Archive for February, 2010

モノ作りと知恵作りとライセング, Part2

Sunday, February 28th, 2010

Making Things, Making Knowledge, and Licensing, Part 2>> English translation

「日本はなにを作るのか。日本でなにを作るのか。」

以上の質問は最近放送された(日本で1月24日、アメリカで2月14日)NHKスペシャル番組“メイド・イン・ジャパンの命運”の表題でした。

この番組は、中国が低賃金のモノ作り業界の主導権を握り、アメリカが高付加価値のデジタル業界の主導権を握っている現代の世の中、日本のモノ作りのビジネスモデルは持続可能かどうかを追求するというものでした。

確かに昨年日本で百余りの大手工場が閉鎖したということは悩ましいことです。

モノ作りというビジネスモデルに加えて、日本の産業界にはもう一つの選択技があるのをほのめかしていました。もう一つとは、知恵作りというビジネスモデルです。このビジネスモデルには、ライセンスは大事な役割を演じています。

その点で、NHKの番組はこのブログで以前に紹介した堺屋太一氏の意見とかなり一致していると思います。堺屋氏がおっしゃったように、モノ作りは日本の伝統だけれども、知恵作りは日本の将来です。

NHKのウェブサイトがこの番組について以下のように説明しています:

「金融危機の影響がもっとも大きく出た日本。GDPはまもなく中国に抜かれ3位に転落するのは必至である。こうした中、日本はグローバル経済の中で、何を作り、何で稼いでいくべきなのか。世界最強のブランドと言われた“メイド・イン・ジャパン”が、出口を求めて必死にもがいている。いま日本の製造業が直面している世界の地殻変動、それは、猛スピードで技術が陳腐化し、製品の差別化が難しく、しかも製品の寿命が超短命に陥っていることだ。メイド・イン・ジャパ ンの代名詞だったテレビ業界では、特にその傾向は顕著で、どんなに高度で精密な薄型テレビを作り出しても瞬く間に韓国台湾などアジア勢の猛追を受ける。少しでも安いモノをと考える消費者にとって、ライバルがある程度の技術力を持てば、日本製品の優位性は一気に崩れるのだ。こうした中、いま一度日本国内工場 の存在意義を問う、「生き残りをかけた実験」が始まっている。東芝ではコストを度外視した超高機能テレビを作り技術力を極めようとする試みが佳境を迎えた。JVCケンウッドでは、自社生産にこだわらず、技術を中国メーカーに譲って製品を作らせ、そのライセンス料を企業収入にしていこうという動きも見られる。番組は、「日本は今後どうやって食べていくのか」、「日本人は何が得意なのか」と自問を繰り返す二つの電機メーカーの社運を賭けたプロジェクトに密着 し、メイド・イン・ジャパンの未来を見つめていく。」

番組の中で痛ましかったのは、肝心な家電製品のトレードショーで超高機能東芝テレビデビューの最中、複数のソフトバグのせいで、ディスプレイ用のテレビ画面がいきなりに真っ白な状態になったことです。NHKのナレータが「手触りのないデジタルの世界を制することができるのか」という質問をしました。従来の東芝テレビの開発を担当している技師チームはハードのアナログの世界で育ち、まだ自社のソフト技師チームとうまく協力できないらしいのです。

その一方で、JVCケンウッドは、ビジネスモデルを根本から変えようとしているということです。それは知恵作りのビジネスモデルに基づき、中国の低賃金メーカーと交渉をし、技術を貸し出してモノを作らせる。すなわち、デジタル知的財産(技術)をライセンスすることにより、モノ作りをせずに特許の使用料をもらうということです。

番組によると、JVCケンウッドは、モノを作るだけでなく、魅力的なシステムをあみ出す知恵にこそ日本の活路があると思い至ったのです。堺屋氏はその考え方に賛同すると思います。 (more…)

Software & Web Licensing Corner: Enforceability of Clickwrap and Browsewrap Agreements

Wednesday, February 24th, 2010

Clicking the "I Accept" Button-- No, Not THAT Button!

