What Every Non IP Attorney Should Know
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- Scott Bradford
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1 What Every Non IP Attorney Should Know
2 Morris E. Turek Solo practitioner representing entrepreneurs, small businesses, non profits, and educational institutions Ten years of non patent IP law experience Focuses on trademark & copyright matters Trademark and copyright clearance Federal trademark and copyright registration Trademark and copyright infringement litigation Trademark oppositions and cancellations Trademark and copyright licensing Domain name disputes
3 Christopher R. Carroll Previous engineer for Intel Corp. Engineering and law degrees from U. of Illinois Focuses work on non litigation patent law Patent procurement Licensing Due diligence investigations (e.g., during product/company acquisition) Clearance projects/infringement analysis Appellate/post grant patent review
4 Types of Agreements Many agreements that are not centered on intellectual property issues still have important IP issues that can arise Common agreements where IP issues arise: Website design and development agreements Franchise agreements Non disclosure agreements (NDAs) Asset purchase agreements (APAs) Software development agreements
5 Website Development Agreements Your client (e.g. a local business) wants to enter into an agreement with a web developer for the design and development of a website, AND/OR, Your client (a web developer) wants you to draft a website design and development agreement that it can use to retain clients.
6 Website Design Copyright Issues Ownership Who owns what? Independent contractor relationship (not a work made for hire ) Does agreement include a copyright assignment? Is there an additional cost for assignment of all rights? Are only certain rights being assigned? When does the copyright assignment become effective? If subcontractors will be used, does agreement represent and warrant that web developer received full assignment of all rights?
7 Website Design Copyright Issues Copyright Infringement Does agreement indicate from where the web developer will acquire images, photos, videos, graphics, text, etc.? Does agreement represent and warrant that web developer will obtain proper permissions and acquire proper licenses? Does agreement state whether the website code will primarily be custom? If not, does it indicate where the bulk of the code is coming from?
8 Website Design Copyright Issues Indemnification for Infringement What if the business is sued for a copyright infringement stemming from web developer s actions? Does the agreement represent and warrant that web developer has commercial liability insurance? Does insurance cover breach of contract and copyright infringement claims? Does agreement require business to be included as a named insured on the policy? Does agreement require web developer to provide full cooperation to business if sued for infringement at web developer s own expense?
9 Franchise Agreements Your client (the franchisor) wants to franchise its existing business, AND/OR Your client (the franchisee) wants to enter into a franchise purchase agreement
10 Franchise Agreements Trademark Issues Use and Ownership of Trademarks Does agreement identify exact trademarks being licensed to franchisee by franchisor? Does franchisor own federal trademark registrations for trademarks being licensed? Does agreement outline proper and authorized usage and display of trademarks on signage, in advertising materials, on social media, on receipts, etc.? Does agreement allow franchisee to use/register a domain name incorporating franchisor s trademark? What about social media usernames or handles? Does agreement stipulate that unauthorized use of franchisor s trademarks would be considered an infringement and would be grounds for termination?
11 Franchise Agreements Trademark Issues Use and Ownership of Trademarks Continued Does franchisee expressly acknowledge franchisor s ownership of the trademarks and all associated goodwill? Does franchisee expressly acknowledge that franchisor s trademarks are valid and may not be challenged by franchisee during the term of the agreement or subsequent to termination? Does agreement prohibit franchisee from registering franchisor s trademarks in franchisee s name or an associated third party? Does agreement prohibit franchisee from sub licensing trademark to a third party? Does franchise agreement refer to a separate Trademark Use Compliance Manual that contains more detailed guidelines on use/display of trademarks?
12 Franchise Agreements Trade Secrets Use and Ownership of Trade Secrets Does agreement refer to a separate Operations Manual that identifies all information which the franchisor considers to be trade secrets? Does the Operations Manual address how those trade secrets are to be used/protected by franchisee and its staff? Does agreement allow for immediate termination and/or legal action should franchisee disclose or improperly use franchisor s trade secrets?
