Structuring Software and Technology and Development...
Transcript of Structuring Software and Technology and Development...
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Presenting a live 90‐minute webinar with interactive Q&A
Structuring Software and Technology Structuring Software and Technology Licensing and Development AgreementsCrafting Provisions to Allocate Risk, Avoid Common Pitfalls, and Minimize Liability
T d ’ f l f
1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific
TUESDAY, OCTOBER 4, 2011
Today’s faculty features:
Paul H. Arne, Partner, Morris Manning & Martin, Atlanta
Paul C. Jorgensen, Principal, Jorgensen Law Firm, Washington, D.C.
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Structuring Software and Structuring Software and Technology Licensing and Technology Licensing and Development AgreementsDevelopment AgreementsDevelopment AgreementsDevelopment AgreementsCrafting Provisions to Allocate Risk, Avoid Common Pitfalls, Crafting Provisions to Allocate Risk, Avoid Common Pitfalls, and Minimize Liabilityand Minimize Liability
Paul C. Jorgensen202‐466‐[email protected]
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Segment GoalsSegment Goals
Most important Draft better Most important provisions of tech license and
Draft better provisions
development agreements
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Why License/Develop Tech?
No capacity for Can avoid runaway p ymanufacture, development, distributionS lf i t < Li
ylicensee
Innovation control Self-invest < License or
develop Licensee better capacity
Settle dispute Competition control
Independent incomeLicensee better capacity and expertise
Keep IP
Independent income
Commercialize/expand Access without costs
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Why Seek License/Develop?
Access to IP Have market access Access to IP IP ready for
commercialization
Have market access and expertise
Market ready for IP No R&D resources
y Independent
expansion and pimprovement plan
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Preparation
Understand the relationship Understand the IP Know your audience Understand the goals Know the key provisions
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Term
Position upfront Avoid Position upfront Consider IP and
expectations
Avoid Auto-renewals
T i tiexpectations Precise Effective
D t d d
Termination details
Date and end dates
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Licensor’s Obligations
Clearly Identify IP Clearly Identify IP Use Attachment Account for IP complexity Account for IP complexity Account for technology changes If in development, attach If in development, attach
development agreement or SOW
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Licensor’s Obligations
What can be done with Character of grantWhat can be done with IP? Grant appropriate and
ffi i t i ht
Character of grant Exclusive/non-exclusive Assignable/non-
i blsufficient rights Use unambiguous verbs
Where activity can be
assignable Most Favorite
Where activity can be done? Territory Field Specific location or
purpose
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purpose
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Licensor’s Obligations
Contact Contact Technical assistance
IP Maintenance IP Maintenance
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Licensee’s Obligations
Services/Deliverables – Separate SOW Services/Deliverables – Separate SOW Payments Type Type Lump Sum – Up front or milestones Royalties - Tied to gross/net saley g
Various methods Useful as incentive Make calculation clear
Frequency – up front, calendar, acceptance
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Licensee’s Obligations Quality Standards
Varies with IP Varies with IP Attachment if potential to change Objective and measurable Inspection/review
ReportingFrequency Frequency
Type Audits
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Confidentiality
Everything CONFIDENTIAL List exceptionsp Proscribe receiver’s use Require security level Include liability for disclosure Return/destroy Specify termination survival
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Warranties
Create reliance and risk Create reliance and risk Full disclaimer or “as is”
Reasonable warranties Reasonable warranties Industry consistent
Client’s degree of control over IP/goods/services Client s degree of control over IP/goods/services Safe duration
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Warranties Do facts allow?
Commercially reasonable timely d lidelivery
IP ownership Capacity to grant
IP lid/ i f i IP valid/no infringe Fitness for intended purpose No workmanship defects Accuracy Reliability No law or 3P right violation Functionality Compatibility Authority
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IP Ownership and Maintenance
Not transferringNot transferring Who owns IP What each bringsg Who owns independently-developed IP Who owns jointly-developed IP
Broad definition Post-termination license Anticipate unknown technologies Anticipate unknown technologies Stress confidentiality
Who must maintain/protect
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Indemnification/Limitation of Liability Indemnification Limitation of Liability
Core Unrelated to Agreement Arising from misreps or
b h
Set reasonable limit Waive consequential,
punitive, etc.breaches
Specific L/r: Related to IP
L/e: Related to
State limits N/A to indemnification Exceptions for breach of
confidentiality or gross L/e: Related to development, manufacture, etc.
