A Legal Guide to Web & Software Development / Edition 5

by Stephen Fishman J.D., Attorney Stephen Fishman

Overview

Protect your rights, and your hard work! The laws covering website and software development are complex and confusing, but if you don't untangle them, it could cost you thousands of dollars in attorneys' fees and lawsuits. Fortunately, Legal Guide to Web & Software Development decodes this complex area of the law, thoroughly and in reader-friendly English. It also provides contracts, agreements and legal forms on CD-ROM, with step-by-step instructions for filling them out, so you can protect your software and website without paying a lawyer's ransom. Use Legal Guide to Web & Software Development to learn: what kind of legal protection you need the strengths and limitations of each type of protection how to avoid infringement which provisions you need when drafting an agreement how to obtain permission to use other people's materials You'll find complete, step-by-step instructions to draft: employment agreements contractor and consultant agreements development agreements license agreements The 5th edition of Legal Guide to Web & Software Development is completely updated to provide the latest case law and statutory revisions.

Product Details

ISBN-13:	9781413305326
Publisher:	NOLO
Publication date:	11/26/2007
Edition description:	Fifth Edition
Pages:	544
Product dimensions:	7.00(w) x 8.90(h) x 1.10(d)

About the Author

Stephen Fishman is the author of many Nolo books, most recently Tax Deductions for Professionals. Other titles include Deduct It! Lower Your Small Business Taxes, Every Landlord's Tax Deduction Guide and Home Business Tax Deductions: Keep What You Earn - plus many other legal and business books. He received his law degree from the University of Southern California in 1979. After time in government and private practice, he became a full-time legal writer in 1983.

Read an Excerpt

Introduction
Most websites and software programs combine a variety of materials, including text, graphics, photos, videos, and sounds. Unfortunately, such projects can present difficult and expensive legal problems. These fall into two main categories:

• Copyright permissions problems: You may need to obtain permission to use materials protected by copyright, whether it be text, photos, video and film clips, software, or music.
  Obtaining permissions for a Web or software project can involve tracking down many different copyright owners and negotiating licenses to use their material.


• Publicity/privacy problems: Use of photos, film or video footage, or audio recordings can constitute a breach of the privacy or publicity rights of the people whose likenesses are used. You'll need to consider whether you must obtain privacy releases from persons whose images or voices are used.

Obtaining copyright permission and publicity/privacy releases can be a weighty task.

EXAMPLE: The University of the Midwest History Department decides to create a comprehensive website about Columbus's "discovery" of America. Midwest wants to incorporate into the website a variety of preexisting materials about Columbus, including:

• text from various articles and books;


• photos from books, magazines, and other sources;


• video clips from several television programs;


• film clips from two theatrical movies about Columbus;


• music to be used as background to the images and text; and


• excerpts from a Broadway musical and Italian opera based onColumbus's life.

Midwest also plans to create an abbreviated version of the website on a CD-ROM for high school students.

All in all, Midwest intends to incorporate hundreds of separate items into its website and CD-ROM. This sounds like a fine idea for a website and CD-ROM. However, Midwest needs to address and resolve the copyright permissions problem and publicity/privacy problems before it can place its website online.

Other Intellectual Property Concerns

A Web or software developer's main concerns are with copyright and publicity/privacy problems. However, other intellectual property laws may come into play as well. For example:

• Third-party software may be patented, as may certain business methods used on the Web. A license must be obtained to use any material protected by a patent.


• The federal and state trademark laws may protect character names, physical appearance, and costumes; some titles; as well as product names, logos, slogans, and packaging. A developer may have to obtain permission to use a trademark on a website. (See Chapter 10 for an
  overview of trademarks.)


• Finally, trade secret problems may occur whenever a developer uses or is exposed to any material or information (even a mere idea) that is covered by a confidentiality agreement. A developer must be particularly vigilant about avoiding use of confidential information any
  employee obtained from a prior employer. (See Chapter 7 for a detailed discussion of trade secrets.)

