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ownership

presentation on development agreements

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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.

who owns your tweets? (@novaspivack)

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Thought I’d tackle a relatively short and easy one today – it’s been a long, long week. Anyway, I noticed a tweet from @novaspivack (via a retweet by @mathewi) asking “Legal question: Who owns the copyright to your tweets, and who has the ultimate right to decide who else can access them?”

Under both the US (§201) and Canadian (s. 13(1)) Copyright Acts, the first owner of a work in which copyright subsists is the author of that work. In other words, you write it, you own it. So that’s your starting point. You write a tweet, you own it.

There are also exceptions to the rule that an author owns the work. For example, if you author something in the course of your employment, your employer will be the first owner of the work absent an agreement to the contrary. So, for example, if you tweet as a part of your job, then copyright in your tweets are owned by your employer, not you, unless you’ve struck a deal saying otherwise with your employer. In the US, this is often referred to as a “work made for hire” (sometimes contracted to “work for hire”).

You can also agree, up front, with a contract with someone else, that a work that you author will be owned by them. Subject to the usual legal niceties of creating a legally enforceable contract (and some caveats, which I won’t get into here), that means that what you write will be owned by that other person. So, for example, you can agree under a contract to tweet for someone else and that those tweets will be owned by that other person.

This can also be done after the fact. You can author a work, and then sell it to someone else under a contract. Then they’ll own it. This could be done with tweets. So for example if a publisher wanted to compile your past tweets into a book, you could sell them the copyright in those tweets, and they’d be free to do what they want with them.

Along similar lines, you can also grant licenses to work you create. The granting of a license means that you give someone else some rights that only you would, in the absence of that grant, be entitled to exercise. So, for example, you could grant someone the right to publish a book of your tweets, in paper form only, in North America. Once you grant that right, then they can publish that book without infringing your copyright.

The reason I mention licenses is because there is a specific term in the Twitter terms of service pursuant to which users of Twitter grant Twitter a license. Here it is, for your reading pleasure:

You retain your rights to any Content you submit, post or display on or through the Services. By submitting, posting or displaying Content on or through the Services, you grant us a worldwide, non-exclusive, royalty-free license (with the right to sublicense) to use, copy, reproduce, process, adapt, modify, publish, transmit, display and distribute such Content in any and all media or distribution methods (now known or later developed).

You agree that this license includes the right for Twitter to make such Content available to other companies, organizations or individuals who partner with Twitter for the syndication, broadcast, distribution or publication of such Content on other media and services, subject to our terms and conditions for such Content use.

Such additional uses by Twitter, or other companies, organizations or individuals who partner with Twitter, may be made with no compensation paid to you with respect to the Content that you submit, post, transmit or otherwise make available through the Services.

We may modify or adapt your Content in order to transmit, display or distribute it over computer networks and in various media and/or make changes to your Content as are necessary to conform and adapt that Content to any requirements or limitations of any networks, devices, services or media.

“Content” basically means your tweets. So you keep ownership of your tweets. BUT, you grant a license to Twitter to do a whole bunch of stuff with it. These rights constitute, more or less, anything you as the owner could otherwise do. It’s quite broad. Very broad, in fact. Substantively, really the only difference between this and giving up ownership completely is that you can continue to use your tweets in other ways. So for example if you want to put your tweets on Facebook, or your blog, or sell a book of your tweets, you would be free to do so. Then again, so can Twitter, if it wanted to.

All of this of course assumes that the terms of service are enforceable. There are arguments for and against, but that’s a bit beyond the scope of this post.

So the second part of the question is who has the ultimate right to decide who else can access them. While, as you probably know, Twitter does allow you to restrict who can see your tweets, they do have the right to give access to whoever they choose, and completely disregard your settings. I didn’t see anything in their terms of use that imposed a contractual restriction on them to honour restricted user settings. Then again, I haven’t exactly read it word for word.

I imagine there might be situations where you could be able to terminate the contract, even though the terms of service don’t expressly provide for that, but I imagine it would be challenging to suggest that the license rights granted to past tweets would terminate. Interestingly, the rights granted under the license language above aren’t characterized as “perpetual” (i.e. forever), which they often are in such documents.

