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:

1. 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).
2. Use of open source code without attribution is a violation of the Digital Millennium Copyright Act.
3. 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.

• 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.

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.

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.

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:

1. Within your means to provide.
2. Within your previously-considered range of acceptable offers.
3. 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.

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.

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:

1. Personal:  one site only; footer link must remain intact; can’t re-sell theme or modifications
2. 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.

I was looking for some insight that I might have missed.  In the world of contracts, your license actually will specifically state who has the ability to audit your license usage (if they have the right at all).  And in the world of law, the term “standing” is used to show who actually is allowed to raise a particular issue (via the courts, etc).  So the SPA/BSA/SIIA (SIIA is their current incarnation) (or any other third-party “enforcer”) wouldn’t have the legal right to ever come in and audit your software license use unless there’s language in the license that allows for such audit.

Even general audit language is probably safe to prevent the SIIA from knocking on your door one day.  Typical audit provisions include:

• explanation of who can come to audit (it usually says that the vendor has the right to audit)
• time-frame of any audits (I typically am very clear to limit audits to 1 time per calendar year)
• notice for audits (even bad audit language usually says that the vendor has to notify the licensee of the intent for an audit)
• who besides the vendor can come audit (if 3rd parties are allowed, I limit to a “big-four” accounting firm and have NEVER been challenged on this limit)

The result is that even with not-so-favorable audit language, I simply don’t see how the SIIA has any right to come and perform an audit, let alone try to sue a licensee for license violations (again, any license that has “no third-party beneficiary” language in it could be used to very clearly show that the SIIA doesn’t have any rights with respects to the license).

Additionally, it’s been suggested that there are two other routes to allow such an audit: the “source” (the licensee’s employee who reports a violation) and the potential for an assignment of audit rights.  As for the source person, unless they’re also the person in the company who can allow someone to come in, that individual probably doesn’t have internal authorization to allow the audit to happen – so I find this unlikely.  The assignment of audit rights potential does exist, and contracts that have poor assignment language could potentially allow the vendor to assign their rights to someone else (and, in fact, it appears that the SIIA attempts to use an assignment of rights in this manner).  So it’s conceivable, but I’ve never seen the language used in that way.

At the end of the day, the lesson is this:

1. Have strong audit language which clearly states who can perform the audit, on what time basis they can audit and what the results would mean (ie: usually you don’t have to pay any form of penalty unless usage exceeds 10% of the licensed quantity – but you’ll always have to pay for the difference in usage).  Include notice provisions and be very clear about whether the vendor can outsource their auditing… many will use large auditors, which is fine, but you don’t want Andy’s Audit Shack to be performing the audit.  Lastly, if you’re maintaining any kind of uber-confidential information (like SSN’s, bank account numbers, etc), then I would also be clear about what kinds of auditing tools can be used to complete the audit, as many vendors like to install their own auditing software onto your network.
2. Have clear assignment language which prevents EITHER party from assigning the agreement without the other party’s consent (not to be unreasonably withheld, if you so choose): “Neither party may assign or otherwise transfer this Agreement or any of the rights hereunder, without the prior written consent of the other, which consent will not be unreasonably withheld or delayed.”.

OK – so you’ve done the prior two things and the SIIA comes knocking (physically or with a letter requesting/demanding an audit).  What do you do?  Simple.  Deny them access – in writing.  They’ll threaten, similar to the Big Bad Wolf, to huff and puff and to blow your house down.  But if you’ve got things properly documented, the SIIA simply doesn’t have the legal right to audit.  It doesn’t matter whether the vendor they’re supposedly auditing for is a SIIA member.  It doesn’t matter if they claim to have permission.  (Oh, and interestingly enough, if they name names and tell you which vendor sent them to you, I would check your license agreement with that vendor because many vendors like to include confidentiality restrictions which prohibit either party from even identifying the other.)

Now, regardless of everything I’ve just told you, I also firmly believe that you should always be 100% compliant with your contractual obligations.  So use some form of license management tool to know that you’re only using what you’re licensed to use.

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.

So, if you have been waiting for the eBook version of the Software Licensing Handbook (I’m matching Amazon’s price for the paper version, so get it cheaply now), you can get it here.

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.

Typical negotiation trainers (Karrass, for example) predicate their training materials on the belief that anyone can learn how to negotiate.  Even my favorite professional negotiator, Herb Cohen promises in his book that “You, too, can negotiate anything!”.  But don’t let the razzle-dazzle fool you.  The honest truth is that while everyone can learn techniques to increase their negotiation skills, not everyone can be a good negotiator.

“Wait!” you yell at me – “YOU offer negotiation training, too.  Aren’t you just taking people’s money like everyone else?”  Woah.  I’m not rendering judgment on the value of the service offered by negotiation trainers… lots of the material learned in these courses is excellent stuff.  Heck, even bad negotiators can improve by learning my Five Fundamental Skills for Effective Negotiation.  What I’m saying is that a prospective negotiator needs to be introspective enough to know whether they’re a good negotiator (and sometimes, it’s even case-specific).

So then, what makes someone NOT a good negotiator?  Well, as I just said, it can sometimes be case-specific – I, for example, shouldn’t negotiate the purchase of my own house or car… I’m too emotionally invested in the result.  But more generically, bad negotiators are:

• ignorant (choosing to be without knowledge – would rather shoot from the hip)
• overly-emotional (it’s one thing to be “disappointed” in a result… another to be “sad”)
• hot-tempered (NEVER lose your cool – in fact, keeping cool when the other side is purposefully pushing your buttons is a great skill to have)
• impatient (negotiations can take a LOT of time and you have to be willing to wait things out)
• know-it-alls (the flip-side of ignorance is just as dangerous)

What am I saying, then, if you have these tendencies?  Well – either alter your personality (which proves quite hard for the bulk of the population) or find someone else to do the negotiating.  Remember that bullying someone (which is what a lot of these traits manifest as during a negotiation) won’t get you what you desire and might leave you worse off than when you started.

Oh – you don’t like the implication that everyone can’t be a great negotiator?  Blast me in the comments.

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 human beings, there is research to suggest that we want to generally appease others at a very fundamental level.  This isn’t about conflict management, it’s simply about survival and the power that comes with “the return of the favor.”  It’s even got a political science term that sounds awfully legal: “social contract” – that the individual give up some flexibility of behavior in favor of the larger societal good.  But realize that there is a quid pro quo here, we expect something in return.

It’s important, however, to learn the power and value of saying “No.”

At your individual level, “No” might mean that you have more time to devote to your already-full plate of things you’ve said “yes” to. At the societal level, “No” means that you are recognizing participatory limitations – that you believe that you have already contributed (or are contributing) to the “group” (however you would like to define it at that particular moment). Without realizing it, you actually do a form of “hedonistic calculus” to determine the effect of saying No and formulate defenses in the event you’re challenged.

But it’s not wrong to say No – and there are a lot of benefits to saying “No” with compassion and clarity.

While you may be refusing someone something that they want, and as I reminded someone the other day, you’re no good to anyone (including yourself) if you’re not able to do what you have already committed to do.  Saying “No” is a defense mechanism and allows you the ability to regulate your workload.  But, it’s also a starting point (as pointed out by Jim Camp in “Start with No!”) in that only if you say “No” do you have a place to begin a conversation.

Which means that from a negotiation perspective, “No” is a wonderful way to begin when asked for any settlement.  Camp believes that it’s the ONLY starting point – and he says on his website that starting with no is to “gain control of the deal.”  Whether you believe that’s true (or even if you want control of the deal), he is right that without saying “No”, there isn’t a conversation or negotiation at all – saying “yes” is merely a statement of agreement.

Saying “No”, however, doesn’t have to be done in a mean spirited manner and doesn’t have to be used with force.  Rather, the manner in which you say “No” can convey almost any conceivable emotion and can even foster a reciprocal compassion for your need/desire to say “No.”  For example, I was asked the other day to complete some new work for an old client on a quick-turnaround basis.

I responded saying that while I wanted to complete their project, I didn’t have time to get it done on their schedule because I was going on a babymoon with my wife.  In other words, I said “No.”  But of course, I didn’t only say “No.”  My next sentence was to give them the option for me to complete the project upon my return.  When they learned that my wife and I were expecting and because they understood the desire to take a last vacation before the baby arrived, they were sympathetic to my reason for saying No – and in fact, their time schedule really wasn’t as inflexible as they first made it appear.  In the end, I will get to enjoy my babymoon, I will complete their work promptly upon my return and they’ll have their needs met as well. [By the way, the ability to say No is founded upon proper use of Information Gathering skills.]

By saying “No” I was actually able to get everyone what they wanted.  Try it yourself and let me know how it works in the comments!

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.

My clients are typically organizations that fall into one of three obvious categories:

1. small organizations who need a contract negotiator for individual large deals;
2. medium-sized organizations seeking to create a contract management team; and,
3. large organizations who can benefit from strategic advice to bolster their internal staff resources.

So, if you or your organization have been considering contract renegotiation strategies or mitigation work based on risk management assessments, now might be a perfect opportunity to take advantage of the current economic situation.  Additionally, I can provide a VMO-in-a-box (the creation of all things necessary for the implementation of a vendor management office) or simply act as a sounding board to make sure that you’re extracting all of the value possible from each deal.

Contact me today if you’d like to use my knowledge to your advantage.

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.

