The third-party would have to obtain a license from you.

I don't know any OEM that acts as the vendor when it comes to installed software. I've always had to go back and register my copy with the source vendor. Where this isn't the case, like Microsoft Office that comes preinstalled, I end up with poor support and tend to buy my own software and install it over the preinstalled stuff.

David Locke

1. Yes, later disagreement re. the interpretation by one party or both or re. compliance by the OEM licensee, is a dispute that one sees from time to time; defining the deal scope -and- processes is harder than it looks and requires a lot of effort. Evidence of this challenge is the Verity v. Broadvision litigation.

2. Attempts to avoid enabling the OEM to undercut "other" channels are also tough; I've seen and done deals that addressed that goal by stating a combination of intent, downstream contract required terms, downstream contract admin. (including intermittent upstream disclosure/delivery), optional auditing, variable deal duration, and other terms.

3. In dozen of deals, I've seen the rates all over the place, depending on many factos, including what's the minimum amount of mandatory OEM expenditures marketing the product.

best, hank

Henry W. (Hank) Jones, III
Law Office of Henry W. Jones, III -and-
Intersect Technology Consulting
2002 Mountain View Rd., Austin, TX 78703
memphishank@aol.com; mobile 512-695-4673; fax 512-857-0393

1. This is a fairly common sort of issue that is addressed in license verbiage. For example, libraries of clip art are typically sold with a license that says you can use the images in your commercial product, but you can't make a product that is essentially the library of clip art with a wrapper around it. I will look around and try to find an example.

2. I think you are more worried about the economics than you need to be. Your list price is $1000. You sell to an OEM for $500. Now, your total costs per sale must be less than $500, because you are presumably making a profit selling at $500. If this OEM decides to compete with you, then his costs are certainly higher than your $500, because his sub-license cost alone per copy is $500. So he is not in a terribly competitive position.

Here, I found an example, from a cryptography product intended to be included in a re-published application. Not saying it is the best possible wording or suitable for you; just an example of how someone else is attempting to solve this problem:

7. Make and distribute copies of the dynamic link libraries and statically
linked libraries of the SOFTWARE as incorporated into software
application products that you develop provided that the SOFTWARE, or
other [Vendor] products, do not constitute a major portion of the value of
your product.