13 Non Disclosure Agreements Your client wants a third party to sign a non disclosure agreement (NDA) before entering a joint venture with the third party, AND/OR The third party wants your client to sign the NDA before the joint venture NDAs typically require both parties to keep the other party s confidential information confidential, unless and until the confidential information otherwise becomes public
14 NDA IP Issues How do you define the confidential information? How do you control your client s confidential information once it is in the hands of the other party? What happens to the confidential information after the NDA expires?
15 NDA Defining Confidential Information Not just inventions and trade secrets Any information that is not publicly available ANYTHING other than: Information that is generally and conveniently available in the applicable trade; Information that recipient can prove was already in internal records prior to receipt from the disclosing party; and Information obtained from a third party who did not obtain from the disclosing party Examples: customer lists, pricing information, recipes, internal guides/handbooks, source code, etc.
16 NDA Controlling Confidential Information Clearly identify require disclosing party to mark documents CONFIDENTIAL prior to disclosure or within reasonable time period (e.g., 30 days) Maintain log of information that is disclosed (both receiving and disclosing parties) Limit use Disallow copying of the confidential information by receiving party (e.g., watermarks) Prevent copies of confidential information from being physically handed over to receiving party (e.g., checkout procedure, passwords) Seek IP protection File copyright applications, patent applications, and/or trademark applications prior to disclosure Place in escrow prior to disclosure (e.g., source code escrow)
17 NDA After the Agreement Make clear in the agreement that no license or permission to use the confidential information is granted by the disclosure Have a clear termination of the NDA (e.g., renewable terms) Ensure that your client s confidential information is protected upon termination of the NDA: Require that originals be returned Require proof that all copies (if allowed) have been destroyed within X days of termination
18 Asset Purchase Agreements (APA) Your client wants to acquire a target company or a product line/service of the target company, OR A third party wants to acquire your client s company or product line/service
19 APA IP Issues Ownership does the seller actually own the IP rights? Indemnification What infringement protections are in place for after closing? Are these protections worth anything? What is being acquired/sold? Goodwill? Trade secrets? Other IP rights? Past infringement damages? Open source issues with software (discussed in next subject)
20 APA IP Ownership Verify that seller actually owns the IP rights tied to the product/company Assignment database searches not enough Employment agreements Timing verify that seller has the IP rights prior to closing Agree to assign or Hereby presently assign? Chain of title (coders > coding company > seller)
21 APA Indemnification Product/company being acquired may not be target before closing, but after closing can be a different story Due diligence prior to closing Patent/trademark/copyright clearance searches and analysis (cost/benefit analysis esp. w/r/t patents) Is the indemnification worth the paper it s printed on? Ensure that seller has financial means to back the likely indemnification, and/or Hold back part of purchase price (graduated release) Cap to past/expected sales
22 APA What is Being Transferred? Clearly define all IP rights associated with company/product being transferred Goodwill of company Inventive subject matter in applications/patents (not just patents) Past infringement damages License to continue using IP rights
23 SW Development Agreements Your client wants to hire a person or company to write a mobile app or other software application The hired SW developer likely to use other coders and/or open source software to create your client s SW Also can arise in APA where SW is part of deal
24 SW Dev Agreements IP Issues Ownership who owns the IP rights, your client or SW developer? Open Source freely available SW, modules, and libraries
25 SW Ownership Make clear in agreement that all IP belongs to client and is transferred to client (hereby presently assign!!!) Ensure that all coders (internal and external) sign assignments to developer
26 SW Open Source Convenient for developers to use, but some associated with restrictive licenses These licenses can require attribution to open source author, limit distribution, limit modification, etc. License terms can have significant impact: Release source code of improvements to open source Bar collection of licensing fees for SW using open source Grant free license to SW using open source (And some not so significant impacts: buy a beer for the open source author)
27 SW Open Source Solutions Require developer to refrain from using open source or restrict to only using open source licensed pursuant to identified (read: safe) open source licenses Identify open source in SW Requires third party vendor Black Duck or Palamida Identify licenses associated with open source Determine what licenses require and what actions trigger these requirements (modification and/or distribution) Eliminate open source or use accordingly
28 Questions?
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