Three great unanswered questions of our times: 1) did multiple gunmen shoot President Kennedy in Dallas? 2) are government authorities hiding proof that UFOs are piloted by extraterrestrials? 3) can Facebook really change my Terms of Service and privacy settings just by posting an online notice?

Sorry, can’t help you with the first two questions, but for an answer to the third question, you have come to the right place.

As detailed in a recent Five Minute FAQ, it is possible to form a legally binding contract even in the absence of a physical piece of paper signed by both parties, as long as there are an effective offer, acceptance, and consideration.

Usually, the main issue in determining whether a website user is legally bound to the site’s terms of service (“TOS”) will focus on the validity of the acceptance, specifically whether the user clearly understood the TOS offered by the website owner, and clearly manifested his intent to accept those terms.

One of the first definitive answers came in a case from the federal Second Circuit Court of Appeals, Specht vs. Netscape. Visitors to the Netscape website were allowed to download free software by clicking on a download button. Netscape claimed that downloaders were subject to the terms of its software license, but the terms of the license were not on the same page as the download button. Instead, there was a link at the bottom of the download page, visible only after scrolling down from the download button, then users had to click on more links to reach the actual terms of the license agreement. The court ruled that the license was not binding on the software user, because he did not have a chance to manifest his acceptance– the terms of the offer (license agreement) were not plainly visible to the user, and the user was not required to click an “I Accept” button linked to those terms as a precondition to downloading and using the software.

Okay, fine Mr. Wizard, but how does that play out in the Real World?

Clickwrap Agreements
Clickwrap agreements are contractual terms presented with “I Accept/I Decline” buttons. Clicking “I Accept” could be a precondition to downloading software (in other words, what Netscape should have done), or to becoming a member of or subscriber to a website. Steps to ensure that the license/TOS are legally binding include: 1) full and clear presentation of the terms prior to the user’s gaining access to the software or service, via a scroll box or (preferably) full presentation of the terms on the webpage; 2) an opportunity for the user to clearly manifest his acceptance of the terms as a precondition to gaining access to the software or service, via “I Accept/I Decline” buttons or similar mechanisms; 3) an opportunity for the user to further review the terms of the agreement, via a “Print” button or similar mechanism.

Browsewrap Agreements
On much shakier legal ground are so-called “browsewrap agreements,” that is, terms or links to terms that are prominently posted on the homepage of the website with a notice to users that they accept those terms merely by browsing deeper into the site. Obviously, in light of the Specht decision, there are serious questions whether users are aware of and clearly manifest their acceptance of the TOS just by browsing beyond the landing page. However, if the site owner is not offering membership or access to restricted portions of the website, then it may not have the opportunity to require the browser to click an “I Accept” button, even though it still has a critical need to protect its rights and restrict its liabilities. Steps to increase the likelihood that browsewrap terms are legally binding include: 1) placement of the terms or a link to the terms that is so prominent that users are guaranteed to see them upon first entering the website; and 2) prominent placement of a message that taking further action (browsing, clicking, etc.) is an acceptance of such terms. It also helps if the terms are geared towards commercial users rather than consumers. For example, in a case involving Tickets.com deep-linking to pages in the Ticketmaster.com website in violation of the browsewrap terms on Ticketmaster’s home page, the court ruled it would not dismiss the breach of contract claim solely because the Ticketmaster.com TOS lacked an “I Accept” button. Its decision appears based in part on a belief that Tickets.com was a sophisticated user that would expect its activity to be subject to online terms and conditions.

Amendments
What if a website user agreed via a valid clickwrap contract that the website owner could amend the TOS or license in significant ways just by the owner’s posting of the amendment on its website, without special notice to or agreement by the user? This very question was at the root of a recent controversy involving Facebook, which needed to amend its TOS, but with millions of users, found it impractical to notify and gather evidence of each user’s acceptance. Since the users agreed in the original TOS that Facebook could amend the TOS merely by posting the new terms, shouldn’t that be okay?