I also realized that many of you might have no idea what you’re seeing below.  Sorry.  These are “tweets”, 140 maximum character messages sent via Twitter.  Within the Twitterverse individual users follow others and have followers (think of it like overlapping Venn diagram circles).  To read a tweet, you have to wade through a bit of jargon used to make the most of the 140 character limitation.  “RT” for example, is shorthand for “Re-tweet” and the @____ is the username of some other individual on Twitter.  Combined together, then, “RT @_____” means that someone else wrote a tweet that I found important and I now want to forward along to my followers.  The URL’s are then also shortened by shortening services like bit.ly to make the most of the character limitation, too.  Lastly, you might see “hash” identifiers “#______” which are ways to tag tweets of a particular flavor for easy searching later and “<” which means that I am commenting on what came before it.

• RT @TradeSecretLaw: Vary the Speed and Timing of Your Negotiations for a better deal. http://bit.ly/XP5W9 < Good. Are there better examples?
• RT @johnlwatkins: New blog post: Why Judge’s confidentiality rule may increase arbitration and mediation. http://bit.ly/j9PYj
• RT @TOpatentlawyer: Microsoft patents a way to make more money from MS Office http://ow.ly/tGOg (via @slashdot)
• RT @dahowlett: Qu: do software buyers make rational decisions? Methinks ‘not often.’
• The Cloud Computing Consultant: http://bit.ly/2lSgVQ (via @dealarchitect) < Hilarious and NSFW.
• MS attempts to patent software licensing based on time: http://bit.ly/kRcsO < I hope there’s a solid prior art search (and practice).
• RT @glambert: “When is a blog a sponsored endorsement?” (via DLA Piper) http://bit.ly/peWyj
• RT @CopyrightLaw: “NBC And CNBC Sued For Infringing Use Of…FONTS” http://tinyurl.com/yfob39h
• RT @jayshep:Best law school advice? “Say hi to Heidi. She’s in our section.” Been married to her 13 years with 2 beautiful daughters.<
• RT @TradeSecretLaw @worklawyer: Don’t lecture. Tell stories. Emotion is more persuasive than facts. < works w/ negotiation, too.
• RT @matthomann: Three great questions to help you remove ego from your (and your clients’) decision making: http://bit.ly/isPkL < Excellent!
• RT @CopyrightLaw: “More fair use follies — copyright infringement by court filing?” http://tinyurl.com/yh75nfc < I’m loving @copyrightlaw
• RT @gfiremark: Termination rights: music to artists’ ears http://bit.ly/15O7Hq
• RT @CopyrightLaw: Resale of International Textbooks to US Students Not Protected by First Sale Doctrine http://tinyurl.com/ybqo828
• RT @gfiremark: Was a Contract Formed? http://bit.ly/OvsQs < K wasn’t conditioned on others’ perf. Can’t wait to see the pics.
• @VBalasubramani OK… so who’s going to take this to the SCOTUS? And what’s the third case: Vernor, Cincom and…???
• RT @VBalasubramani: what’s the difference between a purchase and license of software? http://bit.ly/QSMwP < Congrats! Great job.
• Cool trademark search/registration site: http://www.trademarkia.com
• Andy Clarke (@cowshedstudio) on being a Contract Killer: http://bit.ly/Bv4pP <Good article by the kind of person I want as a contract client.
• RT @highrockmedia Freelance contracts: Do’s And Dont’s – http://bit.ly/hiXLg (via @smashingmag) < I’m commentator #39.
• SEC charges former CEO of IBSG with fraud in announcing fictitious licensing agreements: http://bit.ly/3NLp6U
• RT @gtiadvisors: Gmail, AOL, Yahoo! all hit by webmail phishing scam http://bit.ly/3UN3CM < What does this say about the USERS?
• RT @ITLeadersForum @alltop The Twitter decision flow chart – fun way to think about our use of Twitter…http://retwt.me/CgU4
• RT @marinafeehan: Nixon Peabody Says Student Recruitment needs Overhaul. http://bit.ly/CJsHL < Translation: We don’t want to go it alone.
• New post at licensinghandbook.com : FTC Required Disclosure http://bit.ly/18TPsw
• RT @WieseLawFirm: What are you saying that you aren’t saying? New Blog Post up on the importance of Body Language. http://bit.ly/4gSB7k
• RT @Molly_McDonough: Need a social media/copyright refresher? Take this @bobambrogi quiz http://bit.ly/EyHq
• RT @DanaNewman: Guns N’ Roses sued for copyright infringement: http://bit.ly/NbvWI
• Court Re-Affirms First Sale Doctrine Applies to Licensed SW – http://bit.ly/2fNwsI < Compare w/ Cincom http://bit.ly/IJKVR
• Just use whatever the hell you click “yes” to the first time you load up Resident Evil V to get you started. > http://bit.ly/3WiF51 < Oh my
• Stanford loses patent rights b/c a researcher signed a partner co’s visitor agreement (@ontechcontracts): http://bit.ly/vyPit
• RT @gtiadvisors @kaedron: Microsoft confirmed that thousands of Hotmail accounts compromised in a phishing attack – http://bit.ly/1kpIVT
• RT @fscavo: Expect to hear more of these. From @DavidLinthicum “SaaS Horror Stories Are Starting to Appear” http://bit.ly/kpFT4
• RT @Francineward: Intellectual property- Should biz methods be protected by patent? What will the Supreme Ct say? http://tinyurl.com/ya84d57
• RT @BrianNFletcher: Reading: Red Hat files briefing in support of stopping software patents http://sbne.ws/r/2WRe
• RT @DanaNewman: Dreamworks’ “Flushed Away” sued for copyright infringement: http://bit.ly/p9dOa
• New post at licensinghandbook.com : Announcing the Software Licensing Education Series on DVD http://bit.ly/7RNjZ
• RT @JoeTalik: Many firms unhappy with procurement outsourcing deals http://bit.ly/2lcPP < Don’t outsource what you don’t already do well.
• RT @gfiremark: Excellent Review of “most prolific scholar of copyright in history” http://bit.ly/2dGAws
• Have you downloaded my free Software Licensing Risk Matrix yet? http://bit.ly/FreeRiskMatrix
• RT @raesmaa: Do your lecture notes violate your prof’s copyright? Holy crap! http://bit.ly/1yyPoT < Read comment #8 for the best analysis.

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.

I was about to say nothing when I remembered that I received a copy of H. Ward Classen’s A Practical Guide to Software Licensing for Licensees and Licensors.  It took me so long to read and review that Ward probably regretted even having a copy sent to me.  But I got it for free nonetheless.  Oh, and if you want to send me something for free… I love freebies.  Just remember that I’ll now disclose that I got it for free.

But I think the FTC’s missing a real opportunity for regulation.  I think people who send out free things should disclose from whom they’re attempting an endorsement or comment.  I’ll even go first because, frankly, I only send things to people I know and respect and who would actually have a use for what I’m sending.  This, by the way, is also a great list of folks that you should be following/reading (in alpha order):

• Ken Adams
• Adam Ayer
• Rick Chapman
• H. Ward Classen
• Jim Geisman
  
• Eric Goldman
• Stephen Guth
• Victoria Pynchon
• Frank Scavo
• Brian Sommer
• Ray Wang

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.

So it gives me great pleasure to announce the availability of the Software Licensing Education Series on DVD.  While previously offered here as a digital download, I wanted to make these videos available to a much broader audience.  Teaming with CreateSpace has given me that opportunity.

The Software Licensing Education Series is video-based software licensing training.  Designed with even a novice in mind, the Series progressively moves from basic topics to those requiring more experience and background.  Built around a college-courseware format (100, 200, 300, 400 and 500 levels are available), the Software Licensing Education Series provides instruction in bite size pieces for optimal learning.

Pricing for the DVD set is $750 – significantly cheaper than the cost of most software licensing-related conferences and packed with way more instructional time (551 minutes… more than 9 hours of material).  The DVDs may be used in a business setting, too… and are re-usable over and over as needed.

Buy the Software Licensing Education Series now via DVD or digital download and start saving money and reducing risk today!  Oh, and get a 10% discount through the month of October on the DVD using discount code: 89YYH47X

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.

I also realized that many of you might have no idea what you’re seeing below.  Sorry.  These are “tweets”, 140 maximum character messages sent via Twitter.  Within the Twitterverse individual users follow others and have followers (think of it like overlapping Venn diagram circles).  To read a tweet, you have to wade through a bit of jargon used to make the most of the 140 character limitation.  “RT” for example, is shorthand for “Re-tweet” and the @____ is the username of some other individual on Twitter.  Combined together, then, “RT @_____” means that someone else wrote a tweet that I found important and I now want to forward along to my followers.  The URL’s are then also shortened by shortening services like bit.ly to make the most of the character limitation, too.  Lastly, you might see “hash” identifiers “#______” which are ways to tag tweets of a particular flavor for easy searching later and “<” which means that I am commenting on what came before it.

