Acquisition
Dear Faithful Readers:
I’m excited to finally be able to let you all know where I’ve been these last few months. NET(net), Inc. has acquired the licensinghandbook.com family and we’ve all spent the last several weeks preparing, moving and re-organizing content to better serve you.
I’m sorry I’ve been away so long… these types of transitions are difficult to say the least. I haven’t had a lot of time to blog as much as I would like with my new duties – but this move now provides you with access to more than a dozen software license negotiation specialists: from Scott Braden and his Microsoft practice to Steve Zolman and his incredible wealth of practical negotiation advice and expertise.
The result is that you’ll be better served by the team rather than just me as an individual… and since I’ve wanted you to always have the best information, this is an incredibly fortunate event.
For now, blog posts will be cross-posted at licensinghandbook.com and at netnetweb.com/blog. I will be redirecting the feedburner RSS feed shortly. But feel free to make the necessary changes on your side first.
I look forward to continuing this adventure with you! Feel free to find me at jgordon@netnetweb.com going forward.
~Jeff
NET(net) acquires LicensingHandbook.com
HOLLAND, Michigan, January 11, 2010– NET(net), Inc., the industry leading provider of IT Investment Optimization Services, is pleased to announce its recent acquisition of the LicensingHandbook (www.licensinghandbook.com) family. LicensingHandbook.com is a premier destination for licensing, contracting, negotiation and risk management information and is the online home for the Software Licensing Handbook.
This acquisition strengthens NET(net)’s market leadership position with respect to helping clients optimize software licensing investments, adding to the collective expertise and Federated Market Intelligence of its already thriving investment optimization practice. Along with the acquisition comes Mr. Jeffrey I. Gordon, the former owner of the licensinghandbook.com family, who joins NET(net)’s team of experts as Vice President of Value Creation. As part of this role, Mr. Gordon will be responsible for leading NET(net)’s COMPASS practice, managing key client engagements, and refining the professional services delivery methodologies for NET(net)’s maintenance and services related engagements. Mr. Gordon will continue to write licensing, contracts and intellectual property-related articles for NET(net)’s blog and former licensinghandbook.com content will be available at www.netnetweb.com [Update: this content is available now, please update your links.], including access to Mr. Gordon’s books and training video series.
NET(net) President & CEO Steven C. Zolman said,“The LicensingHandbook has been a valued resource for many clients dealing with the complexities of the software licensing conundrum. Capturing the collective market intelligence of years of research, analysis and publication, will help us continue to refine our already industry leading capabilities as we surge further ahead in the IT Investment Optimization industry. Integrat- ing the expertise of Jeff Gordon into our value creation services engine will enable us to deliver this compre- hensive expertise in all future client engagements”.
“Understanding the old adage,‘Never bring a knife to a gunfight’ is essential when it comes to working with technology suppliers. Having the right tools and the right people makes all the difference when it comes to managing both spend and risk. NET(net)’s team of seasoned professionals allows me to provide more value to our collective clientele. From Microsoft-specific experts to former CIOs, NET(net) has created a best-in- class services organization and I’m honored to join the team!” said Jeffrey I. Gordon.
About Licensinghandbook.com:
Based in Raleigh, North Carolina, Licensinghandbook.com has a monthly readership of more than 200,000 individuals interested in learning the ins and outs of software licensing, contract negotiations and risk management issues.
About NET(net):
Founded in 2002, NET(net), Inc. is a global IT Investment Optimization and Negotiation firm, serving more than 1200 clients worldwide, in virtually every industry sector, with over 15,000 engagements, resulting in strategic and financial value exceeding $50B of incremental value. Additional information is available at www.netnetweb.com.
FOSS licenses upheld!
After a five-year struggle in US Federal District Court, Robert Jacobson recently prevailed in his copyright infringement claim against Matthew Katzer as a result of Katzer’s alleged misappropriation of open source code from Jacobson’s Java Model Railroad Interface project.
