free legal advice (at least in California, for now)

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And no, I don’t mean this blog, because as you know I don’t dispense legal advice here.

In any event, read about a new startup called LawPivot in an entry from the venerable TechCrunch. It’s described by TC as “a self described “Quora for legal” that allows technology companies to confidentially ask legal questions to expert attorneys.” And currently, for free. By the looks of it, seems to be limited to California for the time being. But hurry! Apparently the business model is to eventually charge both the askers and the askees for access.

TechCrunch seems to be bullish on its prospects. Myself a bit less so. I would think that one of the drivers of something like this would be to develop a critical mass of legal information or advice, much in the same way that many law firms have started developing massive indexed and searchable databases both for their internal use and sometimes for access by clients. Limiting it to one-off queries seems to limit the ability to leverage advice and to result in, to some extent, a duplication of efforts by the various lawyers seeking to impress a potential client.

But who knows. Perhaps they plan to leverage content in some other way at a later stage. Worth keeping an eye on. And of course, if you’re in Calfornia, worth giving a spin if you’re looking for some free legal advice.

standardized seed financing docs for canucks

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Some of my loyal readers may recall one of my posts earlier this year about the development of standardized seed financing docs in the US, where there were, at the time, about four different sets of docs which had been developed. It pointed to a more detailed article by Brad Feld. In any event, I had asked the question whether anyone was aware of a similar initiative in Canada but didn’t hear from anyone. Was actually going to try doing it myself, but free work that you give away sometimes goes quickly to the back burner (or rather off the stove altogether) when things get busy. Least that’s my excuse.

In any event, I was very happy to hear that someone in Canada has in fact undertaken this initiative. The folks at MaRS here in Toronto, and in particular Mark Zimmerman, have apparently developed a nice set of Canadianized templates, including a term sheet (.doc) a subscription agreement (.doc), articles of amendment (.doc) and a shareholders’ agreement (.doc), with a founder’s agreement and employment agreement in the work. They already have a template independent contractor agreement (.doc).

I haven’t had a chance to look at them, but if you happen to need a set of seed round docs, and you’re here in the great white north, I’d encourage you to check them out. The folks at MaRS deserve a pat on the back for taking the initiative.

Tip o’ the fedora to Jonathan Polak for bringing this to my attention.

it.can presentation on open source

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I gave a speech, along with Thomas Prowse (Genband) and Fred Dixon (Blindside Networks) at the IT.Can Annual Conference (PDF) in Montreal last week. The following is the paper that went along with the presentation, for whatever it’s worth. Not particularly earth-shattering but an approach that is a little different than user/purchaser centric approach I usually see about the topic in other papers and presentations, at least within the realm of those addressed to lawyers. Also in Word format: IT.Can 2010 open source (paper) v2.

Many other great presentations as well, by some of the leading IT practitioners in Canada. Not a member? Consider joining. Well worth it.

OPEN SOURCE BUSINESS MODELS

by David Ma[1]

1.                  INTRODUCTION

This paper will: (a) review some of the more common business models used to exploit intellectual property; (b) describe, in brief, what open source is; and (c) identify characteristics of open source licenses as they pertain to those business models.

It is oriented primarily to owners or developers of intellectual property that are contemplating the alternatives available to them in the commercial exploitation of that IP. The general context on which this paper focuses is the development and exploitation of software. However, some or all of the principles described below may be applied in other contexts, and we describe some of these briefly toward the end of the paper.

The intent of this paper is not to advocate open source business models as the definitive way to undertake such a venture. Rather, it is to familiarize the reader with the underpinnings of what is becoming an increasingly prevalent approach to exploiting IP which warrants serious consideration as an alternative to more traditional methods – namely, a proprietary licensing model which emphasizes the treatment of underlying source code as a trade secret. It may well be that the particular circumstances of a business undertaking do not lend themselves to such models. However, it would be, in the author’s opinion, inadvisable not to give them due consideration.

Read more it.can presentation on open source ›

amazon one-click patent – federal court decision

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If I were to pick a subtitle for this post, it would probably be “Bilski, Canadian style”.

