Evan on Engineering Software

Y'all know that I was at COFES (The Congress on the Future of Engineering Software) last weekend.

It's a thought-dense environment.  Bill Barnes, of Lattice, told me that, at times, he wanted to get away from the sessions and meetings, because his head was full.  Maybe I'm paraphrasing a bit (Bill's got a big head... I mean a big brain... I mean... he's a smart guy... why do I get myself in trouble like this?  Just go visit Lattice's website.  It's cool stuff.)

I should probably avoid my natural tendancy to go off on tangents (Did you see the youtube video of a bunch of CAD industry people doing a singalone to American Pie at COFES?)

In any event, one advantage of having a mind that tends to bounce around a bit is that I occasionally make interesting connections.  Here's one:

There was quite a bit of talk at COFES about the reality of the economy.  There aren't many rose-colored glasses among people in the engineering software industry.

I had a chance to talk to Buzz Kross, who runs Autodesk's mechanical products division.  One of the things he mentioned is that he's very focused on keeping his reseller channel healthy.  Good thing, in my book.  I don't think there are too many CAD resellers who are well-positioned to weather the downturn.

When Buzz said this, I thought of  how resellers are going to have to deal with customers that reduce their purchases, and worse: those who go bankrupt.

This thought made me remember something I'd read awhile back... in the Autodesk Software License Agreement.  (I just looked it up, to get the exact words):

9.1. No Assignment; Insolvency. You may not assign this Agreement or any rights hereunder (whether by purchase of stock or assets, merger, change of control, operation of law, or otherwise) and any purported assignment by You shall be void. The Agreement and the licenses granted hereunder shall terminate without further notice or action by Autodesk if You become bankrupt or insolvent, make an arrangement with Your creditors, or go into liquidation.

That's verbatim from the AutoCAD 2010 license agreement, but similar language regarding assignment and insolvency is in Autodesk software license agreements going back many years.

It occured to me... there's a possibility that GM will go bankrupt.  What effect might that have on their standing as an Autodesk customer?

There are a few possibilities:

• GM uses products from companies such as Alias, that Autodesk has acquired.  Those will be subject to whatever license agreements were already in place.
• GM may have negotiated special terms licensing terms with Autodesk.  But I wonder... would they have thought far enough ahead on the issues of assignment and insolvency to have negotiated those terms out?  And would Autodesk, which publicly has a "take it or leave it" attitude about its software license agreement, have been willing to give up those terms?
• If GM did negotiate special license terms with Autodesk, does Autodesk deliver special software packages to them, which do not include the click-through license agreement? Autodesk's public position is that click-through agreements are legally binding.  Autodesk's click-through agreements all (to my knowledge) include an "entire agreement" clause, which would invalidate any pre-existing negotiated license agreement.

The bottom line is that it seems likely that most any company -- except possibly a few of Autodesk's biggest customers, is in a situation where, if they go bankrupt, or are acquired, they automatically lose their Autodesk software licenses.  Or, as the Business Software Alliance (of which Autodesk is a founding member) would say, they automatically become software pirates. Thieves.

As problematic as this might be for users, it might really bite Autodesk in the... (what word should I use here?)

If an Autodesk customer goes bankrupt, it is a matter of public record (at least, in the USA).  Therefore, Autodesk is aware of it.  And, as a consequence, Autodesk is aware that the customer is no longer a customer.  That is, their Autodesk software license agreements are terminated, and any use of Autodesk software is without license.

There is a well known legal doctrine called "laches."  It's based on the maxim that equity aids the vigilant and not those who procrastinate regarding their rights.  If Autodesk knows a company is using its software without a license, and fails to act in a timely fashion, they''re probably out of luck if they want to enforce that license later.

(This whole situation is rather ironic:  Autodesk claims its software is licensed, and not sold.  Yet, there are likely thousands of companies which use the software with no valid license, with Autodesk's acquiesence.)

Believe it or not, all of this stuff actually passed through my head as a result of Buzz making a casual remark about the economy and resellers.

While you might think it occurred to me to write this up in my blog, and call Autodesk bad names, my first thought was "this could be a real mess - for everyone." 

So, I told Buzz about it. (He didn't know about the offending clause in the license agreement -- but, to be fair, I doubt that anyone at Autodesk but the lawyers do know about it. It's pretty obscure stuff.)  And I suggested he might want to mention it to the Autodesk lawyers, and see if they could find a way to undo it.

What's the moral of the story?  Probably something about lawyers.  Or the law of unintended consequences.  Or the need to actually read agreements.