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Challenges Faced by Legal in Global technology Companies

Challenges Faced by Legal in Global technology Companies



Michael Michalyshyn slides on Challenges Faced by Legal in Global technology Companies

Michael Michalyshyn slides on Challenges Faced by Legal in Global technology Companies



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    Challenges Faced by Legal in Global technology Companies Challenges Faced by Legal in Global technology Companies Presentation Transcript

    • IT.Can Seventeenth Annual Canadian IT Law Association Conference October 24, 2013
    • Confidential Information of QNX Software Systems Limited 2 Challenges Faced by Global Technology Companies
    • Confidential Information of QNX Software Systems Limited 3 Legal in Challenges Faced by Global Technology Companies
    • Confidential Information of QNX Software Systems Limited 4 Who are we? Two distinct technology businesses within BlackBerry, each with global operations but each facing different legal challenges  BlackBerry (BB) - OEM of mobile handsets, and provider of associated application and device management services • Legal challenges driven by the “speed of consumer”, by scale of operations, and by past growth and success  QNX Software Systems (QSS) - Intermediate software supplier, and provider of platform-enablement services • Legal challenges driven by complexity of technology, diversity of customer base (vertical markets, size and sophistication), and by length of customers’ product life cycles
    • Everyone knows what BlackBerry does ….. but what about QNX? Confidential Information of QNX Software Systems Limited  QNX Software Systems (QSS) - supplier of embedded Real Time Operating System (RTOS) software and platform middleware  Customers range from very large (auto projects with millions of units) to very small (nuclear power plant control systems that need to keep systems in service for decades)  Auto is our key market (infotainment, hands free, telematics & digital instrument clusters)  Founded in 1980, we have 33 years of experience in embedded systems • 25 years of private ownership & organic growth, 5 years as a subsidiary of Harman International, 3 years as a subsidiary of BlackBerry • Throughout we have continued to operate like an independent start-up company  Our journey (customer base & parents) has given us visibility into a wide spectrum of in-house legal groups  Our market has exposed us to some big licensing challenges over the years 5
    • Confidential Information of QNX Software Systems Limited 6 Tackling Challenges Faced by Legal in Global Technology Companies
    • Embrace 4 Touchstones Confidential Information of QNX Software Systems Limited 7 Introduced by BlackBerry’s CLO (Steve Zipperstein) to guide behaviour & measure performance of Legal professionals. Must be embraced by staff & reinforced by leaders! • Urgency – approach work with a sense of urgency. The business can’t afford for Legal to delay projects. Anticipate your clients' needs. Be proactive, not reactive and act as a catalyst to move projects forward. Help your colleagues if they are overwhelmed. If you need help, ask • Efficiency – work smarter, simplify processes and eliminate bureaucracy as much as possible • Practicality – focus on enabling and achieving the business’ goals, taking into account the true risks at stake and the paramount need to comply with the law. Our job is to solve problems and help the business people figure out the best, cleanest, most practical way to achieve their objectives. Legal needs to value practicality above winning every last negotiation point • Creativity – challenge comfort zones and precedents, provide the business people with creative solutions to assist them in reaching their goals. Sometimes we must say “no”, but always be prepared to offer alternatives. Our goal is to make the business view us as a valuable and trusted partner, not a roadblock or bottle neck If you’re committed, the results can be remarkable!
