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Intellectual Property Agreements

David Mirchin
by

Liron Gerti

on 12 September 2013

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Transcript of Intellectual Property Agreements

Intellectual Property Agreements
Trademark
Word, phrase, symbol, design, smell, color, etc.
That identifies the
source
of the product or service
To distinguish from another company’s product or service
David Mirchin 2013
Symbol of “quality”
Own Name
…she forgot to sign her application.
Not uncommon for public figures to own their names,
Sarah Palin was denied because …
Registered/Unregistered
According to country or region

(Israel, US, European Union)

September 1, 2010-

Israel joins Madrid Protocol

Permits filing in Israel and other countries simultaneously


Unregistered: ™

Put notice first time used—website, marketing material

Term: 10 years, indefinitely renewable
Trademarks
®
Reviewing Ad Copy
Changes Following
Our Review
Domain Name Disputes
Recent question from client
From: Avichai Cohen [mailto:avichai@liveu.tv] To: 'Baruch Altman'; 'Bezalel Finkelstien'; shmuelw@liveu.tv; 'Ken Zamkow'; 'Ariel Galinsky'
Subject: google add
When you google “buy liveu” or just “liveu” in the sponsor link on the right you will have ad of TVU.  
Test: “Not obvious”
Continuation of LiveU email to me
We’ve come across an issue with TVU Networks, a potential competitor on which we’d like to hear your opinion:
When searching for LiveU on Google, an Adwords advertisement for TVU appears.

Apparently this is legitimate as long as TVU doesn’t use our trademark within the body of the advertisement

(see: http://adwords.google.com/support/aw/bin/answer.py?hl=en&answer=144298).
However, if you take a look at the source of TVU’s home page
(http://pages.tvunetworks.com/)
Continuation of LiveU email to me
“you can clearly see their inclusion of LiveU (and some permutations) as one of their hidden meta-tag keywords  (see included screenshot) –
with the obvious intention of capturing Google traffic intended to find us.

From my limited understanding of trademark law, aren’t we actually obliged to at least send them some kind of cease-and-desist in order to prove our defense of the our registered trademark?”
Question:
Is this a trademark infringement?

Test of trademark infringement:
likelihood of confusion
Use in commerce
“Initial Interest” Confusion test
Patents
Inventions

Must be “useful”

“novel” over “prior art”

Not “obvious” in light of the prior art

Property right: to exclude others from making, using or selling

Term (US) greater of (a) 20 years from date of application or (b) 17 years from date of grant
“IBM’s restroom reservation system patent describes a system that would determine who is next in line for using the facilities on an airplane, passenger train or boat.”

“We dedicated that patent to the public so that we could continue focusing on our high-quality patent portfolio”, said an IBM spokesman.

“Critics have charged that too many patents don’t pass the smell test because they cover “obvious” inventions that can’t be patented.”
Ridiculous Patents
Who patented it: Mary Maalouf
When: May 2007
Where can I get one?:
It's not available in stores, though SNL did a skit about it.
http://www.myspace.com/video/nichole/snl-diaper-thong-skit/55142013
The Thong Diaper
Amdocs agrees to defend at its own expense any action brought against Licensee to the extent that it is based on a claim that any Software furnished by Amdocs to Licensee infringes a [U. S.] [patent,] copyright, or [trademark] (“Infringement Claim”), and Amdocs will pay the amounts finally awarded against Licensee in any action which is attributable to an Infringement Claim.
Why would a licensor not wish to indemnify for patent infringement?
How is it different from copyright infringement?
Database Protection
Martindale Hubbell’s Directory of Lawyers

Telephone Directories (Dapei Zahav)
Pratt’s Guide to Venture Capital
Van Gogh
“Basement of a Publisher”
Munch,
“Screaming Database Maker”
European Union
Database Directive
Prevent Unauthorized extraction or re-utilization
15 years from completion or substantial change
January 1, 1998
companies based in the EU
Databases Not Protected
No protection in Israel or United States
Case Law
Maariv V. AllJobs
Bezeq v. Dapei Zahav
2009 case
Questions We get: copying genealogies
Issue:
Can we collect the routing information from all flights in the US, including fare information?

“Hidden City Ticketing”

