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Startup Legal and IP

Bruno Lowagie
Bruno Lowagie
Bruno LowagieFounder / CTO at iText Group

These are my slides for the Founder Institute's "Startup Legal and IP" session in Brussels (January 5, 2014). The b

Startup Legal and IP

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© 2014, iText Group NV, iText Software Corp., iText Software BVBA© 2014, iText Group NV, iText Software Corp., iText Software BVBA
Startup Legal and IP
Founder Institute, January 5, 2015
© 2014, iText Group NV, iText Software Corp., iText Software BVBA© 2014, iText Group NV, iText Software Corp., iText Software BVBA
Intellectual Property
Copyright versus Copyleft
Reviewing the IP of your product
© 2014, iText Group NV, iText Software Corp., iText Software BVBA
Copyright versus Copyleft
Copyright law allows an author to prohibit
others from reproducing, adapting, or
distributing copies of the author's work.
Copyleft gives every person who receives a
copy of a work permission to reproduce, adapt
or distribute the work as long as any resulting
copies or adaptations are also bound by the
same copyleft licensing scheme.
Founder Institute: Startup Legal and IP3
©
©
© 2014, iText Group NV, iText Software Corp., iText Software BVBA
Friends, foes, and food
A permissive license makes most people see you as lunch,
A proprietary license makes most people see you as an enemy,
A copyleft license makes most people your ally.
Founder Institute: Startup Legal and IP4
Quote: http://zguide.zeromq.org/page:all#header-136
© 2014, iText Group NV, iText Software Corp., iText Software BVBA
What is distribution?
Founder Institute: Startup Legal and IP5
Suppose that iText was an engine and the application using iText was a car or a bus:
License: MPL / LGPL GPL AGPL
Car distribution
(e.g. OEM)
Commercial use? OK for gratis commercial use Commercial license needed Commercial license needed
Bus service
(e.g. SaaS)
Commercial use? OK for gratis commercial use OK for gratis commercial use Commercial license needed
Free/Proprietary Before iText 5:
Improvements engine: LGPL
Car or bus: can be proprietary
Car: must be GPL
Bus: can be proprietary
Since iText 5:
Car or bus: must be AGPL
Or: buy commercial license
© 2014, iText Group NV, iText Software Corp., iText Software BVBA
The iText case
Consent of owners is needed to change license
Who wrote iText?
Started by one person in 1998
Another developer joined in 2000
From then on organic growth of the product: different contributors
iText is MPL/LGPL, but
Who is the owner of the code?
Who owns the intellectual property of the code?
Founder Institute: Startup Legal and IP6