• RT @raesmaa: Do your lecture notes violate your prof’s copyright? Holy crap! http://bit.ly/1yyPoT < Read comment #8 for the best analysis.
• RT @CopyrightLaw: “Focusing In On The Value: Google Books Provides An Amazing Resource” http://bit.ly/3d8YJB < Ends do not justify the means
• How to Avoid a Bad Bargain: Don’t Threaten: http://bit.ly/zPEzF
• Second Life sends TM infringement notice to SL educators: http://bit.ly/4qA2XO
• RT @gfiremark: New case throws cold water on constitutional challenges to statutory damages awards http://bit.ly/123lyz
• RT @CopyrightLaw: “Ideas, originality, and copyright. Coldplay accused of infringement again.” http://tinyurl.com/y8krmku
• RT @DanaNewman: Apple and Eminem settle copyright infringement case: http://bit.ly/22VfWw
• RT @fscavo: “Safe to say that the stimulus bill has been a failure” http://bit.ly/Y0TMY
• RT @vpynchon @cbsalary: First Court Order Served Via Twitter http://bit.ly/LQYRc
• RT @richards1000 @copycense Sweet: Complete collection of all USTR Special 301 Reports from 1989-2009 http://bit.ly/4xOXbX
• RT @CopyrightLaw: “Court rules (again) that Vernor can sell Autodesk software” http://tinyurl.com/ydm65tk
• RT’ing original thought w/o attribution is a copyright violation. Grrrrr.
• National Archives may have leaked data on 70M vets. But don’t worry, the contractors signed a privacy policy. http://bit.ly/13Y7o8 Oops
• Amazon clarifies their Kindle book deletion policy: http://bit.ly/ESmwq
• RT @DanaNewman: Copyright Alliance asks Obama to support creators’ rights: http://bit.ly/18GR4T
• RT @nikiblack: “Is Twitter Grounds for Trademark Infringement?” | Corporate Legal … http://bit.ly/3ubzCM (via feedly)
• @kevino80 Actually, the BSA really can’t audit anyone. People only believe they can.
• RT @DeistPatriot: “Let us never negotiate out of fear. But let us never fear to negotiate.” – J.F.K. #tcot
• RT @mgmtmatters: The single most important thing to figure out during a negotiation – the other party’s position <Wrong. Know YOUR position.
• “I just stole a baby’s intellectual property.” – Modern Family <– Awesome.
• RT @vpynchon: Greatest predictor of long lifespan is being appointed to US Supreme court < Hehehehe. Awesome.
• RT @raesmaa: Nice blog on negotiations but seen that win-win is worth zero when a lawyer compensated for avoiding risks http://bit.ly/phaF1
• RT @maryadamsICA: New blog post: What’s the Right Definition of Intellectual Property? http://bit.ly/QKX5r
• RT @raesmaa: 1990s question for IT vendors – what’s your sales model? 2010s IT – what’s your scales model? (via @monkchips)
• RT @BrettTrout: Microsoft gets $388M patent infringement judgment tossed out http://is.gd/3OUWc
• RT @drjimanderson: He Who Works the Hardest Wins the Negotiation: http://EzineArticles.com/?i…
• New post at licensinghandbook.com : Response to 50 Tips http://bit.ly/pdBsc
• @DanaNewman I love Track Changes (one of only 10 key Word features that should exist). 24# paper? Please. I’m happy if it’s signed.
• RT @smallfirm Berge’s 2nd Principle of Practicing Law, “Sue solvent defendants.”
• 50 Tips for Writing a Contract http://bit.ly/MON8g (HT to @dananewman for the link) < But only abt 30 of the tips are actually good ideas
• RT @DanaNewman: Judge tosses out remaining claims against Disney in long-running Pooh copyright case: http://bit.ly/ZmtlV
• RT @GregBufithis: RT @JanusPatents: Patent BlackBerry Battle: RIM/NTP Patent Case Takes New Turn http://bit.ly/7lztW < NTP not satf w/ $612M
• RT @TradeSecretLaw: Intangible assets make up 75% or more of your company’s value. Can you identify your intangible assets?
• RT @CopyrightLaw: “Corporate Reorg Caused Breach of Non-Transfer Provision of License” http://bit.ly/IJKVR < I want to see the full license.
• RT @CopyrightLaw: “I wish law professors realized that’s what lawyers should always do.” http://tinyurl.com/ydf34o4
• Apple Introduces New Educational Software Licensing Program for Institutions: http://bit.ly/TgbuY (via MacRumors.com)
• RT @GregBufithis: RT @dnball Licenses to use intellectual property are not transferable unless that right is in writing http://bit.ly/UTMPe
• RT @gtiadvisors: Mega-Breaches Employed Familiar, Preventable Attacks http://bit.ly/W3bHP < Which is why I won’t remove cont’l liability.

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.

3.  Ask your client for a similar contract. Huh?  If your client has a similar contract, they probably don’t really need you.  Now, I’m not advocating reinvention of the wheel.  If there’s a pre-existing solution to the problem, by all means, use it.  But I’m guessing that someone’s coming to you to draft the agreement because you have the skills.  More importantly, however, is that their template/sample probably contains a LOT of issues.  So it’s usually 110% easier to start from scratch (or from your form) and customize it to your client’s specific needs.

4.  Check the form books and treatises for a contract form. and  5.  Buy forms on disk or CD-ROM. I don’t know who first created form books, but they’re not as good as one might think… and they’re not necessarily battle tested, either.  You’d be better off getting a template from someone else you know if you don’t know where to start.  There are exceptions, of course, but still – be careful (see the second part of my advice for #3 above).

6.  Don’t let your client sign a letter of intent without this wording. Actually, my advice is to NEVER sign a letter of intent, regardless of the wording.  As I’ve said before, a Letter of Intent is usually just a poorly written contract.  Don’t get caught up in that mess.

9.  Identify the parties by nicknames. This isn’t a hard-and-fast rule.  Use nicknames only if it actually makes things easier to draft AND read.  Be careful about using descriptive terms as nicknames (customer, vendor, consultant, etc) because other forms of that word could appear in the agreement.  Use the “Find” feature of your word processor to discover if this is true.

12.  Include recitals to provide background. I know a lot of people love these.  But I hate them.  I hate reading them and I hate writing them.  On the other hand, for complex deals where the agreement could apply to many different things and you want to be clear on what the contract is really covering, this is the place.  But for a standard software agreement, the place to list the products is in a product schedule… that way you can use the same license and only add additional product schedules w/o having to amend the agreement itself to modify some “Now therefore, the parties agree to license Word Processing application.” type of language.

17.  Title it “Contract.” Actually, the better advice is to simply make sure that it doesn’t say “proposal” or some other transient contract type (like “letter”).  Granted, I like document titles “Software Licensing Agreement” or “Amendment to Master Services Agreement”.  But putting “Contract” in bold at the top of the first page is silly and WAY outdated.

24.  Write number as both words and numerals: ten (10). I agree with Ken Adams on this one.  Use the standard rules for numbers: words for zero through ten and numerals for 11 on up.

25.  When you write “including” consider adding “but not limited to.” Not worth adding.  Ever.

26.  Don’t rely on rules of grammar. WHAT!?!?! OK.  Look.  Use plain English wherever possible.  Write clearly.  Using superior grammatical skills.  If you don’t have such skills, don’t draft contracts.

29.  Be consistent in grammar and punctuation. Well, at least Mr. Martin shows consistency in his inconsistency regarding grammar.

30.  Consider including choice of law, venue selection, and attorneys fee clauses. Consider?  Absolutely include choice of law and attorney’s fee clauses (though in some cases attorney’s fees won’t ever be granted… but it doesn’t hurt to ask).  On the other hand, you’ll almost NEVER get venue if the other side understands it well enough to ask for a different location.  But if you’re both in the same location, it never hurts to add it in to make sure you won’t be dragged out of state.

32.  Define a word by capitalizing it and putting it in quotes. and 33.  Define words when first used. No and No.  Define words in a definitions section up front.  Unless you only have an average of one defined term per section.  Then you can define “in line”.  Otherwise it just gets too ornery to try to make sure you define the term the FIRST time you use it.  This is especially true when definitions end up getting used in the definition of other defined terms.

34.  Explain technical terms and concepts. If you’re using terms that laypeople can understand, the only technical terms that should appear should be in a statement of work or other descriptive document regarding the work.  As such, it should be written so as to be understandable by the people that have to abide by the contract.  Judges and lawyers can find technical people to explain technical terms.  The only time you should explain technical terms is if there’s a reasonable disagreement in the technically-educated community as to the usage of the term.

35.  All contracts should come with a cover letter. Not necessary.  If your contract is so difficult as to not be able to understand how to sign it, you’ve got a problem.  The best thing I’ve seen so far?  “Sign Here” tape flags that you put on the side of the document they’re supposed to sign for each signature line.  Then paperclip your business card to the front with a post-it note attached thanking them for their help and asking them to sign and return one of the two originals.

38.  Use your word processor’s spelling and grammar checker. Yes, but don’t rely on it.  Two, to, too, toe.  Their, there, they’re.  Through, thorough.  Notice anything?  They are all real words and spelled correctly.  Spell checker isn’t going to flag any of these.  Grammar checker is no better: “A parakeet is not a bluebird.” is grammatically correct.  But if you intended to say that a parakeet isn’t blue, the prior sentence is not correct but won’t be flagged.

42.  Save the drafts as multiple files on your computer. Yes, but not how it was recommended.  Unfortunately, using periods in your filename is still problematic for some operating systems.  Weird abbreviations for drafts, comparisons, etc are also hard to decipher.  Instead, try this:  “filename vX date initials.doc”.  So if you have a file called MasterService and it’s the 4th iteration being saved on September 29, 2009 by Jeffrey I. Gordon, the filename would be:  “MasterService v4 092909jig.doc”  Why do I do it this way?  Well: a) it keeps the files in draft order in virtually all file systems (Windows, Mac, Linux); b) it notes which version it is (saves on confusion about which document is the latest); c) notes the date it was created; d) notes who created the draft.  Sometimes I’ll substitute my company’s TLA instead of my name… but usually, I like my initials better to let me know that I was the author of that version of the document.  When I get the last version that becomes the final, I change my initials to FINAL – so the name would now be: “MasterService v10 101509FINAL.doc”.  This lets me know that v10 was the final and which version was signed.