There are ways to get around, or at least alleviate, permissions problems. First we'll discuss when a Web or software developer does and does not need to obtain permissions, and second, where and how to get them if they are needed. We'll then review the privacy and publicity issues that arise in Web and software projects.When You Need to Obtain Permission
Whether or not a Web or software developer needs permission to include any given item in a project depends on:

• whether the item is protected by copyright or is in the public domain;


• whether or not the material is created especially for the project;


• who created it (employee, independent contractor, or third party); and


• the extent and nature of the intended use.

New Material Created for a Web or Software Project

No copyright permissions problems are normally presented when material is created especially for a Web or software project, whether by the developer's employees or independent contractors.

Under the copyright laws, a developer will automatically own the copyright in materials created in-house by its own employees. As a result, the developer need not obtain permission from its employees to use copyrighted works -- the developer already owns those rights. For example, Midwest University would not need to obtain permission to use text or graphics created by an employee for its website on Columbus. It is wise, however, to have creative employees sign employment agreements transferring whatever ownership rights they might conceivably have to the developer. (See Chapter 14 for a detailed discussion and sample forms.)

When a developer hires an independent contractor to contribute to a Web or software project, it should require the contractor to assign copyright rights to the developer. For example, if Midwest hires a freelance artist to create drawings for its Columbus project, it should have the artist, before commencing work, sign an independent contractor agreement assigning her rights in the drawings to Midwest. (See Chapter 15 for a detailed discussion and
sample forms.)

Preexisting Materials

The permissions problem raises its ugly head when a developer wishes to use preexisting materials -- that is, materials previously created by nonemployees (or created by employees before they became employees). You can figure out whether permission is required by answering the following two questions:

• Is the material in the public domain?


• Does your intended use of the material constitute a "fair use?"

If your answer to both questions is "no," you need permission; otherwise you don't.

Using Copyrighted Material Without Permission

You might be tempted to use copyrighted material without permission if you are unable to locate the copyright owner or simply don't have the time, money, or staff to obtain numerous permissions. If the copyright owner later discovers what you've done, at the very least you will be liable for the reasonable value of the use. If the material is not terribly valuable, this won't amount to much, and the owner will probably accept a small permission fee.

EXAMPLE: Midwest University wants to quote two pages from an old magazine
article about Columbus. The magazine is out of business and neither the author nor her heirs can be located. Midwest University decides to use the quotation anyway. One year later, Midwest University is contacted by the article's copyright owner. The owner agrees to accept $250 from Midwest for retroactive permission to use the quotation.

On the other hand, if the material is valuable, you could find yourself in big trouble. At the very least, you'll be liable for a substantial permission fee, perhaps more than you'd be able or willing to pay. Instead of settling for a permission fee, the copyright owner might sue you for copyright infringement. In this event, you could face substantial damages. The
copyright owner you've stolen from could ask the court for the reasonable value of the use and the amount of any economic loss caused by your theft; or, if the material has been registered with the U.S. Copyright Office, the copyright owner could ask for special statutory damages, which can range up to $150,000 (it's up to the judge or jury to decide how much). In some cases, you could even be subject to criminal prosecution. And don't forget, you'll be paying your attorney handsomely, regardless of how the case turns out.

EXAMPLE: Midwest University "borrows" several minutes from the video version of a recent theatrical movie about Columbus and uses it on its website. The film's copyright owners discover the theft and sue Midwest for copyright infringement. They obtain an injunction prohibiting Midwest University from using the pirated footage and ultimately obtain a court judgment against Midwest. They ask the judge to award statutory damages, and, because the judge finds that the infringement was willful and blatant, she awards $50,000 in damages against Midwest.Works That Are in the Public Domain
The general nature of copyright protection is discussed in Chapter 3. If you haven't read that material, do so now. Copyright protects all original works of authorship. This includes, but is not limited to, writings of all kinds, music, sound recordings, paintings, sculptures and other works of art, photographs, software, film, and video.

