The rise of cloud-based businesses in India has made software licensing agreements one of the most crucial contracts for startups. With SaaS (Software as a Service) models dominating industries such as HealthTech, FinTech, and EdTech, startups must carefully draft SaaS license agreements to protect intellectual property, revenue, and client trust.

 

Unfortunately, many founders rely on generic templates for SaaS agreements in India, not realising that vague contracts can spark disputes over SaaS software assets and licensing rights. This case study examines a Kerala startup conflict and shows how custom software licensing agreements prevent costly litigation.

 

Case Overview: SaaS License Agreement India Gone Wrong

 

Two startups in Kerala—a HealthTech company and a FinTech company—partnered to develop a SaaS platform for medical billing. Instead of drafting a custom SaaS license agreement India, they relied on a generic contract downloaded online.

 

Problems arose when:

 

  • The HealthTech startup began licensing the product independently.
  • The FinTech partner claimed joint ownership of the SaaS software asset.
  • Their software licensing agreement lacked IP ownership, revenue-sharing, and exclusivity terms.

 

This led to a legal standoff, threatening both companies’ growth.



Key Issues in SaaS-Based Licensing Between Startups

 

  • Unclear IP Ownership – No agreement on who owned the SaaS codebase.
  • Confusion over SaaS License Meaning – Did “license” include resale rights or just usage?
  • No Revenue Sharing – Subscriptions profits weren’t addressed.
  • No Exclusivity Clauses – Both assumed exclusivity, but nothing was documented.
  • No Dispute Resolution – No clause for arbitration or mediation under Indian law.

 

TGC Legal’s Role in Resolving the Dispute

 

TGC Legal, with expertise in software licensing agreements and SaaS license agreements in India, intervened by:

 

  • Drafting a custom SaaS license agreement defining ownership and licensing rights.
  • Adding revenue-sharing clauses linked to SaaS subscriptions.
  • Introducing exclusivity and sub-licensing terms.
  • Including dispute resolution under arbitration in Kerala.
  • Ensuring compliance with Indian IT Act and Copyright law.

 

What is a SaaS License Agreement? Understanding SaaS License Meaning

 

A SaaS license agreement regulates how software hosted on the cloud is accessed, used, and distributed. Unlike traditional software licensing:

 

  • The customer pays for usage (subscription-based).
  • The developer retains ownership of the SaaS software asset.
  • The agreement defines limitations on copying, modifying, or reselling the software.

 

SaaS license meaning: permission to use cloud-hosted software under defined restrictions and legal protections.

 

Types of SaaS Agreements Every Startup Should Know

 

  • End-User SaaS License Agreement (EULA):

Defines how individual users or companies can access and use the SaaS product. Includes restrictions on modification, resale, and sharing login credentials.

 

  • Enterprise SaaS Agreements:

Designed for large organisations. Covers bulk licensing, data security, compliance with Indian data protection laws, and multi-user access.

 

  • Joint Development SaaS Agreements:

When multiple startups collaborate, this agreement defines ownership rights, licensing models, and profit-sharing. (The Kerala case study dispute arose due to lack of such clarity.)

 

  • White-Label SaaS Licensing:

Allows another company to rebrand and resell the SaaS platform. Protects the original developer’s IP while enabling commercial partnerships.

 

  • Custom SaaS License Agreement India:

Tailored contracts that reflect Indian legal requirements, IP ownership, subscription models, and dispute resolution mechanisms. Essential for startups in sensitive industries like HealthTech or FinTech.

 

Why SaaS Software Asset Protection is Critical for Startups in India

 

The SaaS software asset—the code, algorithms, and platform—is the backbone of any SaaS startup. Protecting it through well-drafted software licensing agreements is crucial because:

 

  • Safeguards Intellectual Property: Prevents misuse, reverse engineering, or unauthorised distribution.
  • Defines Revenue Ownership: Clear terms on subscription profits and royalties.
  • Supports Investment & Acquisition: Investors demand clarity in SaaS agreement India before funding.
  • Ensures Compliance: Protects against breaches of IT Act and data privacy laws.
  • Maintains Business Continuity: Avoids operational disruption due to ownership disputes.
  • Prevents Legal Risks: Strong NDAs + licensing terms reduce litigation chances.
  • Secures Competitive Advantage: Ensures proprietary SaaS innovations remain exclusive to the startup.

 

Conclusion – Custom SaaS Agreement India for Startup Growth

 

This Kerala startup case study proves that generic software licensing agreements are insufficient in today’s SaaS-driven economy. Whether defining SaaS license meaning, choosing among the types of SaaS agreements, or protecting a valuable SaaS software asset, custom legal drafting is essential.


At TGC Legal, our technology lawyers in Kochi specialise in SaaS agreement India, offering tailored solutions to protect intellectual property, ensure compliance, and secure long-term growth for startups.