One of my colleagues (Thanks Peter!) was kind enough to mention that the judgement of the Federal Court of Canada (PDF) was released earlier today, so I set aside a few minutes to go through it. Admittedly, I haven’t been following the case all that closely.

In any event, rather than slogging through all 35 pages yourself, the following is a rather abbreviated summary of the decision:

  • After quite a bit of back and forth on the application process, the Commissioner of Patents ultimately rejected Amazon’s patent application in 2009
  • The Commissioner rejected Amazon’s patent on the basis that it was “non-patentable subject matter”, primarily for any one of three reasons:
    • the claimed invention was not physical in nature nor did it result in some change or effect on physical objects;
    • the claims were claims on business methods, which the Commissioner concluded were not patentable; and
    • the claims were not “technological” in nature (meaning that they could be used to address a technical problem) and therefore not patentable.
  • The Federal Court disagreed with each of the Commissioner’s reasons:
    • the Court was of the opinion that the physicality test was too restrictive – instead, the proper test was whether or not the claims had “practical application” – i.e. something that results in a “change in character or condition” and found that Amazon’s claims could meet that standard through Amazon’s customers “manipulating their computer and creating an order”;
    • the Court did not agree that business methods were non-patentable under Canadian law; and
    • the Court did not agree that there was a “technology” test for patentability under Canadian law.

On the first point relating to physicality, the Court’s comments seem to echo, to some degree, the Bilski decision by the US Supreme Court and its rejection of the “machine or transformation” test.

Although the Federal Court did not agree with the Commissioner’s rejection of the patent, it also did not affirm its validity nor did it grant the patent. Instead, it sent back the patent for re-examination.

Of course, there is quite a bit more in the decision itself, including riveting details on novelty, analyses of the process used to assess patentability, elements of that process versus application of same to the patent itself, etc. etc. So consider the bullet points above a gross oversimplification and use accordingly.

us supreme court releases bilski decision on patents

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The US Supreme Court yesterday released its decision on the Bilski v. Kappos case.

The bottom line:

Business methods can still be patented in the U.S.

The summary:

Bilski attempted to patent a method of hedging energy commodities, primarily in the form of a mathematical formula. The US Patent Office rejected the application. The rejection was upheld by the Board of Patent Appeals and the Court of Appeal for the Federal Circuit.

Most notably, the Court of Appeal rejected the previous test which had enabled the claiming of business method patents (the State Street Bank & Trust case), instead holding that “a claimed process is patent eligible [only] if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing”.

Needless to say, this new test would have put a bit of a damper on business method patents.

The Supreme Court did not agree with the Court of Appeal. It held that the “machine or transformation” test is not the only test for patent eligibility for a process and that business method patents are in fact permissible under the Patent Act.

That being said, they nonetheless agreed with the Court of Appeal that Bilski’s patent should be rejected, not because it failed to meet the “machine or transformation” test, but rather because it was an attempt to patent an abstract idea rather than a business method. The Supreme Court affirmed that abstract ideas are not patentable.

Comments:

Many like the EFF seem to be disappointed, but from a jurisprudential perspective the judgement makes sense to me. The Supreme Court’s rationale was that courts “should not read into the patent laws limitations and conditions which the legislature has not expressed” and there was no reasonable basis on which the term “process” had to be specifically tied to a machine or the transformation of an article.

In other words, it’s not the job of the courts to make up new stuff when it comes to the law – their job is only to interpret the law correctly. And if there’s any issue with the Patent Act, then it should be dealt with through legislative change rather than a judicial decision.

Perhaps not quite the interventionist approach that some might have been hoping for.

So, as the EFF notes, all of you out there that have a glimmer of inspiration on how to make your fortune from, for example, a system for reserving toilets, (or suing others who come up with the same thing but didn’t apply for a patent) can still pursue that dream.

