Does a SaaS needs to offer a license grant?
<p>I run a SaaS service (<a href="https://pdfshift.io" rel="nofollow noreferrer">https://pdfshift.io</a>) and I've recently received an email from a potential user that is worried about any IP infringement between them and their client when using our service.</p>

<p>This is their request:</p>

<blockquote>
  <p>We are concerned about infringement of intellectual property.  If for
  example, a third-party approaches us and claims that our use of your
  proprietary API infringes that third-parties' rights, there is nothing
  in your Terms of Service that protects us.  Typically, in Terms of
  Service for Saas products there is some form of license grant as well
  as reps and warranties by the Licensor. I'm not sure what to answer to
  that. From my reading
  (<a href="https://www.techcontracts.com/2018/06/01/dont-use-licenses-saas-contracts/" rel="nofollow noreferrer">https://www.techcontracts.com/2018/06/01/dont-use-licenses-saas-contracts/</a>),
  as a SaaS, I shouldn't provide a licence, but I'm not sure.</p>
</blockquote>

<p>Here are my <a href="https://pdfshift.io/terms" rel="nofollow noreferrer">Terms of Service</a>.</p>

<p>I must say that I'm a bit lost about what to say here. I saw that some recommends to not have license when being a service because they don't get a copy of the software (<a href="https://www.techcontracts.com/2018/06/01/dont-use-licenses-saas-contracts/" rel="nofollow noreferrer">https://www.techcontracts.com/2018/06/01/dont-use-licenses-saas-contracts/</a>), but I'm hoping you'll have more details about what to respond.</p>

<p>Thank you in advance.</p>

<p>Update: I've added this clauses to my terms:</p>

<blockquote>
  <p>Licensee Provisions Note: Licensee is PDFShift whereas, Licensor is
  the user using PDFShift.</p>
  
  <p>— Licensor will defend, indemnify, and hold harmless licensee for
  third party intellectual property infringement.</p>
  
  <p>— If Licensee’s continued use of the Software is restricted or
  prohibited as a result of any such infringement, Licensor shall, at
  Licensee’s option and at no charge to Licensee: i. secure for Licensee
  the right to continue using the Software ii. modify or replace the
  infringing components of the Software so that they are non-infringing
  iii. refund to Licensee all amounts paid by Licensee for the Software
  — Exclusions— Licensor will not be obligated to indemnify Licensee to
  the extent of the infringement claim based upon (i) use of the
  Software in breach of this Agreement (ii) any modification of the
  Software made by Licensee (other than at Licensor’s direction)</p>
  
  <p>— Defense of Third-Party Suits— Licensee will notify Licensor of third
  party suits promptly. If licensee tenders claim to Licensor, Licensor
  will have right and obligation to defend such claim. Once Licensor
  assumes defense of a Claim, it will be conclusively presumed that
  Licensor is obligated to indemnify Licensee. No settlement of a Claim
  will be binding on Licensee without Licensee’s prior written consent.</p>
</blockquote>

<h2>First and foremost - ask your lawyer</h2>

<p>I'm not looking at or commenting on your terms of service because that's legal advice and you need your lawyer to do that.</p>

<h2>Intelectual property</h2>

<p>Copyright can't be infringed by the user because, as you say, they make no copies. If you infringe someone's copyright, that's between you and them and cannot involve your users.</p>

<p>However, copyright is not the only form of IP.</p>

<p>It's possible to <a href="https://www.ipaustralia.gov.au/patents/understanding-patents/types-patents/what-can-be-patented/patents-computer-related" rel="nofollow noreferrer">patent</a> algorithms \with details varying by jurisdiction. If you illegally use a patented algorithm in your service then your users are illegally using a patented algorithm. From this perspective, the user's request is immediately reasonable.</p>

intellectual-property terms-of-service