Luckily for Web and software developers, however, not every work of authorship ever created is currently protected by copyright -- not by a long shot. A work that is not protected by copyright is said to be in the "public domain"; in effect, it belongs to everybody. Anyone is free to use it without asking permission, but no one can ever own the work again. By using public domain materials, a developer can avoid going through the time, trouble, and expense involved in getting permission to use copyrighted materials.

Following is a brief description of the types of materials that are in the public domain. However, to determine whether a particular work is in the public domain, refer to The Public Domain: How to Find & Use Copyright-Free Writings, Music, Art & More, by Stephen Fishman (Nolo).

Things That Are Never Protected by Copyright

Certain works of authorship and other items are never protected by copyright and are therefore always in the public domain. These include:

• Ideas and facts: Because copyright only protects an author's expression, ideas and facts themselves are not protected.


• Words, names, titles, slogans, and other short phrases: Individual words are always in the public domain, even if they are invented by a particular person. However, these items may be protected under state and federal trademark laws if they are used to identify a product or service. (See Chapter 10.)


• United States government works: All works created by U.S. government employees as part of their jobs are in the public domain. This includes, for example, everything printed by the U.S. Printing Office, NASA photographs, the president's speeches and publications, and other works by federal agencies. But this rule does not apply to works by state and local government employees; those works may be protected by copyright.

Works Whose Copyright Has Expired

Another large category of public domain works are those whose copyright has expired. As of 2007, every work published in the United States before 1923 is in the public domain in the U.S. Many works initially published in the U.S. during 1923-1963 are also in the public domain because their copyrights were never renewed.

Works Dedicated to the Public Domain

The owners of some works have decided they don't want them to be protected by copyright and dedicate them to the public domain. For example, some software has been dedicated to the public domain. There are no formal procedures for dedicating a work to the public domain. The author just has to indicate on the work that no copyright is claimed.

Public Domain Works Are Not Always Freely Available

Table of Contents

Your Legal Companion

1. Creating Agreements
The Process of Reaching a Final Agreement
Print Out and Proofread the Final Agreement
Attach All Exhibits
Sign the Agreement
Dates
Faxing and Emailing Agreements
Save the Agreement

2. Introduction to Intellectual Property
What Is Intellectual Property?
Trade Secret Law
Copyright Law
Patent Law
Trademark Law
Implementing an Intellectual Property Plan

3. Copyright Basics
What Is a Copyright?
What Does Copyright Protect?
Three Prerequisites for Copyright Protection
Limitations on Copyright Protection
Copyright Infringement
Copyright Formalities
Masks Used to Manufacture Computer Chips

4. Copyright Registration
Copyright Registration: The Basics
Selecting the Proper Application
Filling Out the Application
Complying With Copyright Deposit Requirements
Software Deposits
Website Deposits
Sending Your Application to the Copyright Office
Expedited Registration
Preregistration of Unpublished Software
Dealing With the Copyright Office
Corrections and Changes After Registration Is Completed (Supplemental Registration)

5. Copyright Notice
Why Use a Copyright Notice?
When to Place a Copyright Notice on Software and Websites
Form of Notice
Notice on Compilations and Derivative Works
Where to Place Copyright Notice
Other Information Near Notice

6. Software and Web Copyright Infringement

Part I. Avoiding Copyright Infringement

Things You Should Never Do
Things You May Be Able to Do
Protecting Against Infringement Claims
What to Do If You're Accused of Copyright Infringement

PARTII. Suing Others for Copyright Infringement

How to Know Whether You Have a Valid Infringement Claim
Self-Help Remedies for Copyright Infringement
Nuts and Bolts of Infringement Lawsuits
What You Can Get If You Win: Remedies for Copyright Infringement

7. Trade Secret Basics
What Is a Trade Secret?
Trade Secret Owner's Rights
Limitations on Trade Secret Protection
Enforcement of Trade Secrets
Avoiding Trade Secret Misappropriation Claims
Using Trade Secrets With Other IP Protections

8. Establishing a Trade Secret Protection Program

Part I. Identifying and Protecting Your Trade Secrets

Identifying Your Trade Secrets
Basic Trade Secret Protection Program
Advanced Trade Secret Protection Program