Bilski v. Kappos (PDF)

fusenet’s employment/entrepreneur program

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A very interesting story in IT World Canada about a company called Fusenet that has put into place a novel approach to business. In effect, it is empowering its employees to become entrepreneurs and giving them equity in their creations. Fascinating approach. Inevitably comparisons can be drawn with a similar program Google runs, but as far as I’m aware Google retains ownership of everything created by its employees. Not so with Fusenet’s model. From the article:

Every Friday, the Pet Project Program (P3) goes into effect. “If you’ve been approved into the program, on Friday, we don’t expect to see you at your desk. You’ll be in our lab or you’ll be collaborating with other people,” said Singhal.

The P3 model is codified into employee agreements and the intellectual property developed during this time does not belong to Fusenet, he said.

If an employee spends three months working every Friday to develop a new technology for better video compression, for example, and then presents it to the company, the idea still belongs to the employee, said Singhal.

Fusenet will ask the employee how much they want to sell the idea for or whether they want to start a company that will sell or license the product, he said. “We’ll help you market that and say, ‘We’ll take 50 per cent of the equity, you take the other 50 per cent,’” he said.

“We will help you with money, we will give you all the resources you need – marketing, customer service, R&D – but you get to keep a significant chunk of the equity in the business as opposed to having just the pride of being able to say you started it,” he said.

The policy applies to all employees, but it’s the software developers who are most likely to come up with the ideas, said Singhal. “We thought this was an interesting model … 99 per cent of the companies out there will take the software,” he said.

Fusenet has experienced one major success, one emerging success and two failures as a result of the model, said Singhal. Another five projects are currently in the R&D stage, he said.

Of course there is a caveat noted in the story about how such an arrangement must be carefully documented. I could also see a few risks associated with this as far as delineation of IP and who owns what. Very often, when new ideas spring up, they may be closely related to some existing intellectual property or based upon it. The question then is where the dividing line is or should be drawn and how that is set out in the documents. Not an insurmountable issue but one that does warrant a bit of thought.

I certainly admire Fusenet for having the vision and courage to adopt such a model. Of course, it’s no guarantee for success but certainly puts all the right incentives in place to have an environment conducive to that. I really do hope to see some interesting things come out of their shop in the near future. They will, after all, be very likely to attract the right sort of folks with this program.

new copyright act now online – updated

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Update: For anyone out there who: (a) pored over the previous incarnation of this bill (i.e. Bill C-61) back in 2008; (b) doesn’t happen to have redlining software; and (c) just wants to review what has changed between C-61 and C-32, here are redlines showing the changes from C-61 to C-32 (Word and PDF). Happy reading.

The much anticipated Copyright Modernization Act (or Bill C-32) was tabled yesterday and is now on-line and available for your reading pleasure. Given the broad interest in this act, it’s not surprising that there has already been a ton of press on it, including summaries and analyses galore.  I don’t propose to reinvent the wheel, so will simply point to you a post in Michael Geist’s blog where he provides a summary and various links to media coverage of the bill (which also have their own summaries) plus of course his own take on it.

My initial impression is that the bill strikes a relatively good balance between content creators and content users. Of course, given the highly politicized nature of copyright reform, and the sometimes fairly extreme views taken in various camps, it won’t make everyone happy. From the perspective of Geist et al. on the user side, the biggest criticism so far has been how digital locks (or “TPMs”) are dealt with. The short version is that TPMs are permitted even if they prevent users from exercising specific rights that are deemed by the Copyright Act not to constitute copyright infringement.

I have my own views on TPMs but will reserve that for another post.

do lawyers own their pleadings?

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Very interesting (at least to lawyers) post on Slaw about a class action proceeding against Thomson Reuters. In short Thomson has started offering a service where it charges a fee to access a database comprised of pleadings filed by lawyers in court.

Raises a whole number of issues, both in respect of the ownership of the materials themselves and what implied licenses, if any, are being granted by lawyers in filing them with the court, whether to the court, participants in the court and the general public, as well as copyright not necessarily in the materials but the database created by Thomson (which of course in and of itself has value).

Not the first time it’s happened. There was a claim by Milberg Weiss (or at least the threat of a claim) a few years ago. Not sure what happened with it.

how not to use social media

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It never ceases to amaze me how some folks manage to mess things up when it comes to social media. I could perhaps understand it a few years ago, when Facebook and LinkedIn weren’t all that popular just yet, and the former was more or less limited to students. But these days, I would have thought that people would know better. And to some extent they do. For example, as compared to just a few years ago, most people I see on Facebook have taken the effort to turn on at least some of the privacy settings, which hasn’t always been the case.