You can read all of the story in more detail at ConsortiumInfo.org. The end result is a huge win for open source developers as a result of three key findings by the District Court:
- Violation of an open source software license constitutes copyright infringement, not just breach of contract (this was first upheld by the Federal Appeals Court in 2008 in this case).
- Use of open source code without attribution is a violation of the Digital Millennium Copyright Act.
- These violations entitle the Plaintiff (Jacobson) to monetary damages – which, as they’re based on violations of copyright law, are potentially much more substantial than those which may have been limited by contract law.
There are some mitigating circumstances in that the results in this case are not yet dispositive of all future violations, as the ruling of a US District Court is limited to absolute applicability only in its geographic district. The concern is that a Federal Appellate Court (including the US Supreme Court) could overrule or otherwise reverse this decision. Worse yet would be another US District Court coming to a different conclusion with a similar set of facts.
But for now, FOSS developers can rest a little easier knowing that their creations are protected by copyright law.
Things that shouldn’t count as force majeure
Define the term “force majeure” for me. Looking online, there are several:
- it’s French for “superior force”
- act of God: a natural and unavoidable catastrophe that interrupts the expected course of events (WordNet)
- a common clause in contract which essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties (Wikipedia)
- an unavoidable catastrophe (Wiktionary)
So what’s the common theme? It’s the ability to AVOID a particular set of actions. In other words, force majeure events are those which are unavoidable or unforeseeable. If you only click one link above, do the one for Wikipedia and learn about the three-part test in French and international law for what constitutes a force majure event. UCC Section 2-615, “Excuse by Failure of Presupposed Conditions” and the Restatement of Contracts 2d, Section 261 “Excused Nonperformance” also include multi-part tests.
But we’ve gotten lax in contract drafting in the US and folks have assumed that force majeure clauses (those that allow a party to not perform as a result of one of these types of events) were continually written with actual unavoidable events listed. In fact, almost every force majeure clause I now see contains at least one, if not more, of the following things as force majeure events:
- strikes/labor disputes
- telecommunication difficulties
- supply chain problems
- terrorism and war (sometimes even phrased as “acts of the public enemy”)
- riots
- government regulation
Unfortunately, these are not force majeure events. Why? Because most of them can be planned for… and even something like terrorism and war (especially when they’re happening right now), should be planned for. If you can plan for them, they’re foreseeable. And if they’re foreseeable, they’re not unforeseeable. See where I’m going with this? 
So when you strike these items out of the force majure event clause, you’re going to get push back because people don’t want to be responsible for planning in all eventualities. You’re not asking them to do it. Rather, you’re asking that contract performance not be hindered or halted as a result of things that are capable of having a backup plan. Which means that you could, if you were so inclined, draft language which allows for these items to be force majeure only if they were part of a backup plan that still was impeded. In other words, you’ll give these items force majure weight if the party claiming force majeure can show that they had planned for them properly, but still ran into trouble.
Oh, and by the way, force majeure also isn’t one-size-fits-all. Would you EVER list telecommunication difficulties in a contract with your telephone service provider? Additionally, force majeure protections should benefit BOTH parties, even if one party’s sole obligation is to cut a check. Payment can be made quite difficult by floods and hurricanes, just ask the good people in Louisiana, Alabama and Mississippi about business deals during Katrina.
The Licensing Handbook Blog is the companion site to the Software Licensing Handbook. Covering licensing topics on a regular basis, Jeffrey Gordon attempts to offer advice, add humor and sometimes even a bit of wit to a practice that most people find abhorrent – namely, reading a contract from start to finish. Follow me on Twitter if you want up-to-the-minute information on contracting, licensing, negotiation and the law.
Third Party Providers
Happy New Year!
I saw an interesting article today that high-tech vehicles were posing problems to some mechanics. The mechanics claim that they can’t afford the thousands of dollars that are necessary for them to obtain the specialized diagnostic tools for each auto manufacturer. The manufacturers are claiming that they’re trying to protect their intellectual property.
