A software integration arrangement is a document in which two or more discrete phases of the outsourcing process are encapsulated. It is an agreement between two or more discrete parties concerning the details of the integration of their software.
Integration Agreement Terminology
More specifically, it is a document that spells out exactly the same language used by an NDA (nondisclosure agreement). To put it simply, once the software is integration-incompatible the nonda must cease to exist.
Such agreements are frequently used when two parties want to carry out an integration of their software without the cost of having to litigate in the courts over the ownership and control of the software license. These agreements are not legal documents. Rather, they are technical communications which describe the relationship that exists between the parties involved in the integration.
As the nonda states in its definition: “an integrated software service consists of a collection of computer software products and/or services delivered via a single communications channel such as a network, a server, software applications and/or a CD-ROM.” These agreements often include specific licensing terms, financial penalties, and other provisions to govern the transfer of intellectual property.
These agreements became effective in April of 1994. This legal precedent was set with the International Computer Software Development Association (ICDA) and NSDI (National Security Information Database). In the months following the adoption of these rules on the number of companies using these agreements grew dramatically multi-level marketing software. The new rules were designed to prevent the abuse of the APRN by developing parties to release software products under false pretences. The new rules also became effective with the formation of NSDI.
With the new rules the nonda no longer has the ability to prohibit a software integration agreement between two independent software products companies. If these two companies wanted to work together on products, the two parties could enter into a licensing agreement. If the nonda wanted to control the distribution of the software, they could still do so, but now it would be within the rules of the NSDI.
Under these conditions, a license agreement could be used to prevent one of the parties from distributing their product if they did not want to abide by the terms of the agreement. These agreements have become very important to the medical software industry as a way of assuring that a company does not take advantage of another party.
However, a new interpretation of the merger clause is becoming popular amongst mergers and acquisitions advisors. This interpretation believes that the original APRN agreements are still enforceable. However, the new interpretation states that if the merger occurs then the company is in effect entering into a software integration agreement.
This interpretation is more likely to impact smaller acquisitions that occur after the effective date. Since the merging parties are already in a transaction, the new interpretation may make the proceedings harder for the merger committee to review.
Many of the large software vendors have begun to protect themselves against entering into negotiations regarding the integration of their products with their competitors. Most of these vendors have put into place measures that will require the merging parties to sign non-compete agreements.
In addition, the majority of these companies have put into place measures that will force the merging parties to wait an agreed-upon amount of time before they are allowed to enter into an integration agreement. These measures are designed to prevent the use of new technology or technologies that might cause harm to either party.
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