Software Law for Developers

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Brett Phelps
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1 Software Law for Developers Boise Code Camp March 19, 2016 Brad Frazer

2 Introduction... The business of writing, owning, licensing and monetizing code has become more complicated due to the evolution of SaaS and the move to mobile, meaning a proliferation of apps and APIs. Proper awareness of how to own your code (or not), how to license it, how to allow others to subscribe to it, how to protect it and how monetize it is critical for every developer.

due to the evolution of SaaS and the move to mobile, meaning a proliferation of apps and APIs.

3 Outline 1. Own it 2. Protect it 3. Monetize it

4 Own it Presentation assumes you are able to own the code Exceptions... When you don t.

5 Own it Where did the source code come from?

6 Own it In what role did you write the code? Solo Contractor Employee

7 Own it Anybody else write part of it?

8 Own it Where do you want ownership to reside? You LLC Corporation

9 Own it Ownership legal exposures Warranty of title Indemnification concerns Exit strategies

10 Protect it Copyright law Creation Ownership Registration Enforcement

11 Copyright law Creation Protect it Copyright is a noun Sufficiently creative idea embodied in a tangible medium

12 Copyright law Ownership Protect it Author owns the copyright Except for works made for hire Except independent contractor with a signed writing

13 Copyright law Registration Protect it Creates a remedy does not affect creation or ownership Required to maintain infringement lawsuit in federal court Register timely ASAP after creation of best edition of the work

to maintain infringement lawsuit in federal court

14 Copyright law Vigilance Protect it Watch for infringers Address them promptly (three year statute of limitations) Do not bluff

15 Copyright Hypothetical Assume that Company X hires an independent contractor to write computer code. Company X pays the programmer, Jim, $5,000, and Jim delivers a flash drive with the commissioned program on it. Company X thereafter begins to license the software to third parties. A short time later, Jim s former employer sues Company X for copyright infringement asserting that it owns the copyright, not Company X since Jim created it while he was their employee and Company X did not obtain a written copyright assignment from either Jim or Jim s former employer. (Note that Jim s former employer may also, on these facts, sue each of Company X s putative licensees.) Company X settles that lawsuit and buys the copyright to the code from Jim s former employer. Company X again begins licensing the code to third parties. One of those licensees begins selling copies of the software without permission, and Company X sues them for copyright infringement. The case is dismissed without prejudice, however, because Company X did not register its copyright in the software before filing the complaint.

A short time later, Jim s former employer sues Company X for copyright infringement asserting that it owns the copyright, not Company X since Jim created it while he was their employee and Company X

16 Monetize it What s the deployment modality? Can you charge for it? Consider open source code

17 Monetize it Deployment modality: license Contract Worthless if you cannot prove assent to the contract Mechanisms? Issues: warranties, indemnity, install base

18 Monetize it Deployment modality: SaaS Service, not software Different contract Issues: security, privacy, data, you can only give what you have received

19 Monetize it Deployment modality: hybrid Contemplates service (subscription) and an app (license) Let s talk about apps...

22 Monetize it Post-deployment issues: Support Maintenance License versus SaaS implications

23 Monetize it Exit, VC, sell company, sell code as standalone All these are impaired if fundamentals are not observed

24 When to Use a License and When to Use SaaS If a SOFTWARE OWNER does not want to be responsible for support and maintenance obligations of the install base, then a subscription model may be more appropriate.

25 When to Use a License and When to Use SaaS If a SOFTWARE END USER needs the ability to customize the code and how it works in the end user s enterprise environment, a license model may be more appropriate.

26 When to Use a License and When to Use SaaS If a SOFTWARE OWNER is concerned about trade secrets in its code being misappropriated through reverse engineering, then a subscription model may be more appropriate.

27 When to Use a License and When to Use SaaS If a SOFTWARE END USER has a large enterprise that requires a great deal of software support, a license model with support and maintenance agreements may be more appropriate.

28 When to Use a License and When to Use SaaS If a SOFTWARE END USER has a large enterprise that requires development of custom code and implementation services, a license model with both professional services components and support and maintenance agreements may be more appropriate.

29 When to Use a License and When to Use SaaS If the application object code is still in beta and/or is subject to very frequent revision, then a subscription model may be more appropriate for that SOFTWARE OWNER. A note here on beta or source code licenses.

30 When to Use a License and When to Use SaaS If either the SOFTWARE OWNER or the SOFTWARE END USER is concerned about cloud privacy and data security or if the relevant regulatory environment disqualifies a cloud deployment model for those reasons, then a license model with support and maintenance agreements may be more appropriate.

31 When to Use a License and When to Use SaaS If the SOFTWARE END USER is in a location or facility that renders Internet access spotty or unreliable, a license model may be more appropriate.

32 When to Use a License and When to Use SaaS If the SOFTWARE OWNER cannot affirmatively state (warrant) that it owns the copyright in and to or has rights to sublicense the implicated code, a subscription model may be more appropriate. This is the warranty of title problem. Otherwise your client may get sued for copyright infringement remember hypothetical?

33 When to Use a License and When to Use SaaS If the SOFTWARE OWNER has both serverbased deployment AND an app or an API, a hybrid model may be more appropriate. Consider the move to mobile...

34 When to Use a License and When to Use SaaS Does your app already have an upstream license in place, like the itunes App Store license? Do you need more/different?

35 THANK YOU! Brad Frazer

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