PLS 780Week 5

Agenda

• Contracts overall• Contracts and the internet• The importance of defensible agreements in online

environments• Licenses• Joint ventures, partnerships and

manufacturing/supply chain agreements• Proprietary contracts for software

Contract

• Agreements, alliances, deals• Based upon the idea that two parties need to work

together—cant do it alone!• Premised upon negotiation• Roadmap for rights and duties between two

agreeing parties• Ultimately a bet. Why?

Elements of a Contract

• Offer (must be defined and limited)• Acceptance (expressed or implied)• Consideration (something of value that each party

gets---not one sided!)• Cannot be unconscionable (so one-sided that it

shocks the conscience)• Legal Capacity

Performance

• Conditions: Contracts are oftentimes premised upon outside events taking place that are required under the terms of the contract; These are called conditions

• They can be preceding (precedent) or succeeding (subsequent)

• Think complicated processes that depend upon certain things happening before parties can act…

Discharge, Termination, Breach & Remedies

• Contracts can end in a number of ways• Discharge (being fully completed)• Terminated by both parties due to conditions not

being met or by clauses that called for termination based upon specific events

• Breached when one of the parties fails• Remedies are provided in case of breach either by

the terms of the contract or a judgment—can be complicated!

Rockland Trust v Computer Associates

• Facts• Issue• Holding• Rule: What does this case stand for?

Contracts Relevant to Internet and Technology Users/Providers

• Tons!• All facets of operations can and should have some

contractual elements• Think about a company like Apple, Google or

amazon.com and review the graphic on page 269 of text

Licensing

• Extremely important in technology• The idea that you can control technology or

intellectual property owned while getting others to use and pay for it

• Android is a licensing success for Google• Even competitors license each other’s technology

(Apple and Samsung for example)• Usually incorporate some type of NDA

Bayh-Dole Act

• Prior to 1980 federal funds given for research meant the government had ownership of new technologies

• After the act the research (or sponsoring entity usually) has ownership in order to promote innovation, creativity and commercialization of new technology

• Is this good policy?• Worked for Google. What do I mean by that?• Can you think of instances where this act might stifle

innovation or creativity?

Pitt v Townsend

• Facts• Issue• Holding• Rule

Forms of Licenses

• Technology transfer agreements• In-licensing agreements• Outbound licensing• Cross-licensing• Exercise: In small groups consider the pros and

cons of each of these for 10 minutes and report back to the group

Partnerships

• Sometimes the relationship goes deeper and licensing is insufficient to the task

• Partnerships are useful vehicles for technology companies to cement relationships (again, all about defining rights and duties!)

• Joint ventures (project based agreements)• Contract Manufacturing/Supply chain Agreements

(production based)• Barter contracts (startups prefer these

arrangements)

Government oversight of contracts in technology

• What are the concerns?• Why would government inject itself into this space?• What policy goals are being pursued?• Pp 284-85

Proprietary agreements

• Agreements that require user to act in a certain way as a condition of use (software of website)

• Site license agreements (how users interact with websites)

• Software Developer Kits (SDK’s) (how developers develop products within an OS environment)

• Is unconscionability an issue?

Feldman v Google

• Facts• Issue • Holding• Rule

Davidson & Blizzard v Internet Gateway

• Facts• Issue• Rule • Holding

Free and Open Source Software Agreements

• Permissive licenses--completely open from source code to use of the software; no conditions attached to use

• CopyLeft licenses—more “restrictive” or conditional in that derivative works are also made to be freely available

Policy issues and software licensing

• Piracy, copyright infringement and more• Software and intellectual property law are oftentimes

at odds• Traditionally software was copyrighted (problems?)

as well as patented (difficult and limited) or protected under trade secrets law

• Digital Rights Management is making this irrelevant?• Policy issues? Should intellectual property law be the

main force for protection? Is it adequate to the task of protecting software?