44.  Print the contract on 24 pound bond paper instead of 20 pound copier paper. Not worth the cost of paper.  Especially if you want the other side to sign first – ask them to print two originals, sign both and send to you… you can’t control the paper it’s printed on.  Besides, if you’re using a contract management system, you’re going to scan and forever more look only at the digital version, so the paper is irrelevant and not worth the added expense.

47.  Initial every page of the contract. Wholly unnecessary unless you don’t trust the other side and you’re signing first.  But as I’ve said before, if you don’t trust the other side, you shouldn’t be doing the deal in the first place.

48.  Identify the parties and witnesses who sign by providing blank lines below their signature lines for their printed names and addresses. and 50.  Add a notary clause that complies with the notary law. Witnesses and notaries aren’t necessary unless required by law for the specific type of contract you’re closing (usually for real property, but I’m not sure it’s required for any other type… anyone know for sure?).  Many businesses have a notary on staff, but unless the document is required to be signed “under seal”, this also is usually not a requirement and is an added expense to some (and added time/effort for everyone).

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.

I also realized that many of you might have no idea what you’re seeing below.  Sorry.  These are “tweets”, 140 maximum character messages sent via Twitter.  Within the Twitterverse individual users follow others and have followers (think of it like overlapping Venn diagram circles).  To read a tweet, you have to wade through a bit of jargon used to make the most of the 140 character limitation.  “RT” for example, is shorthand for “Re-tweet” and the @____ is the username of some other individual on Twitter.  Combined together, then, “RT @_____” means that someone else wrote a tweet that I found important and I now want to forward along to my followers.  The URL’s are then also shortened by shortening services like bit.ly to make the most of the character limitation, too.  Lastly, you might see “hash” identifiers “#______” which are ways to tag tweets of a particular flavor for easy searching later and “<” which means that I am commenting on what came before it.

• RT @CopyrightLaw: “Music Industry Copies Language Of Copyright Reformers In Pushing For Three Strikes” http://tinyurl.com/ybbqfs4
• RT @CopyrightLaw: EFF: “You Bought It, You Own It: MDY v. Blizzard Appealed” http://tinyurl.com/ye4tcu6
• RT @gfiremark: It’s official: Victoria Espinel nominated as ‘IP Czar’ http://bit.ly/2yIgv
• @fscavo they’d better understand 97-2 if they want me to bend for a revrec issue.
• @rwang0 Make them show you the section in AICPA SOP 97-2 which stops them from doing what you want them to do.
• RT @rwang0: Finding it pred that software vendor sales reps keep using rev rec as an excuse when pushed for discounts on 1yr maint contracts
• RT @libertyluver: Justice Ginsberg in the hospital…a speedy recovery to a one of a kind woman!!!! http://ow.ly/qZLh
• RT @kevinokeefe: My Name Is Kate and I Am a Listener; listening is key to use of the net (@accesstojustice) http://bit.ly/k4ART
• RT @CopyrightLaw: “Beyond Kicking People Offline, France Raises Fines For Copyright Infringement To $440,000” http://tinyurl.com/l9foj7
• What a well-placed $20 gets you (via @kottke): http://bit.ly/p8M5w
• RT @libertyluver: And someone said Copyright Law didn’t matter? How about sticking your foot in your mouth again? http://bit.ly/1OrWtW
• RT @CloudAve: DMCA Take Downs, Copyright, Fair Use http://bit.ly/wpA7f
• RT @vpynchon: downturn=commercial wild west: READ THE CONTRACT … DO NOT SIGN if it contradicts reps made by sales
• Seth’s new business isn’t a hit.. it’s extortion. (@TEDchris) RE: http://bit.ly/2ljDEW
• New blog post on licensinghandbook.com: Insurance Basics http://bit.ly/uadLy
• Do you only worry about the dollar limits in your contracts’ insurance sections? Think again. Full story coming in 20 minutes.
• Not that Apple actually needed anyone’s permission: http://bit.ly/3×2fXO
• Facebook gives developers access to users’ inbox messages!!! http://bit.ly/3r67OL Oh boy.
• RT @stephenrwalli: blogged thoughts on the open source business “tools” and dual licensing: http://tinyurl.com/nz6uzx
• @nipclaw Hmmm… dunno’ that that’s the real problem. I’ve met VERY few lawyers who’ve drafted a contract from scratch.
• @nipclaw Copyright on forms might not apply in the US. Depends on a LOT of variables (See http://bit.ly/TAL4f as well).
• RT @CopyrightLaw: “Scribd fires back, denies violating copyright” http://tinyurl.com/l7bqux < Gonna’ be quick if Scribd’s being truthful
• RT @richards1000 @jaredcorreia @AbacusLaw History: US District Court Judge issues first digitally signed judicial order http://bit.ly/18WlaX
• RT @tomsearcy: So-called “experts” are … even worse when they’re on your buyer’s team: http://bit.ly/2YF4CQ
• RT @gtiadvisors: RT @DougCornelius: [new blog post] Intellectual Property and Social Media http://bit.ly/GBn4S
• RT @blawgreview: Blawg Review Sherpa, “woman lawyer”, @vpynchon http://www.forbes.com/forbe… writer http://tinyurl.com/m4ewy6
• RT @SusanEJacobsen: A litmus test before hiring a social media “expert” http://bit.ly/1BrE4v < Could be used with any kind of consulting
• RT @adamsdrafting Blog Update: Who Gets to Draft Contracts? http://bit.ly/pNdLY < Interesting question… would love input.
• RT @gfiremark: And that makes three (governments): The United States opposes the Google Books Settlement http://bit.ly/vDjtS
• RT @AdamsDrafting: Easier than ever to be a free rider rather than develop content.
• Too cool… just got quoted in the Washington Post on severance negotiation (I can only find the article via Omaha): http://bit.ly/3aOqzb
• RT @gfiremark: The Scholarly Kitchen: ‘$80,000 per Song, and Perceptions of Copyright’ http://bit.ly/Ju3RO < Excellent post!
• RT @TradeSecretLaw: Ten Fatal Mistakes that Business Owners Make – No. 10: Failure to Protect Intangible Assets http://tinyurl.com/pmqcht
• NC law allows minors to back out of contracts unless approved by the Superior Court. The NCAA just figured this out: http://bit.ly/le6rl
• Some rumors should rest untested (via Lowering the Bar): http://bit.ly/MHgEr

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.

Insurance Types

There are five basic types or categories of insurance policies: Commercial General Liability, Professional Liability (errors and omissions type), Excess or Umbrella Liability, Workers’ Compensation, and specific liability policies for particular types of work (auto, boating, construction, etc).  Your contract should at least list the first four and optionally include reference to any other policies necessary based on the work you (or your vendor) are performing.  There are, of course, some caveats.

1. Not all professional services will qualify for Professional Liability policies.  It’s conceivable that you (or your vendor) will not be able to provide this type of insurance because of the nature of the work completed.  However, many insurance companies will interview the insured organization and “create” a Professional Liability policy for that service – the key is to simply ask.
2. Excess or Umbrella Liability policies can’t exist without a primary Commercial General Liability policy on which to hang (hence the term “excess”).
3. Workers’ Compensation is MANDATORY.  In fact, in most contracts, you’ll see this called out as statutory Workers’ Compensation.  In other words, if state law requires it, the insured must have it.  If the insured is a sole-proprietorship (ie: they are their only employee), this policy probably won’t apply.  Again, however, it’s based on the state’s law in which the work is being performed.
4. Specific Liability policies aren’t always easy to determine up front.  Who today can guess that you’ll need “boater’s insurance” five years from now?  If you don’t list these policies in the master agreement, simply remember to add them to a particular Statement of Work when needed.

Insurance Limits

Typically, when talking about Insurance Limits, we’re really talking about the maximum dollar value of each policy.  Some organizations love to go for broke on this – asking for $10M minimum aggregate and $5M per occurrence, etcetera.  Lets break down the distinction and then talk about dollars.

1. “Minimum aggregate” refers to the total amount of money recoverable under the specific policy regardless of the number of claims for the entire life of that policy.  If a $1M aggregate policy is claimed upon by 1000 people equally (over the span of the policy’s life), the most each person would get is $1000.  ($1,000,000 / 1000 = $1000).  But things don’t usually work out that way.  Rather, these same 1000 people might claim at different times during the life of the policy.  If the first of those thousand people recovers $900,000 from the $1M aggregate, there will only be $100,000 left to satisfy the other 999 future claims.
2. “Per occurrence” then is a limit on the per-claim reimbursement/coverage.  The per occurrence limit is usually 1/2 the value of the minimum aggregate.  So if you have a $1M aggregate policy, you will then typically see a per occurrence limit of $500,000.  This partially helps with the problem from the end of the last section, where the first claimant receives an abundance of the value of the policy, leaving little remaining value to any other aggrieved party.
3. Excess or Umbrella Liability policies usually only list a “not less than” amount which is almost always 2x the minimum aggregate of the Commercial General policy.  For our example here, if the CG had a $1M minimum aggregate, the Excess or Umbrella limit would be not less than $2M.
4. Statutory Workers’ Compensation almost never lists an actual dollar limit.  Again, because it’s based on different state laws (which could change like the tides), most contracts simply state that the insured will meet the requirements of the law, whatever they happen to be at the time.

Dollar limits on insurance policies can get really interesting in a hurry, partially because of the nature of the work that many professional services organizations perform and partially because of the nature of insurance policies in general.  In most cases, I ask for insurance dollar limits that are far and above what I would ever expect the value of the work performed to be.  This freaks out my vendors – they worry that they won’t be able to get a $10M policy (or, more accurately, won’t be able to afford it).  But I have to remember something that they would rather I didn’t – that their single insurance policy is covering the work that they do for EVERYONE.

