Law Articles - September - December 2011

The following articles were gratefully supplied by Dilanchian Lawyers and Consultants - Intellectual Property and Innovation Professionals.

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10 conversations about business models

Friday, 30 December 2011
In 2007 we extended an invitation to readers to call for a conversation on 10 possible topics. Happily some took up the offer.

The nature of the questions kept them relevant. So for 2012 we repeat them and our invitation. If you want to discuss the 10 topics below call us whether you are a client, collaborator or a stranger. We're proposing an open conversation to exchange thoughts, play cards and see where that might lead.

9 core competencies for intellectual property

Monday, 19 December 2011
A business journalist asked me today: "What role can directors play to secure their organisation's intellectual property".

Nice question. But I'd like to answer a better question. It's this: "What role can directors play to build and protect an intellectual property business and its future?"

The employment vs contractor agreement distinction

Monday, 19 December 2011
Under law in Australia and most countries whether A is B's employee or, alternatively an independent contractor, is critical for ownership and protection of intellectual property. And that's just the beginning.

In Australia, if A is an employee numerous legal consequences follow. Superannuation must be paid, income tax must be taken out, and workers compensation insurance put in place.

To answer the question of whether A is an employee involves considering layers of law, facts and circumstances. There are variations for employees working in the private or public sector, under awards or enterprise agreements, or Common Law contracts and so forth.

Is your brand an IP risk or IP asset?

Monday, 19 December 2011
Investment to create wealth through ownership of a brand is wasted if there is ignorance of intellectual property law ("IP"), IP search procedure, and IP protection tasks.

This is illustrated by probably the most common of all IP risks - legal issues arising from poorly selected brands and poor product identification.

Consider this scenario - Company A names a product and releases it . Assume the product name has IP rights. Some time later Company B launches a product with a similar name and for the same market.

World's best wine label 2011

Thursday, 15 December 2011
Decanter reports that the World Label Awards Association has given the 2011 best label design award to the South Australian wine, Alpha Crucis Shiraz 2008.

It's produced by Chalk Hill Winery in McLaren Vale. Related articles:

* [VIDEO] Picking a trade mark
* Hunter Valley wine brands and branding
* "New England Australia" is now a geographic indicator for wine
* Is Australian cheese properly branded?

Sham independent contractor agreements

Thursday, 15 December 2011
Can a person be legally an "employee" if he or she works casual or part-time for multiple businesses? What makes a person an employee and not an independent contractor?

In law the short answer is many factors. There are major financial and legal consequences. Employers have statutory obligations and employees have statutory entitlements, eg to superannuation payments.

The employees or contractors question arose in a 2011 court case involving the Australian Tax Office - On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366.

Start-up funding checklist

Wednesday, 14 December 2011
Every start-up operates in its own unique circumstances. It has its own mix of products, people, markets and operating methods. It has its own vision of its past, present and future. Differentiation moves markets.

Every start-up seeking funding or raising post-establishment capital also requires a customised pitch. It pitches its circumstances and vision to raise funds. Information moves markets.

Sharing information on differentiation brings together investors and start-up entrepreneurs or founders. Collaboration supported by documentation moves markets. These facts have grown trade since ancient times. This article is a "how to" checklist for start-ups and investors seeking to get together.

Distribution agreements in 3D

Monday, 12 December 2011
"What product exclusivity am I getting?" This is a common first question asked by prospective distributors considering a draft distribution agreement. It's usually followed with a money question such as: "How much do I have to pay the supplier or manufacturer?"

Let's consider these questions and techniques for assessment of distribution proposals and draft distribution agreements. The aim is to design realistic, workable and practical arrangements between manufacturers, suppliers and distributors.

The starting point is to recognise that these exclusivity and money questions are often based on assumptions due to what we'll call a 2D view of distribution arrangements. Having drafted or reviewed over 350 distribution agreements, I see them in 3D.

