Authorized use: Overview, definition, and example
What is authorized use?
Authorized use refers to the permitted or approved manner in which a party may use a product, service, or intellectual property as specified in a legal agreement or contract. In many cases, the concept of authorized use is defined in terms of what is allowed under the terms of a licensing agreement, employment contract, or terms of service. It establishes the boundaries for how an individual, company, or other entity can interact with or utilize specific assets, such as software, intellectual property, equipment, or even confidential information.
The terms of authorized use are typically outlined in detail to prevent misuse or unauthorized access, ensuring that the party using the asset complies with specific limitations, restrictions, and conditions.
Why is authorized use important?
Authorized use is important because it protects the interests of the owner of the asset, product, or service by ensuring that the asset is only used in ways that are consistent with the terms of the agreement. It helps maintain control over intellectual property and ensures that resources are used in a way that aligns with the intended purpose, whether for profit, personal use, or limited business operations.
For businesses, defining authorized use helps safeguard proprietary information, trade secrets, and intellectual property from misuse, theft, or infringement. For individuals or companies that receive access to assets, clear guidelines on authorized use prevent accidental violations that could lead to legal disputes, penalties, or loss of rights.
Understanding authorized use through an example
Imagine a software company licenses its product to a business for internal use only. The authorized use clause in the license agreement specifies that the software can only be installed on a certain number of devices within the company and cannot be resold or used by any third party. If the company later uses the software outside of the agreed-upon scope (e.g., installing it on additional devices or reselling it), this would be a violation of the authorized use terms.
In another example, an employer might grant an employee access to company data for specific purposes, such as conducting market research. The employee’s authorized use of this data is limited to performing the research and cannot extend to sharing it with external parties or using it for personal gain. If the employee uses the data outside the scope of their authorization, this would constitute an unauthorized use.
An example of an authorized use clause
Here’s how an authorized use clause might look in a contract:
“The Licensee is granted a non-exclusive, non-transferable license to use the Software solely for internal business purposes and may install the Software on no more than [Insert Number] devices. The Licensee agrees not to sublicense, distribute, or resell the Software, nor allow third parties to use the Software under any circumstances. Any other use of the Software is strictly prohibited without the prior written consent of the Licensor.”
Conclusion
Authorized use is a fundamental concept in legal agreements that helps protect assets, intellectual property, and resources by clearly defining how they can be used. By outlining what is permissible and what is not, authorized use clauses prevent misuse and ensure that parties comply with agreed-upon terms. For businesses and individuals, understanding and adhering to authorized use guidelines is crucial to avoiding legal risks, penalties, and disputes while preserving the value and integrity of the assets involved.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.