Sound familiar? Yup, it’s exactly like the issues Frank Scavo and Ray Wang have written about with regards to third-party software providers being blocked from performing various maintenance/implementation tasks by the contracts and software licenses and services agreements of certain primary vendors.
On the automotive side, it’s apparently gotten to be such an issue that there’s a congressional bill called the Motor Vehicle Owners Right to Repair Act of 2009. The stated purpose of this Bill is to “protect the rights of consumers to diagnose, service, maintain, and repair their motor vehicles”. What’s really interesting are the Bill’s findings, among which say that:
- Motor vehicle owners are entitled to choose which service provider will diagnose, service, maintain, or repair their motor vehicles.
- Promoting competition in price and quality… will benefit consumers.
- Only service technician with the necessary tools and information can access the computers to perform diagnosis, service, maintenance and repair…
And the requirements of the Bill, specifically:
- Duty to Make Tools Available: The manufacturer of a motor vehicle sold, leases or otherwise introduced into commerce in the United States must offer for sale to the motor vehicle owner and to all service providers on a reasonable and non-discriminatory basis, any tool for the diagnosis, service, maintenance, or repair of a motor vehicle, and provide all information that enables aftermarket tool companies to manufacture tools with the same functional characteristics as those tools made available by the manufacturers to authorized dealers.
- Replacement Equipment: The manufacturer of a motor vehicle sold, leased, or otherwise introduced into commerce in the United States must offer for sale to motor vehicle owners, and to all service providers on reasonable and non-discriminatory terms, all equipment for diagnosis, service, maintenance, or repair of a motor vehicle.
The only thing the Bill protects for the manufacturer are things that are actual trade secrets.
Wow. Of course, there are a LOT of people (and more specifically, a lot of trade association and advocacy groups) behind this Bill.
Could you imagine what would happen if this passes and someone realizes that software in cars isn’t that dissimilar to plain old enterprise software? If only there was a trade association group for buyers of enterprise software apps. 
But let’s talk about the other side of the issue for a moment. Do consumers have a right to have third-party companies provide service? A right? No. I don’t think there’s a right to be able to have third-party providers. [Keep in mind, when we're talking about rights, we're talking about things equal to "life, liberty and the pursuit of happiness...".]
Absent a right, should third-party providers still be allowed/encouraged? I’m really torn on this. On one hand, I’m all in favor of things that inspire commerce. I like behaviors that create business, allow more people to work… and of course, things that drive down costs and dissipate apparent monopolies. On the other hand, an individual or organization who creates something should be able to protect their idea/invention and not have to give up the secret sauce simply so that other people can benefit. But there seems to be a line somewhere that once you cross it should allow for third-party companies to fill available niches. Maybe it’s where the original vendor is no longer able to provide a quality-level of service. Maybe it’s a situation where the original vendor is charging exorbitant rates. I’m not sure.
Anyone have a solution?
The Licensing Handbook Blog is the companion site to the Software Licensing Handbook. Covering licensing topics on a regular basis, Jeffrey Gordon attempts to offer advice, add humor and sometimes even a bit of wit to a practice that most people find abhorrent – namely, reading a contract from start to finish. Follow me on Twitter if you want up-to-the-minute information on contracting, licensing, negotiation and the law.
As the year draws to a close
Hopefully, most of you are done with work for the year. But for those of you about to close end of year, firesale-type deals in the remaining 6 days of the year (the end of the year is even a Thursday, so you don’t have to “work” a weekend if this is your fate), here is a list of articles on how to get the most out of your transaction time:
Start with fundamentals on negotiation. Think outside the box.
Then go through the basics on firesales. If you want more, buy the Firesale Concall Recording.
Understand pricing, and when it might pay to avoid maintenance costs.
Start your deals from good templates.
And, lastly, consider the reasons for agreeing to renegotiating deals.
To my faithful readers: Thank you for listening to me for another year. I hope you have a very joyous holiday season and a happy New Year. See you in 2010 (unless something really awesome in the licensing world happens between now and then).