That’s right, the nasty little insurance secret that no one really wants to discuss is that almost 100% of the time, the policy that covers your work is also covering 100+ (or 1000+) other jobs.

But wait, you say, I am named as an additional insured.  That bumps me to the head of the line.  Not so fast.

Insurance Certificates and Additional Insureds

In almost all cases, the customer is able to get the insured to provide them an insurance certificate directly from the insurance company as proof of the existence of the policy.  And in many cases, the customer (as well as its officers, employees and agents) can also be added as additional insureds to the Commercial General Liability policy only (even if you want to be an additional insured on the other policies, most insurance companies won’t allow it).  The customer then asks to have the insurance certificate even state that the customer is a named additional insured entity.  What you don’t see, however, is all of the other additional insureds.

What you’re really looking for, then, is to find a way to make sure that the policy limits are going to cover the work that the vendor is performing for you – and making sure that you’re going to be able to fully recover that amount in the event a claim is properly brought.  The solution?  Ask the vendor to get a specific policy just for you – on a “primary and noncontributing basis” and including a waiver of subrogation in favor of you.  The vendor might still balk at this – you’re asking for an individual insurance policy.  But you can now decrease the policy limits to be more manageable because now you know that this policy is just for you.  So the overall cost to provide insurance to you for the work performed might actually be less than if you required the vendor to increase the policy limits to extraordinary heights.

Oh, and don’t forget that you want the certificate of insurance to indicate that the Excess or Umbrella Liability policy is a “following form policy”.  This means that if the excess or umbrella policy has terms or conditions that conflict with the Commercial General policy, the CG policy terms will control.  But there is some controversy given current insurance practices which may make this difficult.

Insurers

Many customers also want to be certain that the insurance company providing the policy is reputable.  There are different ratings institutions, but I prefer A.M. Best with a rating of no less than A-, Class X.  The A- means that they’re still in the Excellent rating category and the “Class X” is an indicator of their financial health (X is actually a Roman numeral) with an adjusted policyholder surplus of $500-750M.  This is to ensure that the money actually exists to cover the upper limits of any potential claim.

Policy Changes

Relatively speaking, insurance is easy to obtain.  It’s not always cheap, though, so there have been times where insureds have made financial decisions to decrease policy limits or change coverage types as a cost-savings method.  If you’re a customer, you want to know about this as it’s happening (and not at the start of the next year when the next insurance certificate arrives with lowered limits, leaving you to wonder when the change actually happened).  So always remember to include language in your insurance section that requires the insured party to notify the other of any changes to the policy within 30 days of any adverse change (you really don’t care too much if limits are increased).

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.

I also realized that many of you might have no idea what you’re seeing below.  Sorry.  These are “tweets”, 140 maximum character messages sent via Twitter.  Within the Twitterverse individual users follow others and have followers (think of it like overlapping Venn diagram circles).  To read a tweet, you have to wade through a bit of jargon used to make the most of the 140 character limitation.  “RT” for example, is shorthand for “Re-tweet” and the @____ is the username of some other individual on Twitter.  Combined together, then, “RT @_____” means that someone else wrote a tweet that I found important and I now want to forward along to my followers.  The URL’s are then also shortened by shortening services like bit.ly to make the most of the character limitation, too.  Lastly, you might see “hash” identifiers “#______” which are ways to tag tweets of a particular flavor for easy searching later and “<” which means that I am commenting on what came before it.

• Too cool… just got quoted in the Washington Post on severance negotiation (I can only find the article via Omaha): http://bit.ly/3aOqzb
• RT @gfiremark: The Scholarly Kitchen: ‘$80,000 per Song, and Perceptions of Copyright’ http://bit.ly/Ju3RO < Excellent post!
• RT @TradeSecretLaw: Ten Fatal Mistakes that Business Owners Make – No. 10: Failure to Protect Intangible Assets http://tinyurl.com/pmqcht
• RT @raesmaa: Every person … of restless mind writes a book. From Predictions for 1993 (1893). http://bit.ly/HA8UY < It’s the internet.
• NC law allows minors to back out of contracts unless approved by the Superior Court. The NCAA just figured this out: http://bit.ly/le6rl
• Some rumors should rest untested (via Lowering the Bar): http://bit.ly/MHgEr
• RT @blawgreview: Negotiation 101: Gender War Or Gender Peace And Prosperity? http://tinyurl.com/m4ewy6 (it’s @vpynchon, no less!)
• RT @DanaNewman: Fergie named in copyright infringement suit over “Voodoo Doll:” http://bit.ly/8JLEY
• RT @bethanyriskin @stacyrea: Leader Test: When your team members “fail,” do you wag your finger or extend a hand?
• New blog post on licensinghandbook.com: Contracting as a Specialty: http://bit.ly/iCFYQ
• RT @richards1000: “Professor Posts ‘Illegal Copy’ of Guide To Oregon Public Record Laws” http://tinyurl.com/kq35dc (via @CopyrightLaw)
• RT @BrettTrout: IBM’s new strategy: Open Innovation. http://is.gd/3o3DV < About damn time.
• RT @gtiadvisors @lawyerist: Lawyers do Love Arguing http://bit.ly/1uzoJ5 < Remember, though, that arguing isn’t negotiating!
• Open Source Business Models: http://bit.ly/EVvXC (by @stephenrwalli)
• Listening tips from a Hostage Negotiator: http://bit.ly/WUEMn < These are great… esp #2.
• New blog post: Business Continuity http://bit.ly/1dwMvn
• DOJ may revise eDiscovery procedures after 9th Cir ruling: http://bit.ly/ZNlet
• Apple pushes to change subscription accounting rules: http://bit.ly/Mjf4z < RevRec lesson of the day
• RT @kottkedotorg: Protecting yourself from your own irrationality http://bit.ly/12nj3M < Excellent negotiating advice!
• RT @AdamsDrafting: Blog Update: Lawyer and Contract Manager: Compare and Contrast http://bit.ly/KwMKo
• RT @uMCLE @SCartierLiebel @GabrielCheong: Agreements on Sex in Prenups http://bit.ly/4xnvsu < Love this lesson on contractual severability.
• RT @bobambrogi: LawSites blog: Free Site Enables Document Assembly http://bit.ly/vda1A (@jasonanderman)
• RT @bcuban @Smartalyx @Lotay: A blogger who gets a product (before/after a post) doesn’t disclose has ethical probs. Do you agree? <Agree
• RT @uMCLE @steigerlaw 16 Major Studios Sue ‘Ellen DeGeneres Show’ for 1,000+ copyright violations http://bit.ly/cSI6D < hehahahahahah
• Great negotiation advice: http://bit.ly/1dY7du

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.

Law school creates generalists.  Your curriculum usually spends 1.5 years on the 10 basic classes: Criminal Law/Procedure, Civil Law/Procedure, Constitutional Law (usually long enough to require 2 separate courses), Torts, Evidence, Legal Writing and Contracts.  The rest of that second year and part of the third is usually focused on electives: tax, business, alternative dispute resolution, intellectual property, etc.  The last part of the third year (distributed in part of the second and third years, actually) is almost always some sort of practicum or clinic experience along with some trial advocacy skills and legal ethics.

So at the end of this endurance test, newly minted lawyers have had exactly ONE class on most of the various subject matters that they’ll encounter in practice.  This is pretty frightening to some if you consider that some new lawyers immediately hang their own shingle and go into practice for themselves.  Contrary to the educational system of the past, then, these lawyers now have to learn on the job with live clients.

This is true of contracting.  If they took an elective on contract drafting, then fine, they had two classes.  But still – a sum total of 1 academic year of discussion on contract theory and drafting is not a lot when you consider the vast nature of the space.  Software licensing, hardware purchase agreements and other tech-related contracts are but one type of contract.  Services agreements, nondisclosure agreements, regulatory-related agreements and others add to the mix (and we haven’t even talked about things like Statements of Work or other more business-y agreements).

Add to this the fact that contracting doesn’t happen in a vacuum.  Contract negotiations are the method by which two or more parties come together to agree on the needed and acceptable language.  Negotiation is but one facet of alternative dispute resolution – and again, unless taken as an elective, hasn’t necessarily been formally taught to a law student.

All this is to say that it makes sense that contract professionals exist in this world as a specialty service.  In fact, some contract professionals even only specialize in one type of contractual agreement.  Lawyers should therefore: a) not assume that their law degree grants them the knowledge to automatically operate in this space without additional training; and b) remember that specialization is a hallmark of the law business – so they shouldn’t be afraid of seeking assistance from contracting specialists when they’re approached for this type of service.

Lawyers in the crowd may be booing me at this point, but wait!  All is not lost.  There is VALUE in using specialists to do this work for you:

• First, is that top-tier contract professionals aren’t cheap.  We don’t bill at the rate of a DC Partner, but we’re not giving work away, either.
• Second, contract professionals are efficient.  It takes me, on average, about an hour to read and redline two-to-four pages of dense material.
• Third, contract professionals have their eye on the prize.  We’ve seen enough deals (because this is what we do) to know what’s really important and what can be passed over.  We know when to fight and when to concede.

Combined together, this means that your average specialist takes less time to produce more quality work – and what’s billed is still “acceptable” to both sides.  Lawyers and law firms alike should remember that they don’t need to go it alone (regardless of whether they’re in-house or out in the world).  Contracts professionals aren’t trying to be lawyers (even if a contract professional or two happens to be one) – they just want to be contracting specialists… and they can help a lawyer spend their time more efficiently and effectively, too.

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.

