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| IT and IP Law |
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| IT Contracts |
 Other Contract Issues |
Open Source Software
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 Well-drafted contracts are of central importance
in any transaction involving computers or information technology. One
reason is that Intellectual property lies at the core of computer and
IT transactions. Ownership of that property must be clearly defined.
Without a clear contract, ownership of that property can be confused
or contrary to the intention of one or both of the parties. Under the
copyright laws of the U.S. and of most countries, the creator of a work
is the owner, with certain narrow exceptions, including employees creating
copyrightable works as part of their jobs. This can only be changed by
a contract between the parties.
CASE IN POINT: The owner of a small software company engaged a colleague
to assist in programming a software application that had a vast prospective
market. He paid the programmer for his time spent on the project.
Just when the software was ready to be demonstrated to a large
prospective customer, the programmer demanded to own a substantial interest
in the
company. How could he do this?
The answer is simple. He created the software. There was no written agreement
that the intellectual property rights were to be owned by the company,
and there was no agreement to assign this property to the software company.
As such, the company did not own more than a single copy of the program
and could not sell it to others.
When your company acquires software, you need to have a clear idea of
what intellectual property you are actually acquiring. Is it a license,
or is it ownership of the intellectual property? What third party rights
need to be considered? To what extent will the supplier maintain the software?
To what extent can the client obtain access to the code for modifications
if the supplier stops maintaining the software?
The question of ownership of intellectual property rights also arises
when a company engages an outside party to create the company's Web site,
to create its advertising or to write manuals or other materials.
At Pitegoff Law Office PLLC, ownership and protection of our clients' IP rights
is a central focus in our contract drafting, review and negotiation.
Other Contract Issues
Related areas of concern include warranties, infringement, indemnification
and confidentiality. Confidentiality includes trade secrecy as well as
the protection of individually identifiable data of customers and employees.
Confidentiality issues arise even before the IT project begins and can
continue indefinitely thereafter. Both the corporate IT user and the supplier
need the protection of a confidentiality agreement. For example, the supplier
may have access to the corporation's sensitive data and the corporate
customer may receive competitively sensitive confidential information
about the supplier.
A large percentage of IT projects fail or are never completed. (See “Information
Technology Contracts Workshop…”) The software may not perform
as promised and the customer's recourse may be limited. At Pitegoff Law Office PLLC, our job is to draft and negotiate IT agreements that increase
the odds of success (by helping to flesh out details at the start) and
minimize the likelihood of lengthy and expensive litigation should project
failure be unavoidable
Open Source Software
Software companies strive to maintain their competitive edge by keeping
the source code out of the hands of potential competitors. Software license
agreements commonly prohibit reverse engineering that would enable a programmer
to decipher the source code.
The increasingly popular open source approach turns the traditional software
business model on its head. [See “Open Source, Open World” .] Both the source code and the object code are free and freely available
over the Internet. This allows any company to customize the software to
its needs. Anyone in the world can improve the code for the benefit of
everyone.
The open source license employs a novel inversion of intellectual property
law to promote rather than restrict the copying, use and modification
of software. Instead of guarding exclusive rights, the open source license
ensures free access, use and modification of software. While free, open
source software nevertheless relies on intellectual property rights.
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