William A. Tanenbaum Co-Head, Technology Transactions. LA / NY / SF / DC / arentfox.com
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1 William A. Tanenbaum Co-Head, Technology Transactions LA / NY / SF / DC / arentfox.com
2 Conflating IP and Subject Matter Definition of Intellectual Property: Intellectual Property means copyrights, patents, trademarks, domain names, software (in object code and source code form), confidential information Definition of Confidential Information: includes... all IP... Footer Text 2
3 Intellectual Property Regimes Copyright Patent Trade Secret Trademark and Service Mark Moral Rights Footer Text 3
4 What is Needed to Assign IP? Provider ownership of base and derivative works Provider s subcontractors ownership Subcontractor assignment Subcontractor recordation Footer Text 4
5 Work Made for Hire The Parties agree that all Custom Work Product created for the Customer shall constitute works made for hire. Effect of clause on ownership and payment Footer Text 5
6 Moral Rights Provider hereby licenses and agrees to license to Licensee Provider s moral rights and droit morale in the Work Product. Footer Text 6
7 Moral Rights (continued) Provider will cause each individual providing work product to waive his or her moral rights. Footer Text 7
8 Dynamic Online EULAs Problem: future unilateral amendment by provider/vendor/licensee Addressing the problem: Amendments in standalone document Delete and replace entire provision State that licensee-specific amendments survive future unilateral licensor amendments Make reference to section title as well as number Footer Text 8
9 Cloud Product Under EULA and Software Vendor s Custom Work for Customer Need to coordinate two agreements Issue: EULA gives provider ownership of suggestions Does this cover actual coded improvements? Addressing Licensee s risks Indemnity Vendor and EULA platform try to resolve but customer has no liability to Vendor Footer Text 9
10 Ownership and License Rights in Custom Work Product Box A Box B Box C Box D Box E Provider Base Software Provider Derivative Work Provider Custom Derivative Work Final Custom Work Product Derivative Works of Custom Work Product William A. Tanenbaum 10
11 Joint Development Agreement Combined Enhanced by Hardware Company Combined Enhanced by Software Company Combined Hardware and Software Hardware Company DR/New Work Software Company DR/New Work Hardware Company Preexisting Software Company Preexisting Footer Text 11
12 Jointly Owned IP Inventorship vs. authorship may not be joint Potential Problems Dispute over what is primarily related for technology Especially for IP that can be used outside the joint venture When developed primarily by one party based on confidential information of the other Footer Text 12
13 Software IP Licenses Use is a patent not copyright time Section 106: reproduce, prepare derivative works, distribute, display publicly, and for sound recordings, perform publicly May omit common software operations: install, operate, deploy, make available or accessible on servers, etc., integrate and make interoperable Will worldwide be sufficient? But territoriality of IP rights Footer Text 13
14 IP Reps and Warranties Owns or has license to IP Qualification: as between the parties No pending litigation or claim of IP alleging IP To knowledge after diligent inquiry (officer) Which if adjudicated against Licensor would interfere with: rights granted or intended to be; provide Services; interfere with use of Licensor s technology Infringement claims for licensed IP Except as scheduled Footer Text 14
15 IP Reps and Warranties (continued) No invitation to license; no patent claim chart Except as scheduled (Licensee: not interfere) Not aware of a claim and not received notice Limit to senior employee or relevant department Technology not contain third party IP unless identified Need connection to indemnification No other IP license needed Pass-through (including for COTS) Footer 15
16 IP Reps and Warranties (continued) Licensor can make assignments (custom) Breach of contract vs. infringement Double recovery Cover IP used in supply chain Covenants re IP infringement Not challenge Licensee s IP rights Exclude incorporated Licensor rights Licensor will comply trademark requirements Warranty pass-through (COTS) Footer Text 16
17 Settlements under Indemnification Obligations Subject to licensee approval in full discretion; or Subject to approval which cannot be unreasonably withheld, conditioned or delayed, but only if: Unconditional litigation release Does not require admission of liability Does not require payment or action Footer Text 17
18 License from Licensee For purposes of engagement During Term What about Licensee reps and warranties? Footer Text 18
19 Indemnity Exclusions and Exclusions to Exclusions Combinations Not authorized (including by subcontractors) *solely to extent combination caused the infringement applies to all Not used as designed or intended to be used Modifications Unauthorized (including by subcontractors) Derivative (IP) Works Licensee: not if approved Footer Text 19
20 Indemnity Exclusions (continued) Failure to discontinue alleging infringing software after direction from Licensor Where Licensor met specific requirements of Licensee Key: exclusion to exclusion -- solely to the extent [exception to the exception] caused the infringement May divide liability in infringement action Footer Text 20
21 Impact on Arbitration Clause Requires arbitrator with IP knowledge But parties may exclude IP from arbitration Footer Text 21
22 Who is the Reader of the IP and License Agreement? Need litigator skill Opposing in-house counsel Arbitrator What will be disputed? Aim towards summary judgment Lesson: technical schedules need to be legal documents One-sided evidence Footer Text 22
23 Data Licensing Who owns data? IP protection Data sharing CDO vs. CIO Licensing is vehicle Proprietary datasets Privacy is contextual Problem of vendor disclosure to competitors Litigation retention vs. revenue Footer Text 23
24 Customer-Facing Outsourcing Traditional focus on internal cost savings Next generation outsourcing will be front-office revenue generation Goal: faster, more targeted product development B2B and B2C Applies to non-outsourcing arrangements Litigation document retention period Will be contextual Footer Text 24
25 Internet of Things Need vendors who can manage IoT and data Will be New vendors Old vendors with new offerings New consultants/advisors New importance for IP licensing and terms New role for In-House Counsel Footer Text 25
26 Questions and Answers William A. Tanenbaum Co-Head, Technology Transactions Arent Fox LLP Footer Text 26
27 William A. Tanenbaum, Arent Fox LLP William A. Tanenbaum was named as one of the Top Five IT lawyers in the country by Who s Who Legal in 2016, and was previously named as Lawyer of the Year in IT in New York by US News & World Report/Best Lawyers. Chambers named Bill as one of only five lawyers in Band One in Outsourcing & Technology in New York, in Band Two nationally, and as a Leading Outsourcing Lawyer in its global edition. Legal500 found that he is a Leading Authority on Technology & Outsourcing. He was selection for inclusion in the inaugural edition of Who s Who Legal: Thought Leaders Bill is a Past President of the International Technology Law Association. He is currently a Vice President of the Society for Information Management (SIM) (New York Chapter), and industry CIO organization, and the only lawyer on the Board of Directors. Clients endorse Bill as a brilliant lawyer. I cannot imagine working with anyone else; brings extremely high integrity, a deep intellect, fearlessness and a practical, real-world mindset to every problem; efficient, solution-driven and makes excellent judgment calls (Chambers); "one of the best IP lawyers I have worked with" and "knows exactly how to get a deal done (Clean Tech and Who's Who Legal). 27
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