Aug 28 2011

Arbitration as a consumer dispute resolution tool

Several months ago the Supreme Court insulated arbitration clauses in consumer and other small claims settings from the most frequent challenge to their enforceability – the allegation that they are unconscionable unless they allow class action proceedings. The decision presents businesses with a choice – many will use mandatory arbitration clauses in licensing, online, services, and other contracts.

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Apr 29 2011

UCITA in court and doing well


When the Uniform Computer Information Transactions Act (UCITA) was being debated nationally in the late 1990’s and early 2000’s, it became part of a wildly intense debate about the nature of contract law that ultimately led to the rejection of two misguided efforts to revise ancient UCC Article 2. UCITA barely survived vitriolic and often dishonest attacks. It was enacted in two commercially major states and the concepts it set out have become mainstream judicial analyses, referred to in a number of legal treatises. 

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Feb 22 2011

Infringement and disclosure risk in development on copyleft platforms

While many companies that write apps or develop parallel platforms grounded in open source willingly disclose code and comply with copyleft rules (e.g., some transferees to also disclose their code), others prefer to protect (e.g., not disclose) some of their code and not force customers who resell products to disclose their code. The issue for these companies has always been how can they approach an open source platform or program without being caught in the copyleft “license” with a duty to disclose if they retransfer their products. The answer has never been certain, but the stakes today have never been higher.

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Jan 25 2011

Ninth Circuit in Vernor got first sale doctrine right

The Ninth Circuit revisited the ownership question involved in copyright first sale in Vernor v. Autodesk, Inc., 2010 WL 3516435 (9th Cir. 2010) and got it right, adopting a variation of the Federal Circuit’s DSC decision and the approach taken by all other Circuit Courts that have looked at the question.  The terms of the contract control whether the transferee becomes the owner of the copy.

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May 18 2010

Why are free and open sources licenses different?


Millions of dollars and thousands of hours have been spent during the last decade worrying about how to deal with free and open source software licenses. This leads me to ask ‘what makes these licenses different in a way that attracts all of this attention, both negative and positive?’

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Nov 22 2009

Standard Forms Often Need Reconsideration

In light of the many changes in privacy, intellectual property, and e-commercial law that have occurred in the past decade, standard forms and model agreements that were first brought into existence only a relatively short time ago should be re-examined to make them consistent not only with the demands placed by new law, but also with the new language and approaches that have become central to modern practice.

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Nov 8 2009

The Limits of First Sale Doctrine

One clear message of intellectual property law is that mere possession, or even ownership, of a product or a copy does not vitiate the rights-owner’s interest in and right to control use or disposition of the product or copy. First sale doctrine carves out a very limited exception to this.

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Oct 24 2009

Posting as Implied License


Merely posting a work online does not relinquish all rights. As in other environments, merely placing property in public does not release property rights. The Internet context, however, may indicate that some actions with respect to the work are implicitly permitted. 

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Sep 1 2009

Should Google be a regulated utility under its "Settlement"?


The Google Book Settlement (GBS) would give Google unprecedented power over hundreds of thousands of copyright owners and control of an asset that may become essential to 1) book publishers, 2) book authors, and 3) any entity that desires to operate a search or archive function regarding published books. The Settlement should not be approved unless it ensures all competitors and others access and fairly protects the copyright owners who were not represented at the “settlement” discussions and whose property is being stolen.

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May 11 2009

Flawed ALI Software Contract "Principles"

The proposed draft of the fundamentally flawed ALI Principles of the Law of Software Contracts has been published and, given the in-bred politics of the American Law Institute, will almost certainly be approved.  But then the Principles should be left to die a quiet and quick death.

   Although written by two respected academics, the Principles are fundamentally flawed in part because they were drafted with virtually no input from commercial software producers and drafted under the influence of a group dominated by people and companies who failed to achieve their goals in UCITA or in drafting revisions of Article 2.  They thus shifted over to a friendly forum they could dominate.  I will have more to say about this, but let’s start with an illustration – a misguided, non-disclaimable warranty that no “hidden” “defects” exist in software.


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Aug 18 2008

"Proprietary" and "free" licenses get a win, but is it contractual?


FOSS licensors applaud the Federal Circuit decision in Jacobson, but the real winners are the vastly more numerous software producers who reject the “free” software model. Why………?

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Jul 13 2008

The Supreme Court walked up to the edge, but left first sale and exhaustion doctrine intact.

The Supreme Court in Quanta Computer, Inc. v. LG Electronics, Inc., 2008 WL 2329719, 86 USPQ2d 1673 (US 2008)  confirmed both the importance of patent exhaustion as a doctrine and the appropriate limitations of that doctrine – the doctrine does not apply to transactions that are conditional in nature.  That means, simply, that the terms of a contract determine when or if exhaustion or first sale occurs.  That is how it should be.