Protect your IP or lose it

Thursday, 08 December 2011
Over recent months that's the learning from our client work as well as from external developments in intellectual property ("IP") law in Australia and abroad. This article is an update on those external developments, answering these five questions:

• Trade secrets: Who did DuPont sue to protect it's Kevlar trade secrets and win $US919.9 million in a U.S. jury trial?
• Patents: Why has Apple Inc. (with iPad) versus Samsung (with Galaxy Tab 10.1) gone to the High Court, the highest court in Australia?
• IT Security: What can an employer do to retain control over Twitter, Facebook and social media web presence against former employees and web masters?
• Copyright and safe harbour principle: How is the forthcoming High Court decision in Roadshow v iiNet (ie Hollywood studios and some Australian ring-ins versus a big ISP) merely one of many battle fronts in the ongoing war over copyright and revenue streams?
• Trade marks: Do you think of where you might make a legal complaint or lodge a court action when you think of your online marketing or e-commerce ventures? You should.
• Facebook faces that issue in a case against Faceporn.com, a business established in Norway. So have the Australian distributors of Affinage products.

Software as a service contract Q&A

Monday, 21 November 2011
We are seeing a growing trend among our software developer clients. They are entrepreneurial business of all sizes. They're run by smart people who know only too well that the value in what they offer is often not found in "out of the box" software or stand-alone products. They realise customers are busy people who value software that serves niche needs and is efficient, reliable, up-to-date and easily maintained. These software developers and their customers are realising that the best way to provide this is to keep the software developer in the loop.

Intellectual property law protects investors

Thursday, 17 November 2011
The rationale for intellectual property law has changed over time. The topic became highly politicised a decade or two ago with rarely unconfused debate.

Logo copyright blocks copying

Friday, 11 November 2011
A client asked today if he could reproduce logos of big companies without permission onto a brochure which he'd designed to promote his new marketing services business. His intention was to make the brochure more attractive. He wanted to illustrate results he could deliver and make the brochure a more convincing marketing tool. The brochure promotes his services as a marketer for businesses wanting to build their brand. It's a simple question. I'll try to keep the answer simple too, and short.

How to take a business online

Wednesday, 09 November 2011
"There are certain things we need to get down way before we get to the point of drafting agreements or changing agreements." This is how I ended my video, Prerequisites for Technology & IP Contracts. Imagine you run a company named Offline Pty Ltd. Its revenue is declining. It wants to spend its savings to launch a parallel business to be named Webco Pty Ltd. This web business case study illustrates the required preparatory work for taking a business online. Assume Online Pty Ltd is willing to spend say $20,000 to get a smart website with many trimmings.

App strategy on four IT platforms

Wednesday, 09 November 2011
Apple has become a lead innovator in shaping the competitive landscape for mobile devices and apps. This is an outcome of its integrated business strategy, hardware, software and user interface initiatives. These are evident in the launch of iTunes and iPods in 2001, iPhone in 2007 and the iPad in 2010. Each blind-sided old and new competitors and indeed their industries. Strategy is also evident in Apple's decision, during R&D on touchscreens, to prioritise going to market first with iPhone over iPad due to seeing a clearer "go to market" strategy, to quote Steve Jobs.

Risk management critical in realpolitik and law

Monday, 07 November 2011
I've found as a lawyer that I use historical analysis to understand and advise on proposed client deals and decisions. Like business law, history involves gathering evidence principally documentation, putting it into order usually chronological, and letting examination produce results.

In business law this approach helps study proposed business and legal relationships. In history relationships can be between ideas, actors, forces and responses. In business law they involve entities, rights, obligations, and prohibitions. Same, same but different.

I read a lot of law and a lot of history, they inform each other. One of my favourite sources is the Conversations with History series on YouTube from the University of California, Berkley. It has a great format, a scholarly interview for an hour or more usually with a historian who has written a recent book.

Risk management critical in realpolitik and law

Monday, 07 November 2011
I've found as a lawyer that I use historical analysis to understand and advise on proposed client deals and decisions. Like business law, history involves gathering evidence principally documentation, putting it into order usually chronological, and letting examination produce results.

In business law this approach helps study proposed business and legal relationships. In history relationships can be between ideas, actors, forces and responses. In business law they involve entities, rights, obligations, and prohibitions. Same, same but different.

I read a lot of law and a lot of history, they inform each other. One of my favourite sources is the Conversations with History series on YouTube from the University of California, Berkley. It has a great format, a scholarly interview for an hour or more usually with a historian who has written a recent book.