Desired Flight: Airport A to Airport B (but expensive, because B is unpopular, like Lexington, Kentucky)
Levy Family Reunion in Lexington, Kentucky
Alternative:
Airport A to Airport C (popular city, like Chicago),
with a stopover in Airport B.
What are the different types of IP protection?
trademark
patent
database protection
copyright
trade secret
What are the essential terms for some key IP agreements?
license;
source code escrow agreement;
distribution agreement (including VAR and OEM agmts)
Why do you need a software license?
Are shrinkwrap and clickwrap licenses enforceable?
How effective are licenses?
A license is an
agreement
where the person who owns or rightfully controls the property
(software; patent; trademark) permits someone else to use the property.
What is a License ?
It does not transfer ownership of the property (e.g., the software)
Five Exclusive Copyright Rights
Reproduction
Distribution
Display
Performance
Derivative works
European Union: Life plus 70 years
US: life plus 70 years
Company author: 95 years
Israel: Life plus 70 years
Software development: 70 years from last to die in group
Not a good partner for software development
A much better choice
The Lawyers Full Employment Act of 2013
Protect non-copyrighted information
Disclaim implied warranties limit damages (to product price)
limit uses (e.g., internal use only)
choice of law; choice of forum
What is my client’s strategy?
What image do you wish to project?
“[Netscape] is not intended for use in hazardous environments such as in the operation of nuclear facilities, aircraft navigation systems, air traffic control, direct life support machines, or weapons systems, in which its failure could lead to death, personal injury, or severe environmental damage.”
Exclusive or non-exclusive
Semi-exclusive—will not give right to third party
Exclusive give right to sue
Exclusive—need minimum royalties
1. Grant:
WHO? Just for Amdocs Israel? All of Amdocs group?
Licensor—define “affiliate” as narrowly as possible
For internal use only?
Number of Users—IBM Word for 1 or 100,000
2. Scope of Use:
Worldwide?
Particular physical site?
For software—can it be networked?
On a specific named server?
3. Where to use?:
Omrix: use this glue only for attaching to heart valves
No use as Service bureau
Can you include it in your product and sell onward?
(Spellchecker in Word)
(Recommendation to software developers—don’t include unless checked with counsel)
4. Purpose:
Open Source -GNU
GPL Infection clause:
Can make
all software open source
if integrated in way that it is not
“separate and independent”.
Need to provide source code
Risk
No reverse engineering
No derivative works
Restrictions on Use
Perpetual---watch out;

Termination provisions

Fixed Term

Conditional (“One year from the date the website goes live”)

Licensor wants some drop-dead date

The term is often connected with the…
Separate for license and for maintenance
One-time
Annual
Usage based
Royalties
Few twists
Percent of revenues, not profits
Usage-based—audit rights are critical
If more than a certain deviation, licensee pays
Rule: If a “license”, then usually withholding (a few exceptions—UK, Ireland);
often 10% to 12-1/2%
If a “sale”, then no withholding
Depends on what the licensee can do with the software
Drafting—who pays the tax?
Pro-licensor: “The license fee is the net amount to be received by the licensor”
Maintenance—often a percent of LIST PRICE, not the price actually paid
Can you increase the price?
Limited? If so, inflation
Maintenance
Service Level Agreement
Requirement to respond
Or requirement to fix?
What’s the penalty if we fail?
Uniform Commercial Code— disclaimer must be conspicuous
Case law: capital letters are conspicuous
Licensor—meets specifications set forth in documentation
Does not violate IP of third parties
ASP—Delivered over internet
Limited to IP in force on the date hereof
Exclude open source
To knowledge of licensor?
Exclude planned downtime
In the US only
Typical American software Licensor
WHY CAPITAL LETTERS?
Indemnification
Licensor will pay for all breaches of warranty
That’s why want to limit the warranties
Key: attorney fees
Must control defense
Repair or replace
If cannot, then refund your money
Limited Remedies
Consultant—counter-intuitive
They own their work even if you pay for it, under US law.
Israeli law—PROBABLY "MAZMIN" owns it
Must include an assignment clause:
“the consultant assigns all rights in the work to the company”
Ownership of IP
If representing the developer
Recommendation:
Right to re-use the know-how
Limitation of Liability
The most important provision

Limited to amounts under the agreement

What if long agreement—last 12 months?
Carve-outs:
IP, breach of confidentiality
Office of Chief Scientist
April 2005 amendment: Can transfer outside Israel in connection with a transaction with permission of the OCS
Transfers inside Israel with permission
Mixed transactions
Hardware is sold
Software is licensed
Source Code Escrow Agreements
Why? Small company could go bankrupt
Source Code—to maintain, modify software
Key provision—release conditions
Also—who pays?
Licensor: only released upon my agreement or court order
When released, can only use to perform maintenance
Distribution Agreements
OEM (original equipment manufacturer);

branding may be key

VAR (value-added reseller)

Reseller
Cannot export know-how
Need OCS approval for escrow overseas
Must have Israeli escrow agent
Exclusive—non-exclusive
EU: payments upon termination
Minimum purchase requirements
Territory?
EU: Can’t prevent passive sales
Terminate upon 90 days notice
Payment directly to company or to distributor?
Who takes risk of bad debt?
Late payments—can charge interest
Can require prepayment
Structure: license directly with company, but payment between distributor and customer
Trademark License to distributor—to use only during the term, not inconsistent with company usage
Maintenance
Need to employ at least one qualified Oracle programmer

Or certified by Oracle

First line support
How Effective are Licenses?
Raising Issues for Discussion

Depends on the “Market”:
do your competitors enforce?

Depends on Organization’s and Country’s “Contract Culture”

“Bad” Public Image
Shrink-Wrap/Clickwrap
THANK YOU
WWW.MEITAR.COM
Enforceable?

If you can see the entire terms before you pay, or you get a refund
Full transcript