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May 17 2008

The DC Circuit restores some rationality to antitrust law re Standards Setting Organizations (SSO) in the Rambus case.

I truly enjoy it when a court catches an administrative agency expanding their scope to advocate a particular view of what economic or political life should entail, and then tells the agency that it cannot rewrite law to suit its own preferences.  That happened to the FTC in Rambus, Inc. v. FTC dealing with standards-setting.  In most cases, conduct by an individual firm in an SSO creates no antitrust issues even if the firm failed to disclosure patents or other potential proprietary rights related to the standard. The Rambus court reaffirmed this rule.

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Feb 28 2008

Licensing in the absence of intellectual property rights

Licensing unrelated to any intellectual property right has been a common practice for generations - since at least the time of the civil war.  But there are some who think of licensing as only appropriate if there are rights to license and that, if the rights do not exist, the contractual license terms must be abrogated.  This is wrong, but a recent case indicates that drafting agreements in this context must be done with care.

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Nov 22 2007

First sale limits at risk - they should not be

The Supreme Court has accepted cert in the LG Electronics case.  The issue involves patent exhaustion doctrine.  This is an opportunity for the Court to affirm the right of a patent (or copyright) property owner to control the terms on which its invention or work is provided to the public – by license or sale.  But unless the rights-owner community pitches in, the Court may get it wrong.

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Sep 29 2007

Ninth Circuit abandons modern law and attacks standard forms

U.S. law has long held that non-negotiated, standard-form contracts are fully enforceable unless they smack of both procedural and substantive unconscionability. But the Ninth Circuit has embarked on a new path equating procedural unconscionability to mere use of standard forms without deception, and even though there is no lack of notice, no lack of choice and no other indicia of procedural unconscionability; other courts should reject this path and the Ninth Circuit should retract it. Continue Reading
Jul 17 2007

Software is not goods

The idea that licensed software should be treated the same in law as a refrigerator that has been sold is absurd and has drawn increasing levels of rejection. Now, one state and two additional appellate courts have joined in understanding that software is intangible. Continue Reading
Jul 8 2007

GPL 3.0 and third party patent owners

The final version of the GPL 3.0 has been released. Third party patent holders should not care unless they themselves make and transfer works containing software licensed under this new license, but if they do, they may risk losing enforcement not only of current, but of future obtained patents. Continue Reading
Jul 1 2007

E-Commerce should not be over-regulated

We wake up one morning and discover that a question we have been asking for the last decade or two may now be the wrong one.  The question was – how can we use law to enable businesses to use e-commerce? The question now seems to be: how can we shape law to support but to avoid over-regulating it? Continue Reading
Sep 10 2006


With the noise about the likely to fail GPL 3.0, it is easy to forget that we are still dealing today with existing GPL and its infectious brethren. The issue for those licenses is: can other software coexist with free and open source licenses? The answer is yes, but only with care.

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Jun 29 2006

Chopping at old antitrust trees

The Supreme Court has put to rest a lingering remnant of an age of hostility to IP - the fiction that a patent or copyright gives market power sufficient to support an antitrust tying claim when a license is conditioned on the licensee taking other property or rights.

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Jun 14 2006

Contracts trump fair use and reverse engineering

The ability to reverse engineer a product and the amorphous fair use privilege are not inviolate. They can be waived or supplanted by agreement. Contracts control subject only to ordinary standards that might find them anti-competitive or unconscionable in very limited cases.

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Feb 12 2006

New licensing law site launched

The Houston Intellectual Property and Information Law Institute has recently launched a new website providing information about selected cases and articles relating to licensing transactions.

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Nov 12 2005

Open source license proliferation, a broader view

The desire of OSI to curb "license proliferation" by changing its policies and the effort of FSF to draft a new version of GPL should cause many to pause. Why are these changes being considered? Is it finally time to understand FSOS on terms other than the communities own, self-defined terms given that those terms may change over time? Is it time to recognize 'Free Software" and "Open Software" (FSOS) as inherently a heterogeneous phenomenon that is part of a continuum of software licensing styles, rather than entirely separate and apart from other means of software distribution? I think so.

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Sep 6 2005

Is the GPL license a contract? The wrong question

Are the GPL and other free software and open source licenses contracts? Although often-asked, this is the wrong question and easily answered. Pieces of paper and digital files are not, themselves, contracts. Thus, the answer is that none of these license forms standing alone are contracts. But, of course, there is more to it than that.

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Sep 6 2005

Shrink-wraps are enforceable contracts

The vast majority of courts enforce shrinkwrap and "clickwrap" licenses even though the individual terms are not negotiated and even if the licensee did not read them. Since that is true, and has been true for a number of years in a number of settings, it is interesting still to see statements like "shrinkwrap contracts are unenforceable." The statement and others like it are simply wrong as a matter of law and of practice. There are few exceptions to enforceability in the cases and they most often can be explained by flaws in how terms were presented.

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