    • Confidential Information of QNX Software Systems Limited 8 Stay Close to the Business  Understand the technology (products and services) and stakeholders’ needs – rapidly moving targets, especially for consumer device businesses (the “Speed of Consumer”) • how technology is licensed (inbound and outbound) • how technology is delivered, updated and supported • how technology is used (by customers, technology suppliers and by eco system developers) • how the technology fits together (black box abstraction ) and how it is built  Key to having a nimble & responsive Legal team • can’t negotiate effectively unless you understand the impact of proposed compromises • can’t tell when you don’t have all the information you need if you don’t understand the basics • can’t get engineering or product management bandwidth if you lack credibility in their eyes or constantly need them to participate
    • Confidential Information of QNX Software Systems Limited 9 Stay Close to the Business (cont.)  Embrace Blurring of Operational Lines - break down silos & work as a team, with each member taking on what they do best • We are a unique integration point for information about commercializing our technology - • R&D, Prod. Mgmt., Strategic Alliances, Marketing, Engineering Services, Sales, Finance We can be a very valuable and sought out contributors to the business if we are prepared to blur the lines of our traditional roles – its one of the most rewarding aspects of working in-house - Examples – SID & Technology Block Diagrams (cross functional tools), Product Management (license models, product and service offerings), Patent Prosecution (offloading developers), Sales (setting customers’ expectations), ISO PIT Crew, Revenue WIG  We excel in ferreting out engagement details because we have the experience, knowledge and scars from previous customer/supplier engagements (and, well … because we’re anal by nature)
    • Confidential Information of QNX Software Systems Limited Stay Close to the Business (cont.)  We can facilitate this: • Align legal professionals with business units - to give them the opportunity to develop in-depth product and business knowledge • Physically co-locate them with the groups they support, and encourage interaction to foster teamwork - face to face whenever possible, invest in working relationships • Encourage & support development and sharing of product knowledge across the Legal team, as well as the participation of Legal professionals in cross-functional group projects - technical resources as part of BB (one generalist one OSS specialist) & QSS Legal • Consider developing technical experts into future legal professionals  It pays off • Greater effectiveness of Legal team & key stakeholders. Key driver of engagement, professional development and job satisfaction for in-house counsel 10
    • Confidential Information of QNX Software Systems Limited So, Staying Close to the Business …  Fosters Creativity - you better understand the implications of deviating from your standard engagement model and related policies • Lack of understanding or experience results in lawyers defaulting to standard company policies because they don’t understand whether or not they might be creating a problem  Drives Efficiency – you’re not as reliant on stakeholder groups to understand the business impact of decisions – and when you do need them, they’ll respond because you’ve established yourself as a valued member of their team who will only bring them in when really needed. Also helps identify what you should not be doing • Legal can question whether what we are doing is substantively meaningful, or just diligent completion of a flawed process (Black Duck analysis of open source, source code production for litigation – brute force vs. logic and reason) 11
    • Confidential Information of QNX Software Systems Limited 12 So, Staying Close to the Business … (cont.)  Allows you to be Practical - you know what the business is trying to accomplish (not just in the context of the one transaction, but in the larger picture) and you understand the pressure points for your client as well as the customer/supplier you’re engaging with • Understanding the business is fundamental to effectively balancing risk, IP ownership positions, service commitments, etc. The alternative is to take overly conservative positions to deal with worst case scenarios  Addresses Urgency - everything becomes less work given your background knowledge and access to critical team members • You will become a sought-out resource early in the game, instead of an afterthought, or worse – an obstacle to be avoided if at all possible
    • Confidential Information of QNX Software Systems Limited 13 Challenges Faced by Legal in Global Technology Companies
    • Confidential Information of QNX Software Systems Limited 14 Licensing Groups Challenges Faced by Legal in Global Technology Companies
    • Confidential Information of QNX Software Systems Limited 15 Challenges Created by Patents  Bigger issue for BB as an OEM than QSS as an intermediate software supplier • Range of Patent challenges (Primary and Secondary) • Threat from Non-Practicing Entities (BlackBerry get’s its share) • Cross licensing with competitors • Licensing with other patent stakeholders (e.g., standards-essential patent pools)  BlackBerry Technology Licensing is separate from BB’s Patent Group (prosecution, licensing and litigation support) which is separate BB’s Litigation Group  But Patents are still a big challenge for the BlackBerry and QSS Licensing groups • When we engage with technology suppliers who are divisions of companies who are monetizing their patent portfolio, or • When we engage with technology suppliers who are divisions within companies who are competitors and have or may want to establish patent cross license arrangements
