Obvious and non-obvious

No company is an island:

When English poet John Donne wrote his famous line “No man is an island,” almost 400 years ago, in many ways he was forecasting the future of business as it operates today.

No company is an island.

It may interact with universities, cooperate closely with key suppliers and vendors, collaborate with application developers, content providers, technology companies and design houses, plus work with various communities including 'open’ communities, innovation networks, as well as customers and end-users.

Agreements:

An agreement is a legally binding document between at least two parties that defines and governs the rights and duties of the parties to an agreement. It is legally enforceable because it meets the requirements and approval of the law.

In almost all of the relationships described above, there will an agreement in place. It may be a simple non disclosure agreement, a memorandum of understanding agreement, a collaboration agreement, a subcontractor agreement, a supplier agreement, a terms & conditions of use agreement, etc. etc. In many relationships, there may be multiple agreements in place.

As a company grows from a start-up to a scale-up to an established business entity, the number and complexity of such agreements will increase substantially.

Obvious versus non-obvious

Something is obvious when it is easily perceived or understood; clear, self-evident, or apparent.

I suggest that the collection of agreements within any company falls into two categories, namely

• obvious agreements
• non-obvious agreements

Obvious agreements are those agreements drafted by the company (or the other entity); reviewed, red-lined, updated and eventually signed off by the various entities involved.

I would argue that it is somewhat challenging for a company to miss these agreements due to the work involved in putting them in place. That said, I do come across companies dis-organized when it comes to the management and maintenance of such agreements.

The non -obvious agreements are those entered into by the company without any of these stages described above.

In this non-obvious category sit such agreements as ...

• Open source software licenses
• Creative commons licenses
• Open access licenses
• Terms & conditions associated with the use of cloud based services (e.g. Amazon, Microsoft, etc.)
• Terms & conditions associated with social media platforms (e.g. LinkedIn, Facebook, etc.)
• Terms & conditions associated with apps

An Intellectual Property issue:

I suggest that this is a major IP issue for companies. Why?

Firstly, almost all of the agreements mentioned above, both those that fall into the obvious category as well as those that fall into the non-obvious category contain IP provisions.

Many of these non-obvious agreements contain interesting IP provisions of one sort or another (including IP license provisions) yet in many companies, these particular agreements are not on the radar of the in-house IP function and/or their external IP advisors.

Secondly, the percentage of non obvious agreements within most companies is increasing.

Terms and conditions of use for LinkedIn:

In the terms and conditions of use for LinkedIn, there is the following provision ...

"As between you and LinkedIn, you own the content and information that you submit or post to the Services, and you are only granting LinkedIn and our affiliates the following non-exclusive license:

A worldwide, transferable and sublicensable right to use, copy, modify, distribute, publish and process, information and content that you provide through our Services and the services of others, without any further consent, notice and/or compensation to you or others. These rights are limited in a number of ways ..."

Open Source Software GPL v3 license:

Section 11 of the GPL V3 license has a provision on patents.

"A “contributor” is a copyright holder who authorizes use under this License of the Program or a work on which the Program is based. The work thus licensed is called the contributor's “contributor version”.

A contributor's “essential patent claims” are all patent claims owned or controlled by the contributor, whether already acquired or hereafter acquired, that would be infringed by some manner, permitted by this License, of making, using, or selling its contributor version, but do not include claims that would be infringed only as a consequence of further modification of the contributor version. For purposes of this definition, “control” includes the right to grant patent sublicenses in a manner consistent with the requirements of this License.

Each contributor grants you a non-exclusive, worldwide, royalty-free patent license under the contributor's essential patent claims, to make, use, sell, offer for sale, import and otherwise run, modify and propagate the contents of its contributor version.

In the following three paragraphs, a “patent license” is any express agreement or commitment, however denominated, not to enforce a patent (such as an express permission to practice a patent or covenant not to sue for patent infringement). To “grant” such a patent license to a party means to make such an agreement or commitment not to enforce a patent against the party.

If you convey a covered work, knowingly relying on a patent license, and the Corresponding Source of the work is not available for anyone to copy, free of charge and under the terms of this License, through a publicly available network server or other readily accessible means, then you must either (1) cause the Corresponding Source to be so available, or (2) arrange to deprive yourself of the benefit of the patent license for this particular work, or (3) arrange, in a manner consistent with the requirements of this License, to extend the patent license to downstream recipients. “Knowingly relying” means you have actual knowledge that, but for the patent license, your conveying the covered work in a country, or your recipient's use of the covered work in a country, would infringe one or more identifiable patents in that country that you have reason to believe are valid.

If, pursuant to or in connection with a single transaction or arrangement, you convey, or propagate by procuring conveyance of, a covered work, and grant a patent license to some of the parties receiving the covered work authorizing them to use, propagate, modify or convey a specific copy of the covered work, then the patent license you grant is automatically extended to all recipients of the covered work and works based on it.

A patent license is “discriminatory” if it does not include within the scope of its coverage, prohibits the exercise of, or is conditioned on the non-exercise of one or more of the rights that are specifically granted under this License. You may not convey a covered work if you are a party to an arrangement with a third party that is in the business of distributing software, under which you make payment to the third party based on the extent of your activity of conveying the work, and under which the third party grants, to any of the parties who would receive the covered work from you, a discriminatory patent license (a) in connection with copies of the covered work conveyed by you (or copies made from those copies), or (b) primarily for and in connection with specific products or compilations that contain the covered work, unless you entered into that arrangement, or that patent license was granted, prior to 28 March 2007.

Nothing in this License shall be construed as excluding or limiting any implied license or other defenses to infringement that may otherwise be available to you under applicable patent law."

Donal O'Connell is the Managing Director of Chawton Innovation Services Ltd.

His company's Aspen tool (coming to market in mid 2021) is designed to help start-ups and small companies better log and track both their obvious and non-obvious agreements.