Part II. Drafting Nondisclosure Agreements

General Nondisclosure Agreement
Prospective Licensee Nondisclosure Agreement for Software Company
Software Beta Tester Nondisclosure Agreement
Visitor Nondisclosure Agreement
Interview Nondisclosure Agreement

9. Software and Internet Patents
Patent Basics
Patents for Software
Internet Business Method Patents
Should You Apply for a Software or Internet Patent?
Avoiding Patent Violations (Infringement)

10. Trademarks and Domain Names
What Are Trademarks and Service Marks?
Trademark Ownership
Selecting a Trademark
Federal Trademark Registration
Trademark Notice
Trademark Searches
Enforcing Trademark Rights
Trade Dress Protection
Internet Domain Names

11. Software and Website Ownership
Copyright Ownership
Trade Secret and Patent Ownership
Transferring Software and Website Ownership and Use Rights

12. Electronic Databases
Types of Databases
Copyright Protection for Electronic Databases
Registering Contents of Electronic Databases
Using Noncopyright Means to Protect Databases

13. Website and Software Permissions
Introduction
When You Need to Obtain Permission
Works That Are in the Public Domain
The "Fair Use" Exception to Copyrighted Works
Obtaining Permission to Use Copyrighted Materials
Privacy and Publicity Problems

14. Employment Agreements

Part I. Employer's Guide to Drafting Employment Agreements

Why Use Employment Agreements?
Who Should Sign?
When New Employees Should Sign
Agreements With Current Employees
Selecting Employment Agreements You Need
Employment Agreement for Nontechnical Employees
Employment Agreement for Technical Employees

Part II. Employment Agreements From the Employee's Viewpoint

Confidentiality of Trade Secrets
Intellectual Property Ownership
Postemployment Restrictions on Competition

15. Consulting Agreements

PART I. Hiring Independent Contractors

Introduction
Benefits and Drawbacks of Using Independent Contractors
Which Workers Qualify as Independent Contractors
Independent Contractor Agreement Favorable to Hiring Firm

PART II. Working as an Independent Contractor

Benefits and Drawbacks of Working as an Independent Contractor
Consulting Agreement Favorable to an Independent Contractor

16. Software and Website Licenses
What Is a License?
Why Use Licenses to Sell Software?
Types of Software Licenses
Licenses for Mass-Marketed Software
Negotiated License Agreements
Open Source Licenses
Website Content License
Website Linking Agreement

17. Website Development Agreement
Identifying the Parties to the Agreement
Contents of Website Development Agreements

18. Custom Software Development Agreement
Introduction
Contents of Custom Software Development Agreements

Appendix
How to Use the CD-ROM
Installing the Form Files Onto Your Computer
Using the Word Processing Files to Create Documents
Using U.S. Copyright Office Forms
List of Forms Included on the CD-ROM

Index

What People are Saying About This

Jeff Duntemann

"This book passes my own personal test for legal guides -- that it be easily readable for people who detest lawyers -- and passes it with higher marks than any other legal guide I've come across."--(Jeff Duntemann, Editor, PC Techniques Magazine)

John Dvorak

"An amazing book! A must for anyone in the software business... Answers nearly every legal question you can imagine and some you would have never thought of Highest recommendation!"--(John Dvorak, PC Magazine)

Editorial Reviews

An amazing book! A must for anyone in the software business... Answers nearly every legal question you can imagine and some you would have never thought of. Highest recommendation!
— John Dvorak

PC Magazine

An essential read for web and software developers looking for a straightforward legal guide...

Oman3D.com

Covers every imaginable detail important to such a rapidly growing and intangible medium.

Entrepreneur

Here is a timely education into the basic legal issues that should be understood by every programmer, designer, and manager. At last, in one book, you can read all about... intellectual property, employment and contracts.

EDS Research

This book passes my own personal test for legal guides -- that it be easily readable for people who detest lawyers -- and passes it with higher marks than any other legal guide I've come across.
— Jeff Duntemann

PC Techniques Magazine