Non-commercial software licence in business: the legal risks

Using software with a non-commercial licence in your business is copyright infringement, not just a breach of contract. The rights holder can then demand that you stop using it, claim damages or your profits, and recover its actual legal costs under Article 1019h of the Dutch Code of Civil Procedure (Rv); in serious cases a director can be held personally liable as well.

The only way out is permission: a commercial licence, or proof that your use fell within the free scope. This page explains what a non-commercial licence allows, what a rights holder can claim and how to keep your software use in order.

What does a non-commercial licence allow?

Use that is not primarily aimed at commercial advantage or payment. Creative Commons uses this definition for its NC licences; vendors use labels such as Personal Edition, Community Edition or Home Use.

The common misunderstanding is that “commercial” means reselling the software. It does not. Using a free PDF editor to draft client contracts, a free design tool for a quotation or a free image on your website all support a business activity. The number of users and the size of the company are irrelevant: a sole trader with one copy is in the same position as a company with a hundred.

Non-commercial software is also not open source. The Open Source Definition of the Open Source Initiative does not allow restrictions on fields of use, so licences such as MIT, Apache or the GNU GPL permit commercial use. Software with an NC restriction is proprietary software with a condition.

Why is this copyright infringement?

Computer programs are protected under the Dutch Copyright Act (Auteurswet, Aw). Reproduction includes loading, displaying, running, transmitting and storing a program where that requires copying it (Article 45i Aw).

A lawful acquirer may make the copies needed for the intended use, unless agreed otherwise (Article 45j Aw). A licence restricted to non-commercial use defines the scope of that permission. Use outside it is use without permission, so each installation running in your business is an act of copyright infringement. That opens the full range of intellectual property remedies.

How is the scope of a licence interpreted?

Under the Haviltex standard of the Dutch Supreme Court (ECLI:NL:HR:1981:AG4158), the meaning of a contract depends on what the parties could reasonably understand and expect from each other in the circumstances. For a standard licence text that was simply accepted, the ordinary meaning of the words carries considerable weight.

That works against the business user. “Not for commercial use” will be read as meaning exactly that. If the vendor also sells a paid commercial edition, that is strong evidence of where the line was meant to be.

What can the rights holder claim?

• An injunction. An order to stop using the software, usually backed by a penalty payment (dwangsom) per day or per breach. If the software runs a production process, this can hurt more than the money claim.
• Damages. Usually based on the licence fees you should have paid, for the period and number of installations; the court may set a lump sum (Article 27 Aw).
• Surrender of profits. As an alternative or in addition, the profits made through the infringement, with an obligation to account for them (Article 27a Aw).
• Legal costs. The reasonable and proportionate costs actually incurred, not the low fixed scale of ordinary civil cases (Article 1019h Rv). In a defended case this often exceeds the licence fees in dispute.
• Intermediaries. An order against a hosting provider or platform whose services are used for the infringement (Article 26d Aw).

Can the rights holder act without warning?

Yes. In urgent cases the preliminary relief judge can issue an immediate order against the alleged infringer without hearing it first (ex parte, Article 1019e Rv). A bailiff serves it and it takes effect at once.

The rights holder can also get permission to seize evidence (bewijsbeslag, Article 1019b Rv). A bailiff, often with an IT expert, copies hard drives, server logs and records; a custodian keeps them, and access requires a separate court decision. If you receive a claim letter, do not start uninstalling: removing software after a complaint can look like destroying evidence. Secure the facts and get advice first.

When are directors personally liable?

Directors of a private limited company (BV) are in principle not liable for its infringements, unless they can be seriously blamed personally (ernstig persoonlijk verwijt). That threshold is generally met if the director knew of the infringement and continued or failed to stop it.

The District Court of The Hague held two indirect directors jointly liable with their company for trademark infringement with counterfeit accessories: they carried out the purchases and sales themselves, knew of the rights holder’s warnings since 2016 and took no adequate measures (ECLI:NL:RBDHA:2023:18697). The same reasoning applies to software: a director who is told the licences do not cover business use and carries on takes a personal risk. In a bankruptcy, directors can also be liable for the deficit if they clearly mismanaged the company and that was an important cause of the bankruptcy (Article 2:248 BW). See our article on directors’ liability.

Does it help that you did not know?

Rarely. Infringement does not require intent or fault; fault matters mainly for damages. A business is expected to know the terms of the tools it uses.

The picture changes only if the rights holder caused the misunderstanding, for example by presenting the software as free for any use, or tolerated known business use for a long time. The court can reduce damages if full compensation would lead to clearly unacceptable results (Article 6:109 BW), but uses that power with restraint.

What should you check as a business using software?

• Is every installation routed through one person who reads the licence first?
• Does any tool on your systems carry a Personal, Community, Home or NC licence?
• Does your list of installed software match the licences you actually bought?
• Are licence terms filed with the purchase records, so you can prove the scope years later?
• Have staff been told that “free for personal use” means “paid for business use”?
• Has a non-commercial tool become embedded in a process? Then buy the commercial licence now.

What should you check as a software rights holder?

• Does your licence define “non-commercial” clearly, and does it name the paid edition?
• Can you show how and when the user accepted the licence?
• Do you have evidence of the business use, or do you need a seizure of evidence under Article 1019b Rv?
• Have you calculated your claim on the basis of the licence fees missed?
• Have you warned the company’s directors in writing, which matters for their personal liability?

What can we do for you with software licences?

Our IT and intellectual property lawyers act for software users and rights holders.

• We assess whether your use falls within a licence and what a claim against you is realistically worth.
• We respond to claim letters and audit requests, and negotiate a settlement or a commercial licence.
• We set up a software compliance procedure for your organisation.
• We conduct proceedings on injunctions, evidence seizures and claims under Article 1019h Rv.
• For rights holders: we draft licence terms and enforce them, including ex parte measures.

Summary

• Business use of software under a non-commercial licence is copyright infringement, not merely a breach of contract.
• “Commercial” covers any use that supports a business activity, not only resale.
• The rights holder can claim an injunction, damages or profits, and its actual legal costs (Articles 27 and 27a Aw, Article 1019h Rv).
• Ex parte orders and evidence seizure are possible without warning (Articles 1019e and 1019b Rv).
• Directors who knowingly let the infringement continue risk personal liability.

Frequently asked questions