for the opposite model, our guide to the open source software licence.

What does a proprietary licence grant you?

A proprietary licence is a contract, not a sale. You receive a right of use that is usually non-exclusive, non-transferable and limited in scope, while the supplier keeps the intellectual property and supplies only the object code.

Everything not expressly granted stays with the supplier. That is why proprietary terms are in practice read narrowly. It also means that using the software outside the licence and using it without a licence are different problems. Exceeding an agreed number of users is a breach of contract, which leads to additional fees, damages or termination. Using the program with no licence at all, or continuing after termination, is copyright infringement. That opens the door to injunctions, surrender of profits and, in serious and deliberate cases, criminal liability.

The licence rarely stands alone: maintenance terms, an SLA, cloud terms and a GDPR data processing agreement often attach to it and contradict each other, so establish before signing which document prevails.

What is the legal basis in Dutch and EU law?

Computer programs are protected as literary works under the Dutch Copyright Act (Auteurswet). The specific rules come from the Software Directive 2009/24/EC, implemented in Articles 45h to 45n of the Act.

Protection arises automatically when the program is created; there is no registration. The rightsholder has the exclusive right to reproduce the program, to adapt or translate it and to distribute copies. Loading, running and displaying a program count as reproduction in the copyright sense. That is why you need a licence for something as ordinary as installing it.

Who owns the copyright is a separate question from who paid. If an employee writes a program as part of their duties, the employer is regarded as the author under Article 7 Auteurswet. If a contractor or agency writes it, the rights stay with the developer unless transferred by a written deed; paying the invoice does not transfer copyright.

Which rights do you keep whatever the licence says?

EU software law gives the lawful user four rights that a licence cannot, or cannot fully, take away. Many proprietary licences still try to exclude them.

The first is normal use. A lawful acquirer may reproduce and adapt the program as far as necessary to use it for its intended purpose, including correcting errors, unless the contract validly provides otherwise on that last point. The second is the back-up copy. A person entitled to use the program may make a back-up copy where that is necessary for the use, and a clause that forbids it altogether is void.

The third is observing and testing. Someone entitled to use the program may observe, study and test how it works, to find the underlying ideas and principles, while carrying out acts they are entitled to perform. This right cannot be excluded by contract, and it is the legal basis for building interoperable products.

The fourth is decompilation for interoperability. Reverse engineering is allowed where it is indispensable to obtain the information needed to make an independently created program work with the licensed one, the information is not otherwise readily available, and the decompilation is limited to the necessary parts. The information may not be used for other purposes or given to third parties. In Top System (case C-13/20, 6 October 2021), the Court of Justice of the EU added that a lawful acquirer may also decompile the program to correct errors that affect its operation.

Is a click-through licence binding in the Netherlands?

In principle, yes. A Dutch court will usually treat an end-user licence agreement (EULA) as general terms and conditions, which bind you if you had a reasonable opportunity to read them before or when the contract was concluded.

Under Article 6:233(b) of the Dutch Civil Code (Burgerlijk Wetboek, BW), general terms can be annulled if the user was not given a reasonable opportunity to take note of them. Article 6:234 BW sets out how that opportunity must be offered. Online, terms that are made available before the contract is concluded, in a way that allows you to store and reproduce them, generally meet that requirement. A link hidden in a footer that you only see after installation does not.

Consumers benefit from the statutory lists of unreasonably onerous terms in Articles 6:236 and 6:237 BW, and clauses that remove statutory rights or impose long notice periods are vulnerable. Those lists do not apply to businesses. Larger business customers, with 50 or more employees or published annual accounts, cannot even invoke the general annulment grounds of Article 6:233 BW (Article 6:235 BW). In a business setting, negotiated amendments are therefore worth more than the hope that a court will strike a clause down.

Shrink-wrap terms inside a package, visible only after purchase, are the weakest form: if you could not read them before the contract was concluded, Article 6:233(b) BW gives you a strong argument. Our article on the licence agreement looks at how these agreements are structured.

Since 1 January 2022, Dutch law also contains specific rules for the supply of digital content and digital services to consumers, implementing Directive (EU) 2019/770. The software must conform to the contract, and the supplier must provide updates for the period a consumer may reasonably expect. The rules apply whether the consumer pays with money or with personal data.

Which licence models are there, and where are the risks?

Proprietary licences come in a few basic models. The legal risk usually sits in the licence metric, not in the name of the model.

A perpetual licence gives an indefinite right to use a particular version, usually on defined hardware, with support and upgrades sold separately. The risk is version drift. The right to use version six does not include version seven, and a supplier that ends support for your version leaves you legally compliant but practically stranded.

A subscription or software-as-a-service (SaaS) model gives access as long as you pay. Access ends when payment stops, which makes the termination and data return clauses more important than the price. For consumers, Dutch law limits automatic renewal: after the initial term, a renewed subscription must be terminable at any time with a notice period of no more than one month. Business customers have no such protection and are bound by what they signed.

Seat-based and device-based licences count named users, concurrent users, devices or processors. Most audit disputes start here, because the metric in the contract and the actual deployment have drifted apart. Typical examples are test environments, disaster recovery copies, virtual machines, contractors and former employees whose accounts were never removed.

Tiered and freemium models sell the same program at different functional levels; terms an administrator clicks through during an upgrade bind the company as firmly as a signed agreement.

Which clauses should you negotiate before signing?

Focus on scope of use, transfer and change of control, audits, liability, and support and exit. These clauses decide what the licence is worth in practice.

Scope of use comes first. A licence for internal business use does not cover a customer-facing portal, and a licence granted to one legal entity does not automatically survive a reorganisation.