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Startup Legal and IP

  • 1. © 2014, iText Group NV, iText Software Corp., iText Software BVBA© 2014, iText Group NV, iText Software Corp., iText Software BVBA Startup Legal and IP Founder Institute, January 5, 2015
  • 2. © 2014, iText Group NV, iText Software Corp., iText Software BVBA© 2014, iText Group NV, iText Software Corp., iText Software BVBA Intellectual Property Copyright versus Copyleft Reviewing the IP of your product
  • 3. © 2014, iText Group NV, iText Software Corp., iText Software BVBA Copyright versus Copyleft Copyright law allows an author to prohibit others from reproducing, adapting, or distributing copies of the author's work. Copyleft gives every person who receives a copy of a work permission to reproduce, adapt or distribute the work as long as any resulting copies or adaptations are also bound by the same copyleft licensing scheme. Founder Institute: Startup Legal and IP3 © ©
  • 4. © 2014, iText Group NV, iText Software Corp., iText Software BVBA Friends, foes, and food A permissive license makes most people see you as lunch, A proprietary license makes most people see you as an enemy, A copyleft license makes most people your ally. Founder Institute: Startup Legal and IP4 Quote: http://zguide.zeromq.org/page:all#header-136
  • 5. © 2014, iText Group NV, iText Software Corp., iText Software BVBA What is distribution? Founder Institute: Startup Legal and IP5 Suppose that iText was an engine and the application using iText was a car or a bus: License: MPL / LGPL GPL AGPL Car distribution (e.g. OEM) Commercial use? OK for gratis commercial use Commercial license needed Commercial license needed Bus service (e.g. SaaS) Commercial use? OK for gratis commercial use OK for gratis commercial use Commercial license needed Free/Proprietary Before iText 5: Improvements engine: LGPL Car or bus: can be proprietary Car: must be GPL Bus: can be proprietary Since iText 5: Car or bus: must be AGPL Or: buy commercial license
  • 6. © 2014, iText Group NV, iText Software Corp., iText Software BVBA The iText case Consent of owners is needed to change license Who wrote iText? Started by one person in 1998 Another developer joined in 2000 From then on organic growth of the product: different contributors iText is MPL/LGPL, but Who is the owner of the code? Who owns the intellectual property of the code? Founder Institute: Startup Legal and IP6
  • 7. © 2014, iText Group NV, iText Software Corp., iText Software BVBA The situation before 2006 Founder Institute: Startup Legal and IP7 White zone Gray zone Black zone
  • 8. © 2014, iText Group NV, iText Software Corp., iText Software BVBA The White Zone Founder Institute: Startup Legal and IP8 White zone Gray zone Black zone
  • 9. © 2014, iText Group NV, iText Software Corp., iText Software BVBA The White Zone You have written the code yourself, but What about your employer? Does your employer own (part of) the code? Do you have a formal agreement with your employer with respect to F/OSS? Where did you get your inspiration? IBM developers are forbidden to look at any code that is not formally approved by IBM’s legal team. Good practice or burden? Founder Institute: Startup Legal and IP9
  • 10. © 2014, iText Group NV, iText Software Corp., iText Software BVBA Employees and IP Founder Institute: Startup Legal and IP10
  • 11. © 2014, iText Group NV, iText Software Corp., iText Software BVBA The Gray Zone Founder Institute: Startup Legal and IP11 White zone Gray zone Black zone
  • 12. © 2014, iText Group NV, iText Software Corp., iText Software BVBA The Gray Zone The code was contributed, but did the contributor agree with the license? did the contributor’s employer agree? where did the contributor get his inspiration? The code is taken from another project, but are the licenses compatible? do you respect the other project’s license? where did the other project get its code from? Founder Institute: Startup Legal and IP12
  • 13. © 2014, iText Group NV, iText Software Corp., iText Software BVBA The Gray Zone Contributor License Agreements The Apache Foundation demands contributors and their employers to sign a CLA SUN used to demand contributors to sign an SCA from the moment contributions contained more than 20 lines of code Check License Compatibility Keep a detailed inventory of all F/OSS projects (subset / derivative work) Founder Institute: Startup Legal and IP13
  • 14. © 2014, iText Group NV, iText Software Corp., iText Software BVBA License compatibility Founder Institute: Startup Legal and IP14 Your product: MPL GPL Your product: MPL ASL
  • 15. © 2014, iText Group NV, iText Software Corp., iText Software BVBA The Black Zone Founder Institute: Startup Legal and IP15 White zone Gray zone Black zone
  • 16. © 2014, iText Group NV, iText Software Corp., iText Software BVBA The Black Zone Unfortunately, it may happen that you weren’t allowed to use some specific code that is now part of your project. Possible solutions:  Either you ask (and get!) permission, or  You rewrite the code, or  You remove the code. Founder Institute: Startup Legal and IP16
  • 17. © 2014, iText Group NV, iText Software Corp., iText Software BVBA Founder Institute: Startup Legal and IP17 Who owns iText? First PDF library written in 1998 Completely refactored in 2000 Many people contributed, and IANAL
  • 18. © 2014, iText Group NV, iText Software Corp., iText Software BVBA IP Project July 2006: Eclipse Simultaneous Release “Callisto”; tested and approved by IBM Eclipse/BIRT (Actuate) is part of this release Project led by Actuate iText is used in Eclipse/BIRT License MPL/LGPL: not acceptable for IBM Research agreement between Actuate and Ghent University with as deliverable: IP Review Founder Institute: Startup Legal and IP18
