What Is Commercial Use? A Definitive Guide

Updated March 10, 2023

Commercial use outlines the way a customer or business can use intellectual property or tools and products. Commercial use agreements are important business documents because they help protect a company's assets and ensure fair financial compensation. Understanding what commercial use is can help you create an agreement for your company or know how to verify whether something is for commercial use. In this article, we define commercial use, explain how to know if you can use something for commercial use, compare it with non-commercial use and explain why verifying it is important.

What is commercial use?

Commercial use is a legal term that defines the use of certain merchandise, tools or intellectual property for financial gain. A business can use anything labeled for commercial use for its purposes, including resale, production of other goods and tools and marketing. Commercial use licenses set specific restrictions on a company's assets to ensure they're fairly compensated. For example, a company might limit the use of a service to 1,000 uses before users upgrade to a commercial license. Companies define commercial use in their terms of service agreement and use the protections of commercial use agreements to defend intellectual property.

Related: Commercial Arts: Definition and Careers To Pursue

How do you know if something is for commercial use?

It's important to verify that you can use something like software or intellectual property for commercial purposes before proceeding so you don't violate the terms of use. This is an agreement that accompanies intellectual property, certain merchandise and often software or mobile applications. There are several ways to verify whether something is for commercial or personal use, including:

Read the terms of use agreement

You can use the terms of use agreement for any product or software to verify its commercial use status. Sometimes known as a terms of service agreement, the document acts as a legal agreement between the provider or creator of the product and the user. Some terms of use or service agreements serve only as a disclaimer, but the agreement generally is legally binding. Terms of use agreements often accompany things like websites, software or mobile applications. You might visit a company's website, the user manual or contact company support to discover if something is for commercial use.

Related: 21 Commonly Used Business Documents

Check the company or product website

If you're uncertain about the use of a product, you can check the company's website or product page. Sometimes, the product's description clarifies whether it is for commercial use. If you can't find the terms of use there, try the "about us" or "company information" page. These pages may include terms of service agreements or other information about the company's commercial and non-commercial use policies.

Contact the distributor or producer

If you can't find any information on the company website, you can contact the provider or distributor to clarify the intended use. Try emailing the customer support desk or place a phone call to the customer service line. Clarify what you want to know with the representative by asking questions like "Can I use this product for commercial purposes?" or "Where can I read your terms of service agreement to learn about commercial use?"

Other characteristics and examples of commercial use

Here are some unique characteristics that can apply to commercial use cases:

Limited commercial use

Limited commercial use is a kind of commercial license that exists between full commercial use and explicit non-commercial use, which is licensing that allows someone to use a product or service without making a profit from it. The terms of limited commercial use typically limit the number of uses of a product, license or intellectual material. For example, if you purchase audio recording software with a limited commercial use license, you may only have access to 4,000 hours of commercial recording before you upgrade. Some companies provide a limited commercial use license so users can try a product.

Commercial property

Property also can be subject to commercial use rules, depending on the terms the property owner provides. Municipalities often divide neighborhoods or areas by residential, industrial and commercial use. Commercial buildings are for businesses that perform financial transactions, such as merchandise sales. Commercial buildings can be subject to tax specifications or other regulations, depending on the laws of the area.

Related: Commercial Buildings: Definition, Types and Tips

Expiration dates

Some personal use products have an expiration date that limits the use of the product within a specific period. For example, if you purchase a subscription to software, the subscription might expire within a year. Most commercial licenses allow for unlimited use for any period. This allows the business to pay only once for the product and saves money on frequent subscriptions.

What is non-commercial use?

Non-commercial use is an explicit agreement between a provider and a user that a product, intellectual property, software or other item is only for individual use. This means the person using the product doesn't generate income from the product's use. For example, if you use photo editing software to create a family portrait, no financial transaction occurs, so you are using the software for personal use. Most software or mobile applications you can download are for non-commercial use.

You can even use some company logos on personal items. For example, if you wanted to create a hooded sweatshirt as a gift for a loved one, you could include a company logo, but you couldn't sell that same sweatshirt. Non-commercial use licenses are common in education. An educational institution may access a non-commercial use license for software to provide for its students. Because the educational facility isn't marketing or generating profit from the software, it's a non-commercial use.

Related: Guide to Severance Agreements (With Template and Example)

Why verify commercial use?

Verifying that a product or tool is for commercial use is important because there can be legal ramifications for violating the terms of service agreement. If you're running a business, you may be liable in court or be financially responsible for compensating the provider. Verifying commercial use by checking the terms of service, company website or contacting the company can save time and money for your business. It also can be a gesture of respect to the creator of the product or tool, showing your business values its terms and agrees to follow them in the future.

Disclaimer: This article is for information purposes only and is not intended to constitute legal advice; you should consult with an attorney for any legal issues you may be experiencing.

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