Lawyers guide to Software, app & video game development
laW
LAWYERS GUIDE TO Software, App & Video Game Legal Issues
WED, SEPTEMBER 14, 2016NOON- 1PM
JIM CHESTER, SPEAKER
Entrepreneur & Founder/CEOTechnology Attorney & Managing
PartnerAdjunct Professor of Law
[email protected]
IntroductionCompared to other types of venturesLots of
similaritiesIP-based offers unique opportunities and risk
Software App & Video Game EntrepreneursSAVaGEs
Formation and FundingEntity StructureChoicesStateEntity TypeLLC,
Inc., GP, sole prop.Tax Considerations
Common PitfallsSo-and-so says I need to be a DE corpNot
completing the process
Formation and FundingFunding Self Equity DebtRoyalty
Common pitfalls Not properly documentedLoss of controlGetting
value (& Valuations)
SAVaGE Development DIY (including
co-owners)EmployeesContractors
Common pitfallsOutsource (outside US)Failure to secure IPClear
benchmarks
Ill put in Icons when Youre done. Or who knows you may change
the layout6
Only large high-tech companies have IP- EVERY business has IP
Assets - A significant amount of innovation comes from individual
inventors & small and medium enterprises
Securing your IP rights in the US will give you protection in
other countries as wellIn most cases, US IP rights mean nothing
outside US
IP law protects ideas Law protects the tangible manifestations
of ideas
Intellectual Property
Common IP Myths
I. S.U.E. IP Protection StrategyIdentify SecureDirect
IndirectUseEnforce
TrademarksAny name, symbol, figure, letter, word, or mark
adopted and used by a business to designate its goods/services and
to distinguish them from those of othersCommon law rights
automatic, but USPTO registration grants broader rightsInitial term
6 years, but can be renewed indefinitelyCan file
multi-international but must prosecute separately.Convention gives
6 months to claim priority.
IDENTIFY: Types of IP
A service mark is the same as a trademark, except that it
identifies and distinguishes the source of a service rather than a
product.
There are generally three types of certification marks. First,
there are certification marks that certify that goods or services
originate in a specific geographic regionCOGNAC (knyak) for
distilled brandy from a region in FranceSecond, there are
certification marks that certify that the goods or services meet
certain standards in relation to quality, materials, or mode of
manufacture (e.g., approval by Underwriters Laboratories). CELANESE
certifies plastic toys meeting certifiers safety standardsThird,
certification marks may certify that the work or labor on the
products or services was performed by a member of a union or other
organization, or that the performer meets certain standards.
There are two characteristics that differentiate certification
marks from trademarks or service marks. First, a certification mark
is not used by its owner and, second, a certification mark does not
indicate commercial source or distinguish the goods or services of
one person from those of another person.
Trade dress originally included only the packaging or dressing
of a product, but in recent years has been expanded to encompass
the design of a product. It is usually defined as the total image
and overall appearance of a product, or the totality of the
elements, and may include features such as size, shape, color or
color combinations, texture, graphics. Two Pesos, Inc. v. Taco
Cabana, Inc., 505 U.S. 763, 764 n.1, 23 USPQ2d 1081, 1082 n.1
(1992).
Patent- the exclusive right to an inventor to manufacture, use,
or sell an invention.- Can only come from the US govt.- Must meet
statutory requirementsnovel, useful, non-obvious, etc.- Expire
after 20 years from filing NO renewal(Design patents 14yrs. From
issue)PCT allows for foreign filing/priority but must prosecute
each countryTypes of IP
Trade Secrets- Secrets secrets kept from the world that relate
to how to manufacture, use, or sell something (i.e., give a
competitive advantage)- No registration required - Does not expire-
Must be protected (e.g., limited access, NDAs, etc.)Types of IP
Copyright- exclusive right to make copies, license, and
otherwise exploit a literary, musical, or artistic work, whether
printed, audio, video, etcCan last long time:Authors life + 70
yearsUp to 120 years for work for hire
Under Berne Convention, this is the one type of US IP right that
gets automatic protection in other countriesDont need registration,
but registration gives additional rights/benefits
Types of IP
Even though registration is not a requirement for protection,
the copyright law provides several inducements or advantages to
encourage copyright owners to make registration. Among these
advantages are the following: Registration establishes a public
record of the copyright claim. Before an infringement suit may be
filed in court, registration is necessary for works of U.S. origin.
If made before or within five years of publication, registration
will establish prima facie evidence in court of the validity of the
copyright and of the facts stated in the certificate. If
registration is made within three months after publication of the
work or prior to an infringement of the work, statutory damages and
attorneys fees will be available to the copyright owner in court
actions. Otherwise, only an award of actual damages and profits is
available to the copyright owner. Registration allows the owner of
the copyright to record the registration with the U.S. Customs
Service for protection against the importation of infringing
copies.
Intellectual Property - Software
GUI = graphic user interface13
Intellectual Property - Apps
Intellectual Property - Games
NDAs/Confidentiality AgreementsPartner/JV
AgreementsAssignments/TransfersEmployment/Contractor AgreementsWork
for Hire and development agreements
SECURING IP Rights - Directly
Direct IP protection refers to using contracts and individual
relationships to protect IP rightsThis allows IP owners to define
the scope of their IP rights and identify when an infringement
occursThe key limitation is that IP owners can only enforce their
IP rights only against those with whom they have contractual
relationships
State & Federal U.S.TM, SM, trade dress USPTO/StatePatents
USPTO Copyrights US Library of Congress Trade Secrets (no
registration)
International Treaties: WIPO/PCT (Patent); Madrid Protocol
(TMs)Berne Convention (Copyright)Foreign GovtsSECURING IP Rights -
Indirectly
Indirect IP protection involves taking advantage of government
registration protections to secure IP rights against a much broader
group of would-be infringersDue to the broad scope of protection, a
key limitation of indirect IP protection is that it is difficult to
spot infringement, particularly when the infringing activity is
isolated or remote
No cookie-cutterType of agreement will depend on type of IP,
value, etc.Often start with prior agreements, but each transaction
will need to be evaluated individuallyEULA/TermsUSING IP Assets
Licensing & Assignment
Investigating claims/potential infringementDrafting letters of
inquiry & Cease & desist lettersNegotiating settlements
& consent agreementsProsecuting & defending infringement
lawsuits
ENFORCING IP
Burden of policing and enforcing IP rights rests with owners of
the IP
eCommerceTerms of Use/EULAWarranties Limits of LiabilityDMCA
PoliciesIP ownership Limits of license/grounds for
terminationPrivacy PoliciesGoverned by an array of state, local,
foreign lawsSpecial rules may apply (HIPAA, PCI, etc.)
Common PitfallsCut and PasteNot following PP terms
Other
AgreementsSLAsSaaSMSAsAdvertisingPublisherDistributor/ResellerMerchandisingCharacter/content
licenses
International IP protection
Use of Open source code
US trade laws
Tax issues
Special Issues
https://opensource.org/faq#commercial
ExitSelling the company / AssetsHousekeepingDue Diligence
Common PitfallsIP ownershipLT employment agreementsContingent
Liability
SAVaGE ResourcesFree SAVaGE Knowledge Base available at:
www.chester-law.com/se-kb
Join Texas SAVaGEsLinked In:
https://www.linkedin.com/groups/8530939MEETUP:
http://www.meetup.com/Texas-SAVaGEs-Software-App-Video-Game-Entrepreneurs/Web:
www.TexasSavages.com Facebook:
https://www.facebook.com/TexasSavages/