  • 19. © 2014, iText Group NV, iText Software Corp., iText Software BVBA Turning Gray and Black into White Founder Institute: Startup Legal and IP19 White zone Gray zone Black zone
  • 20. © 2014, iText Group NV, iText Software Corp., iText Software BVBA Founder Institute: Startup Legal and IP20 The process Source code was vetted by lawyers Source code was screened using software Weekly reports listing potential issues
  • 21. © 2014, iText Group NV, iText Software Corp., iText Software BVBA Example 1: Quick&Dirty XML parser State machine to parse XML quickly Source code taken from/inspired by: http://www.javaworld.com/javaworld/javatips/jw-javatip128.html Read the fine-print! All contents of JavaWorld, including text, programs, applets, source code, and images are copyrighted and owned by IDG or the copyright holder specified, all rights reserved. No material may be reproduced electronically or in print without written permission. Founder Institute: Startup Legal and IP21
  • 22. © 2014, iText Group NV, iText Software Corp., iText Software BVBA JavaWorld article + Fine-print Founder Institute: Startup Legal and IP22
  • 23. © 2014, iText Group NV, iText Software Corp., iText Software BVBA Solution Write JavaWorld and author, get permission! There were many other places where license information was incomplete or missing. It must become your second nature to ask for permission and to document! document! document! Founder Institute: Startup Legal and IP23
  • 24. © 2014, iText Group NV, iText Software Corp., iText Software BVBA Example 2: RC4 encryption algorithm Names and variables referring to RC4 RC4 was initially a trade secret, but in September 1994 a description of it was anonymously posted to the Cypherpunks mailing list. It was soon posted on the sci.crypt newsgroup, and from there to many sites on the Internet. Because the algorithm is known, it is no longer a trade secret. The name "RC4" is trademarked, however. The current status seems to be that "unofficial" implementations are legal, but cannot use the RC4 name. Founder Institute: Startup Legal and IP24
  • 25. © 2014, iText Group NV, iText Software Corp., iText Software BVBA Solution RC4 is often referred to as "ARCFOUR" or "ARC4" (meaning Alleged RC4, because RSA has never officially released the algorithm), to avoid possible trademark problems. Change all class and variable names:  Don’t use: RC4_ENCRYPTION  Use: ARCFOUR_ENCRYPTION Founder Institute: Startup Legal and IP25
  • 26. © 2014, iText Group NV, iText Software Corp., iText Software BVBA Example 3: Class IntHashtable Code take from ACME.com: // This is 90% based on JavaSoft's java.util.Hashtable. // Visit the ACME Labs Java page for up-to-date versions // of this and other fine Java utilities: // http://www.acme.com/java/ JavaSoft is a name used by Sun in the past in their Java activities. ACME indicates use of the class java.util.Hashtable which is subject to unfriendly Sun license It is unlikely that this code is available under a license that permits this use. Without information indicating that Sun approved of this usage the class should not be used. Founder Institute: Startup Legal and IP26
  • 27. © 2014, iText Group NV, iText Software Corp., iText Software BVBA Solution Use the same class released by Apache under the ASL in Apache-Commons instead of the ACME class. Founder Institute: Startup Legal and IP27
  • 28. © 2014, iText Group NV, iText Software Corp., iText Software BVBA Founder Institute: Startup Legal and IP28 IP Review: result iText shipped with “Europa” simultaneous release No more doubts about ownership iText Transfer of IP to first iText company
  • 29. © 2014, iText Group NV, iText Software Corp., iText Software BVBA Today: disciplined IP “book keeping” Founder Institute: Startup Legal and IP29
  • 30. © 2014, iText Group NV, iText Software Corp., iText Software BVBA© 2014, iText Group NV, iText Software Corp., iText Software BVBA Trademarks Register your brand name Register your logo
  • 31. © 2014, iText Group NV, iText Software Corp., iText Software BVBA Unregistered vs Registered Trademark You don’t need to register your trademark if you want to add ™ to your brand name. Your brand name needs to be registered with the USPTO before you can add ® Registration isn’t always easy:  “I TEXT” is descriptive: “I send an SMS”  USPTO and BBIE could be convinced that iText was sufficiently distinctive  OHIM didn’t agree (IMO, they were too lazy to read our arguments) You can register your logo as a Trademark Founder Institute: Startup Legal and IP31
  • 32. © 2014, iText Group NV, iText Software Corp., iText Software BVBA Registered Trademark Founder Institute: Startup Legal and IP32
  • 33. © 2014, iText Group NV, iText Software Corp., iText Software BVBA Scam Alert! Founder Institute: Startup Legal and IP33
  • 34. © 2014, iText Group NV, iText Software Corp., iText Software BVBA© 2014, iText Group NV, iText Software Corp., iText Software BVBA Patents Why companies use patents To patent or not to patent?
  • 35. © 2014, iText Group NV, iText Software Corp., iText Software BVBA Founder Institute: Startup Legal and IP35 Why write a patent? To prevent others to copy your invention To trade: “You can use mine if I can use yours” To enforce a standard To create value for your company
  • 36. © 2014, iText Group NV, iText Software Corp., iText Software BVBA Use patent to enforce standards Founder Institute: Startup Legal and IP36 http://partners.adobe.com/ public/developer/support/ topic_legal_notices.html Most important words: “compliant with the Specification” ISO
  • 37. © 2014, iText Group NV, iText Software Corp., iText Software BVBA Founder Institute: Startup Legal and IP37 Open Source versus patents Open source is a means to prevent others to patent You can not patent source code You can patent software mechanisms
  • 38. © 2014, iText Group NV, iText Software Corp., iText Software BVBA Founder Institute: Startup Legal and IP38 Questions?