    • Confidential Information of QNX Software Systems Limited Challenges Created by Patents (cont.)  These divisions cannot to do anything that might compromise existing or potential patent licensing opportunities • Grants are limited to copyright (and maybe trade secrets) - Patent non-asserts may be available if you have enough bargaining power • IP ownership negotiations are more complex  Requires extra diligence to avoid contamination of “common code” • Must avoid creating dependencies on their patent licensing program - e.g., when you’re not using their hardware or implementing standards-essential functionality (background, foreground – independent and collaborative, feedback) - -  Exposure – we may receive counterpart to software we have developed or have licensed from others (e.g., radio stacks, graphics drivers, etc.) that we have to port, optimize or use to modify our own code, often in a collaborative effort with their engineers to meet deadlines Contamination – we may need to modify our own common code to support the supplier’s products (e.g., optimizing common kernel source to better suit their processor) 16
    • Confidential Information of QNX Software Systems Limited 17 Challenges Created by Patents (cont.)  Close collaboration with BB Patent group to avoid creating conflicts with their existing arrangements or future plans • Above transactions • Consortium agreements (making contributions or clearing in-bound code) that have patent pooling or non-assert provisions • Open sourcing code (inadvertent patent grants)
    • Confidential Information of QNX Software Systems Limited 18 Challenges Created by the Speed of Consumer  Rapid evolution of products and services • Need to understand new product and service plans to determine required legal treatment - rapid introduction/evolution of 3rd party technologies and open source • often breaking new ground with offerings that are new to the marketplace cannot delay schedules Need firm grasp of overall license engagement model (for products, services, developer ecosystem), to ensure that supply arrangements and complementary product and/or service offerings mesh without conflicts and agreements  Legal agreements usually required well before product release, often when details required for those agreements are still evolving • Classic squeeze at product release milestone deadlines • Need to address requirements in all material markets around the world (localization) - Requires close collaboration with outside counsel
    • Confidential Information of QNX Software Systems Limited 19 Challenges Created by the Desire for Simplicity  Balancing simplicity of engagement model (user experience) with: • Precision and enforceability - Many (and growing) legal issues to be dealt with in many countries - • What do competitors do? How much risk is the business willing to take? Flexibility and maintainability - Must support cadence of change to product and service offerings • The right level of abstraction creates versatility without destroying comprehension Inertia created by earlier releases - • How do you transition the existing user base as product and service offerings evolve and as new licensing requirements emerge? What are we going to break? - Precedents refined over many releases by many hands, usually for very good reasons - Trying to re-capture all of these nuances in new simplified agreements can be a real challenge
    • Challenges Created by Open Source Confidential Information of QNX Software Systems Limited  Increasing use of OSS in products & recognition of such by customers and competitors  Desire to push source out to developer community under OSS terms (easy access) or as contribution to open source projects (reduced maintenance) • Clearing use - Requires visibility into code adoption (policies, registration database, audit tools) with proactive strategy to minimize surprises at product release - Requires precise understanding of how code is used, which can change over time (this is where the product knowledge and credibility with engineering really pays off) • Compliance - Strategy and tools to gather and publish required flow-thought licenses/attribution - Well defined process and infrastructure to deal with source requests resulting from distribution of Copyleft-licensed code • Clearing Contributions - Requires well defined consultation process to conduct required patent scrub and to confirm with all stakeholders – are any patents or differentiating features at risk? 20
    • Confidential Information of QNX Software Systems Limited 21 Challenges Created by Privacy  Amazing to see data being mined from computing devices – reinforced every time you use a browser, crowd-sourced apps or location based services • Personalizing on-line experiences • Focusing on-line advertising  Just the tip of the iceberg for what’s coming – connecting devices into the internet of things • Big Data - many big players investing heavily in anticipation of emerging opportunities • Data collection – both interactive (user input) and passive (sensors) • Data analytics – connecting the dots  Companies like BlackBerry, who control important collection points (mobile devices), and QSS, who have the technology and expertise to enable embedded platforms, have important opportunities in this emerging area