Wow.  Regardless of whether you’re talking about on-premise applications or SaaS “hosted” apps, business continuity is a pretty important issue.  Many organizational leaders are extremely worried about making sure that their infrastructure is stable enough to allow them to sleep well at night.  So they sink a lot of cash into various potential solutions in hopes that they’ll create a safety net.  Right now, for most customers and vendors, this safety net is built out of four potential components (some solutions aren’t conducive to all options):

1. source code escrow (vendor out of business)
2. insurance (vendor causes damage)
3. warranties (solution doesn’t work as advertised)
4. IP indemnification (solution infringes on rights of others)

Like any net, though, it has a lot of holes – gaps in the netting where stuff can slip through.  Even if you try to cinch the net tighter, it’s not a solid material – there are ALWAYS going to be gaps.  This is a hard lesson to learn, especially in the game of risk management and mitigation.  You’re not going to protect it all.  [It's an imperfect analogy, but look at the Secret Service detail for the President of the US - he doesn't walk around all day completely enclosed in bullet-proof material.  Rather, he's protected by agents all around.  Once and awhile, something slips through, even after extensive diligence and effort.]  At the end of the day, therefore, you protect against what you can with the understanding that the only way to obtain 100% protection is to restrict operations by 100% as well.

The goal, therefore, is to find a way to mitigate the biggest risks, not just the low-hanging fruit and those that are most obvious – but those that can cause the most damage.  Which brings us back to losing access to software used to run a business.  This could be your desktop operating systems… it could be your word processing applications… it could be your CRM (customer/relationship management) application.  The key is to determine which applications are mission critical and then figuring out strategies to make sure that you have options available in the event you lose access.

This does not mean you need source code escrow for every application.  Microsoft Word, as pervasive as it is, isn’t the only word processing application available in the world.  It’s also not using a file format that is wholly unreadable by any other word processing application.  So if Microsoft Word becomes suddenly unavailable tomorrow, even if it was a hosted application (which it currently is not), having spent money on source code escrow will have been wasted.  You could probably more cheaply (and with greater efficiency) simply buy a new word processing application.  And guess what?  This is true for almost ALL of the applications that your business uses!  As Apple has been saying for their iPhones, “there’s an app for that.”  In fact, there are usually a dozen.  What you move to might not be your favorite, but it will get the job done in a cost effective manner.

So where did you need escrow?  In the past, it was for customized applications or those that required substantial and pervasive integration and implementation – something so ingrained in your environment that its failure would immediately and irreparably cripple your business.  Many CRM tools used to be of this nature.  They were so customized… so specialized… so deeply modified for your particular use that it wouldn’t be as simple as just grabbing a new one off the shelf and porting the data over.  But that’s not really how it is these days.  Data is no longer held in proprietary databases, it’s held in more generically available database architectures (like Oracle or SQLServer).  Competitors now are even building their apps using similar data structures to encourage customer poaching.  You can thus port your data efficiently and quickly if necessary.  Thus escrow has become an almost non-starter.  Eventually, you’ll have to move to a new app regardless – but with an on-premise solution, you can keep using the software until you migrate.  Source code isn’t going to get your data moved to a new application any quicker.

For hosted apps, however, the added risk is that you no longer have control of your data.  Even a daily backup doesn’t get you the application.  Source code escrow in this scenario was hopefully going to give you access to the code to bring up at your own site if the hosted vendor went away.  But wait!  It’s not OBJECT code escrow, it’s SOURCE code escrow.  Additionally, you’re not getting the support applications, either.  We need another option.  A way to provide a SaaS customer continuity in software use.

It’s brainstorming time.  I put out my suggestion in the comments of Frank Scavo’s post.  Now it’s your turn.  Speak loudly – get creative – no idea is too outlandish.  The comment area awaits your input!

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.

I also realized that many of you might have no idea what you’re seeing below.  Sorry.  These are “tweets”, 140 maximum character messages sent via Twitter.  Within the Twitterverse individual users follow others and have followers (think of it like overlapping Venn diagram circles).  To read a tweet, you have to wade through a bit of jargon used to make the most of the 140 character limitation.  “RT” for example, is shorthand for “Re-tweet” and the @____ is the username of some other individual on Twitter.  Combined together, then, “RT @_____” means that someone else wrote a tweet that I found important and I now want to forward along to my followers.  The URL’s are then also shortened by shortening services like bit.ly to make the most of the character limitation, too.  Lastly, you might see “hash” identifiers “#______” which are ways to tag tweets of a particular flavor for easy searching later and “<” which means that I am commenting on what came before it.

• RT @rwang0 @dealarchitect: Don’t cry for me Germany. SAP had plenty of warnings. http://tinyurl.com/mclvbm < I can’t wait to see who’s next
• RT @richards1000: Tuunanen et al. on Automated Software License Analysis http://bit.ly/svjQR < Cool but irrelevant. FOSS license are nonneg.
• RT @rwang0: reading the new twitter terms of service. like the fact that you and only you own your content. < At least for now.
• RT @jimcalloway @ernieattorney Important safety tip for ‘would-be lawyer bloggers’: if you lack common sense don’t blog http://bit.ly/2fFcBH
• New blog post: Content, Value and Commoditization http://bit.ly/27HVx
• RT @btannebaum: Lawyers, do you care about transparency on twitter? http://mylawlicense.blogspo…
• Contract negotiation according to the Marx Brothers: http://bit.ly/12U7pY
• US Registrar of Copyrights opposes Google book deal: http://bit.ly/KhP83 … so do I. Unwarranted monopoly.
• … and then there was a whole discussion on what constitutes being an expert at something, sparked by one lawyer’s assertion that it takes 6 months’ of research and then a good SEO strategy to get yourself to the top of the Google rankings.  I, and others, disagreed.  (RT @nikiblack @Adrianos: “How To Become An “Expert” In Your Niche In 6 Months” http://bit.ly/pIj2Q < I really do NOT like this!)
• New blog post: On Acceptance Testing… http://bit.ly/s0zsV
• @JasonAnderman The author misses part of the value of the lawyer – understanding that a form isn’t 1sizefitsall. Available /= viable.
• @ferrusi @PeterKretzman When discussing vendors, not having them in the room usually leads to more openness. It can also reveal biases.
• @PeterKretzman @mckenziesa: RE: Find a way to get the salesmen out of our vendor discussions! < Um, Ask them to leave?
• RT @glambert: Blogging Lawyer Charged with Confidentiality Violations – http://bit.ly/mLcTj (Public Defender tells a little too much)
• RT @rwang0 Cloud computing model – IDC numbers show s that its … 1/2 the cost < How does that translate to customer fees?
• RT @PeterKretzman @testobsessed Source code, like invty, is a liability, not an asset. (PK: indeed. It’s why I laugh at source code escrow)
• RT @vpynchon @tamerabennett: Disney, Pixar Sued by Luxo Lamp Co: http://bit.ly/MO4X7 < Shouldn’t matter. Pixar’s not selling lamps.
• RT @fscavo: @negot8or thinks #saas providers should set up living trusts (my word) for their customers. Read comments: http://is.gd/34L65
• Kate Gonzalez’s Tom Ten Force Majeure Imposters (via @superbuyer): http://bit.ly/Ol4Wy
• Confessions of a Car Salesman: meeting, greeting and dealing: http://bit.ly/3nihk (via edmunds.com)
• Antitrust lawyer slams Google book pact: http://bit.ly/83Hqp (via All Things Digital)
• RT @LeighMonette: RT @PrivacyLaw: “’Anonymized’ data really isn’t—and here’s why not” http://tinyurl.com/ksxz8t
• RT @fscavo: Just blogged: SaaS contingency plans need more than software escrow http://bit.ly/r2cJn < Escrow is wasted money IMHO.
• RT @jimcalloway: Blogged about lawyers taking their laptops across the U.S. borders. http://tinyurl.com/n4bfms
• RT @BrettTrout “World Patent” good for M$, bad for most everyone else. http://bit.ly/o0rbZ
• Jeremy Telman, contracts prof @ my almamater, on why execution before performance is a good idea: http://bit.ly/1iJjY7
• RT @vpynchon: http://twurl.nl/tiuvp7 the negotiation analysis of the lessons of the Cove (which halted the killing of dolphins for one day)
• RT @bobambrogi: LawSites blog: Plaxo’s New Terms of Service http://bit.ly/1BNRy
• RT @bobambrogi @paulzink: You and your attorney colleagues (esp. those in copyright law) may get a chuckle from this: http://bit.ly/jJd6G
• … and then we had a long discussion on the tweeting of the play-by-play via twitter of a NFL game (the NFL likes to exert some extreme control over their content).  Some folks thought that twitter was a game-changing technology.  I argued that it was control-changing…. that they should tweet every game in their own words: @FlashFusion @julito77 @gtiadvisors It’s only a copyright issue if you tweet the actual broadcast wording/play-by-play. Make up your own.
• RT @doctorow: Another reason you can’t outsource your kids’ online safety to spyware companies: http://tinyurl.com/n934fh < Read the EULAs!!
• RT @gtiadvisors @GregBufithis @BrettTrout Proposed U.S. patent law reforms would stifle innovation and injure entrep’s http://is.gd/2ZXza
• RT @OmarHaRedeye: Blawg Review #228 is live http://bit.ly/11D50J/ < Thanks for the inclusion!
• Sometimes is pays to see how the software sausage is made: http://bit.ly/S3b5p

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.

