You probably already knew that a software license is a contract between an owner of computer software and an end user of that computer software – sometimes called an End User License Agreement or “EULA” – that specifies the scope of the rights granted by the owner to the user.  But what you may not know is the meaning behind the many different types of software and licenses out there.  Here are just a few examples of the types of software and licenses typically used:

• “Free software” or “open source software” is software which can be used, copied, studied, modified and redistributed without restriction.  “Free” in this sense, however, doesn’t mean “gratis” but rather “free to do with as you please.”  The usual way for software to be distributed as free software or open source software is for the software to be accompanied by a software license and a copy of the source code of the software.
• “Freeware,” by contrast, is software that is available free of charge but is nevertheless generally proprietary, and therefore restricted as to its use.  The only criteria for software being classed as “freeware” is that it be provided to users at no cost, thus freeware can be subject to any licensing terms its owner deems necessary.
• “Shareware” is a marketing method for software, whereby a trial version is distributed in advance and without payment, either by downloading from the internet or, in some cases, from magazine cover-disks.  A shareware program is often accompanied by a request for payment, and the software’s distribution license often requires such a payment, after a set period of time has elapsed following installation.
• “Click through” and “shrink wrap” are terms used for software licenses that require a user to agree to the terms of the EULA by either clicking an “ok” or “I agree” button on a dialog box or pop-up window for downloaded software, or by simply removing the shrink wrap packaging coating retail software boxes (although the latter is not necessarily exclusive to software sales and has come under judicial scrutiny).  The content and form of every “click through” or “shirk wrap” agreement will vary widely, and the terms should be (but rarely are) reviewed before using the software.

Bonus: Did you know, the U.S. Copyright Act, 17 USC § 117, permits the owner of a copy of a computer program to make copies necessary for the use or backup of a computer program?

–Matt

This YouTube video is making its way through the blogosphere.  It is a very impressive mash-up of homemade music clips, each of which the author carefully credits.  This video is a terrific illustration of the mash-up art movement — a movement that is frequently at odds with our current copyright policy.

If you are interested in this topic, myself and others will be addressed it as part of the “Remixing the Rules” panel discussion taking place on Thursday, March 26, 2009, from 1 – 2:30 p.m. at the WORK Gallery in Ann Arbor.

–Matt

Our very own Don Baker is quoted in an article on the sometimes tricky implementation of royalty triggers in license agreements in this month’s edition of Technology Transfer Tactics, a publication on best practices in tech transfer (paid subscription required).  Here’s the quote:

Basing a royalty on annual sales, as Alder discovered, is one of those areas with a distinct grayish tint. “You have to deal with defining ‘annual,’” explains Donald H. Baker Jr., a principal at Safford & Baker PLLC, Bloomfield Hills, MI. “Does that mean calendar year sales? Sales during a rolling 12-month period? And do you measure it when it’s collected or when it’s accrued? You have to be very careful to be sure the terms are crystal clear. There’s no substitute for extremely tight definitions.” He adds: “If you have trigger, you’ve got to build a lot of structure around anti-avoidance. Say you have a license agreement that says the licensee owes 6% of net sales until those sales hit a certain point, and then after that, it’s going to be 8%. Now you’re talking about, ‘Net sales to whom? End users? Affiliates?’ Any time you’ve got a trigger, you have to work harder.” Still, he calls royalty triggers “a really useful mechanism, because having flexible approaches to solving economic problems is another arrow in your quiver.” Indeed, he enthuses, “I think they’re great, and I use them all the time, and in a variety of contexts. They really make a lot of sense because they recognize that a constant royalty rate rarely recognizes what’s going to happen across the life of the IP. Triggers represent simple recognition of the fact that in the early stages of an enterprise, the licensee will be spending more to develop the market. So why not incentivize that somehow?”

–Matt

As readers of this blog know, I’m Chair this year of the Arts and Entertainment Section of the State Bar of Michigan, otherwise known as ACES.  Below is a press release for one of our upcoming events.  I hope you can make it.

