juridiko by Sean Hogle

Preserving DMCA Infringement Immunity for Website Owners: You're Doing it Wrong

The Digital Millenium Copyright Act of 1998 amends Title 17 of the US Code, ie, the US Copyright Act, to create a safe harbor for "online service providers" (defined, essentially, as providers of online services and websites offering unmodified third party content) against copyright liability in certain circumstances. Namely, such service providers will not be liable for infringing content posted on their sites if the service providers adhere to prescribed safe harbor guidelines and promptly block access to or remove infringing materials upon receiving notification of infringement form the applicable copyright holder.  This DMCA safe harbor immunizes the site operator from liability if the operator complies with the takedown procedures specified in section 512 of the Act. Surprisingly, many prominent sites are apparently failing to follow these requirements and are consequently exposed to the risk of losing this DMCA immunity.

Beware "Work Made for Hire" Language in Independent Contractor Agreements

Technology companies, particularly early-stage startups, often meet staffing needs with independent contractors rather than employees.  Such personnel are commonly hired via written independent contractor agreements that make clear that because they are not employees, they are not entitled to the benefits or privileges available to employees under California's employment laws, including unemployment insurance, health benefits, or the like.  Independent contractor arrangements can be mutually beneficial to the contractor and the startup, affording greater flexibility and ease of administration.  However, to the unwary and unitiated, such agreements can be problematic, particularly in the context of retaining individual software developers in California.

This is the kind of advice I give to my software client engineers from whom I'm trying to elicit cogent statements of work:


My interest is to just make sure that we can say, very clearly, that we delivered what we said we would deliver, and that therefore, we should get paid.  There should be no dispute about that.
Just listing, "UDP Push", as an example, would be useless to us, in the event of a dispute.

Linux Foundation Launches the Open Source Compliance Program

Today the Linux Foundation announced a set of training modules, tools and programs designed to assist companies with compliance with open source licenses.

Employment Agreement Drafting Lessons from the "Barbie versus Bratz" 9th Circuit Decision

On July 22, 2010, the Ninth Circuit Court of Appeals held that Mattel, Inc., maker of the Barbie line of dolls, should not have been granted intellectual property rights ownership over the Bratz line of dolls, estimated to be worth $1 billion. The originator of the Bratz concept, Carter Bryant, presented the ideas for Bratz to MGA Entertainment, Inc., Mattel's competitor, while Bryant was an employee of Mattel (although the work Bryant performed was done after hours and at Bryant's home).

Enforceability of Vendor On-Line Terms After Written Contract Execution

National Auto Lenders, Inc. (NAL) purchases installment contracts from retail car dealers in Florida, thus enabling indirect consumer loan purchases for cars. NAL contracted with SysLOCATE to purchase over 2,000 GPS units to track vehicles covered by its loans on SysLOCATE's website SysLOCATE makes available to its customers. Unfortunately, many of these units turned out to be defective, thus frustrating NAL's ability to locate and repossess vehicles of owners in default. While the parties were trying to resolve their dispute, SysLOCATE changed the terms of its online click-accept access contract that would have effectively limited NAL's ability to recoup its losses, and that would require binding arbitration as a means of resolving disputes. NAL's executives, upon learning of these new on-line terms, instructed SysLOCATE that only certain named individuals have authority to bind NAL to the terms of any contract, including any online click-accept agreement.

Tech Startup Nightmare on My Street: How Lack of Written Documentation for Staff Developers Wreaks Havok

It's difficult to imagine a more frightening scenario for tech startup founders. Envision a small bootstrapped tech venture hiring a software engineer, with family connections and a proven track record of competence and trustworthiness, to perform coding work from his home in a remote out-of-state location. The engineer is paid solely in shares. He receives no benefits and no tax withholding occurs. No written agreement between the engineer and the company exists.

You work from home with your own computer? You are not paid cash salary or benefits or have taxes withheld? You're an EMPLOYEE!

It could be one of hundreds of similar situations that occurs every day in the Valley. A developer-founder paid only in shares, working from a remote (out-of-state) location, with no benefits, and no withholdings — and is ruled to have been an employee of his company for purposes of copyright ownership.


ALI's Principles: My Recommendation for Software Vendors

I'm recommending to all of my clients that they insert into their operative software license agreements the following or something close to it in the choice of law clause: "This Agreement and all related disputes shall be governed by the laws of _______, without regard to the United Nations Convention on Contracts for the International Sale of Goods or the American Law Institute's Principles of the Law of Software Contracts ("Principles"). The parties agree that (i) the Principles shall have no application whatsoever to the interpretation or enforcement of this Agreement, and (ii) neither party shall invoke the Principles in whole or in part in any judicial or arbitral proceeding relating to this Agreement."

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