Software Law for Developers

Software Law for Developers

Brad [email protected]

208.388.4875@bfrazjd

Boise Code CampMarch 19, 2016

Introduction . . .The business of writing, owning, licensing and

monetizing code has become morecomplicated due to the evolution of SaaS andthe move to mobile, meaning a proliferation

of apps and APIs. Proper awareness of how toown your code (or not), how to license it,

how to allow others to subscribe to it, how toprotect it and how monetize it is critical for

every developer.

Outline

1. Own it

2. Protect it

3. Monetize it

Own it

• Presentation assumes you are able to ownthe code

• Exceptions . . .

– When you don’t.

Own it

• Where did the source code come from?

Own it

• In what role did you write the code?

– Solo

– Contractor

– Employee

Own it

• Anybody else write part of it?

Own it

• Where do you want ownership to reside?

– You

– LLC

– Corporation

Own it

• Ownership legal exposures

– Warranty of title

– Indemnification concerns

– Exit strategies

Protect it

• Copyright law

– Creation

– Ownership

– Registration

– Enforcement

Protect it

• Copyright law

– Creation

• Copyright is a noun

• Sufficiently creative idea embodied in atangible medium

Protect it

• Copyright law

– Ownership

• Author owns the copyright

• Except for works made for hire

• Except independent contractor with asigned writing

Protect it

• Copyright law

– Registration

• Creates a remedy—does not affect creationor ownership

• Required to maintain infringement lawsuitin federal court

• Register timely—ASAP after creation of“best edition” of the work

Protect it

• Copyright law

– Vigilance

• Watch for infringers

• Address them promptly (three year statuteof limitations)

• Do not bluff

Copyright HypotheticalAssume that Company X hires an independent contractor to writecomputer code. Company X pays the programmer, Jim, $5,000, and Jimdelivers a flash drive with the commissioned program on it. Company Xthereafter begins to license the software to third parties. A short timelater, Jim’s former employer sues Company X for copyright infringementasserting that it owns the copyright, not Company X since Jim created itwhile he was their employee and Company X did not obtain a writtencopyright assignment from either Jim or Jim’s former employer. (Notethat Jim’s former employer may also, on these facts, sue each ofCompany X’s putative licensees.) Company X settles that lawsuit andbuys the copyright to the code from Jim’s former employer. Company Xagain begins licensing the code to third parties. One of those licenseesbegins selling copies of the software without permission, and CompanyX sues them for copyright infringement. The case is dismissed withoutprejudice, however, because Company X did not register its copyright inthe software before filing the complaint.

Monetize it

• What’s the deployment modality?

• Can you charge for it?

• Consider “open source” code

Monetize it

• Deployment modality: license

– Contract

– Worthless if you cannot prove assent to thecontract

– Mechanisms?

– Issues: warranties, indemnity, install base

Monetize it

• Deployment modality: SaaS

– Service, not software

– Different contract

– Issues: security, privacy, data, “you can onlygive what you have received”

Monetize it

• Deployment modality: hybrid

– Contemplates service (subscription) and anapp (license)

– Let’s talk about apps . . .

Monetize it

• Post-deployment issues:

– Support

– Maintenance

– License versus SaaS implications

Monetize it

• Exit, VC, sell company, sell code as stand-alone

– All these are impaired if fundamentals arenot observed

When to Use a License and Whento Use SaaS

• If a SOFTWARE OWNER does not want tobe responsible for support andmaintenance obligations of the install base,then a subscription model may be moreappropriate.


• If a SOFTWARE END USER needs the abilityto customize the code and how it works inthe end user’s enterprise environment, alicense model may be more appropriate.


• If a SOFTWARE OWNER is concerned abouttrade secrets in its code beingmisappropriated through reverseengineering, then a subscription modelmay be more appropriate.


• If a SOFTWARE END USER has a largeenterprise that requires a great deal ofsoftware support, a license model withsupport and maintenance agreements maybe more appropriate.


• If a SOFTWARE END USER has a largeenterprise that requires development ofcustom code and implementation services,a license model with both professionalservices components and support andmaintenance agreements may be moreappropriate.


• If the application object code is still in betaand/or is subject to very frequent revision,then a subscription model may be moreappropriate for that SOFTWARE OWNER.

• A note here on beta or source codelicenses.


• If either the SOFTWARE OWNER or theSOFTWARE END USER is concerned aboutcloud privacy and data security or if therelevant regulatory environmentdisqualifies a cloud deployment model forthose reasons, then a license model withsupport and maintenance agreements maybe more appropriate.


• If the SOFTWARE END USER is in a locationor facility that renders Internet accessspotty or unreliable, a license model maybe more appropriate.

When to Use a License and When to UseSaaS

• If the SOFTWARE OWNER cannot affirmativelystate (warrant) that it owns the copyright inand to or has rights to sublicense theimplicated code, a subscription model may bemore appropriate. This is the “warranty oftitle” problem.

• Otherwise your client may get sued forcopyright infringement—rememberhypothetical?


• If the SOFTWARE OWNER has both server-based deployment AND an app or an API, ahybrid model may be more appropriate.

• Consider the move to mobile . . .


• Does your app already have an “upstream”license in place, like the iTunes App Storelicense?

• Do you need more/different?

www.hawleytroxell.com

THANK YOU!

Brad [email protected]

208.388.4875@bfrazjd