[Info-vax] VSI Subscription Licensing Response Letter

[Arne Vajhøj]

On 5/26/2021 2:03 PM, Simon Clubley wrote:
> On 2021-05-26, Arne Vajhøj <arne at vajhoej.dk> wrote:
>> On 5/26/2021 8:24 AM, Simon Clubley wrote:
>>> On 2021-05-25, Arne Vajhøj <arne at vajhoej.dk> wrote:
>>>> On 5/1/2021 11:15 PM, Simon Clubley wrote:
>>>>> On 2021-04-30, Dave Froble <davef at tsoft-inc.com> wrote:
>>>>>> On 4/30/2021 2:36 PM, Arne Vajhøj wrote:
>>>>>>> On 4/30/2021 1:09 PM, Simon Clubley wrote:
>>>>>>>> Why would it become the customer's problem ? Have you seen something
>>>>>>>> the rest of us have missed so far ?
>>>>>>>
>>>>>>> Transfer of something of value away from creditors can
>>>>>>> be a legal problem. In bankruptcy cases what is called
>>>>>>> "fraudulent transfers" can be undone by court.
>>>>>>
>>>>>> If it is an agreement between vendor and customers, I don't see how it
>>>>>> could be a problem.  That would take something of value from the
>>>>>> customers, which they have paid for, and are entitled to.
>>>>>
>>>>> Indeed. That is _exactly_ the point of escrow agreements.
>>>>
>>>> But it is not the case here.
>>>>
>>>> A typical escrow agreement is that company A delivers software
>>>> X to company B and promise N years of support for a given amount.
>>>> The source code for X is put in escrow and B get access to it
>>>> if A are not able to deliver the promised support.
>>>>
>>>> What we are discussing here is a different scenario. Company A
>>>> delivers software X to company B and promise N years of support
>>>> for a given amount. Company A actually delivers as promised, but
>>>> after the N years they don't want to sell X again or A and B cannot
>>>> agree on the price for selling X again. And you want B to get
>>>> X for free forever in that case.
>>>>
>>>
>>> No Arne, that is not the case.
>>>
>>> I have made it very explicit that a condition for the permanent licences
>>> escrow triggering is that you had a valid support contract at the time
>>> that VSI either failed or was taken over by some company unable to provide
>>> proper support or which wanted to impose extreme price rises.
>>>
>>> That makes it _exactly_ the same as the normal source code escrow
>>> release you are talking about in your first example.
>>
>> No it does not.
>>
>> You paid for a license until time T.
>>
>> With a normal escrow agreement you will have rights up to time T
>> and zero rights after that.
> 
> It's time for you to do some reading Arne:
> 
> https://en.wikipedia.org/wiki/Source_code_escrow

Maybe you should read your own link.

It says:

<quote>
The software's source code is released to the licensee if the licensor 
files for bankruptcy or otherwise fails to maintain and update the 
software as promised in the software license agreement.
</quote>

When you pay VSI for a license for N years then, then there
is a license agreement for those N years.

There is no license agreement after those N years.

If VSI or whoever acquire VSI assets after those N years
do not want to sell a new license for M years, then they
are not violating any agreement. They delivered for N
years as promised.

> Or did you miss the bit above where I said that you would need to
> have a valid support contract with VSI at the time they went bust
> in order for the escrow to still be valid ?

That one has a support contract and a valid license before
the license expire does not give one any rights after
the license expire.

>> Getting a permanent license is not like that. Getting a
>> permanent license is getting something after time T. Something
>> that you have not paid for.
>>
> 
> Does time T represent the termination date of your support contract
> or when VSI goes bust ?

T is end of license paid for.

>>>> Very different.
>>>>
>>>> And given that if VSI goes under then the right to
>>>> issue new VMS licenses is likely the only real asset
>>>> that can be used to cover debt to creditors, then giving
>>>> away that asset for free to customers will raise
>>>> questions.
>>>
>>> It's not for free. It's part of the legally binding contract between
>>> the customer and VSI which was agreed before the customer would agree
>>> to hand over money to VSI.
>>>
>>> That makes it _exactly_ the same as the normal source code escrow
>>> release you are talking about in your first example.
>>
>> No.
>>
>> If the escrow agreement says that a third party would get
>> right to source code from VSI went under until your license
>> expired at time T, then it would be a normal escrow agreement.
> 
> Please read the link I have provided above about normal source code
> escrow agreements work.

It doesn't match what you are proposing.

VSI or whoever acquire VSI assets would have delivered as promised
on agreed contract - they just don't want to sign a new contract.

To do a car analogy.

You rent a car for X per year for N years.

If you do not get your car for those N years then you have a
valid case.

But if you after those N years go to the car company and said that
you want to rent a new car for another N Years and they say no,
then you do not have a case.

You are of course free to ask for the first rental contract to contain
a clause that says that if they after the N years are not willing to
rent you a car again then you can keep the first car forever for free.
But do not expect the car company to signoff on that.

Arne