It may also be worth mentioning that Twitter can control access to your tweets to the extent it involves Twitter. Just to make this clear, they have this provision in their terms of use:

We reserve the right at all times (but will not have an obligation) to remove or refuse to distribute any Content on the Services and to terminate users or reclaim usernames. Please review the Twitter Rules (which are part of these Terms) to better understand what is prohibited on the Service. We also reserve the right to access, read, preserve, and disclose any information as we reasonably believe is necessary to (i) satisfy any applicable law, regulation, legal process or governmental request, (ii) enforce the Terms, including investigation of potential violations hereof, (iii) detect, prevent, or otherwise address fraud, security or technical issues, (iv) respond to user support requests, or (v) protect the rights, property or safety of Twitter, its users and the public.

So, for example, they can pull all of your tweets off Twitter, so that no one can see them anymore. However, that doesn’t preclude you from, for example, reposting all your tweets to Facebook or a blog, if you wanted to, and assuming you retained a copy of them.

Of course, lawyers tend to argue about everything and anything, so I’m sure someone out there may be inclined to disagree with something I’ve written above. Which is fine. And of course the usual – not legal advice, no lawyer-client privilege, no obligation or liability. Just in case you live in the US.

Fascinating stuff, isn’t it?

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.

being an employee and a (potential) entrepreneur

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Apologies to my loyal readers for the extended blog absence. What can I say – I was perhaps discouraged by the recent pronouncement in wired that blogging was dead – and that twitter is the Next Big Thing.

In any event, I was reading Dilbert this morning. As those who follow the strip know, there has been a running series about how Dilbert started his own business on his company’s time. (As an aside, it was called dilbertfiles.com and is actually a real site that Scott Adams set up for file sharing).

So today, Dilbert gets some bad news:

Dilbert.com

Funny, but true, unfortunately. One of the things that I admire about Dilbert is the way it conveys some simple truths, such as the one above, with a bit of humour. And it never ceases to amaze me that some entrepreneurs do continue to find themselves barfing in their box full of junk. To wit: The founders of MGA Entertainment – the company that was very successful in marketing a line of dolls called “Bratz”. Apparently, the person who came up with the concept and drawings for the Bratz dolls did so while still in the employ of Mattel. Because of that, Mattel claimed that it owned the rights to the Bratz concept. The court agreed, and gave ownership to Mattel, which then wasted no time in seeking (and obtaining) a court order that effectively shut down MGA’s Bratz business and handed the keys over to Mattel. The folks at MGA likely barfed in their box of junk to the tune of several hundred million dollars. Not good.

The fact of the matter is that if you are a budding entrepreneur who still has a job, unless you have a written agreement with your employer that you will personally retain ownership of certain IP that you come up with, then in all probability whatever you create in the course of your employment will in fact be the property of your employer. So think twice about creating that little side software project on your work computer. Or, for that matter, that really cool blog. Otherwise, you may find yourself handing it over when it’s worth quite a bit more.

the (not so) long arm of the tax authorities

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The recent case involving the Canada Revenue Agency and eBay took an interesting (and perhaps somewhat ironic) twist on access to information. Without getting into too much detail, the essence of the issue was this: CRA wanted eBay Canada to cough up information on folks known as “Power Sellers” – those that sell a lot of stuff on eBay. Presumably so that CRA could helpfully remind those folks of their tax obligations in the unfortunate event they somehow forgot to report all the income they made in Canada by selling on eBay.

eBay Canada’s response was that the legal entity in Canada did not in fact own that information and it was also not stored in Canada. Rather, the information was owned by some of its affiliates and stored in the US, outside of Canadian jurisdiction. So they couldn’t provide the information, they asserted.