The Licensing Handbook Blog is the companion site to the Software Licensing Handbook. Covering licensing topics on a regular basis, Jeffrey Gordon attempts to offer advice, add humor and sometimes even a bit of wit to a practice that most people find abhorrent – namely, reading a contract from start to finish. Follow me on Twitter if you want up-to-the-minute information on contracting, licensing, negotiation and the law.
Comic: Why you should have a lawyer negotiate your contracts
Change “lawyer” to “contracts professional” and you’ve got it.
The Numbers All Go To Eleven
A few years ago, I got into a little issue at work. I had found that my negotiation dial could go all the way to 11. Being the Type-A person that I was, I learned how to crank it to 11 on a regular basis. And like the child whose mother warns him to not make that face because it’ll freeze like that, sure enough, I got to a point where I couldn’t turn it off.
No, I don’t mean dial it down, I mean turn it off at all. There was no 0. Oh, and 11 became the new 1. Which meant that there were even higher and much more intense levels above 11, too. It took about a month for it to impact my then-new marriage. A few days later, folks at work started to bristle, too. Uh oh.
With some patience, time and a little vacation, I reset my meter – only this time, 0 was 100% off and 5 was the new 10. Guess what? I didn’t lose any effectiveness at all. I was able to accomplish the exact same results as before – only this time, I didn’t piss people off in the process.
As with anyone who has undergone this type of behavioral transformation, it makes me more sensitive to others’ similar behavior. So when I see a slew of articles recently on negotiating everything from a raise to a new car or better ISP rates, I think back to being “at 11″ and wonder about when it’s ok to NOT negotiate.
It’s ok. I really did just say “not negotiate.” And I meant it, too. (The world is not coming to an end. I promise.) There just happen to be times when it’s absolutely recommended to simply agree with the other party and take what they offer in the form in which it’s offered.
The question, of course, is: “When?”
Well – it’s up to you. But I recommend agreement without negotiation when the proposed solution/offer/etc is:
- Within your means to provide.
- Within your previously-considered range of acceptable offers.
- Not necessarily going to create a precedent that you’ll be tied to in the future.
Does this mean you might pay a little more? Maybe. Do a little more? Maybe. Get a little less? Maybe.
In exchange, you’ll keep your sanity… and your friends. Those are way more important than “winning” every negotiation.
[My apologies to Nigel and Spinal Tap for the stolen quote as the topic.]
The Licensing Handbook Blog is the companion site to the Software Licensing Handbook. Covering licensing topics on a regular basis, Jeffrey Gordon attempts to offer advice, add humor and sometimes even a bit of wit to a practice that most people find abhorrent – namely, reading a contract from start to finish. Follow me on Twitter if you want up-to-the-minute information on contracting, licensing, negotiation and the law.
Updating Contract Language for the 21st Century
Holly Towle wrote an excellent article on the boilerplate contract language issues that might now exist in your contract language. Read the article… consider the issues… review your templates. Make some changes. Of course, you can always just call me and I’d be happy to review your contracts for you.
The Licensing Handbook Blog is the companion site to the Software Licensing Handbook. Covering licensing topics on a regular basis, Jeffrey Gordon attempts to offer advice, add humor and sometimes even a bit of wit to a practice that most people find abhorrent – namely, reading a contract from start to finish. Follow me on Twitter if you want up-to-the-minute information on contracting, licensing, negotiation and the law.
GPL, WordPress and Themes
I saw an intriguing post the other day by Jennifer Schiffer on WordPress, themes and the GPL. She linked to a video of Matt Mullenweg (one of WordPress’ lead developers) who was talking about why WordPress was a GPL product (short answer: they didn’t really have a choice because WP is based on b2, which was GPL) and, more specifically, was talking about why themes and plugins are also then GPL.