Prerequisites for technology & IP contracts [VIDEO]

Wednesday, 26 October 2011
A terminology issue exists in a contract if key terms are not defined or are poorly defined. Terminology issues are commonplace in technology and intellectual property (IP) agreements. To be meaningful these types of agreements require good situation-specific definitions.

IP increases food and beverage shelf-life

Tuesday, 18 October 2011
This Mumbrella video on YouTube illustrates that the practice of imitating popular supermarket products is rife at Coles. Coles no doubt checks the legality of each of its imitations.

Here's a few suggestions on how manufacturers and product originators can improve their legal protection. Each involves being a futurist in use of intellectual property law. Each involves the principle that it's better to design your IP than IP your design.

How to protect brands with letters of demand

Wednesday, 12 October 2011
To prepare a letter of demand to protect a name you have two main tasks. Assume you claim ownership to the name and today discover a competitor using an identical or similar name. It might be for a similar business or for comparable products or services.

Task 1: First, gather facts by listing registrations you have for any relevant trade marks, company names, domain names or business names. You're sure to have some evidence here, maybe even if it is a product name or brand.

Task 2: Next, gather facts by listing your evidence of use of the name or brand in the course of trade. This task is difficult for many businesses.

In-house standard contract - drafting challenges

Tuesday, 11 October 2011
Each of the in-house standard contracts we're currently drafting for clients involve thinking about their daily practical use. One is for an established wealth management consultancy. Another for a supplier of hosted customised software. Both require us to design and test like an engineer designing a car of the future. The relatively easy bit is drafting legal wording for compliance with law and making legally effective agreements.

The hard bit is finessing and designing when and how each client will deal with its business tasks. That's the work that minimise the most risks. They are the client's practical tasks of writing business proposals, project plans, scope of work or specifications, and setting price expectations.

Search and register names at your own risk

Thursday, 06 October 2011
A prospective client this week sought to register a name as a business name or company name. He did his own online name availability search... or so he thought. On seeing an identical name on a business name register in another state he wondered if he should still proceed with the target name. It was still available as a domain name and trade mark... or so he thought. I wrote on this topic in What trade mark professionals do. Today I had to be blunt. Here's what I wrote.

People create intellectual property

Thursday, 06 October 2011
Here's six questions designed to help your company or organisation create intellectual property. Based on your response, prioritise what to do next.

1. Do people love work at your place?
2. Do people at your place feel their careers and the business is developing?
3. Are they trained to take both to the next level?
4. Are the paths for that clear to all?
5. Do the employment contracts align with those paths?
6. Is there credible evidence for your answers to these questions?

These question are focused on people. My personal experience points to people as the top priority. As further evidence let's see what two great inventors working with teams have said.

Lightbulb on Steve Jobs

Thursday, 06 October 2011
We've all learned a lot from Steve Jobs (1955-2011). He's inspired a great deal of thought and writing on this Lightbulb law blog.

In memory of his unforgettable life and work, below is a list of my articles about him or shaped around his work. He won't stop inspiring. Great people never do. Each time I look up at the clouds, he'll be beaming down.

"Made for mobile device" opportunity

Wednesday, 05 October 2011
The window of opportunity is growing for ventures and developers if they have made for mobile device apps, content or services. Mobility and mobile device screens (smartphones, tablets, e-readers) make possible new functionality and uses for devices. For example it would be useful to know how readers of The Australian Financial Review use their iPads, about 30% of them have iPads! It's a niche, and there are others hiding in research data. What's exciting about facts like that is that for developers and their investors mobile device app, content or services development provides a point of market entry.

App development myths and legal tasks

Wednesday, 28 September 2011
Software development is a field with many myths. Here's three, following by a myth busting extract from an application development tasks list. There's the myth of a first mover advantage. Very few successful IT companies were first in their field. Not Google for search engines, not Microsoft for PC operating systems, not Apple for phones or digital music players, and the list goes on.

Cloud contracts and business models

Thursday, 22 September 2011
As our firm is currently working on many contracts for client cloud projects, I listened to this long video and recommend it: The Future of Cloud Computing. It's a panel presentation held at The Commonwealth Club in California. Some very interesting points are made by the first two speakers.

