User agreements and other legal questions

[Stephane Potvin-2]

Good day all,

I am new to this list and also new to the vertical market.

I have a develop a database I want to market. As part of the process  
I have met with a lawyer to get some advice. However as minutes went  
by the bill was getting always higher.

Her recommendations were to hire a lawyer for:
- writing a license agreement ($1500)
- researching possibility of patent and writing patent application  
($15 000)
- changing form sole proprietorship to corporation ($1000)
And the list goes on.

I am wondering if these expenses are indeed really necessary.

I am curious to know how other 4D vertical market developers handle  
these issues.
I would greatly appreciate some advice and to learn from your  
experience.
Canadian specifics prior experience would also be greatly useful.

Thank you,

Stephane
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[Pat Bensky-2]

Hi Stephane,

Here are my comments:

Licence agreement: Copy one from a software product you have bought and
change the names in the text. Look at a few and choose one that seems most
appropriate to your software.

Patent: Unless your software does something truly new and original there is
no point spending money on a patent. You might want to think about
registering a trademark - but this can also be expensive.

Incorporation: Probably a good idea because a) it gives you more credibility
and b) it gives you some protection.

HTH

Pat

--------------------------------------------------
CatBase: The Data Publishing Solution
CatBase Software Ltd.
T: [phone]
W: http://www.catbase.com
skype: pat.bensky
--------------------------------------------------

> From: Stephane Potvin <stephane.potvin@...>
> Reply-To: 4D Biz <4d_biz@...>
> Date: Tue, 18 Mar 2008 20:30:50 -0400
> To: <4d_biz@...>
> Subject: User agreements and other legal questions
>
> Good day all,
>
> I am new to this list and also new to the vertical market.
>
> I have a develop a database I want to market. As part of the process
> I have met with a lawyer to get some advice. However as minutes went
> by the bill was getting always higher.
>
> Her recommendations were to hire a lawyer for:
> - writing a license agreement ($1500)
> - researching possibility of patent and writing patent application
> ($15 000)
> - changing form sole proprietorship to corporation ($1000)
> And the list goes on.
>
> I am wondering if these expenses are indeed really necessary.
>
> I am curious to know how other 4D vertical market developers handle
> these issues.
> I would greatly appreciate some advice and to learn from your
> experience.
> Canadian specifics prior experience would also be greatly useful.
>
> Thank you,
>
> Stephane
> **********************************************************************
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[Mikey-3]

Mornin' Stephane,

Unfortunately you're in Canada, and I'm not, so it will be difficult
for me to comment directly on Canada.  However, since our legal
systems are sometimes a little similar,
1) Incorporating is a good idea anyhow, and at least in the USA $1,000
is cheap...of course now, if you could spend $1,000 US as a Canadian
you're even better off.
2) License agreement seems a little steep, but ballpark.
3) Unless you're going to make a killing on it and the idea is going
to completely set the world on fire, we have been advised repeatedly
to forgo the patent applications.
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[Mikey-3]

Commenting on Pat's Trademark comment, at least here, trademarks are
not very expensive, but names are not trademarked, symbols are - in
other words, your product's name cannot be trademarked, but the logo
can be.
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[Randy Engle]

Hello Stephane,

<Her recommendations were to hire a lawyer for:
<- writing a license agreement ($1500)

This seems reasonable if you don't feel able to pull it together yourself based

<- researching possibility of patent and writing patent application  
<($15 000)

I'd like to think you've got a truly fabulous product that merits this type of
cost.
This might be reasonable if your product were to assist in creating a
cold-fusion reactor, transporting water via fiber optics, or a system that is
able to guess winning lottery numbers....  ;-)
Otherwise, this looks like a couple of pretty nice lunches for the attorney.

<- changing form sole proprietorship to corporation ($1000)
<And the list goes on.

I think you can do this on-line yourself for $100 or so.
I don't know how Canada is different than the US for corporations.  It may be
more involved.

Regards

************************************************
Randy Engle, Creative Director
EngSoft Solutions/XC2 Software
mailto:randy.engle@...
415.258.9573 (Direct - Northern California)
503.650.5100 - (Main Office - Portland, OR)
415.258.9561 - Fax
www.xc2software.com
************************************************


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[Eric Weberg]

Stephane,

> Canadian specific prior experience would also be greatly useful.

While there are some differences, the concepts of incorporation and
intellectual property between US and Canada are generally similar.