Some of these articles advocate changing the business model – such as this article that talks about offering “free” versions and then what amount to special editions – customized content that people would pay for since it appeals directly to their interests.  Others, like this post by Jason Anderman (of WhichDraft fame), talk about the economics and business advantages (giving away free content potentially encourages customers to come back to you for paid gigs).  But everything seems to be stemming from Chris Anderson’s latest book: Free: The Future of a Radical Price.  As I’ve not yet read this book (but his other on The Long Tail was interesting, if not challenged by some economists), I can’t really comment on what Chris is suggesting.

But I can comment on the value of free, especially as it relates to contracts, software licenses and other legal forms… and it’s a cliche, but the truth is: You Get What You Pay For, especially in legal forms.  But this is because it’s not about the form itself, but rather, the drafter and the advice you get when using the form.

To understand why legal documents are somewhat of an exception, it’s important to start at a foundational level (with the law) and build up towards the client.  Remember first that within the United States alone, there are 51 bodies of law (each State, plus Federal), not including any of our protectorates or territories… nor considering any of the other 193 US State Department-recognized countries’ laws.  Second, know that within a given type of agreement, there are literally THOUSANDS of potential combinations and permutations of clauses that can be used to obtain a particular goal – and dozens when you whittle down your agreement to only be governed by one or two bodies of law.  Lastly, think about your own personal situation with respects to your needs.  Now look around and ask yourself what other items in your life you use without modification of some sort.  Your home, car, office… even your computer.  All are customized because of the way you plan to use the tool.  Sure, there might have been a framework involved, but who did the customizations?

The answer, with respects to contracts, is a contract specialist and sometimes a lawyer.  They use templates as starting points to prevent the re-invention of the wheel and to make sure that all bases are covered.  But they are only starting points.  As I’ve said in the past, I almost never give/sell/provide my templates to other people because I’m simply afraid that they’ll take them and use them without modification – contrary to their intended use.

In fact, a few years ago, I ran a search to see how many online EULA’s were similarly modeled after Microsoft’s… and was pretty shocked to discover the sheer number that had copied the document word-for-word, including the choice of forum language (venue) for any disputes.  I notified a very distressed company in Australia that they might want to change the language because as it stood, any disputes with them would have to be resolved in King County, Washington (Seattle, Microsoft’s hometown).

So remember that while you might find forms, templates and other legal documents freely available online, you probably need professional assistance to help you customize that document for the specifics of your particular situation.  Don’t be fooled into thinking that one size fits all.  It doesn’t.  AVAILAbility doesn’t equal VIAbility.  (That said, Stephen Guth gives away his license agreements – which are good starting points if you’re looking for a free document.)

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.

Today I didn’t hover, I was reading e-mails.  When they called my name to pay, they quickly read off the list of things they checked and reviewing the computer screen, I asked the guy behind the counter: “Did you check the engine coolant level?”  With a slight hesitation, he replied “Yes.”

I paid, took my keys and walked out to my car.  Deciding to check the coolant level, I popped the hood and looked.  Sure enough, the fluid was below the line marked “Fill”.  I walked back inside and told the same employee that I thought that the fluid wasn’t checked and could he come confirm.  He looked a little shocked, walked out to the car and confirmed that the fluid was low.  He apologized and made some sort of excuse about the shop being busy and that my question during check-out didn’t raise any red flags – that he figured I’d asked them to check it and that his employees did (apparently, he was the manager).  I said it was no big deal, but that I would like it topped off.

[OK.  If you haven't already figured it out, this story parallels many services-type engagements from the IT world.  You pick a provider when you realize you don't want to do it yourself, you "order" a set of services... and at the end, you are presented with a completion check-list and asked to pay.  What services providers don't want prior to payment is anything conceptually equivalent to an Acceptance Test.  They want payment first and then resolution of any "defects" under their services warranty provisions (if any).  This way, they have control of the money and can book the revenue as earned.

But don't let their desire to avoid Acceptance Testing sway you... and don't fall into the trap I did today and pay first.  What happened next was predictable and I should have seen it coming.]

The manager then said, “well, we normally charge for topping off the coolant.”

Oh.  Alright, I thought, whatever… just get my car finished and get me on my way. “How much does that cost?”, I asked.

“Five dollars.”

Thank god my negotiation-sense kicked back in … and I just stood there silent for a few beats too many.

“But because of the confusion, I’ll take care of it.”, he continued.

I smiled and said “Thank you.”

While he was retrieving the coolant I scanned the engine compartment and realized that the large rubber gasket between the hood and the firewall had completely come off and was just laying across the engine!  Holy cow.  I was really glad I popped the hood today – this piece of rubber, which probably came off during the oil change and was simply overlooked due to its matching blackness to everything else under the hood, could have gotten wound into various belts, heated and set afire or fallen down to the road and lost.  It was a no-brainer fix to simply push it back onto the car’s frame – but catching it was the biggie.

The same is true for many acceptance testing issues – the no-brainer is to look for them at the right time (preferably before payment).  Don’t get suckered into someone else’s process (they moved my Jeep out of the repair bay and into the parking lot (keys in it and running) as “customer service” perk.  But it’s meant also to get you off the lot before you notice anything wrong (where they can attempt to reasonably say that the problem happened outside their control).

One again, learn from my mistakes. 

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.

I also realized that many of you might have no idea what you’re seeing below.  Sorry.  These are “tweets”, 140 maximum character messages sent via Twitter.  Within the Twitterverse individual users follow others and have followers (think of it like overlapping Venn diagram circles).  To read a tweet, you have to wade through a bit of jargon used to make the most of the 140 character limitation.  “RT” for example, is shorthand for “Re-tweet” and the @____ is the username of some other individual on Twitter.  Combined together, then, “RT @_____” means that someone else wrote a tweet that I found important and I now want to forward along to my followers.  The URL’s are then also shortened by shortening services like bit.ly to make the most of the character limitation, too.  Lastly, you might see “hash” identifiers “#______” which are ways to tag tweets of a particular flavor for easy searching later and “<” which means that I am commenting on what came before it.

• RT @LeighMonette @cyberlaw: Microsoft can still sell Word, at least until the appeal is decided – the stay was granted. http://is.gd/2StlM
• New blog post: The Prisoner’s Dilemma http://bit.ly/3pXV37
• It only takes 1 person who knows your purchasing system to bilk you. http://bit.ly/pBmcI Wanna’ chat about better processes? Call me.
• RT @harrymccracken: Amazon gives Kindle owners their copies of 1984 and Animal Farm back: http://wp.me/pg9un-4iW
• Remember the story about a music label paying artist’s education from early this summer? They didn’t. http://bit.ly/hhf1a
• Because I love words: http://bit.ly/rN6v0
• RT @bobambrogi: LawSites blog: New Site for Sharing Legal Documents http://bit.ly/1SXQGf < Just remember you get WHO you pay for.
• RT @wallybock: RT @ericdbrown: Blog post: The Dangers of Hidden Talent – http://bit.ly/170Yk
• RT @gtiadvisors @GaryHonig: The SBA has a new online federal procurement training site http://www.sba.gov/fedcontr…
• RT @gtiadvisors @constructionlaw: Insurance, Guarantees and Performance–Oh my! http://su.pr/1aFG69 < Glad 2 C this is more than an IP prob
• RT @blawgreview: Is there a looming trust crisis in the “social media expert” space? http://tinyurl.com/lfc9bn via @CharlesHGreen
• New blog post: Brittle Contracts http://bit.ly/2Qo5hE
• RT @Licensing_News: TSO3 enters into exclusive negotiations with 3M http://cli.gs/dNPJ7 < Wondering about benefits of this announcement.
• RT @SusanEJacobsen:“Small talk” is just that–small & insignificant. Say something meaningful. Give folks something to think about. Be real.
• Fifth of Five Fundamental Skills for Effective Negotiation (Communication): http://bit.ly/2GfAel
• RT @CloudAve: Free Sometimes Comes at a Huge Cost http://bit.ly/x2f5O < Excellent!
• RT @gtiadvisors: @negot8or (trusting SM) I would suggest the old fashion way – Trust, but Verify… the verify part is where we help.
• DOJ announces $1.9M+ in grants for criminal IP enforcement: http://bit.ly/11MMWZ
• Is breach of contract a good use of taxpayer dollars? http://bit.ly/d7kgE
• One reason I don’t like press releases for deals: http://bit.ly/12rE0o
• 4th of Five Fundamental Skills for Effective Negotiation (Perception of Power): http://bit.ly/Fi64Z
• I’m excited to announce that my wife and I are expecting in March, 2010. http://twitpic.com/g17r0
• Seth Godin on “wanting”: http://bit.ly/1mvLJ8 < Apply this before negotiating to clarify your needs vs wants.
• RT @LeighMonette @internetcases: Interesting email privacy case that could be relevant in cloud computing context: http://is.gd/2JxpU
• Thanks to Sheryl Schelin (@theinspiredsolo) for including the LicensingHandbook Blog in this weeks’ blawg review: http://bit.ly/YULSx
• RT @gtiadvisors @BurgessCT: Alliance Against IP Theft http://ow.ly/nnke – their new website is full of useful data & easy to navigate
• RT @SuperBuyer: How are vendors like a Big Eighties band? Find out here: http://tinyurl.com/m3m9y2
• RT @jod_writer @caseywright: Girl’s science project disproves advertiser’s claims, results in multi-million $ lawsuit http://bit.ly/14iTan
• RT @jod_writer @chucknewton @BlawgTweets: Ave Maria School Of Law Prepare Student’s For Law School By Scrubbing Toilets http://bit.ly/17DcKc
• RT @gtiadvisors @gaconsultants Not first time, had case 3 yrs ago, Marriot and Radisson Customer Data Breached http://bit.ly/ZP6dv
• RT @fscavo: heheh RT @yourdon For software ppl, today’s Dilbert is hilarious! http://bit.ly/LSuwW
• RT @iasta: Poor Communication = Poor Supplier Performance, Part V http://bit.ly/2jMoQV

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.

