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Classification of Licensees

Few undertakings in today's business world are activities of a single entity. Many parties are involved in the planning, financing, design, production, quality control, marketing, and operation of any project, and each of the project participants relies on a network of business partners and vendors that may be scattered throughout the world. It is essential that all project participants have access to the same information resources and use such resources without violating copyright laws.

To help you assess your licensing needs for the Indexes of Russian Industry Standards, we have classified all project participants into four classes: A, B, C, and D. The chart below shows the relationships between project participants from the viewpoint of the person purchasing a License for an Index of Russian Industry Standards (“Publication”).

Class A.  Class A represents the purchaser of the License (an individual or business entity). If the purchaser is a large company with a diversified organizational structure and a network of subordinate business units, such group of entities is called a “controlled group”. A controlled group includes the parent company and all of its divisions, local offices, and subsidiaries in which the parent company controls 100 percent of the stock or votes.

Class B.  Class B consists of individuals and business entities who are clients of Class A.

Class C consists of affiliates of Class A. This Class includes business partners such as partners in a joint venture that includes Class A, members of a consortium of which Class A is a member, and companies in which Class A is a stockholder owning 99.99 percent or less of the stock or votes. In the last example, the member of Class A is an investor in these subsidiaries, rather than a parent company, which would have sole and unrestricted control over its subsidiary if it controlled 100 percent of the subsidiary’s stock or votes.

Class D.  Class D includes vendors of products and equipment and service providers for the business needs of Class A.

 

Licensing Rules

Licensing Rule 1.  Members of each Class must purchase User Licenses separately and independently of the members of the other Classes.

Example:  A member of Class A may not purchase a Publication for members of Class B, C, and D; a member of Class B may not purchase a Publication and transfer it to members of Class A, C, and D, and so forth.

Licensing Rule 2.  A parent company within a controlled group may centrally purchase User Licenses for all members of the controlled group headed by that parent company. Individual members of the controlled group other than the parent company cannot act as central purchasers separately from the parent company or other members of that controlled group. Only the parent company has the right and privilege of centralized purchasing for its controlled group.

    Example:  Members of Class A who are members of a controlled group want to buy the following quantities of a Publication: 1 copy for the parent company library, 6 copies for the parent company quality control department, 10 copies for Subsidiary A, 15 copies for Subsidiary B, and 8 copies for Subsidiary C, for a total of 40 Licenses. The parent company can purchase two 20-User Licenses for its departments and subsidiaries. This will result in a significantly lower per-user cost for all members of the controlled group. Theoretically, if these departments and subsidiaries were located in the same building with a single local area network, then the parent company could simply purchase one Site License, and save even more money on a per-user basis.

Licensing Rule 3.  Each member of a controlled group can purchase User Licenses for its own needs separately and independently from the other members of the controlled group.

    Example:  If the parent company in the example for Rule 2 does not wish to centrally purchase Licenses for its departments and subsidiaries, then each member of the controlled group can purchase User Licenses for its own needs independently of the parent company and other members of the controlled group.

Licensing Rule 4.  Each individual member must purchase a User License for its own needs separately and independently of the other members of the same Class. Members of a controlled group for which the parent company can purchase User Licenses in compliance with Rule 2 are the exception.

    Example 1:  A member of Class A retains three independent consultants from Class D for his project. Each consultant needs the same Publication for his work. Under Rule 1, a member of Class A cannot purchase a Publication for members of another Class, while Rule 4 requires that each consultant purchase his own copy of the Publication for individual use separately and independently of the other consultants.

    Example 2:  A member of Class A is the general contractor for the project. The member of Class A hires three teams of subcontractors: one team consisting of two of its subsidiaries from Class A, the second team consisting of two of its subsidiaries from Class C, and the third team consisting of two subcontractors from Class D, each of which is a wholly owned subsidiary of the same parent company X (not shown in the chart). Members of three different Classes are used in this example. Let us consider the licensing needs of the members of each of the Classes individually. Class A: Since subsidiaries of Class A are the exception to Rule 4, their parent company can purchase User Licenses for them according to Rule 2. Class C: Since by definition the subsidiaries of Class C cannot be considered members of any controlled group, each subsidiary in Class C must purchase its own copy of the Publication for individual use separately and independently of the other subsidiaries and, according to Rule 1, independently of the members of Class A. Class D: Since the companies of Class D in this example are 100 percent controlled by company X, they are an exception to Rule 4, and so their parent company X can centrally purchase User Licenses for them according to Rule 2.

 

More information:

Need help determining which license is best for you? Review the licensing principles and license examples.

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     Licensing Principles
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     Licensing Glossary
     How to Purchase
 

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