    • Challenges Created by Privacy (cont.) Confidential Information of QNX Software Systems Limited  These opportunities come with privacy responsibilities • What can be collected (possible to collect vs. practical to get required waivers) • What can the data be used for (especially once combined with other information)  How does this change with BYOD (dual personalities – personal and corporate) • Different personal & corporate views on what devices and data may be used for  The engagement model for all customers using sensor-enabled devices (like mobile handsets) and/or hosted services (pre-loaded or downloadable) need to take into account the related privacy laws for all relevant jurisdictions • To work with product management to fully understand (or try to predict) the long term vision for these service (including related business models) so we can draft agreements that are flexible enough to support what they are trying to achieve - Many of these services will be staged over several releases (e.g., BBM)  How to impose required policies around the world for both new and existing customers in a way that doesn’t overwhelm consumers or become a nightmare to administer as programs evolve 22
    • Confidential Information of QNX Software Systems Limited 23 QNX Software Systems’ Challenges Faced by Licensing Groups in Global Technology Companies
    • Confidential Information of QNX Software Systems Limited Challenges Created by Delivering 3rd 24 Party Software  Build more value into our Software Development Platform – more middleware and integration of third party software • Demonstrate what can be done with our product in demonstration platforms and reference implementations - QNX Connected Automotive Reference Platform (CAR) - CES demo cars (Prius, Corvette, Porsche, Jeep, Bentley) • Deliver value/time savings of engineering integration effort without adding licensing complexity - Cascading sublicensing rights and flow-through terms can be a nightmare (QNX RTP) o Development and distribution rights through multiple levels of value add and through direct and indirect channels around the world – we don’t fit traditional software models - Right to deliver reference implementations (sometimes with prerequisite licenses) - Commercial development/distribution license to be negotiated by OEM directly with 3rd party
    • Confidential Information of QNX Software Systems Limited Challenges Created by 3rd Party Terms 25  QSS as an intermediate software supplier, provides building blocks to developers. They only use a subset – but what subset? • Configuration-specific Open Source disclosure /compliance • Configuration-specific proprietary license restrictions or gaps (patent licenses, prerequisite licenses)  Developed License Guide that summarizes and attributes these restrictions to applicable components • Lots of manual work, intimidating superset of information, moving target from release-to-release • Very difficult to link in-bound licenses to specific code, or source code to a functional description • Doesn’t cover patches, custom engineering deliverables, mixing of components from different releases  Developed a tool that allows tracing attributes associated with individual source code files through the build process to resulting binary files (Source Information Database) • Collaboration of Legal, R&D, Build Group, IT – definitely “blurring of operational lines” • A real-time, full coverage equivalent of License Guide - all kinds of synergies
    • Confidential Information of QNX Software Systems Limited 26 Challenges Created by Mission Critical Markets  Mission critical markets (incl. safety critical Automotive, Medical, Nuclear) • Who is in the best position to mitigate risk (even if it’s a latent problem in our OS) – our customers indemnify us (what?!?) - All software has errors – documented in release notes, found/fixed in subsequent releases, latent errors. Can be customer’s own development/configuration that causes an issue to surface - Need to isolate the final configuration of runtime components and test them with rest of software on the intended hardware platform (integration testing). Rigor of testing depends on vertical markets and company practices/appetite for risk - QSS doesn’t control integration testing, product release decisions (when is it good enough to ship), risk mitigation (including end user contracts) - We license a commoditized product (bolts) into low volume high risk applications - We built our reputation on the reliability and robustness of our software, but the risks still have to be balanced with the commercial opportunity
    • Confidential Information of QNX Software Systems Limited 27 That’s it - Questions?
    • © 2013 QNX Software Systems Limited. QNX, QNX CAR, NEUTRINO, MOMENTICS, AVIAGE and other product names are trademarks of BlackBerry Limited, which are registered and/or used in certain jurisdictions, and used under license by QNX Software Systems Limited. The information herein is for informational purposes only and represents the current view of QSSL as of the date of this presentation. Because QSS must respond to changing market conditions, it should not be interpreted to be a commitment on the part of QSSL, and QSSL cannot guarantee the accuracy of any information provided after the date of this presentation. QSSL MAKES NO WARRANTIES, REPRESENTATIONS OR CONDITIONS EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION. Mike Michalyshyn michalym@qnx.com