The business of writing, owning, licensing and monetizing code has become more complicated due to the evolution of SaaS and the move to mobile, meaning a proliferation of apps and APIs. Proper awareness of how to own your code (or not), how to license it, how to allow others to subscribe to it, how to protect it and how monetize it is critical for every developer. IP and IT lawyer Brad Frazer will discuss these topics and more in a lively, interactive Code Camp session.

1. Software Law for Developers
Brad Frazer
bfrazer@hawleytroxell.com
208.388.4875
@bfrazjd
Boise Code Camp
March 19, 2016

2. Introduction . . .
The business of writing, owning, licensing and
monetizing code has become more
complicated due to the evolution of SaaS and
the move to mobile, meaning a proliferation
of apps and APIs. Proper awareness of how to
own your code (or not), how to license it,
how to allow others to subscribe to it, how to
protect it and how monetize it is critical for
every developer.

3. Outline
1. Own it
2. Protect it
3. Monetize it

4. Own it
• Presentation assumes you are able to own
the code
• Exceptions . . .
– When you don’t.

5. Own it
• Where did the source code come from?

6. Own it
• In what role did you write the code?
– Solo
– Contractor
– Employee

7. Own it
• Anybody else write part of it?

8. Own it
• Where do you want ownership to reside?
– You
– LLC
– Corporation

9. Own it
• Ownership legal exposures
– Warranty of title
– Indemnification concerns
– Exit strategies

10. Protect it
• Copyright law
– Creation
– Ownership
– Registration
– Enforcement

11. Protect it
• Copyright law
– Creation
• Copyright is a noun
• Sufficiently creative idea embodied in a
tangible medium

12. Protect it
• Copyright law
– Ownership
• Author owns the copyright
• Except for works made for hire
• Except independent contractor with a
signed writing

13. Protect it
• Copyright law
– Registration
• Creates a remedy—does not affect creation
or ownership
• Required to maintain infringement lawsuit
in federal court
• Register timely—ASAP after creation of
“best edition” of the work

14. Protect it
• Copyright law
– Vigilance
• Watch for infringers
• Address them promptly (three year statute
of limitations)
• Do not bluff

15. Copyright Hypothetical
Assume that Company X hires an independent contractor to write
computer code. Company X pays the programmer, Jim, $5,000, and Jim
delivers a flash drive with the commissioned program on it. Company X
thereafter begins to license the software to third parties. A short time
later, Jim’s former employer sues Company X for copyright infringement
asserting that it owns the copyright, not Company X since Jim created it
while he was their employee and Company X did not obtain a written
copyright assignment from either Jim or Jim’s former employer. (Note
that Jim’s former employer may also, on these facts, sue each of
Company X’s putative licensees.) Company X settles that lawsuit and
buys the copyright to the code from Jim’s former employer. Company X
again begins licensing the code to third parties. One of those licensees
begins selling copies of the software without permission, and Company
X sues them for copyright infringement. The case is dismissed without
prejudice, however, because Company X did not register its copyright in
the software before filing the complaint.

16. Monetize it
• What’s the deployment modality?
• Can you charge for it?
• Consider “open source” code

17. Monetize it
• Deployment modality: license
– Contract
– Worthless if you cannot prove assent to the
contract
– Mechanisms?
– Issues: warranties, indemnity, install base

18. Monetize it
• Deployment modality: SaaS
– Service, not software
– Different contract
– Issues: security, privacy, data, “you can only
give what you have received”

19. Monetize it
• Deployment modality: hybrid
– Contemplates service (subscription) and an
app (license)
– Let’s talk about apps . . .

22. Monetize it
• Post-deployment issues:
– Support
– Maintenance
– License versus SaaS implications

23. Monetize it
• Exit, VC, sell company, sell code as stand-
alone
– All these are impaired if fundamentals are
not observed

24. When to Use a License and When
to Use SaaS
• If a SOFTWARE OWNER does not want to
be responsible for support and
maintenance obligations of the install base,
then a subscription model may be more
appropriate.

25. When to Use a License and When
to Use SaaS
• If a SOFTWARE END USER needs the ability
to customize the code and how it works in
the end user’s enterprise environment, a
license model may be more appropriate.

26. When to Use a License and When
to Use SaaS
• If a SOFTWARE OWNER is concerned about
trade secrets in its code being
misappropriated through reverse
engineering, then a subscription model
may be more appropriate.

27. When to Use a License and When
to Use SaaS
• If a SOFTWARE END USER has a large
enterprise that requires a great deal of
software support, a license model with
support and maintenance agreements may
be more appropriate.

28. When to Use a License and When
to Use SaaS
• If a SOFTWARE END USER has a large
enterprise that requires development of
custom code and implementation services,
a license model with both professional
services components and support and
maintenance agreements may be more
appropriate.

29. When to Use a License and When
to Use SaaS
• If the application object code is still in beta
and/or is subject to very frequent revision,
then a subscription model may be more
appropriate for that SOFTWARE OWNER.
• A note here on beta or source code
licenses.

30. When to Use a License and When
to Use SaaS
• If either the SOFTWARE OWNER or the
SOFTWARE END USER is concerned about
cloud privacy and data security or if the
relevant regulatory environment
disqualifies a cloud deployment model for
those reasons, then a license model with
support and maintenance agreements may
be more appropriate.

31. When to Use a License and When
to Use SaaS
• If the SOFTWARE END USER is in a location
or facility that renders Internet access
spotty or unreliable, a license model may
be more appropriate.

32. When to Use a License and When to Use
SaaS
• If the SOFTWARE OWNER cannot affirmatively
state (warrant) that it owns the copyright in
and to or has rights to sublicense the
implicated code, a subscription model may be
more appropriate. This is the “warranty of
title” problem.
• Otherwise your client may get sued for
copyright infringement—remember
hypothetical?

33. When to Use a License and When
to Use SaaS
• If the SOFTWARE OWNER has both server-
based deployment AND an app or an API, a
hybrid model may be more appropriate.
• Consider the move to mobile . . .

34. When to Use a License and When
to Use SaaS
• Does your app already have an “upstream”
license in place, like the iTunes App Store
license?
• Do you need more/different?

35. www.hawleytroxell.com
THANK YOU!
Brad Frazer
bfrazer@hawleytroxell.com
208.388.4875
@bfrazjd