The truth of the matter is that the GPLv3 is a very restrictive license, in as much as it’s also a harbinger of freedom. The GPL was written in a way to specifically retain the freedoms it grants through successive iterations of a particular product, or its add-ons. This means that if you like a GPL product, develop a derivative work, a modification, a plug-in or any other type of add-on, the resulting work is also going to be covered by the GPL (you do not have a choice in this).
“You may not impose any further restrictions on the exercise of the rights granted or affirmed under this License.” – Section 10 of the GPL
This means that unless the WordPress GPL (yes, they’re specific by product… you can ADD restrictions if you want… so no 2 GPL’d products are necessarily identically licensed – we’ll talk about this in a minute) allowed for a theme developer to restrict the distribution of a theme, a theme developer isn’t allowed to add that restriction on their own. Your development on a GPL product inherits the license of the original product.
Inheritance is a powerful concept because it creates license congruity, ad infinitum, for all downstream works of the original code. It would be extremely difficult to manage license compliance if WordPress had one license, but a plug-in had a different one.
But there’s apparently a wonderful new theme available for WordPress called Thesis. Its developer sells two several different versions of the theme (selling under the GPL is fine). The problem comes to light when you look at the options:
- Personal: one site only; footer link must remain intact; can’t re-sell theme or modifications
- Developer: can create multiple sites and must pay Thesis developer for each site deployed; can remove footer link; can’t re-sell theme or modifications
And these options are problematic because they violate the GPL v2 under which WordPress is licensed. Specifically, Section 2, which states, in part:
“You must cause any work that you distribute or publish, that in whole or in part contains or is derived from the Program or any part thereof, to be licensed as a whole at no charge to all third parties under the terms of this License.”
and Section 6:
“Each time you redistribute the Program (or any work based on the Program), the recipient automatically receives a license from the original licensor to copy, distribute or modify the Program subject to these terms and conditions. You may not impose any further restrictions on the recipients’ exercise of the rights granted herein. You are not responsible for enforcing compliance by third parties to this License.”
(Note that v2 and v3 of the GPL are vastly different animals… and v2 was actually more in the realm of “free as in free beer” than v3, which touts freedom as “free as in free speech, not free beer”.)
So, in fact, the Thesis theme, as a WordPress derivative work, is bound to the GPLv2 license that WordPress is licensed under. As such, even the sale of the theme is a problem, as are the one-site-only restrictions and the “can’t re-sell” restrictions. Note: the footer link restriction is probably fine, as it could qualify as the attribution allowed under the GPL. Additionally, it could be argued that the fee charged is for the “physical act of transferring a copy” as allowed by Section 1 of GPLv2, but even then, the remainder of the unauthorized restrictions are still problematic.
But who is going to do anything about this violation? Who has the right to enforce the license? WordPress? The folks at b2 (WordPress’ predecessor)? Any particular end user? Technically, it’s the folks at WordPress who have the right to enforce their license upon theme and plug-in developers. They have the ability to potentially even sue to prevent a rogue developer from violating their license with WordPress [though I'm guessing that a theme developer is going to try to argue that a theme isn't a derivative work or a modification]. But this is inherently difficult. So instead, WordPress is taking a slightly different tack. They’re going to create a Theme Page on the main WordPress website which only lists themes that follow the GPL (by the way, all derivatives have to be GPLv2 licensed, as the WordPress license doesn’t allow for newer versions of the GPL to apply). I’m guessing that Thesis won’t be listed.
The Licensing Handbook Blog is the companion site to the Software Licensing Handbook. Covering licensing topics on a regular basis, Jeffrey Gordon attempts to offer advice, add humor and sometimes even a bit of wit to a practice that most people find abhorrent – namely, reading a contract from start to finish. Follow me on Twitter if you want up-to-the-minute information on contracting, licensing, negotiation and the law.
keep looking »-
"an invaluable guide to one of the software’s industry’s most maddening and, at times, controversial topics..."
-Rick Chapman, Editor Soft*Letter
"I would endorse Jeff's book. It is so great I wish I wrote it myself!"
-Jim Geisman, Owner Marketshare, Inc. -