–Matt

Free Educational Panels at the 47^th Ann Arbor Film Festival

The Arts, Communications, Entertainment & Sports (“ACES”) Law Section of the State Bar of Michigan is co-hosting with the Ann Arbor Film Festival (“AAFF”) two free educational panels during the 47^th Ann Arbor Film Festival.

The “Michigan in Motion” panel discussion is taking place on Wednesday, March 25, 2009, from 1 – 2:30 p.m. at the WORK Gallery in Ann Arbor.  The new film tax incentives in Michigan created a national buzz in the past year, with Hollywood film projects receiving much of the attention.  But what do the film tax incentives mean for the independent filmmaker and new media artist?  Who qualifies, and what projects benefit most?  Are the incentives working as intended and what’s their future?  This panel serves to provide an insider’s guide for independent filmmakers from several of Michigan’s experts in the field, including tax specialist Julie May and attorneys and ACES members Howard Hertz and Ethan Bordman.

The “Remixing the Rules” panel discussion is taking place on Thursday, March 26, 2009, from 1 – 2:30 p.m. also at the WORK Gallery in Ann Arbor.  One of the most critical and ongoing debates in the global entertainment industry is the battle over fair use rights and copyright law in the arts.  Whether music, film, new media or beyond, this issue does not just affect these industries, it is redefining the entertainment world as we know it.  Join us for an animated and educational discussion on copyright law, fair use, and infringement; where our panel members considers the current state of copyright law, whether it is compatible with the growing movement of remix art and culture, and whether it is serving or stifling the very creativity it is supposed to foster. Panelists include sample-based filmmaking legend Craig Baldwin, Negativland founding member Mark Hosler, and copyright attorneys and ACES members Larry Jordan and Matt Bower.

Both panels are free and open to the public as part of the commitments of the AAFF and ACES to educational outreach.  The WORK Gallery is an exhibition space provided by the U-M School of Art & Design, and is located at 306 S. State Street, Ann Arbor.

About the Ann Arbor Film Festival

The Ann Arbor Film Festival is internationally recognized as a premiere showcase for creative, inspiring, and influential films of all types: avant-garde and experimental, story-based narratives, documentaries, and animation. As the longest-running film festival of its kind in North America, the AAFF is steeped in a rich tradition of ground-breaking cinema. Thousands of influential filmmakers have showcased early work at the AAFF, including luminaries such as Kenneth Anger, Agnes Varda, Andy Warhol, Yoko Ono, Gus Van Sant, Barbara Hammer, Lawrence Kasdan, and George Lucas. The 47^th Ann Arbor Film Festival takes place March 24 – 29^th, 2009.

About the ACES Law Section of the State Bar

For thirty years the Arts, Communications, Entertainment & Sports Law Section and its members have helped thousands of artists and entertainers by participating in and supporting the cultural organizations and activities of the arts, communications, entertainment and sports industries of Michigan.  ACES supports these industries through partnerships, seminars, public service programs, advocacy, and publications, as well as through fostering and developing the professional skills and knowledge of its members.  Membership in the ACES is open to all members of the State Bar of Michigan.

The Ann Arbor group a2geeks, previously written about here, is hosting an evening of mingling for technology enthusiasts, investors, bloggers, and entrepreneurs (and, one supposes, even lawyers) at their first TECH cocktail event on Friday, March 27, 2009, starting at 6 p.m. at Live at PJ’s.  This event coincides with Entreprelliance (hosted by the University of Michigan’s M-Powered) and Detroit Startup Weekend.  A full house is expected.

Originated in Chicago, TECH cocktail is a community building startup founded in May 2006 by Frank Gruber and Eric Olson (who will be in attendance).  TECH cocktail looks to help the Ann Arbor area and other technology communities like Chicago, Boston, Boulder, Champaign and DC amplify the technology signal while having fun doing it.  TECH cocktail will offer a handful of startups an opportunity to showoff in an expo-style to the rest of the community.

RSVP here.

–Matt