Software Licensing Disputes 4-29-15

SOFTWARE LICENSING DISPUTES: Resolution Methods & Remedies Business Law Seminars and Lawyer Networks Silicon ValleyPresented by:Christopher Shenfeld, AttorneShenfeld & Associates!!!"shenfeldl#!"$o%April 29 2015 Palo Alto, CaliforniaDisclaimerThis session is for educational purposes only.What is discussed in this session does not constitute legal advice, nor does any clientattorney privilege or confidentiality attach regarding issues discussed, pu!licly or privately in relation to this session."n other #ords, #e$re not your la#yers. %&'()"'*+ , A%%-C"AT'% Business Litigation Attorneys Key Provisions Leading to Software Licensing Disputes: Part 1%&'()"'*+ , A%%-C"AT'% Business Litigation AttorneysScope of permitted access and use by licenseeExample. needs of licensee change due to /erger, change in operating syste/sPricing & payment of license fees a/!iguous pricing structurelac0 of clarity regarding installation, testing, training or e1tra serviceslicensee$s rights to dispute invoices Key Provisions Leading to Software Licensing Disputes: Part 2%&'()"'*+ , A%%-C"AT'% Business Litigation AttorneysTird party access and useExample. access !y licensee$s e/ployees vs. independent contractors and advisors!pdates and modificationsExample: failure to ade2uately distinguish /aintenance releases fro/ soft#are support servicesExample: is it an update or i/prove/ent, or a ne# release3 Key Provisions Leading to Software Licensing Disputes: Part "%&'()"'*+ , A%%-C"AT'% Business Litigation Attorneys#estrictions on transferring or sublicensing te softwareExample. A su!licensee !reaches the soft#are license agree/ent and the licensor and licensee disagree on #hen or ho# the licensee /ust ide/nify the licensor for !reachExample: *icensee fails to co/ply #ith a change of control provision #hen assigning its license to a third party that ac2uires the licensee$s !usinessSource $ode %scrow &rrangements 4 #here licensee hedges against licensor$s dissolution or failure to /aintain soft#areDispute#esolution 'ramewor(s%&'()"'*+ , A%%-C"AT'% Business Litigation Attorneys5 *icense True 6ps 5 Cease and +esist *etters 5 Audits 5 *icense Ter/ination 5 7ediation 5 Ar!itration 5 *itigationLicense True !psWhere the end user deter/ines ho# /any licenses it needs and then #ill 8true up9 !y purchasing those licenses fro/ licensor*east adversarial dispute resolution /echanis/:e2uired !y /any soft#are licenses'ssentially an 8&onor %yste/9 predicated on end user representing to pu!lisher that it is in co/pliance #ith licensing rulesCan !e initiated in lieu of a self audit at pu!lisher$s re2uestWor0s !est #here pu!lisher and end user have vested interest in continuing ongoing relationship%&'()"'*+ , A%%-C"AT'% Business Litigation Attorneys$ease and Desist LettersTypically prepared !y attorneys to !e effective-utline allege infringe/ent or violation of soft#are license-ffers to forego further legal action if end user i//ediately ceases fro/ further infringe/ent or violations7ost effective #here !argaining position heavily favors pu!lisher+ata suggests that cease , desist letters have high rate of success%&'()"'*+ , A%%-C"AT'% Business Litigation AttorneysLicense &udits: Part 1Self Audits Where end user inventories the applica!le soft#are on the co/puters and report the nu/!er of installations, licenses, and license deficiencies, then certifies the accuracy of the results to the pu!lisher;ives licensee so/e control over ti/ing and allocation of resources , allo#s it to ensure that audit results are accurate and co/plete-ften e/ployed !ydistri!ution of soft#are ?licensor@ or to 0eep the license in place pending final deter/ination of dispute ?licensee@ (ot availa!le if license irrevoca!le or re2uires dispute resolution first ROADBLOCKSPROO! ISS"ES%&'()"'*+ , A%%-C"AT'% Business Litigation Attorneys Discovery 5urdles: 0nadvertent disclosure of software code or confidential financial data %olution. %ee0 confidentiality order , file docu/ents 8under seal9$an Prove 6rongful !se troug Inferen#e or Substantial Similarit$: *icensor does not need to prove that licensee$s altered soft#are is identical to the licensed product Prove lost profits or un4ust enricment troug e7perts, evaluation of financial data of parties develop/ent costs of creating soft#are value of soft#are to licensor$s !usiness Questions?Please contact us any time with additional questions.Christopher %henfield, Attorney at *a#%&'()"'*+ , A%%-C"AT'%5