FLOATING LICENSE – legal aspects and practical analysis

Publication date: April 04, 2025

Floating License is a form of programmatic license for the use of digital content by more than one user. This solution is characterized by flexibility, which makes it a very convenient solution for enterprises. This convenient approach to licensing allows a limited number of licenses to be shared by a larger number of users at different times. In the event of a person working with a given program leaving, the person taking the place of work of the previous user uses this software, somehow replacing the old user with a new one.

To manage floating licenses, one typically uses a license server that controls access to the software and monitors the number of active users. For example, in the case of Creo software, the license server can be any Windows computer with FlexNet installed. The license administrator connects to this server to verify the available licenses and their number. The following diagram illustrates the use of a floating license. All employees use a floating license, and replacing one employee with another does not require any changes to the software’s usage.

Floating licenses are particularly beneficial for companies that need flexible access to software for many employees, but not all of them need to use it at the same time. This allows to optimize costs by purchasing fewer licenses than the number of potential users.

Access authorization is done via login and password, IP or access code (for offline version). Unless the agreement states otherwise, all licenses contained therein are floating licenses.

It is also worth mentioning the difference between a floating license and a single-seat license (SLM). An SLM license is assigned to a specific computer and cannot be shared between users, while a floating license allows for dynamically assigning access to the software based on needs.

Floating license is not literally mentioned in case law and legal regulations. The regulations should be applied here per analogiam. The Polish Supreme Court in its ruling of 24.08.2007, V CSK 150/07, LEX no. 485891, stated that such a form of license is absolutely permissible, because it does not in any way violate the freedom to conclude contracts (Art. 353¹ of Civil Code). The legal justification also indicates that such use of the program does not constitute a detriment to the copyright of the program producer.

According to Article 353¹ of the Civil Code, the parties entering into an agreement may establish a legal relationship at their discretion, provided that its content or purpose do not contradict the nature of the relationship, the statute or the principles of social coexistence. Freedom of contract, as a fundamental principle of the law of obligations, also applies to license agreements.

However, the legislator requires, under penalty of invalidity, that license agreements be concluded in writing. This has a positive impact for evidentiary purposes and additionally increases the certainty of shaping the relationship between entities. In practice, the more detailed the relationship is in the license agreement, the lower the risk of potential interpretational doubts later on.

The Copyright Act should also apply in this matter, because a computer program is also a work within the meaning of Art. 1 item 2 paragraph 1 of Copyright Act. However, this Act defines a license as an agreement to use a work.

Another equally important legal act is the Act of 30 June 2000 – Industrial Property Law, in particular Chapter 6 entitled License Agreements. A license agreement must be concluded in writing, otherwise it is invalid. It may limit the scope of use of the invention (limited license) or, if there is no such limitation, the licensee may use the invention in the same way as the licensor (full license). The license expires together with the patent, unless the agreement provides for a longer period for other obligations, e.g. benefits related to the use of the invention. If the agreement does not reserve exclusivity, the same invention may be licensed to many entities, and its creator may still use it (non-exclusive license). A sub-license may be granted only with the consent of the patent owner, but it cannot be transferred further.

The license can be entered in the patent register, which allows the licensee to pursue claims in the event of patent infringement. The licensor is obliged to provide the licensee with all technical information needed to use the invention, unless the agreement provides otherwise. If the patent is transferred to another person, the license remains valid for the new owner.

In the case of unpatented inventions or inventions reported to the Patent Office, the rules of the license agreement apply, unless the parties agree otherwise. One can also report an open license, which means that one is ready to grant anyone the right to use the invention. Such a declaration is entered in the register, and the patent fees are reduced by half. An open license is full and non-exclusive, and its cost cannot exceed 10% of the licensee’s annual profits.

If the research contract does not specify the issue of a license, it is presumed that the ordering party receives the right to use the inventions contained in the results of such work (implied license).

Judgment of the Polish National Appeal Chamber (KIO 2106/13) of 13 September 2013

The judgment emphasizes that in the case of public procurement, functional requirements and compliance of the license with the expectations of the contracting authority are key. This may be important for floating licenses if the tender conditions specify specific requirements for access and use of the software.

Key conclusions from the judgment:

• License Functionality – The software license must meet certain usage requirements. In this case, the customer required the license to include the ability to use 20 copies of the training environment at no additional charge.
• Freedom of the ordering party in specifying licensing requirements – the National Chamber of Appeal found that the ordering party may specify licensing requirements and that the compliance of the offer with the tender specification is crucial.
• Rejection of the offer due to non-compliance with the requirements – the Chamber found that the offered license did not meet the tender requirements because it did not include the necessary access licenses (Windows Server Client Access License).

Summary

Floating License is a flexible form of software licensing that allows a limited number of licenses to be shared by a larger group of users. This allows companies to optimize costs by providing access to software only when needed. Access to licenses is managed by a license server that monitors the number of active users.

Unlike a single-user license (SLM), assigned to a specific device, a floating license (NLM) allows for dynamic access allocation depending on needs. Authorization can be done via login and password, IP or access code.

Although the floating license is not directly regulated in Polish law, its admissibility results from the principle of freedom of contract (Article 353¹ of the Civil Code). Case law, including the Supreme Court judgment of 24 August 2007 (V CSK 150/07), confirms that such a licensing model does not violate copyright. In turn, the Copyright Act protects computer programs as works, and a license for their use should be concluded in writing.

In the KIO 2106/13 judgment of 13 September 2013 it was emphasised that in public procurement licenses must meet certain functional requirements. The offer was rejected because it did not include the necessary access licenses, which shows how important it is to adapt the license to the tender specification.

A floating license is an effective solution for companies, allowing for flexible software management, but requires precise regulation in the contract to avoid legal and operational problems.