Demystifying the telerik r.a.d.controls re-distribution rights and limitations

by Vassil Terziev | Comments 10

A prospective customer recently commented on our distribution policies and it prompted me to write a blog post and try to explain things in not-so-legal terms.

Possibly because of improper wording on our part many ISVs do not feel comfortable with our terms and conditions when it comes to using our products in a commercial product.

Here's what our agreement says:
"You are not allowed to integrate and distribute the SOFTWARE as part of branded commercial products meant for mass distribution. This is subject to a redistributable license. For more information and inquiries, please contact sales@telerik.com."

I've been re-reading this paragraph over and over while writing my post. and I have to agree that it is quite misleading and certainly does not reflect telerik's actual licensing policies for the last year or so. It is a fact, however, that we put the agreement in place awhile ago and many things have changed since then, especially our understanding of what's acceptable and what's not.

Unfortunately (or fortunately), we've been focusing mostly on the very products and supplementary services rather than neatly worded agreements which narrowly spell out the customer's rights and limitations. Our genuine intent has always been to make our products available to as many developers as possible by following a licensing model that will not get in the way of widespread deployments. After all, we have no intentions of excluding developers working for ISVs as they are a good deal of our customer base as a matter of fact.
 
So, leaving the legal wording aside, here is a common sense explanation of what's OK from our point of view as a component vendor and what's not OK.

You can use the products freely in:

  • ASP.NET solutions for internal company use
  • Hosted ASP.NET applications
  • Commercial solutions deployed for end-customers by our customers
  • Shrink-wrapped software in which our controls are integrated

Just to make it really clear - our products are offered with a run-time royalty free license and ISVs can fearlessly add our products in their solutions. There are only 3 (threes) limitations which are discussed below and I will add comments as to why each of the scenarios requires a special arrangement with telerik.

Requires additional discussion with our sales team:

  • A product that exposes the design-time of our products. Examples: Visual Studio.NET plug-in, code generators. More or less, none of the commercial component vendors is OK with this type of usage.
  • Modules/components that DO not add significant primary functionality. Example: a DotNetNuke skin that is sold as a separate product and includes r.a.d.menu. Clearly, if r.a.d.menu were to be offered as part of a DNN skin sold for $50 and telerik only sold one license to the skin developer for $249, then we would be losing sales as customers would be buying the skin rather than our product. In such cases we offer skin developers a re-seller arrangement so that everyone has an incentive to enter into a relationship.
  • Open source projects. We are avid supporters of many open source initiatives, however, our standard policies do not allow the native integration of our products in open source products as there aren't any good ways to protect our products in such an environment. It's just too much legal lingo and administration to ensure that everyone downloading a project on SourceForge knows what's inside, what parts of the solution he/she can use freely and which he/she cannot and so on...

I would like to stress that the above-mentioned limitations are default limitations. By "default" I mean that unless you contact us you will have to abide by those stipulations. We can always try to find a custom arrangement which provides value to both parties.

If anyone feels unsure about the current license agreement, please drop us a line. We are working on an update and we will be glad to modify the wording in such a way as to let you guys to feel more comfortable. All comments are welcome.

Vassil Terziev
Co-founder/CEO

10 Comments

chris@centerdynamics.com
Wow, what you posted is completely different than how I read the licensing agreement. If this is true, you should slap it on your home page, as I think you will increase your business. I have been impressed by your controls, but turned off because I thought I had to email sales to see how much it would cost, just because we sell packaged software. Every company I have worked for has a no-royalty policy for components. Your post just opened your company back up for consideration! Cool.
Oliver
So that means that if I build product where I will use your components I can redistribute them to my customers (of course, not for design purpose)?

For example, I am building online real-estate system and I want to use Telerik components for that. Of course, my customers will need to use your components and that is allowed because "Modules/components that DO add significant primary functionality"?

Legal problem here is that you will need to write that in license because with "Modules/components that DO not add significant primary functionality" someone can have freedom to say that in my product this is exactly what is happening.

Also what is if my product costs 49$ and your components add primary functionality? Can I still redistribute Telerik components?

