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SURVIVAL MODE: SAVaGE Legal Issues

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Overview of legal issues faced by Software, App & Video Game Entrepreneurs ("SAVaGEs").

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SURVIVAL MODE: SAVaGE Legal Issues

  1. 1. LAWYER’S GUIDE TO Software, App & Video Game Legal Issues WED, SEPTEMBER 14, 2016 NOON- 1PM
  2. 2. JIM CHESTER, SPEAKER  Entrepreneur & Founder/CEO  Technology Attorney & Managing Partner  Adjunct Professor of Law  214.997.1750  jim@chester-law.com
  3. 3. Introduction  Compared to other types of ventures  Lots of similarities  IP-based offers unique opportunities and risk
  4. 4. Formation and Funding  Entity Structure  Choices  State  Entity Type  LLC, Inc., GP, sole prop.  Tax Considerations  Common Pitfalls  “So-and-so says I need to be a DE corp”  Not completing the process
  5. 5. Formation and Funding  Funding  Self  Equity  Debt  Royalty  Common pitfalls  Not properly documented  Loss of control  Getting value (& Valuations)
  6. 6. SAVaGE Development  DIY (including co-owners)  Employees  Contractors  Common pitfalls  Outsource (outside US)  Failure to secure IP  Clear benchmarks
  7. 7. 1. Only large “high-tech” companies have IP - EVERY business has IP Assets - A significant amount of innovation comes from individual inventors & small and medium enterprises 2. Securing your IP rights in the US will give you protection in other countries as well In most cases, US IP rights mean nothing outside US 3. IP law protects “ideas” Law protects the “tangible manifestations” of ideas Intellectual Property Common IP “Myths”
  8. 8. “I. S.U.E.” IP Protection Strategy Identify Secure  Direct  Indirect Use Enforce
  9. 9. Trademarks  Any name, symbol, figure, letter, word, or mark adopted and used by a business to designate its goods/services and to distinguish them from those of others  Common law rights automatic, but USPTO registration grants broader rights  Initial term 6 years, but can be renewed indefinitely  Can file multi-international – but must prosecute separately.  Convention gives 6 months to claim priority. IDENTIFY: Types of IP
  10. 10. Patent- the exclusive right to an inventor to manufacture, use, or sell an invention. - Can only come from the US govt. - Must meet statutory requirements novel, useful, non-obvious, etc. - Expire after 20 years from filing – NO renewal  (Design patents – 14yrs. From issue)  PCT allows for foreign filing/priority – but must prosecute each country Types of IP
  11. 11. Trade Secrets- Secrets secrets kept from the world that relate to how to manufacture, use, or sell something (i.e., give a competitive advantage) - No registration required - Does not expire - Must be protected (e.g., limited access, NDAs, etc.) Types of IP
  12. 12. Copyright- exclusive right to make copies, license, and otherwise exploit a literary, musical, or artistic work, whether printed, audio, video, etc  Can last long time:  Author’s life + 70 years  Up to 120 years for “work for hire”  Under Berne Convention, this is the one type of US IP right that gets automatic protection in other countries  Don’t need registration, but registration gives additional rights/benefits Types of IP
  13. 13. Intellectual Property - Software COPYRIGHT - Source Code - Images created by code (GUI,etc.) - Web design/Layout - Web content, photos, graphics, text, etc. - Databases PATENT - Systems/Methods - Hardware TRADEMARK - Company Name /Logo - Product/ Service Brand/Logo - Slogans TRADE SECRETS - Confidential graphics - Source & Object code - Algorithms - Programs or other Technical Descriptions - Data & Logic flow charts - User Manuals - Data Structures - Database Contents - User data
  14. 14. Intellectual Property - Apps COPYRIGHT - Source code - Images created by code (GUI, etc.) design/layout - App content, photos, graphics, text, etc. - Databases - Music - Characters - Storyline PATENT -Systems/Methods - Hardware TRADEMARK - Company Name /Logo - Product/ Service Brand/Logo - Slogans TRADE SECRETS - Confidential graphics - Source & Object code - Algorithms - Programs or other Technical Descriptions - Data & Logic flow charts - User Manuals - Data Structures - Database Contents - User data
  15. 15. Intellectual Property - Games COPYRIGHT - Music - Code - Story - Characters - Art - Box Design - Website Design - Manuals/Instructions PATENT - Hardware Technical Solutions - Inventive game play or game design elements - Technical innovations such as software, networking, or database design TRADEMARK - Company Name - Company Logo - Game Title - Game Subtitle TRADE SECRETS - Customer Mailing Lists - Pricing Information - Publisher Contacts - Middleware Contacts - Developer Contacts - In-house Developer tools - Deal Terms
  16. 16. • NDA’s/Confidentiality Agreements • Partner/JV Agreements • Assignments/Transfers • Employment/Contractor Agreements • “Work for Hire” and development agreements SECURING IP Rights - Directly
  17. 17. State & Federal U.S. -TM, SM, trade dress – USPTO/State -Patents – USPTO - Copyrights – US Library of Congress - Trade Secrets (no registration) International -Treaties: WIPO/PCT (Patent); Madrid Protocol (TMs) -Berne Convention (Copyright) -Foreign Gov’ts SECURING IP Rights - Indirectly
  18. 18. • No “cookie-cutter” • Type of agreement will depend on type of IP, value, etc. • Often start with prior agreements, but each transaction will need to be evaluated individually • EULA/Terms USING IP Assets Licensing & Assignment
  19. 19. • Investigating claims/potential infringement • Drafting letters of inquiry & “Cease & desist” letters • Negotiating settlements & consent agreements • Prosecuting & defending infringement lawsuits ENFORCING IP
  20. 20. eCommerce  Terms of Use/EULA  Warranties  Limits of Liability  DMCA Policies  IP ownership  Limits of license/grounds for termination  Privacy Policies  Governed by an array of state, local, foreign laws  Special rules may apply (HIPAA, PCI, etc.)  Common Pitfalls  Cut and Paste  Not following PP terms
  21. 21. Other Agreements  SLA’s  SaaS  MSAs  Advertising  Publisher  Distributor/Reseller  Merchandising  Character/content licenses
  22. 22. • International IP protection • Use of “Open source” code • US trade laws • Tax issues Special Issues
  23. 23. Exit  Selling the company / Assets  Housekeeping  Due Diligence  Common Pitfalls  IP ownership  LT employment agreements  Contingent Liability
  24. 24. SAVaGE Resources Free SAVaGE Knowledge Base available at: www.chester-law.com/se-kb Join Texas SAVaGEs Linked In: https://www.linkedin.com/groups/8530939 MEETUP: http://www.meetup.com/Texas-SAVaGEs-Software-App-Video-Game-Entrepreneurs/ Web: www.TexasSavages.com Facebook: https://www.facebook.com/TexasSavages/

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