Special – product liability
confidentiality or gross negligence
y Carve out willful or
negligent Survive termination
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Termination
Unilateral terminations with notice or none allowed
Eventualities making continuing impossible orcontinuing impossible or repeated failures
Deal killers
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Post-Termination
Obligations stopping and g pp gcontinuing
Return of work completed and in processand in process
Dispensation of source codeR ti Reporting on progress financial status
Confidentialityy Transition assistance
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Miscellaneous
Force Majeure – obligation to Force Majeure obligation to resume
Choice of Law – reflect Territory IP tax security and competitionIP, tax, security and competition laws
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Structuring Software and Structuring Software and Technology Licensing and Technology Licensing and Development AgreementsDevelopment AgreementsDevelopment AgreementsDevelopment AgreementsCrafting Provisions to Allocate Risk, Avoid Common Pitfalls, Crafting Provisions to Allocate Risk, Avoid Common Pitfalls, and Minimize Liabilityand Minimize Liability
Paul C. Jorgensen202‐466‐[email protected]
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Structuring License and D l t A tDevelopment Agreements
Paul H. ArneMorris, Manning & Martin, L.L.P.
3343 Peachtree Rd3343 Peachtree Rd.1600 Atlanta Financial Center
Atlanta, GA [email protected]
www.mmmlaw.com
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Agenda
Drafting “Agile” development g g p
agreements
Open source issues
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Traditional Development ModelTraditional Development Model,“Waterfall”
Determine scope Develop Develop Change Control
T t ( ti i t i Test (sometimes interim deliverables)
Accept (sometime interim acceptance)
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Software developmentSoftware development success rates
Standish group CHAOS report: (2004)( )34% success rate51% “challenged,” i.e., over51% challenged, i.e., over
time, over budget or missing functionality
15% abject failures
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Since Then…
Success rates have improved Success rates have improved
Why?
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Iterative Development Agile Lightweight S Scrum Crystal Clear Extreme Programming Extreme Programming Adaptive Software Development Feature Driven Developmentp Dynamic Systems Development
Method
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Other Major Development:
Software as a service
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Agile Principles
Welcome changing requirements, even late in developmenteven late in development.
Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale.
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Agile Principles
Business people and developers must work ptogether daily throughout the project. p j
The best architectures, requirements and designsrequirements, and designs emerge from self-organizing teamsteams.
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Agile Principles
At regular intervals, the team reflects on how to becomereflects on how to become
more effective, then tunes and adjusts its behavior
accordinglyaccordingly.
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How Should DevelopmentHow Should Development Contracts Adjust?
Consider and document actual development methods
Rights taking on added significanceGovernancePersonnel qualityServices qualityTermination for convenience
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How Should DevelopmentHow Should Development Contracts Adjust?
Recognize and draft different testing at different timesUnitUnitUsabilityRegression
I t ti IntegrationSystemSystem Integrationy gStability Load SecuritySecurity
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Open Source SoftwareOpen Source Software,Agenda
Scope Copyleft Copyleft Sweat the small stuff
Aff Affero Interface with
license/development
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Open Source Scope
It’s plural (x2) It s plural (x2)
It’s ubiquitous
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Copyleft
If you use open source and combine & distribute it with other programming, you must also offer
the source code of the entire work, for a nominal charge, and
not restrict further modification or distribution
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Sweat the Small Stuff
Jacobsen v Katzer 535 F 3dJacobsen v. Katzer, 535 F.3d
1373 (2008)
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Background
Jacobsen – open source
software (JMRI)
Katzer/Kamind Assoc. –
proprietary software
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Alleged “Infringements”Alleged Infringements Authors’ names Authors names
Copyright notices
Reference to license text
Identification of JMRI or Identification of JMRI or SourceForge as the source of the code
Description of how files had been changedchanged
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DMCA
“No person shall circumvent a
technological measure that
effectively controls access to aeffectively controls access to a
work protected under this title.”
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Rise of GNU Affero GPL
[I]f you modify the Program, your modified version must
prominently offer all users interacting with it remotely g y
through a computer network … an opportunity to receive the pp y
Corresponding Source….
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Open Source in License andOpen Source in License and Development Agreements
What open source licenses
i l d?involved?
Internal use only? Internal use only?
Distribution?
Offer on SaaS basis?
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AboutAbout Paul Arne
Paul Arne is the senior partner in the Technology Transactions practice in the Atlanta office of Morris, Manning & M tiMartin.
Paul founded and chairs the firm’s Open Source Practice Group He is a frequentSource Practice Group. He is a frequent speaker and writer on open source topics, including articles in The Computer & Internet Lawyer and the Journal of yInternet Law. `
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Structuring License and D l t A tDevelopment Agreements
Paul H. ArneMorris, Manning & Martin, L.L.P.
3343 Peachtree Rd3343 Peachtree Rd.1600 Atlanta Financial Center
Atlanta, GA [email protected]
www.mmmlaw.com