The Superior Court of Justice (STJ, Brazil’s highest appellate court for non-constitutional matters) issued a decision that directly impacts how companies manage and renew technology contracts. The court barred the perpetual use of software licenses when the corresponding technical support service is not renewed.
The mismatch in support renewal
The dispute arose from a company’s attempt to adjust its technology infrastructure costs. The company had initially procured a package of 10,000 software licenses.
However, upon contract renewal, the company sought to split the package: it intended to renew support services for only 800 licenses, while attempting to maintain perpetual use of the other 9,200 licenses without paying the associated maintenance fees.
The STJ’s ruling
The STJ rejected the client company’s approach. The court held that maintaining perpetual use of the software is not permitted without renewing the support service attached to the full volume of acquired licenses.
The decision indicates that courts may treat software licensing and technical support as interdependent elements of a technology transaction, preventing clients from fragmenting the package to maintain total system use while drastically curtailing payments for maintenance services.
Key considerations for IT contracting
For founders, investors, and executives, the case serves as an important precedent in technology asset management. Structuring software contracts requires clear rules on renewal terms and scope of use should ancillary services, such as technical support, be cancelled or reduced.
Cost-reduction strategies that involve partial maintenance of technology contracts must be assessed cautiously, as courts may not accept separating software usage rights from support services.
This content is for informational purposes only and does not constitute legal advice. For guidance on specific matters, consult a qualified lawyer.
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