10 legal tasks for an import or export business

Tuesday, 13 September 2011
Your training and experience shapes how you investigate and understand a business. Accountants look for numbers, geeks ask about IT systems, and journalists seek news. As a business lawyer I read contracts. I've reviewed over 5,000 contracts in my career.

This Friday I'm running a hypothetical at an exhibition for importers and exporters. The topic is Negotiating Your Supplier and Distributor Contracts. In preparation, I created a handout listing 10 legal tasks for exporters and importers.

Letter of demand tips for names and trade marks

Monday, 12 September 2011
Can you file a trade mark application yourself in Australia, without a lawyer or trade mark attorney? Yes. Should you if you don't have substantive experience? No.

Do-it-yourself applications can be dangerous, inadequate, or full of holes for lawyers to drive trucks through. Here's three reasons and hints on why you'll get value-for-money by outsourcing the job to professionals, at least until you gain experience.

Employment contract repudiation as seen on Facebook

Thursday, 08 September 2011
Can an employee's strongly worded status update on Facebook repudiate his or her employment contract? Take two. Could the update be evidence of an employee's unwillingness to perform contractual obligations, so serious as to give the employer a right to terminate the employee? A fuller definition of repudiation appears in the endnote below.

Certainly, Facebook content is increasingly cited in court cases, including in divorce and employment disputes. Posts have been used as evidence to justify termination of employees. But could a status update, post or comment repudiate a contract, not just put it at risk?

Book proposal checklist

Thursday, 08 September 2011
I've been a publishing lawyer for 28 years. In the last year I've been asked by three different friends how to gather thoughts to make a proposal to a book publisher for a non-fiction title. Here's my most recent advice, stripping it back to a checklist of seven tasks.

Intellectual property frenemies

Thursday, 08 September 2011
For decades the Beatles and Apple Computer, Inc were frenemies. Entities associated with The Beatles sued Apple Computer, Inc three times over almost three decades. They were big cases, they cost a lot to run. They cost Apple Computer even more to settle. This mostly trade mark dispute story has been retold many times. For example see Wikipedia. It's the frenemy relationship notion that interest us here.

Copyright legal advice pays long term

Saturday, 03 September 2011
Yesterday there was confirmation that legal advice pays, sometimes only long term. Phone Directories Company Pty Ltd, a small Queensland-based telephone directory company, struck down giants - Telstra, Sensis and their claims to copyright in listings in the Yellow Pages and White Pages. Victory came to Phone Directories when yesterday two judges of the High Court of Australia refused the Telstra and Sensis application for special leave to appeal. In Australia the High Court is the final court of appeal.

Contract negotiation for imports and exports

Wednesday, 31 August 2011
Few people know that usually more can be gained in a pre-contract negotiation than in negotiations after a written contract is supplied. It's about the importance of process over documentation, preparation over punctuation, deal making over contract drafting. To teach this, since the mid-1990s I've run three hypotheticals on the art of contract negotiation.

The hypothetical are both entertaining and informative. I prepare a script and characterisation for the players. The script allows for a great deal of improvisation. The characters are a panel of "actors" (real people in business playing their real life roles, eg businessperson, lawyer, consultant). The plot involves them talking through a deal in direct negotiations on stage. After many issues arise, this live deal making usually ends in a written contract.

The first and probably best hypothetical I ran was in 1995 for developers of multimedia or IT products at the first national conference of AIMIA. The script had a developer with digital media rights to the book, A History of Australia. The person playing the developer role engaged in negotiations with a panel comprising the book author, book publisher and a CD-ROM distributor. They negotiated together on stage bringing the print book to life on a CD-ROM. DVDs and the internet were not technically or commercially feasible back then.

Copyright exception - fair dealing in news

Wednesday, 24 August 2011
A recent episode of the ABC's Media Watch highlighted the expanded use of watermarking in TV news video footage and news photos. It highlighted ticker tape style watermarks on news video footage and multiple watermark labels on news photos. News source logos have long appeared as watermarks in reports. The following Channel Nine video demonstrates the expanded use of watermarks as well as use of YouTube for public relations to shame Channel Seven.

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