Hackers code of collaboration
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Transcript of Hackers code of collaboration
Hackers Code of Collaboration WORKSHOP SPONSORS
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Hackers Code of Collaboration Presents
Presented by: Matthew Herd & Elizabeth Rosenthal
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Expert Panel • Louis Rappaport
• Attorney from Blank Rome, LLP, concentrating his practice on business and corporate matter
• Speci?ically emphasizes emerging and middle market businesses
• Fred Wilf • Attorney from Wilftek, LLC, concentrating his practice in the ?ields of
technology, intellectual property, business and commercial law
• Rick Nucci • More than 15 years experience as an entrepreneur, Chief Technology
Of?icer, and President of the Philly Start up Leaders
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Introduction
• How many people have been involved in an entrepreneurial project?
• How many people have been to a hackathon or start-‐up weekend?
• Does anyone know the difference between hackathon and startup weekend?
Survey of Entrepreneurs • Assume someone carries on a
project started at one of these events • Who can use the materials? • Who cannot use the materials? • What are the restrictions? • Who has the right to participate in a
future company? • When should you form a legal
entity?
SnapChat Story
• One founder with idea who brought in a business focused co-‐founder who in turn brought in a coder
• The 2 newer co-‐founders then proceeded to force out the initial idea founder
• The 2 newer co-‐founders changed the name to snapchat & developed the company to what it is today
• Initial idea founder suing the 2 newer co-‐founders for ownership for his part in the initial company
Facebook, Part I • Winklevoss twins allege that they hired Mark Zuckerberg
to code the project • Zuckerberg took the project and made it his own, cutting
the Winklevoss twins out • The Winklevoss twins sued because Zuckerberg stole the
idea and ultimately settled their claim
Facebook, Part II • Eduardo Saverin served as Facebook’s Chief Financial
Of?icer and business manager during the website’s launch in 2004
• Later, Saverin appears to have been removed from the company and his ownership interest diluted
• Saverin sued Facebook and won a settlement worth approximately $2.2 bn as of the Co’s IPO
Thoughts? • How would you suggest we avoid this issue in the future? • What happens if you work with a couple people during a
weekend event and create an idea, but then you go off and start a company that ends up being really successful?
• Any suggestions?
Intellectual Property Breakdown • Patents = right to exclude others from making, using, or
selling your invention • Copyrights = any original work of authorship • Trademarks = any words, logos, or symbols which
identify the source of goods • Ideas = not protected on their own
• Just because you thought of an idea, doesn’t mean you are entitled to ownership of the company
• However, if you do work on something, you may have intellectual property
Default Law I
• Absent an agreement, the creators of a patentable idea must join together to ?ile for a patent. Once issued, any inventor can use or license (non-‐exclusively) for their own pro?it
• Copyrightable works also owned by creators and can be licensed, but they must account to each other for pro?its
Default Law II • By default, the company has no rights to the intellectual property created
• Must be assigned by the creators to the company • No requirement that creators/founders keep information and inventions con?idential
• Intellectual property is not the company! • Ideas ≠ ownership of the company • Thus, participants have no right to participate in the company
Possible Solutions • Unanimous / Majority Consent by Creators
• Absent unanimous/majority consent, the Founders shall not engage in any of the following activities: • Make any website or code or services available to the public for a fee; • Accept paid advertising on any website; • Accept revenues of any kind; • Incur any debt or seek or accept any outside ?inancing; or • Incur any ?inancial or contractual obligations or liabilities of any kind
Possible Solutions • Free Use by all Creators
• The agreement is between Hacker01 and Hacker02. We agree as follows:
• Each of us, individually, is free to use any programming concept shared, discovered, or created during the _________ project.
• Each of us hereby grants a full, non-‐exclusive, free license to the other to use any code or binaries from the above project. This means that each of us, individually, is free to use anything we create for the project above as part of a separate larger project with a signi?icant amount of additional functionality.
• In the event that the project above is successful, we’ll take reasonable efforts to come to a new agreement with the goal of creating a separate entity to manage and develop the project further.
Possible Solutions • Idea creator owns all intellectual property
• Absent consent by the project originator, the Founders shall not engage in any of the following activities:
• Make any website or code or services available to the public for a fee; • Accept paid advertising on any website; • Accept revenues of any kind; • Incur any debt or seek or accept any outside ?inancing; or • Incur any ?inancial or contractual obligations or liabilities of any kind
Proposed Approach • To avoid the ?ight down the road between the original
creator of the code project, business idea etc, we propose some rules of thumb:
• When this is an evolving idea, agree that all participants are free to use the IP • When starting to narrow it down to a ‘real’ business venture, assign all
IP to the venture • In any event, there is no right for participation in the company • Remember that IP assignments are defensive & not offensive
Hackers Code of Collaboration WORKSHOP SPONSORS
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The ELC is accepting client applications for Fall 2014 drexel.edu/law/ELC
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