Software Law for Developers
Brad Frazer
[email protected] 208.388.4875
@bfrazjd
Boise Code Camp March 19, 2016
Introduction . . .
The business of writing, owning, licensing and monetizing code has become more
complicated due to the evolution of SaaS and the move to mobile, meaning a proliferation of apps and APIs. Proper awareness of how to
own your code (or not), how to license it, how to allow others to subscribe to it, how to
protect it and how monetize it is critical for every developer.
Outline
1. Own it
2. Protect it
3. Monetize it
Own it
• Presentation assumes you are able to own the code
• Exceptions . . .
Own it
Own it
• In what role did you write the code?
– Solo
– Contractor – Employee
Own it
Own it
• Where do you want ownership to reside?
– You – LLC
Own it
• Ownership legal exposures
– Warranty of title
– Indemnification concerns – Exit strategies
Protect it
• Copyright law – Creation – Ownership – Registration – EnforcementProtect it
• Copyright law
– Creation
• Copyright is a noun
• Sufficiently creative idea embodied in a tangible medium
Protect it
• Copyright law
– Ownership
• Author owns the copyright
• Except for works made for hire
• Except independent contractor with a signed writing
Protect it
• Copyright law
– Registration
• Creates a remedy—does not affect creation or ownership
• Required to maintain infringement lawsuit in federal court
• Register timely—ASAP after creation of “best edition” of the work
Protect it
• Copyright law
– Vigilance
• Watch for infringers
• Address them promptly (three year statute of limitations)
Copyright Hypothetical
Assume that Company X hires an independent contractor to write computer code. Company X pays the programmer, Jim, $5,000, and Jim delivers a flash drive with the commissioned program on it. Company X thereafter begins to license the software to third parties. A short time later, Jim’s former employer sues Company X for copyright infringement asserting that it owns the copyright, not Company X since Jim created it while he was their employee and Company X did not obtain a written copyright assignment from either Jim or Jim’s former employer. (Note that Jim’s former employer may also, on these facts, sue each of Company X’s putative licensees.) Company X settles that lawsuit and buys the copyright to the code from Jim’s former employer. Company X again begins licensing the code to third parties. One of those licensees begins selling copies of the software without permission, and Company X sues them for copyright infringement. The case is dismissed without prejudice, however, because Company X did not register its copyright in the software before filing the complaint.
Monetize it
• What’s the deployment modality? • Can you charge for it?
Monetize it
• Deployment modality: license
– Contract
– Worthless if you cannot prove assent to the contract
– Mechanisms?
Monetize it
• Deployment modality: SaaS
– Service, not software – Different contract
– Issues: security, privacy, data, “you can only give what you have received”
Monetize it
• Deployment modality: hybrid
– Contemplates service (subscription) and an app (license)
Monetize it
• Post-deployment issues:
– Support
– Maintenance
Monetize it
• Exit, VC, sell company, sell code as stand-alone
– All these are impaired if fundamentals are not observed
When to Use a License and When
to Use SaaS
• If a SOFTWARE OWNER does not want to be responsible for support and
maintenance obligations of the install base, then a subscription model may be more
When to Use a License and When
to Use SaaS
• If a SOFTWARE END USER needs the ability to customize the code and how it works in the end user’s enterprise environment, a license model may be more appropriate.
When to Use a License and When
to Use SaaS
• If a SOFTWARE OWNER is concerned about trade secrets in its code being
misappropriated through reverse
engineering, then a subscription model may be more appropriate.
When to Use a License and When
to Use SaaS
• If a SOFTWARE END USER has a large enterprise that requires a great deal of software support, a license model with
support and maintenance agreements may be more appropriate.
When to Use a License and When
to Use SaaS
• If a SOFTWARE END USER has a large
enterprise that requires development of
custom code and implementation services, a license model with both professional
services components and support and maintenance agreements may be more appropriate.
When to Use a License and When
to Use SaaS
• If the application object code is still in beta and/or is subject to very frequent revision, then a subscription model may be more
appropriate for that SOFTWARE OWNER. • A note here on beta or source code
When to Use a License and When
to Use SaaS
• If either the SOFTWARE OWNER or the
SOFTWARE END USER is concerned about cloud privacy and data security or if the relevant regulatory environment
disqualifies a cloud deployment model for those reasons, then a license model with support and maintenance agreements may be more appropriate.
When to Use a License and When
to Use SaaS
• If the SOFTWARE END USER is in a location or facility that renders Internet access
spotty or unreliable, a license model may be more appropriate.
When to Use a License and When to Use SaaS
• If the SOFTWARE OWNER cannot affirmatively state (warrant) that it owns the copyright in and to or has rights to sublicense the
implicated code, a subscription model may be more appropriate. This is the “warranty of
title” problem.
• Otherwise your client may get sued for copyright infringement—remember
When to Use a License and When
to Use SaaS
• If the SOFTWARE OWNER has both server-based deployment AND an app or an API, a hybrid model may be more appropriate.
When to Use a License and When
to Use SaaS
• Does your app already have an “upstream” license in place, like the iTunes App Store license?