To understand my intrigue, we need to start with an understanding of the Prisoner’s Dilemma game.  This game starts with two players, both “accused” of committing a crime together.  They are then separated with no means of communicating with each other.  The only way to “win” the game is for both players to say that their accomplice is innocent. If one person fingers the other for the crime, the innocent one goes free and the guilty one stays in prison.  If both parties accuse the other, both stay in prison.

As Martin explained Simon’s presentation, he states that the “game is interesting and demonstrates why contractual agreement has the potential to results in an optimal deal but leads most of the time to the worst possible scenario.” (italics are mine).

Woah!

[Side note:  I don't know Simon or his background... nor do I know that Martin's recollection of the session accurately depicts Simon's statements.  Everything that follows is merely a response to what was posted on Martin's blog.]

While I do think that some game theory applies to contract negotiations, I don’t believe the Prisoner’s Dilemma is an accurate game to ever use to show the contracting process.  If you’re closing deals and it feels this way, I’m sorry to tell you but you’re doing it wrong.  Time to start from scratch.  If you have been doing it this way and need to start over, here’s the scoop:

Contractual agreements should NEVER lead to the worst possible scenario.  In any negotiation, you must always remember the Five Fundamental Skills for Effective Negotiation: Information Gathering, Strategic Thinking, Time Management, Perception of Power and Communication.  To counter any potential Dilemma scenario, you only need two of these skills: Information Gathering and Communication (and really, you only need Communication).  Simply talking with your accomplice would create a better outcome.  If you add Information Gathering, you’ll discover the three possible outcomes… and then can obviously choose the best one together with even less discussion.

If, for whatever reason, you haven’t gone through the Five Fundamental Skills and are thus not ready for negotiation, don’t negotiate in the face of ill-preparedness.  Delay the negotiation until you have time to prepare properly.  Lastly, if you’ll never be ready, remember that you can always walk away.

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.

To illustrate my point, think about the last contract you reviewed.  Did it have a definition section?  How about references to external documents (a spec list, a set of documentation, a “missing” Exhibit or Appendix)?  Was it full of cross-references or have noticeable gaps (such as missing language for standard terms)?  Was the contract obviously written for a different type of product or service?  In all of these situations, I believe you have a brittle contract.

Contracts are “incorporated” documents.  This means that all of the various sections have to work and play together to form a cohesive end-product.  When you’ve identified gaps, errors or problems, these mistakes can cause cascading failures throughout the entire agreement.  A poorly-defined term, for example, could ripple through the contract, causing errors in judgment regarding expectations, or could even create legal problems with regards to intellectual property.  In other words, the poorly-defined term doesn’t hurt itself, it hurts the entire document.

The same is true for commonly overlooked sections on subjects such as term, termination and scope.  When a lack of attention results in an incomplete picture of the relationship, the net impact can be extremely detrimental (ever had a perpetually-renewing contract for poor services that was hard to get out of because termination was only for breach, yet the services weren’t defined well enough to hold the vendor to performance standards? I have.).

You can also look at brittle contracts from another perspective, one my friend D.C. Toedt might appreciate.  D.C. seems to love language portability – drafting contract sections that can be used in a plug-and-play format to craft the appropriate document (you should check out some of his work in his clause library).  This type of drafting is a part of the holy grail of contracting – the complete automation of the contract creation process based on a wizard-style interface which asks questions and assembles an appropriate finished product from such a library of contract clauses.

The inherent problem with document assembly is brittleness – that you insert a clause into the agreement that has to properly “work” with all of the other sections.  If the clause has a faulty cross-reference, for example, the contract breaks.  On the flip-side, however, document assembly fixes one of the aforementioned brittleness issue with current contracts – having a completely appropriate document for the specific product or service being offered under the agreement.

So… how brittle are your contracts (especially your templates)?

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.

I also realized that many of you might have no idea what you’re seeing below.  Sorry.  These are “tweets”, 140 maximum character messages sent via Twitter.  Within the Twitterverse individual users follow others and have followers (think of it like overlapping Venn diagram circles).  To read a tweet, you have to wade through a bit of jargon used to make the most of the 140 character limitation.  “RT” for example, is shorthand for “Re-tweet” and the @____ is the username of some other individual on Twitter.  Combined together, then, “RT @_____” means that someone else wrote a tweet that I found important and I now want to forward along to my followers.  The URL’s are then also shortened by shortening services like bit.ly to make the most of the character limitation, too.  Lastly, you might see “hash” identifiers “#______” which are ways to tag tweets of a particular flavor for easy searching later.

• RT @ferrusi: RT @procurement: 10+2 Strategies for Managing Suppliers http://bit.ly/wIbFn #sourcinginnovation
• @gtiadvisors Even better is the ToS: http://bit.ly/12Pupt <They’ll narc on you if they believe you’re attempting to commit fraud.
• Lego “rejects” Spinal Tap’s request to use minifig stopmotion video: http://bit.ly/j4AnX < I think Lego is outside the lines on this one.
• NC passed a recent law banning texting while driving. NC DOT started Tweeting traffic updates this week. Where’s Alanis now?
• New blog post: My Lego Love is Fast Fading http://bit.ly/wncA9
• Stephen Guth on whether RFI’s are Ethical: http://bit.ly/iKzP9
• RT @DreamSimplicity: RT @SIIA_Software:#SIIA Announces Appointment of New VP of Comm http://bit.ly/4oCzQJ <could explain new pirate video
• Madisonian on the Ninth Circuit’s decision on computer searches and the plain view doctrine. http://bit.ly/wFpic
• RT @nikiblack @DougCornelius @brucecarton @complianceweek: Oops. Important: Remove “Fudge This” from Financials. http://tinyurl.com/m9t9w6
• Ongoing discussion on FOSS license types: http://bit.ly/30u595 < Really good commentary from Shlomi.
• RT @LeighMonette: RT @AdamsDrafting: Blog Update: When to Provide for Indemnification http://bit.ly/gno5Q
• RT @russellbesq: RT @LawProf: “Second Degree Murder and Six Other Crimes Cheaper than Pirating Music” http://tinyurl.com/ns8y78
• RT @russellbesq: RT @PrivacyLaw: “Alaska Data Protection Law” http://tinyurl.com/kvfudu
• 3rd of Five Fundamental Skills for Effective Negotiation – Time Management: http://bit.ly/q7Z2b
• RT @glambert: Unpredictable Playlist Dooms Sound Recording Copyright Holders’ Infringement Claim – http://bit.ly/OcufG (Mintz Levin)
• RT @nikiblack: “You didn’t learn that in law school either?” Legal Antics http://bit.ly/Ps1EF (via feedly)
• New blog post: Jeff Gordon on Supply Excellence http://bit.ly/2GnCAi
• 2nd of Five Fundamental Skills for Effective Negotiation – Strategic Thinking: http://bit.ly/11Nyof
• RT @gtiadvisors @idexperts: Feds Issue New HIPAA Data Breach Rules: http://tinyurl.com/n5sx3g < Important for your contract lang on confid.
• Layaway is back… I didn’t realize for school supplies. Anyone wanna’ see if together “we” can pay some off? http://bit.ly/3fXxPK
• RT @nikiblack: Great comments from @LeighMonette: “Should lawyers be wary of cloud computing and SaaS?” http://bit.ly/WbS6m < Agreed!!
• RT @nikiblack: Very interesting discussion re: lawyers use of cloud computing in the comments to this post: http://bit.ly/iyYyV Join in!
• RT @nikiblack: “Should lawyers be wary of cloud computing and SaaS?”: http://bit.ly/WbS6m < Note my concerns in the comments.
• RT @hitchandplow: New blog entry: Google Book “Settlement” is Bad for Law, Copyright owners and Users http://bit.ly/3IFdZv
• New blog post: More on Trust http://bit.ly/1D8f9Y
• 1st of Five Fundamental Skills for Effective Negotiation – Information Gathering: http://bit.ly/15a3Hn
• . @ontechcontracts “In praise of short, simple contract clauses” : http://bit.ly/fikJn < Perfectly succinct.
• Speed limit raised b/c “radar speed checks show … already “safely traveling” at that speed: http://bit.ly/um1k5 < chicken & egg problem
• RT @stephenodonnell: New blog post: Vendor Consolidation http://bit.ly/1s38Br < Here, here!
• RT @TheAntiGuru Playing games during negotiations can be costly… http://bit.ly/6tpK #negotiation < great story, demos all 5 Fund Skills!
• RT @francois_ A Decision-Making Perspective to Negotiation: A Review of the Past and a Look into the Future http://bit.ly/ODRX6
• @benpobjoy If you need help with contract negotiations… some of us out here are willing to do so.
• RT @glambert: New on 3 Geeks: Are Blogging and “Thought Leadership” Compatible? – http://bit.ly/WoKFa
• RT @mental_floss: Students at Occidental College can take a course in stupidity (CTSJ180) offered by the Critical Theory/Social Justice dpt.
• Baby lawyer just risked $475K on Millionaire and lost it. I wouldn’t use him as my attorney – in his own words, he wasn’t risk adverse.
• Fatal negotiation mistakes made by copyrighters (or any other service professional): http://bit.ly/gxgJv (from zeriously.com)
• Interview w/ managing partners @ Raleigh firms: 70% don’t use ANY social networking sites. Wow.

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.