Unfortunately (for eBay) it came out that eBay Canada was able to access the information even though it didn’t own the data. In fact, it had to be able to access that information in order to run its business. So the court ruled in favour of the CRA, with this rather cogent analysis:

The issue as to the reach of section 231.2 when information, though stored electronically outside Canada, is available to and used by those in Canada, must be approached from the point of view of the realities of today’s world. Such information cannot truly be said to “reside” only in one place or be “owned” by only one person. The reality is that the information is readily and instantaneously available to those within the group of eBay entities in a variety of places. It is irrelevant where the electronically-stored information is located or who as among those entities, if any, by agreement or otherwise asserts “ownership” of the information. It is “both here and there” to use the words of Justice Binnie in Society of Composers, Authors and Music Publishers of Canada v. Canadian Ass’n of Internet Providers, [2004] 2 S.C.R. 427 at paragraph 59. It is instructive to review his reasons, for the Court, at paragraphs 57 to 63 in dealing with whether jurisdiction may be exercised in Canada respecting certain Internet communications, including an important reference to Libman v. The Queen, [1985] 2 SCR 178 and the concept of a “real and substantial link”.

The implications in this case are relatively clear. In other cases, it may become less so. For example, what happens with this concept when someone who once stored their docs on their local hard drive starts using Google Docs, only to find out that the authorities in whatever far-flung jurisdiction have ordered an affiliate of Google to disclose that information? Or in the near future when things like Prism get to a point where users aren’t even sure whether their data is here, there, or elsewhere. Interesting times, indeed.

Microsoft Patents RSS. Or Tries To. Maybe.

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Interesting post on someone else’s blog about Microsoft apparently trying to patent RSS:

The applications, filed last June but just made public yesterday, cover subscribing and discovering what Microsoft calls “Web feeds.” That comes as a bit of a shock to anyone who’s been working on RSS, which has its origins in a format developed seven years ago at Netscape Communications.

Microsoft executive Don Dodge, while not involved in the patent applications, says he suspects the filings were made to defend the company against “patent trolls”. (The filings were made shortly before Microsoft announced plans to build RSS technology into its upcoming Vista operating system.) Still, if granted, the patents would give Microsoft a legal cudgel to wield against other companies using RSS.

Well. They do have a point. Generally speaking, I don’t think patent trolls (those that basically file overly broad patents and then sit on them in a dark cave until someone who actually does something useful, and therefore has deep pockets, unwittingly infringes, at which point the troll comes out and clubs them over the head with a lawsuit or settlement) are a good thing. That being said, its ironic that Microsoft feels the need to abuse the system in the same way as patent trolls in order to proactively defend itself. It will be interesting to see how things turn out.

Unfortunately, I’m not necesarily sure that prior art would necessarily invalidate these patents – after all, most of NTP’s patents were more or less considered invalid, but that didn’t stop them from collecting several hundred million from RIM. And its not like there haven’t been other, um, rather broad patents asserted in the past. You know, like back in 2002, when British Telecom asserted ownership of hyperlinks (which they lost) though of course BT doesn’t quite fit the description of a patent troll.

Then again, it begs the question as to who or what should or shouldn’t be considered a patent troll – for example, its well known that IBM has a huge, gigantic, enormous arsenal of patents at its disposal. IBM also actively licenses these patents (and of course threatens litigation where it believes its rights are being violated), but it isn’t necessarily the case that IBM would otherwise have exploited these patents in what I’ll call “active” business – i.e. making and selling something based on the patent as opposed to primarily seeking royalties and licenses from those do – even though IBM does do so in some cases. So does that make IBM a patent troll? What about Philo T. Farnsworth who, arguably, never started producing televisions but instead sought legal claims against others?

My perhaps overly simplistic take on this is that patent trolls are not inherently the problem, but rather the ability, primarily in the US, to register patents that should have never issued in the first place. If someone comes up with a smart, cool, inventive, and truly novel way of doing something, then they should certainly be free to either produce something with it, or sue the living daylights out of someone else who comes along and infringes the IP even if they don’t (or can’t) make productive use of it themselves. Not actively exploiting a patent is not necessarily tantamount to being a bad guy, IMHO.

It will be interesting to see what happens on this front, if anything. If nothing does, then I may well turn to drafting patents, the first being “Method of Utilizing a Rhythmic Cadence in the Expansion and Contraction of Multiple Muscular Groupings to Faciliate Indefinite Continuation of Metabolism of Cell Structures.” I like the sound of that. Yes indeed.