presentation on development agreements

Alas, it has been far too long since I’ve posted anything. That being said, I have amassed a nice collection of half-completed posts which have all but lost any relevance or interest. Something I’ll need to work on, I suppose.

In any event, in case it might be of interest, I gave a presentation earlier today as part of the IT.Can – LSUC Annual Sprint IT Law Form. My piece was on development agreements. It was a relatively short presentation, so I only focused on a limited set of issues. I’ve perhaps done better in terms of delivery, but the slides [PPT] aren’t bad. Feel free to download and peruse.

fusenet’s employment/entrepreneur program

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.

conversion of data (and not the conversion you’re probably thinking of)

Very interesting piece from Duane Morris on a case in New York. My ultra short summary of the summary: Insurance company leases computer to agent. Agent puts all his business and personal data on it. Insurance company terminates agency, takes back the computer and all data on it, and refuses to give the agent access to any of it. Agent sues, loses, but then wins on appeal.

The interesting part is the basis on which he won, which was a claim under “conversion”. Not necessarily incredibly groundbreaking, as other cases have dealt with conversion as applied to intangibles previously, but, as the folks at Duane note:

Under the merger doctrine, a conversion claim will apply to intangible property, such as shares of stock, that are merged or converted into a document, such as a stock certificate. Accordingly, conversion of the certificate may be treated as conversion of the shares of stock represented by the certificate. More recently, the court ruled that a plaintiff could maintain a cause of action for conversion where the defendant infringed the plaintiff’s intangible property right to a musical performance by misappropriating a master recording, a tangible item of property capable of being physically taken.

Thyroff was the Court’s first opportunity to consider whether the common law should permit conversion for intangible property that did not strictly satisfy the merger test. Recognizing that it “is the strength of the common law to respond, albeit cautiously and intelligently, to the demands of common sense justice in an evolving society,” the Court decided that the time had arrived to depart from the strict common-law limitation of conversion.

Interestingly, in their analysis of the decision, they conclude that:

This decision provides a powerful remedy for New York employers to bring a cause of action against employees who steal company information or [intangible] property. Unlike claims for breach of fiduciary duty or misappropriation of trade secrets, conversion may be easier to plead than other claims because it does not require that the employer establish willfulness or wrongful conduct.

Hmmm. Not quite sure I’d agree – after all, the “conversion” itself would need to be established. Also, I’m not sure that a rogue employee who takes a copy of his or her employer’s confidential information but leaves the original copy with their employer, would be the basis for a cause of action under conversion, which, if I understand the case correctly, has more to do with depriving someone of property that is rightfully theirs. Absconding with confidential information does not deprive the owner of that information of the data, but rather the value the owner of the data can realize by virtue of the fact it can only be used by that owner. That situation seems somewhat different than the one in Thyroff – the analogy there would be if insurance company did not deny the agent access to his information, but rather took a copy of it and used it in a way they weren’t supposed to. It would be interesting to see whether the court would extend a claim of conversion to deprivation not of the intangible information itself, but rather value of the rights to exploit it exclusively. Alternatively, it may be that the ruling could be read broadly enough to already take that into account.

I also wonder what sort of effect this might have on those who might have otherwise leapt at the opportunity to become an agent for the insurance company…

pushing daisies, amelie and ip claims

I don’t watch much TV at all but by coincidence caught part of this new show, called Pushing Daisies. Overall, I liked what I saw – interesting premise, well told plot, good acting, and keen attention to pacing, cinematography (if one can use that term for a TV show), music, colour, etc.

But something struck me within the first 10 minutes of watching it – something oddly familiar. Not the stories, but rather, the whole look and feel of how it was presented – like: the sometimes oddly surrealistic but realistic presentation of scenes (exaggerated or bright colours, quirky but cute interiors (and exteriors); unusual and repeated focus on otherwise insignificant details (ages down to the hour of each character – oh and also by an omnipresent unknown third party voice over storyteller); oddly familiar patterns of speech – sometimes quick and rapid bursts of somewhat deadpan humour; curious static shots of people or things with some sort of special effect, like zooming away or seeing through something; oddly familiar patterns of music; eccentric but lovable characters like Chuck’s two aunts; eccentric backstories of characters (Chuck’s aunts again – who had wonderful careers as synchonized swimmers until devastingly felled by contaminated kitter litter); oh, and of course, oddly tragic (albeit someone humourous) events that people undergo (see the aunts) as well as oddly humourous but sometimes well-deserved deaths (like that of a rather fat thieving undertaker).

And then I suddenly realized that what I was watching was a show that, for lack of a better word, had (intentionally or unintentionally) “borrowed” the entire look and feel of “Le fabuleux destin d’Amélie Poulain”. Not the story, mind you, not that at all. But rather a multitude of little bits and pieces that all go into how a story is told.

I marvelled, for a moment, at what a great job the creators of the show had done in transposing the look and feel of that movie into the series, and wondered how much effort (if any) went into deliberately attempting to create or invoke the look, feel and mood of Amélie (which, by the way, they do quite well). Then, needless to say (given my profession), I ruminated about which intellectual property laws, if any, could the owners of Amélie used to protect the “look and feel” of their film. Certainly most people (even non-lawyers) are familiar with the Apple v. Microsoft look and feel case back in the 90s (which tried to base a claim in copyright and didn’t get very far if I recall correctly). It would be interesting to see how that would play out in the context of something like a movie or similar work. Not that I’d like to see that happen to Pushing Daisies – its already tough enough to find decent shows…

willy wonka’s ip policy

Ran across the article “What’s Good for Willy Wonka is Good for America” while reading about the sad demise of a company called Miller & Kriesel, which I like (liked?) quite a bit. Ken Kriesel referred to this article in an intereview, so I thought it would be worth reading.

Not that I necessarily agree with what the article alludes to when it comes to policy for safeguarding one’s IP, but noneless an interesting take on IP lessons to be learned from the world’s most famous (albeit fictional) chocolatier:

When it came to internal IP theft, Willy Wonka did not mess around, and others can learn from his success.

Oh, BTW, in case you’re curious, M&K were the folks that invented the concept of the subwoofer and, I think, if not invented, at least helped pioneer surround sound. They’re also the folks that Lucasfilm (I guess perhaps until recently) used for all the speakers in all their studios. The story of their demise can be found relatively easily – suffice it to say, think twice before bringing your key IP over to China.

canadians – as bad as the chinese (almost)

Well, this story certainly has got a lot of coverage. I was quite surprised to read in Wired that quite of bit of IP is stolen in Canada. To wit:

But — surprise, surprise — IIPA also wants Canada added to the list of the most egregious violators. That’s right. Canada. According to the IIPA, Canada was responsible for $551 million in lost revenue in 2006, all of it in the business software sector (numbers from other industries were not available). That makes Canada the fourth-worst offender. See the chart here.

I was also at a very interesting speech that Graham Henderson of CRIA gave on the proliferation of counterfeit goods in Canada. Again, though I knew of some counterfeiting of goods going on here, I was a bit surprised at the numbers that were presented and also the types of counterfeiting – everything from extension cords to batteries to pharmaceuticals.

Of course that’s one side of it. And like everything else there are always two side to a story. Michael Geist is quoted in the story as asserting that the IIPA is out of touch with the rest of the world by criticizing countries who have less stringent measures in place than US legislation, which he asserts to be the world’s toughest.

Its interesting to compare this with the MPAA’s position on proposals in the use on fair use, which I mentioned a bit earlier. Perhaps best described like this:

Geist on IP infringement issues in Canada: “Problem? What problem?”

The MPAA on fair use issues in the US: “Problem? What problem?”

And so it goes. <sigh>