Is it legal for a company to require an extra software license for a backup?
<p>I work for a company that has purchased a software license for software that is needed to make our company run smoothly. We'd like to create a backup of the server in case of hardware failure, however the company we bought it from says that creating a copy of the software on the server is illegal and is instead asking for an insane amount of money for an additional license to create a backup on our own hardware.(Backing up the database for the program isn't an issue with them, just the software itself)</p>

<p>I understand that under U.S.C Title 17 § 117 that if we owned the software we'd be able to create a backup, however because we're just licensing it this might not apply. </p>

<p>In case of a hardware failure they would reinstall the software on another server and restore the database backup however this would be only doable during business hours and would take longer than us doing it ourselves.</p>

<p>Is it legal for them to deny us the ability to create our own backup and instead have to rely on them?</p>

<p>If you're in the U.S., then section 117 of the Copyright Act is likely what you're looking for.  <a href="https://www.copyright.gov/help/faq/faq-digital.html" rel="nofollow noreferrer">The U.S. Copyright Office says</a>:</p>

<blockquote>
  <p>Under section 117, you or someone you authorize may make a copy of an
  original computer program if:</p>
  
  <ul>
  <li>the new copy is being made for archival (i.e., backup) purposes only;</li>
  <li>you are the legal owner of the copy; and</li>
  <li>any copy made for archival purposes is either destroyed, or
  transferred with the original copy, once the original copy is sold,
  given away, or otherwise transferred.</li>
  </ul>
</blockquote>

<p>Based on the information you provided, it sounds like you meet all three of these criteria.</p>

<p>They also note that your particular software's license agreement might include special conditions that affect your right to make a backup copy.  Such a warning would only make sense if it was legally possible for the software distributor to make such a limitation, so I'm afraid the direct answer to your main question is "yes".  It's definitely not the norm - at least in my experiences - but it <em>is</em> a possibility so you'll need to consult your program's license agreement.</p>

<p>There's also a possibility that the company misunderstood you and was thinking that you were <em>running a backup server</em> (in the sense of a redundant infrastructure) and not <em>making an offline backup of your entire server</em>.  It's quite normal to require an additional license for the former case.</p>

copyright software fair-use