Part 1 (of 3) deals with IP legal landmines that caused pretty severe problems for scaleups--this presentation is from the perspective of a scaleup team, i.e., it is not dense legalese.
Nell’iperspazio con Rocket: il Framework Web di Rust!
Ppt oops i just lost a billion euros part 1 3 q18
1. OOPS! I JUST LOST
A BILLION EUROS.
PART 1
GLOBALCAPITAL
GLOBALCAPLAW.COM
2Q18
True stories of legal landmines when
companies goof on IP agreements
JAMES C. ROBERTS III
2. GlobalCapital
I AM NOT GIVING LEGAL ADVICE
While these stories are generalized versions of
true events and they lead to preventive
actions, none of it is legal advice. There are
plenty of exceptions, which we’ll ignore.
7. GlobalCapital
THE BARE FACTS
1. New (genetic) researcher signs an assignment agreement
with university
2. With their permission, works with VC-funded genetic
research company
3. Signs their NDA
9. GlobalCapital
THE CRITICAL LANGUAGE
The Recipient agrees to assign to the
Company all right, title, and interest in
and to any and all [Intellectual
Property]. . .
14. GlobalCapital
2ND STORY BARE FACTS
1. “We Need You to Get to Work”
2. IC starts working without an IC agreement*
*Usually includes assignment & NDA provisions
15. GlobalCapital
THE CONSEQUENCES
You don’t own the IP until she signs one
She can disclose the confidential information
You have violated reps & warranties
You might not own it even after she signs it
16. GlobalCapital
OK, HERE’S A “WORK-FOR-HIRE” AGREEMENT
Does not cover any work already started
Is she an individual in California?
You can go to jail and pay big fines
And you have still violated reps & warranties
18. GlobalCapital
3RD STORY BARE FACTS
1. IC signs the IC agreement. All OK.
*Usually includes assignment & NDA provisions
19. GlobalCapital
ANYONE CHECK HIS PREVIOUS WORK?
Does the IC own his tools?
• His tools are owned by a former client
• He used Open Source Software as if it were
in the public domain
Do you even own the IP that is the basis for further work?
21. GlobalCapital
IP IS A BUNDLE OF RIGHTS:
E.G., MUSIC
Do you have the mechanical rights?
The publishing rights?
The synch rights?
Did you register with the authorities?
22. IT’S ON THE WEB.
SO IT’S IN THE PUBLIC DOMAIN.
AND CAN BE USED.
23. GlobalCapital
“THE EIFFEL TOWER LIGHTSHOW ON GOOGLE”
Availability does not make (certain) content part of
the public domain.
• Coca-Cola’s on the Web. Caterpillar. Prada.
• The Eiffel Tower Lightshow is copyrighted.
25. GlobalCapital
OPEN SOURCE SOFTWARE
IS NOT IN THE PUBLIC DOMAIN*
Everyone uses Open Source Software.
• Everyone has to comply with the license agreement.
*It could be, but not by its nature. Someone might have screwed up.
27. GlobalCapital
WHY SHOULD YOU CARE?
Any IP problems and investors might go elsewhere
• They don’t want and don’t need the headaches.
• Who wants a lawsuit?
• Reputational risk.
29. GlobalCapital
BASIC PRINCIPLE #2:
THE COMPANY SHOULD OWN* ALL NEEDED IP
• Provides competitive advantage.
• Prevents departing team members from competing.
• VCs demand it.
*Own can also mean a license to it (e.g., Open Source)
30. GlobalCapital
IP IN WHAT YOU BUILD
Underlying platform
Programming
Design & Look-and-feel (third-party content, too)
Features & functionality
Tools to make more
31. GlobalCapital
ASSIGNMENT AGREEMENTS
FOR (ALMOST) EVERYONE.
• Each person owns what he/she creates until rights
are assigned IN WRITING.
• Assignment must be “current.” Developer hereby
assigns . . .
• Work-for-Hire agreements=assignment.
32. GlobalCapital
SO WHAT?
1. Always use the present tense with IP
assignments
2. Read every NDA.
• Does it include an assignment clause itself or an
ownership claim?
33. GlobalCapital
TWO AGREEMENTS YOU NEED
1. Assignment Agreements: To transfer to the company
whatever they make for you.
2. License Agreements:
• “Inbound” To use what you need
• “Outbound”
• To let users use what they need (e.g., a TOU)
• For partners or distribution/syndication
34. GlobalCapital
HAVING THE AGREEMENTS SIGNED IS NOT JUST
CHECKING A BOX
• Take the process seriously
• Make it clear to the ICs that they have to be clear
about Open Source and on prior obligations
• It’s not just their rep & warranty
• Timing is important: before work begins.
35. GlobalCapital
THINK ABOUT DUE DILIGENCE
• Take the process seriously
• Do you need to look at ICs previous engagements?
• Timing is important: before work begins.