Most companies licensing the use of their trademarks would not think that a simple license agreement, which provides nothing more than use of the trademark in exchange for a fee, would for legal purposes be treated as a franchise agreement. But if the trademark licensor is in New York then what it thought was a simple trademark license agreement relationship is likely really a franchise arrangement.
Category: Intellectual Property (Page 1 of 2)
Over the years, I’ve lost track of the number of times I’ve sat with or been on the phone with a client and we went over the deal they were trying to close (or more often some part of the overall deal), where they said “We just need something short to memorialize this, preferably a one page agreement.”
Compuserve v. Patterson, 89 F.3d 1257 (6th Cir. 1996).
Patterson, a resident of Texas (a lawyer and software programmer), sold his own software to third parties over Compuserve’s system, pursuant to the terms of a clickwrap agreement (where he had to type “I Agree” into various sections of the agreement).
Compuserve began to sell its own software that was similar to Patterson’s and Patterson demanded Compuserve pay him $100,000 as a settlement. Compuserve then filed a declaratory judgment action in Federal court in Ohio.
Patterson moved to dismiss the action due to alleged lack of personal jurisdiction, claiming he never visited, did business in, or consented to suit in Ohio.
The Sixth Circuit found that making Patterson subject to suit in Ohio due to his acceptance of the clickwrap agreement, a Shareware Registration Agreement, did not violate the due process clause of the United States Constitution.
The Court reasoned that Patterson personally availed himself to do business with Compuserve, and made money doing so, and could therefore have reasonably expected he’d have to defend himself in Ohio due to the terms of the agreement.
This is the seminal case in the shrinkwrap realm, which paved the way for the rise of the browsewrap and shrinkwrap cases. Upholding the software license as normally provided to purchasers, to get around the First Sale Doctrine under U.S. Copyright Law. Cite, facts and holding are below.
I’ve been involved in drafting numerous versions of online agreements, including privacy policies, service agreements, pricing policies, various other policies and last but not least both browsewrap and clickwrap agreements. I’ve done a quick post on case law with respect to browsewrap and clickwrap agreements in the past, and was recently asked to speak for a webinar entitled Drafting Clickwrap and Browsewrap Agreements: Advanced Strategies for Enforceable Online Contracts held by Strafford. If you’d like to listen to the webinar email me or contact them.
I feel that more and more contracting is going to be done over the Internet in the future and I am going to start a series of blog posts on drafting these types of browsewrap and clickwrap agreements as well as case law in the area, which serves to let corporate lawyers know how they have to draft the agreement, and have the users accept it.
Copyright protection was first introduced in way back in 1790, and it has changed a lot over the years. Despite substantial revisions today’s copyright laws still protect owners of original works, however, it is now applied to many different types of works (i.e. websites, source code, etc) than existed hundreds of years ago. Luckily the creators of the copyright protection drafted it so that an original espression in any “fixed medium” is protected. This allows the law to evolve as does technology.
I hit on the Hack-a-thon craze in an earlier post. The IP that is created by the hackers in these programs has to be owned by someone, although there are still times where everyone walks away not knowing what everyone’s rights are. If nothing is ever signed by all participants and the hackathon sponsor, its unclear who owns what.
There are a couple different options. The sponsor may want to own everything, or may want to at least have a perpetual paid up license to use the IP created. The hackers should get some rights as well, but its been hard to delineate what and how it should be handled.
A friend of mine and a fellow startup lawyer, Dave Capuccilli of The Capucilli Firm has been working on a solution to this dilemma. Check out his latest iteration to a Hack-a-thon Collaboration Agreement, courtesy of Docracy. Its a great way to ensure all hackers and the sponsor get a fair shot at using the IP created.
I currently represent a few companies that were born at Hack-a-thons and Startup Labs (a similar idea but slightly different format/program), and if they had an agreement like this signed before they came to me it would have made things much smoother.
Way back in 1996, the US entered into two treaties: the World International Property Organization (“WIPO”) Copyright Treaty and the WIPO Performances and Phonograms Treaty. The provisions of these treaties were implemented by DMCA when President Clinton signed it into law in 1998. (Long time ago I know, I’ve had a lot of questions regarding it lately and wanted to get an explanation out there).