Btw. to me it is logical that I can but then license has to be changed :).
Greg
Ok, I still don't see how this would work. From what I can see I still have no ability to use your controls in a commercial application because of this statement:

Modules/components that DO not add significant primary functionality.

If I use your controls within my system, they are going to be a very large part of the user interface functionality. However, in total they would have very little to do with the actual concept or true functionality of the system beyond the display.

Also, I talked with someone early in the year about re-distribution and they wanted me to tell them how I would protect your controls. My thoughts were basically they are your controls you should have already built a way to protect your own controls. I understand fully not distributing or exposing the design time controls, From what I gathered the person I talked with wanted me to buy a version of the software that would give me source code so I could compile it into our solution. Basically once I got that response i just dropped Telerik from our list.

So the question still is in my mind, if I produce a commercial product that uses your controls and does not expose or have the design time dll's included be re-distibuted royalty free or not? To me it is a simple answer, yes or no. If the answer is not yes, then you do not truly have a royalty free re-distribution license.
Paolo
I think you have to rewrite license agreement.
What I'm thinking of ...?
You're only trying to capture new customers with empty words...
If telerik is really convinced to change it's licensing line there is only one way:

WRITE THEM DOWN !!

Bye
Vassil Terziev
Thanks for your feedback guys!

Chris: I'm glad to hear that. Hopefully with the new agreement customers will not see see our licensing as a show-stopper (like some do today).

Oliver: you are right. There is a fine line between what's OK and what's not OK and it involves some judgment. Thinking about it, you can view things not so much from a technical standpoint, but from a value perspective: what value does your product offer to the developer? In case you are building a real estate listing tool and you are offering it for $20 apiece, you are offering people a way to edit listings more easily. Even though the r.a.d.controls may comprise 90% of the overall code, the product's value is in the management. It doesn't offer value as a developer tool. Another example would be a wrapper for our menu - regardless of the extras you add, the product's value remains the same - to offer cross-browser menu navigation.

Greg: the answer is a straightforward "YES". We've done mistakes in the past but for what's its worth at least we were honest - we weren't sure how to handle the situation and in order to avoid broken promises we wanted interested people to contact us. We are very committed to making things right this time and we truly appreciate your feedback as it shows us the right direction.

Paolo: absolutely! The new agreement is currently reviewed by our legal counsel and will (keeping fingers crossed) go into effect with the Q3 release. It will be properly updated on our site and in the installers.
Tony Basallo
I think Greg's point was critical - and I'm still not clear. Although I like the "YES", what's the ultimate response?

My concern is not for the projects that I will deploy for myself. My concern is for the projects that I'll deploy as a commercial product. Do I need source code so that I can compile and deploy as one product? I stopped looking at Telerik 7 months ago because of this. If I deploy a commercial project that uses Telerik controls, I have to include the DLLs. Theoritically the end user can take that DLL and reuse with another devepoper. How do I stop that so that I am not liable? That was my question in this post http://www.telerik.com/asp-net-community/forums/forum-thread.aspx?b311D=cdmae Has a different solution beed devised or is this pretty much we are today?
Vassil Terziev
Hi Tony,

Theoretically, there's no way to stop people from pirating:) Regardless of the protection you implement or the agreements you put in place, if someone wants to use your software and not pay for it, he/she will find a way.

As long as you have some clause mentioning that the users of your software can't use any parts/components of it outside of the licensed product, you are OK and you are not liable for anything if they violate your EULA.

Does that make sense?
Tim
What I am wanting to do is create a DotNetNuke Module that will use the controls for the UI. The module would be say an issue tracking system. If I did not include the source code to my module would I be able to sell this royalty free?

Tim
Chris
I know this is an old thread, but I just stubled upon it. Here is what I think is an easy question. I am building a cms, but it's more a devloper tool than an end user cms. Now like you've stated above, the primary function is cms, none of your controls do that, but they would be used in the interface obviously. But to sell that to a dev, means I am giving them your .dll as well. Would that be considered something I can do? I realize it's adding your .dll to my product, but considering the customer, I don't think that's something I have license to do right now.

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