Per-Processor License

Refers to a type of license formerly used by Microsoft under which it charged computer manufacturers copyright royalties for Windows and MS-DOS-based on the number of computers using compatible processors they shipped (i.e., x86-type processors) regardless of whether Microsoft’s software was installed or not. The result was to discourage manufacturers from installing any competing operating system since they would have to pay for the Microsoft product in any event. This type of license was ruled illegal. The term per-processor license has come to be used for any license form in which royalties are metered based on sales of an item, which might or might contain the licensed IP, as if every unit sold did indeed contain the IP. It does not require the metered item to be a processor, software, or even computer technology. Such license arrangements are potentially illegal and should be avoided.

Term posted by Origin on in