In any event, apparently we now have another first – the first person to have been convicted for a tweet. The prize goes to Mr. Paul Chambers, for this lovely tweet: “Robin Hood airport is closed. You’ve got a week and a bit to get your s**t together, otherwise I’m blowing the airport sky high!”

He was convicted of sending a menacing electronic communication. Fortunately for him no jail time was involved, though he was fined and apparently also lost his job as a result of the prosecution.

Social media, privacy, personal information and one’s communications through them are, collectively, a very complex topic. I’m sure that if you wanted to, you could spend a whole day (or longer) teaching people how to navigate Facebook’s privacy settings. Or LinkedIn’s. That being said, I usually try to keep my advice on using social media very simple: Before you post, tweet, blog or send, imagine what would happen if whatever it is you’re sending out will appear on the front page of the New York Times. Would you be comfortable with that? If not, then perhaps keep it to yourself. Or share it with close friends or colleagues over a coffee or a beer.

I imagine this might be of a bit of an oversimplification, and perhaps even rather obvious. Also, if someone already lacks any sense of judgement, it certainly won’t help (then again in that case nothing likely will). And it certainly won’t help you if you’re, say, someone with unusual predilections who can use only social media as an outlet. All that said, I find it to relatively good rule of thumb. Also a lot quicker than taking a couple of hours each time Facebook, once again, adds another 30 settings to its privacy controls.

new canadian privacy and anti-spam laws – updated again

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Update 2: Here is a redline showing the changes from the November, 2009 version of ECPA to the May 25 version of FISA, in Word and PDF. The Word version shows the wording of some existing provisions which FISA is amending. You’ll need to scroll over to the right starting around s. 70 to see them. Not included in the PDF version. Doesn’t look like much has changed. Happy reading.

Update: Links to the bills added. See also comments and observations from Barry Sookman, Michael Geist (one on FISA and the other on SCPIA) and David Canton. Mostly just initial observations, except for Mr. Geist’s post on SCPIA. His nickname for the bill (the “Anti-Privacy Privacy Bill”) should give you an idea of his thoughts on it.

Yesterday the federal government announced the tabling of two new significant pieces of legislation. The first is the Fighting Internet and Wireless Spam Act, which has been acronymed as “FISA”. And no, I don’t know why they dropped the W. Maybe easier to pronounce? As many readers probably know, this is the rechristened Electronic Commerce Protection Act that died last year when Parliament was prorogued. In addition to the catchier name, there were a few substantive tweaks to the law. You can read the rather long winded press release though the link above. Alternatively, here’s the point form version:

  • fairly strict and comprehensive approach to unsolicited commercial e-mail (i.e. spam), described as “multi-faceted”
  • enables government agencies to share information with international counterparts to pursue foreign violators
  • sizeable fines for violations – up $1 million for individuals and $10 million for businesses ($15 million in certain cases) for each violation
  • allows businesses and consumers to sue spammers directly, modelled on U.S. laws
  • technology neutral – spam, spim, junk faxes, robocalls – all treated the same

The second piece of legislation are amendments to the existing Personal Information Protection and Electronic Documents Act (or PIPEDA). Doesn’t quite roll off the tongue as nicely as FISA. [Update: The amending act is actually nicely entitled the Safeguarding Canadians’ Personal Information Act which is somewhat sexier.] Point form summary:

  • breach notification requirement – must notify privacy commissioner for material breach and individuals if risk of harm
  • enhanced consent requirements to ensure people (particularly minors) clearly understand the consequences of sharing personal information
  • exceptions added to help people (financial abuse, missing persons, identify dead people)
  • exceptions added for business contact information and to manage employees, information produced for work purposes and due diligence in acquisitions and similar corporate transactions
  • exceptions added for private sector investigations and fraud prevention
  • prohibitions on notifying individuals in connection with disclosure of personal information to law enforcement agencies

More to come in due course.