CORK OPEN COFFEE 24 July 2009 David Reilly Solicitor Reilly & Co Commercial and Technology Law Phone +353 (0)23 88 64887 Mobile +353 (0)86 252 9483 Email [email_address] Twitter @commtechlaw The Creation, Protection and Exploitation of Software www.dreilly.ie

What this talk covers 1. Creation Legal Framework Requirements for Protection Issues Surrounding Start-Ups Software Development Agreements – Key Points Investors and Exit Strategy 2. Protection Types of IP owned in Software How to Protect Them 3. Exploitation Joint Ventures – Key Points Software Licensing Agreements

1. Creation

Legal Framework

Requirements for Protection

Issues Surrounding Start-Ups

Software Development Agreements – Key Points

Investors and Exit Strategy

2. Protection

Types of IP owned in Software

How to Protect Them

3. Exploitation

Joint Ventures – Key Points

Software Licensing Agreements

1. Creation The Legal Framework The Law The Software Directive 91/250/EEC which is implemented by Part II of the Copyright and Related Rights Act 2000 (“the Act”) granted copyright protection to computer programs as literary works. Section 17 of the Act states that: “Copyright is a property right where the owner of the copyright in any work may undertake or authorise other persons in relation to that work to undertake certain acts restricted by way of copyright”. Section 17(3) states that: “Copyright shall not extend to the idea and principles which underlie any element of a work”

The Legal Framework

The Law

The Software Directive 91/250/EEC which is implemented by Part II of the Copyright and Related Rights Act 2000 (“the Act”) granted copyright protection to computer programs as literary works.

Section 17 of the Act states that: “Copyright is a property right where the owner of the copyright in any work may undertake or authorise other persons in relation to that work to undertake certain acts restricted by way of copyright”.

Section 17(3) states that: “Copyright shall not extend to the idea and principles which underlie any element of a work”

1.Creation Therefore, copyright deals with the expression of an idea and not the idea itself – an idea not expressed remains just that, an idea! Copyright as the name suggests, is a right to prevent copying – it is not a monopoly v trademarks and patents.

Therefore, copyright deals with the expression of an idea and not the idea itself – an idea not expressed remains just that, an idea!

Copyright as the name suggests, is a right to prevent copying – it is not a monopoly v trademarks and patents.

1.Creation Requirements for Copyright protection Originality Case of Computer Associates v Altai and the 4 pronged test Is the plaintiff’s work protected by copyright? Are there similarities between the Plaintiff’s and the Defendant’s work? Are the similarities the result of copying? If the copying is found, does it constitute a substantial part of the Plaintiff’s work? Note: Clean Room Environments……

Requirements for Copyright protection

Originality

Case of Computer Associates v Altai and the 4 pronged test

Is the plaintiff’s work protected by copyright?

Are there similarities between the Plaintiff’s and the Defendant’s work?

Are the similarities the result of copying?

If the copying is found, does it constitute a substantial part of the Plaintiff’s work?

Note: Clean Room Environments……

1.Creation Ownership First author is normally first owner Employers v employees and ownership Restrictive covenants in employment contracts Breach of confidence Independent contractors and ownership

Ownership

First author is normally first owner

Employers v employees and ownership

Restrictive covenants in employment contracts

Breach of confidence

Independent contractors and ownership

1.Creation Duration Expires 70 years after the author’s death Restricted acts Copying Making available to the public Adaptations

Duration

Expires 70 years after the author’s death

Restricted acts

Copying

Making available to the public

Adaptations

1.Creation Issues Surrounding Start-Ups Name of the business – CRO+BNA+Domain names Vehicle chosen Commercial contracts generally Subsription and shareholder agreements Terms and conditions of business (on-line/off-line) Lease agreements Licences in and licenses out Software and development agreements Service agreements

Issues Surrounding Start-Ups

Name of the business – CRO+BNA+Domain names

Vehicle chosen

Commercial contracts generally

Subsription and shareholder agreements

Terms and conditions of business (on-line/off-line)

Lease agreements

Licences in and licenses out

Software and development agreements

Service agreements

1.Creation Software Development Agreement - Key points Scope and Specification Cost and when paid Acceptance testing Milestones for the above Ownership and licensing of software (scrutinised by VCs and Investors) Restrictions 3rd party software Warranty period IP indemnity and Warranties generally Maintenance costs/fixes/upgrades/response times

Software Development Agreement - Key points

Scope and Specification

Cost and when paid

Acceptance testing

Milestones for the above

Ownership and licensing of software (scrutinised by VCs and Investors)

Restrictions

3rd party software

Warranty period

IP indemnity and Warranties generally

Maintenance costs/fixes/upgrades/response times

1.Creation Investors and the Exit Strategy VCs and other investors – expectations Exit strategies – know the animal Due Diligence Procedures – what are they? Prepare for them! Heads of Agreement – note: “rowing back” and “family silver” and legally binding or not? Investor Documentation e.g. Shareholder and Subscription Agreements, Investor Agreements etc.

Investors and the Exit Strategy

VCs and other investors – expectations

Exit strategies – know the animal

Due Diligence Procedures – what are they? Prepare for them!

Heads of Agreement – note: “rowing back” and “family silver” and legally binding or not?

Investor Documentation e.g. Shareholder and Subscription Agreements, Investor Agreements etc.

2.Protection Types of IP owned in software Copyright Database Rights Design Rights Patents Trademarks – Registered and Unregistered Domain names – not strictly IP

Types of IP owned in software

Copyright

Database Rights

Design Rights

Patents

Trademarks – Registered and Unregistered

Domain names – not strictly IP

3.Exploitation Joint Ventures – Key Points Normally an alternative to Licensing or Acquisition Corporate Vehicle or Collaboration? IP ownership (“bucket theory”) Exploitation Termination

Joint Ventures – Key Points

Normally an alternative to Licensing or Acquisition

Corporate Vehicle or Collaboration?

IP ownership (“bucket theory”)

Exploitation

Termination

3.Exploitation Software Licensing Agreements – Key Terms B2B or B2C – fundamentally important for all contracts Definition of the “Software” Specification Type of licence provided – Restrictions? Sublicences? Term Payment Warranties and indemnities – what are they and what is the difference? Intellectual property 3rd party licences Maintenance Exclusions and limitation of liability

Software Licensing Agreements – Key Terms

B2B or B2C – fundamentally important for all contracts

Definition of the “Software”

Specification

Type of licence provided – Restrictions? Sublicences?

Term

Payment

Warranties and indemnities – what are they and what is the difference?

Intellectual property

3rd party licences

Maintenance

Exclusions and limitation of liability

CORK OPEN COFFEE www.dreilly.ie David Reilly Solicitor End! Thank you for your attention Any questions?