Transfer and change of control come next. A ban on transfer can block a group restructuring or an acquisition. A change of control clause can allow the supplier to terminate or reprice at exactly the moment you have the least leverage. Negotiate a right to assign the licence within the group from the start.

For audits, a reasonable clause limits them to once a year, excludes competitors as auditors and provides that the supplier pays unless a material shortfall is found.

Liability and warranties are usually presented as non-negotiable, but often are negotiable. As-is disclaimers and caps at twelve months of fees are common. Under Dutch law, however, a supplier cannot rely on an exclusion if the loss was caused by its intent or deliberate recklessness (bewuste roekeloosheid). A cap that leaves no meaningful remedy for a critical system also invites the argument that relying on it is unacceptable under Article 6:248(2) BW. Where the software is business-critical, link liability to the consequences that matter rather than to the licence fee.

Updates, end of support and exit complete the list. Fix how long the supplier will support your version, what notice applies to discontinuation, and what happens to your data and operations when the contract ends. A software escrow arrangement is the classic answer for on-premise systems. For cloud services, the answer is a documented exit plan with data export formats; our article on the cloud contract explains what that requires.

Can you resell a software licence?

Sometimes. If you bought a downloaded copy for an indefinite period against a one-off fee within the EU, you may resell it, even if the licence prohibits transfer, provided you stop using your own copy.

In UsedSoft (case C-128/11, 3 July 2012), the Court of Justice of the EU held that the distribution right in such a copy is exhausted. The first acquirer may then resell it, as long as the original copy is made unusable at the time of transfer. A contractual ban on transfer cannot block that resale.

The limits are just as important. Exhaustion applies to a copy licensed for an unlimited period, not to a subscription or a service. It does not allow you to split a volume licence into separate seats. It requires the seller to stop using the copy, which must be demonstrable.

How do you handle a software audit?

Read the audit clause before you respond and treat the audit report as a claim to be tested, not an invoice to be paid. The contract, not the auditor’s template, defines what you owe.

Most proprietary agreements allow the supplier to verify use. An audit usually starts with a letter, followed by a request for deployment data or a self-assessment questionnaire, and ends with a report that compares entitlements with installations. Where a shortfall is found, the supplier will claim additional licence fees, often at list price and backdated, plus maintenance and sometimes the audit costs (a true-up).

Three things reduce the exposure: keep your licence position documented centrally (contracts, order forms, keys, deployments), check the scope of the audit clause before you hand over data, and test the auditor’s metrics, which are often applied to virtualised or standby systems the contract does not clearly cover.

A supplier may present over-use as copyright infringement rather than breach of contract, because the remedies are stronger; whether that is correct depends on whether the use fell outside the licence or merely breached a term within it. Our overview of intellectual property enforcement in the Netherlands sets out the remedies.

How do you avoid lock-in and keep the right to leave?

The main strategic risk of proprietary software is dependency, not the fee. For cloud services, the EU Data Act now gives you a right to switch; for on-premise software, you must arrange your exit in the contract.

The Data Act (Regulation (EU) 2023/2854) has applied since 12 September 2025. It obliges providers of data processing services, such as cloud and SaaS providers, to remove contractual and technical obstacles to switching to another provider or to your own systems, and switching charges may no longer be charged from 12 January 2027. The Data Act does not cover on-premise licences: there, protection must come from escrow, documented interfaces, data export and a transition period in the contract.

What should you check as a customer?

As licensee you are bound by what you sign, especially as a business customer under Article 6:235 BW. Check at least:

• Who may use the software: group companies, contractors, outsourcing partners, and for which purposes.
• Whether the licence metric (named users, devices, processors) matches your actual deployment, including test and disaster recovery environments.
• The audit clause: notice period, frequency, who pays and who may act as auditor.
• Whether you may assign the licence within the group and what a change of control clause allows the supplier to do.
• Support period for your version, escrow or a documented exit plan with data export formats.

What should you check as a supplier?

As licensor you rely on copyright under Articles 45h to 45n Auteurswet, but only as far as your terms are validly agreed. Check at least:

• That you actually own the copyright, with a written deed of transfer from every external developer.
• That your EULA is made available before the contract is concluded, in a form the customer can store (Articles 6:233 and 6:234 BW).
• That your terms do not exclude the back-up copy, observing and testing, or decompilation for interoperability.
• For consumers: conformity and update duties for digital content since 1 January 2022, and renewal terminable with one month’s notice.
• For cloud services: the switching duties of the Data Act and the end of switching charges on 12 January 2027.

What can we do for you with a software licence?

Our intellectual property lawyers and IT lawyers advise suppliers and customers. In practice we:

• Review the licence, SLA, cloud terms and data processing agreement and the order of precedence between them.
• Negotiate scope of use, group transfer, audit, liability and exit clauses before you sign.
• Check whether you own the software you paid for and draft the deed of transfer if you do not.
• Respond to an audit notice and test the auditor’s metrics against the contract.
• Answer a cease-and-desist letter and assess whether the claim is breach of contract or copyright infringement.
• Set up escrow or a Data Act-compliant exit plan.

The statutory texts can be found in the Software Directive 2009/24/EC.

Summary

• A proprietary licence is a limited right of use; the supplier keeps the copyright and the source code.
• Paying for development does not make you the owner: a contractor’s copyright passes only by a written deed.
• You keep certain rights whatever the licence says, including a back-up copy, observing and testing, and decompiling for interoperability.
• A downloaded perpetual licence can be resold within the EU (UsedSoft), but a subscription cannot.
• For cloud services the Data Act gives a right to switch; for on-premise software, secure your exit in the contract.

Frequently asked questions