Several courts have held in similar factual scenarios that the amendment by posting procedure would not be legally binding. One used the rationale of ineffective acceptance (see Douglas v. Talk America Inc.), another used the rationale of ineffective consideration (see Harris v. Blockbuster Inc.), but both were clearly uncomfortable with the idea that users’ rights could be significantly altered without their knowledge, even if they had agreed in advance. However, both courts hinted at procedures that would more likely make online amendments effective: 1) giving users clear notice of the revised terms, via an e-mail to the user or a pop-up notice when the user next logs on to the site; 2) providing a meaningful grace period (e.g. 30 days) before the amended TOS go into effect; 3) not attempting to make the amendment retroactively effective, but only going forward; and 4) allowing the user the ability to opt out of the new TOS, for example by unsubscribing from the site.

Takeaway: providing full, prominent disclosure to users of offered terms, and opportunities for users to clearly manifest their acceptance of those terms, will result in legally binding licenses, terms of service, and other online agreements.

5 Minute FAQ: When Is An Agreement a Contract?

Sunday, February 14th, 2010

A contract is an agreement that is legally binding, and can be enforced in court.

Q: So what are the magic ingredients that make an agreement a legally binding contract?

First, there must be a concrete, bona fide offer, for example, “I will sell you those shoes for $25”.  But if the seller had said instead, “I am not selling those shoes, but if I did I would probably sell them for $25,” then no contract can result.  (This is similar to the language used in a letter of intent, which is also not legally enforceable.)

Second, there must be an acceptance that matches the offer on at least the main terms, such that there is a “meeting of the minds”—“I will buy those shoes for $25.”  If there isn’t a match, then the reply to the offer might be considered a counteroffer (“I will buy those shoes for $20”) which requires its own acceptance.  Note that an offer can be accepted not only with words (oral or written), but also with actions, for example handing over the $25.

Another necessary ingredient is “consideration,” not in the sense of the parties being nice to each other, but in the sense of each party bargaining for a benefit, including the ever popular “money.”  Which sounds like it would always apply, because who makes an offer for which he does not seek a benefit in return?  But for example, an offer of a gift (“I will give you $1 million because you are a lovely person”), even if promptly accepted with a hearty “yeah baby!” would not “normally” be legally binding, because there is no bargained-for benefit to the gift-giver.  “Normally,” because there are exceptions where offers that lack consideration can still become legally binding.

Finally, some kinds of agreements must be in a signed writing to qualify as a contract.

Q: In some cases? You mean oral agreements can be legally binding?

Yes, if there is a valid offer, acceptance, and consideration, then most oral agreements qualify as contracts.  Certain kinds of important agreements are required to be in a signed writing.  In fact, the laws of every state except Louisiana require five kinds of agreements to be in a signed writing: 1) agreements to pay the debt of another; 2) agreements to sell or transfer real property; 3) agreements to get married; 4) agreements that cannot be completely performed within one year; and 5) agreements for the sale of goods (not services) worth more than $500.  These laws are descended from the English Statute of Frauds enacted in 1677.

In addition, assignments (transfers of ownership) of patents, copyrights, and federal trademarks are all required by law to be in a signed writing.  This often applies to exclusive licenses of patents, copyrights and trademarks, because they are often deemed equivalent to transfers of ownership. Also, a work made for hire contract with a non-employee must be in a signed writing.

Q: So oral agreements are okay?! Doesn’t that contradict what you are always saying?

I said oral agreements could be legally binding, but they are definitely not okay.  Trust me when I say— in case of problems, there will always be a conflict over just what was agreed to.  Any agreement concerning anything of value should always be in writing.  I wholeheartedly agree with the quote variously attributed to Yogi Berra and Samuel Goldwyn: “A verbal contract isn’t worth the paper it’s written on.”

Q: Can a series of e-mails discussing deal terms be considered a contract?