> - changing form sole proprietorship to corporation ($1000)

In my opinion, doing business as a corporation (probably an LLC or an
S-corp) is always preferably to a sole proprietorship. Incorporation
limits your personal liability, provides some tax advantages, and eases
any future sale, merger, or new partners of your company.I believe the
fees of incorporation vary from state to state in the US; not sure about
Canada.Some resources discussing incorporation for small businesses:
http://jobfunctions.bnet.com/whitepaper.aspx?docid=54849
http://jobfunctions.bnet.com/whitepaper.aspx?docid=290527

 > - writing a license agreement ($1500)
 > - researching possibility of patent and writing patent application
($15 000)
Your intellectual property can be legally defended without the up-front
expense of a patent or trademark. Copyright provides some benefits, and
the concept of "prior art" can be used- among others. End-user license
agreements (EULAs) can help defend your company against lawsuits, but
some forms (e.g. shrink-wrap) are legally debatable. You can review the
basic concepts here:
http://en.wikipedia.org/wiki/Intellectual_property
http://en.wikipedia.org/wiki/Software_license_agreement

--
Eric Weberg
US Billing, Inc.
[phone] ext 125
ericw@...
http://www.usbilling.com
************************

>> From: Stephane Potvin <stephane.potvin@...>
>> Reply-To: 4D Biz <4d_biz@...>
>> Date: Tue, 18 Mar 2008 20:30:50 -0400
>> To: <4d_biz@...>
>> Subject: User agreements and other legal questions
>>
>> Good day all,
>>
>> I have a develop a database I want to market. As part of the process
>> I have met with a lawyer to get some advice. However as minutes went
>> by the bill was getting always higher.
>>
>>    

--snip--

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[Bill Weale]

In the US, patents on software are pretty unusual. Software is  
protected by copyright and that's free and implicitly yours until/
unless you explicitly assign it or it expires.

The usually-overlooked aspect about either patent or copyright  
protection is the cost of enforcing your rights and of collecting  
damages. There's no practical point enforcing your rights unless  
there's money you can collect. And the good news is that, if someone  
really has stepped on your property rights, has made a lot of money  
in the process and has assets you can reach, there's always an  
attorney around who'll take your case for a pretty minimal out-of-
pocket cost to you--as long as you give up 1/3 +/- of the $ recovered  
as a contingency fee.

8-)

One thing you can do to help yourself, and it doesn't cost anything,  
is to "mark" your programs and any printed material with your  
copyright claim plus the name and address of your business. That  
eliminates the "I didn't know" claim if you try to collect later and  
it might even prompt someone to contact you before the fact.

I'm not sure how others think, but one thing you didn't mention is  
the most important, IMO: copy protection/registration/activation  
schemes. The idea is to make it really hard, within the constrains of  
"marketability," to use your software if it hasn't been paid for.  
Better to put your programming skills to work on something that is  
practically effective than to "invest" in legal approaches that work  
only in theory...

Bill Weale






On Mar 18, 2008, at 8:30 PM, Stephane Potvin wrote:
> - researching possibility of patent and writing patent application  
> ($15 000)

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[Mikey-3]

Bill,
I think you are incorrect about the software patent claim.  As you
know, you can't patent software, but you can patent "methods", i.e.
algorithms, which is what is normally done.  These patents are called
Utility Patents, and are the more common of the two types of patents
in the US (as opposed to a Design patent).  They are used to protect
objects, methods, and states of matter (I'm missing one, but you get
the point).

You will find that all the big players regularly patent parts of their
software, including Apple, Microsoft, Google, etc.  Amazon owns one of
the most controversial software patents of all time, the so-called
"one-click" patent.

That said, it's expensive to research and file for a patent, and it is
even more expensive to litigate one, so you should have a good reason
for doing it first, because you also have to disclose your invention
publicly, which means that you have lost your trade secret.
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[Bill Weale]

I was trying to point out that it's *really hard* and expensive to  
get a patent. Your success is driven as much by your ego and your  
checking account balance as it is by the merits of your work. It  
takes a lot of energy and money that most businesses can use in  
better ways. And technology patents are more "perishable" than any  
others--your "product" has a good chance of going obsolete before  
it's even reviewed.

It's just a lot more practical to use something that doesn't cost  
anything (copyright) to obtain and something you can do with your own  
skills--copy protection.

--www


On Mar 25, 2008, at 12:22 PM, Mikey wrote:

> Bill,
> I think you are incorrect about the software patent claim.  As you
> know, you can't patent software, but you can patent "methods", i.e.
> algorithms, which is what is normally done.  These patents are called
> Utility Patents, and are the more common of the two types of patents
> in the US (as opposed to a Design patent).  They are used to protect
> objects, methods, and states of matter (I'm missing one, but you get
> the point).
>
>

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[Stephane Potvin-2]

Good day all,

I want to thank you for your insightful advices.

Also, just to answer one comment, my program will require password  
activation. I am just learning to implement the Registration module  
of Foundation 4, which I am sure most of you know.

Thank you again,

Stephane Potvin
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