Proprietary software licences under Dutch law

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. A maintenance and support agreement, a service level agreement, cloud terms of service, a data processing agreement under the GDPR and, in resale chains, a reseller addendum all attach to the same relationship. They frequently contradict each other. Establish which document prevails before signing, because in a dispute the order of precedence clause often decides more than the substantive clauses.

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 for the development. If an employee writes a program as part of their duties, the employer is regarded as the author under Article 7 of the Copyright Act. If a contractor or agency writes it, the rights stay with the developer unless they are transferred by a written deed. Commissioning software and paying the invoice does not transfer copyright. This is the most common gap we find in the files of companies that believe they own their own systems.

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.

These rights do not make proprietary terms unenforceable. They do mean that a blanket ban on reverse engineering or copying goes further than the law allows. A supplier that relies on such a clause in a dispute is on weaker ground than the wording suggests.

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, you have a strong argument that you had no reasonable opportunity to take note of them. 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. Moving between tiers usually means accepting new terms. Terms accepted by an administrator clicking through an upgrade screen bind the company just 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. Establish who may use the software: only the contracting company, or also group companies, contractors and outsourcing partners. 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.

Audit rights deserve attention. Agree the notice period, the frequency, which data must be provided, confidentiality, whether an external auditor may enter your premises and who pays. A reasonable clause limits audits 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. In Tom Kabinet (case C-263/18, 19 December 2019), the Court declined to apply the same reasoning to e-books, treating their supply as a communication to the public rather than a distribution. That limits how far the software reasoning extends to other digital goods.

For a customer, the practical value lies in negotiation. Unused perpetual licences may still have a value, and a supplier’s refusal to permit any transfer is not necessarily the last word.

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. First, keep your licence position documented: contracts, order forms, keys, entitlement records and a current overview of deployments, held centrally rather than in the inbox of whoever bought the software. Second, check the scope of the audit clause before you hand over data. Third, test the auditor’s metrics. They are often applied to environments the contract does not clearly cover, such as virtualised or standby systems, and that is a legal question rather than a technical one.

Where a supplier alleges use beyond the licence, it may present the claim 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. That distinction is exactly what to argue about. Our article on software with a non-commercial licence used in a business shows how quickly this arises in practice, and 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.

Data in a proprietary format, processes built around one vendor’s workflow and integrations written for one vendor’s interfaces all raise the cost of leaving. A supplier that knows this prices accordingly at renewal.

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 enable customers to switch to another provider or to their own systems. Providers must remove contractual and technical obstacles to switching and provide the necessary information and assistance. Switching charges are being phased out and may no longer be charged from 12 January 2027. The Data Act does not apply to on-premise software licences. For those, protection still has to come from the contract: escrow, documented interfaces, data export in a usable format and a defined transition period after termination.

Choosing between proprietary and open source software is a business decision with legal consequences on both sides. Proprietary terms give you a single accountable supplier, contractual service levels and often an indemnity against third-party claims, at the price of control. Open source removes the fee and the lock-in, but brings licence compliance obligations of its own, and copyleft conditions can reach further into your own code than expected. Mixed environments are normal. What causes trouble is an environment nobody has mapped.

When should you involve a lawyer?

Get advice before signing if the software is business-critical, the contract crosses borders, the supplier processes personal data, or the licence metric does not match how you actually work. Get advice immediately when an audit notice or a cease-and-desist letter arrives, because the first response frames the rest of the dispute.

Our intellectual property lawyers and IT lawyers advise suppliers and customers on licence agreements, service level and maintenance agreements, cloud and escrow arrangements, audits and licence disputes. The statutory texts can be found in the Software Directive 2009/24/EC.

In 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.

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