Absolutely.  And under the federal Electronic Signatures in Global and National Commerce (E-SIGN) Act and the largely complementary Uniform Electronic Transactions Act enacted in 47 states and the District of Columbia, an electronic signature in a business or commercial record will be given the same legal effect as a handwritten signature if it is: 1) a sound, symbol, or process; 2) attached to or logically associated with an electronic record; and 3) made with the intent to sign the electronic record.  So an e-mail agreement could be legally binding even if it concerned one of the five “Statute of Frauds” categories of agreements.  Typically, the problem will be figuring out whether in the back and forth of e-mails there was ever truly a meeting of the minds—an offer of terms that was substantially accepted by the other side.

Q: Putting this in the context of license agreements—are so-called “clickwrap” and “shrinkwrap” software license agreements legally binding?

Yes, they can be.  If the licensor made the terms of the license clear and visible to the licensee, and gave the licensee an opportunity to manifest its acceptance, either by removing the shrinkwrap on the install disc or clicking a “Yes, I Accept These Terms” button on a website before downloading the software, then the licensee will be bound by the license terms.  On the other hand, courts have ruled that where the license terms were on a submerged screen not visible from the download screen, then the downloader is not legally bound.  Similarly, if the license terms were not clearly and completely visible to the buyer/licensee before he removed the shrinkwrap, then he would not be bound.  I will examine some of these cases in greater detail in future posts.

Sports Licensing Corner: When a Tattoo Costs an Arm and a Leg— Basketball Star Gets Schooled In IP Law

Wednesday, February 3rd, 2010
I told the 'guy to ink a "T," not a "C"!

Rasheed says: "I told the guy to ink a 'T,' not a 'C'!"

Here is an oldie but goodie from the worlds of sports licensing, which again reminds us that IP assignment agreements are not just for the rarefied world of lab researchers, but for the nitty gritty worlds of tattoo artists and technical foul prone power fowards as well.

Back when he was playing for the Portland Trail Blazers, basketball star Rasheed Wallace got an elaborate tattoo on his upper right arm depicting an ancient Egyptian royal family with the sun in the background (see photos here and here). For a fee of $450, Portland tattoo artist Matthew Reed created preliminary sketches of the tattoo for Wallace’s approval, then applied ink and needle to skin. Reed and Wallace signed a one page contract, but it was silent on who owned the intellectual property in the tattoo.

Wallace appeared in a Nike television commercial which focused on the tattoo in close up, and included an animation simulating the tattoo’s creation, with voiceover from Wallace explaining the meaning of the symbols.

Reed, surprised that his $450 creation was the focus of a multimillion dollar advertising campaign, sued Wallace, Nike, and its advertising agency for infringement of his copyright.

Why? How?

A person who creates intellectual property as an independent contractor generally owns that IP, in the absence of an agreement to the contrary. As mentioned, the contract between Reed and Wallace was silent on the issue of copyright ownership, so it could not be considered an assignment of copyright, and the tattoo did not fit one of the work made for hire categories, so it could not be considered a work made for hire. Since Reed was an independent contractor, the ownership of the copyright in the tattoo remained with him. Which meant that anyone who reproduced the tattoo without a license from Reed was infringing his copyright.

The lawsuit was settled confidentially, but it is likely that Reed walked away with a lot more than the original $450 fee.

So what rights did Wallace get for his $450? Wallace owns the physical manifestation of the tattoo, and has the right to display it to people in the same physical location, but has no right to make or sell reproductions, such as photographs or video, or to create derivative works, such as animations based on the tattoo. Similarly, the purchaser of a painting who does not obtain an assignment of copyright from the painter owns the canvas, and implicitly has the right to sell the original canvas or even destroy it, but does not have the right to make or sell copies of the painting on the canvas.

And it probably would not have helped Wallace’s case even if he proved that he conceived of the “idea” for the tattoo, because copyright does not protect ideas or concepts (e.g. the concept of an Egyptian royal family and a sun), only the expression of those ideas (e.g. an actual image of an Egyptian royal family and a sun).

Takeaway: when purchasing artwork, video, text, or other creative works that you may wish to make available to a broader audience, make sure that you have a written agreement with the seller/licensor either transferring ownership of the copyright to you, or licensing reproduction rights to you (coupled with a guarantee that he is indeed authorized to license those rights to you). Otherwise, you could get “tattooed” like Rasheed Wallace.