I have recently attended a great seminar on business licensing.
Indeed, licensing can be a great way to grow a business and widen one’s streams of passive income.
Licensing has an obvious advantage over franchising in that it imposes substantially less mandatory requirements over the licensor.
It may appear that licensing is some kind of franchising-lite.
Whether or not it is so, it is very important to keep one thing in mind.
By definition, a license is a permission to do something that no one would have the right to do without such permission. A license is not a right, it’s a permission.
The corollary from this definition is that for there to be a valid license, the license should cover something that you can legally stop others from doing. Just like it would be very difficult to enforce a license that allows someone to breathe in exchange for a 10% royalty, it would be difficult to enforce a license pursuant to which a business is licensing something that is readily available to the public without any restrictions.
Aside from properly documenting your intellectual property in the form of copyright, trademarks and patents, you should also take great care in keeping your secrets secret. If you fail to secure your confidential information, you may one day find yourself in a courtroom with a judge who would have little sympathy to your attempts to force a competitor pay you for something that you neglected to protect. Unless your IP is properly protected, you cannot license it out. Let me rephrase that. You may be able to license it out, but it would be difficult for you to enforce the terms of such license.
Intellectual property is an important (and sometimes, the most important) asset of your business. Whether or not your strategy involves licensing your business systems to others, you should always keep in mind that your actions have consequences.
If building business assets is a part of your strategy (and it should be), then having a meaningful IP strategy is a must!
On December 4, 2012, I delivered an "Intellectual Property in Plain English" seminar to over 60 members of Vancouver Business Network.
Those who attended the seminar walked away with:
– 5 big ideas about intellectual property and the law in general that will answer 80% of all questions about IP;
– 5 reasons to register trademarks;
– 7 one-word shortcuts to instantly identify different types of intellectual property.
Below, you can watch highlights and testimonials from the seminar.
If you would like to see the whole seminar, please sign up in the form below.
Today, I saw an avalanche of my Facebook friends posting the following statement in their timeline:
In response to the new Facebook guidelines I hereby declare that my copyright is attached to all of my personal details, postings, writings, comments, illustrations, comics, paintings, professional photos and videos, etc. (as a result of the Berner Convention). For commercial use of the above my written consent is needed at all times!
(Anyone reading this can copy this text and paste it on their Facebook Wall. This will place them under protection of copyright laws. By the present communiqué, I notify Facebook that it is strictly forbidden to disclose, copy, distribute, disseminate, or take any other action against me on the basis of this profile and/or its contents. The aforementioned prohibited actions also apply to employees, students, agents and/or any staff under Facebook’s direction or control. The content of this profile is private and confidential information. The violation of my privacy is punished by law (UCC 1 1-308-308 1-103 and the Rome Statute).
Facebook is now an open capital entity. All FB members are recommended to publish a notice like this, or if you prefer, you may copy and paste this version. If you do not publish a statement at least once, you will be tacitly allowing the use of elements such as your photos as well as the information contained in your profile status updates...
As an intellectual property lawyer and someone who is known for saying that if you require complete privacy, you shouldn’t post anything on the internet, I just couldn’t pass up this opportunity to comment why the quoted statement makes very little sense.
First of all, users’ relationships with Facebook are governed by a contract, namely their Statement of Rights and Responsibilities, which clearly state:
By using or accessing Facebook, you agree to this Statement, as updated from time to time…
Essentially, publicly traded or not, our relationship with Facebook is the same as in the case of any other continuing framework agreement – it’s contractual, like any other.
Think, for example, of a library. When we get a library card, we agree to stick to certain rules that govern our use of the books and the premises. Until we actually go to the library and borrow a book, we care very little about our mutual rights and responsibilities (unless there’s an annual fee payable for the privilege of continuing to hold the library card). Once we walk out of the library holding a book, however, we have suddenly assumed many responsibilities: to take good care of the book, to return it on time, to pay a fine if we don’t.
Similarly, just because we signed up to Facebook, very little has changed in our lives until we actually started posting stuff – comments, status updates, photographs, etc.
Like any other contract, it can only be changed unilaterally if both parties agreed to such a possibility. Section 14 of the Statement of Rights and Responsibilities states that Facebook can change the rules at any time, by giving users notice and, in some cases, an opportunity to comment on the changes – and users agree to it by continuing to use Facebook:
Your continued use of Facebook following changes to our terms constitutes your acceptance of our amended terms.
Not surprisingly, no such possibility exists for unilateral changes initiated by users.
What this means is that if a user does not like the rules, the user has two options:
1. negotiate a direct deal with Facebook pursuant to which the user (or everyone else as well) will be accorded other terms;
2. stop using Facebook or even close down the account.
That’s pretty much it.
Posting a statement that is inconsistent with Facebook’s Statement of Rights and Obligations is akin to borrowing a book from a library and then sending a library a napkin with a note on it stating that you will return the book in a couple of years, maybe. Wouldn’t be very helpful, would it?
Second, you own copyright in your works automatically, you don’t need to declare anything to place your works under protection of copyright laws, that is as long as your works CAN be protected by copyright at all. In other words, if you created something that is an original literary, dramatic, musical or artistic work, that work is automatically protected in Canada and – through a number of international treaties – virtually worldwide. On the other hand, if what you are trying to protect is not a work capable of copyright protection, then no declaration will render the work copyrightable. So stating that you “declare that your copyright is attached to all” of that stuff listed in the declaration is absolutely meaningless, because the declaration does not give or take away any rights to and from you.
Third, Facebook cannot legally exist unless users allow it to use what users post. It’s not that users post their comments in a vacuum. All of these comments go to Facebook’s servers. Facebook stores these comments and displays them according to the users’ privacy settings. Unless Facebook secures permission to store user content on its servers, Facebook would be violating its users’ intellectual property. The nature of any license is precisely that – to make what would have otherwise been an infringement allowable to the licensee.
Section 2(1) of Facebook Statement of Rights and Responsibilities states:
For content that is covered by intellectual property rights, like photos and videos (IP content), you specifically give us the following permission, subject to your privacy and application settings: you grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook (IP License). This IP License ends when you delete your IP content or your account unless your content has been shared with others, and they have not deleted it.
With one small exception, this is perfectly reasonable. Facebook cannot expose itself to a hundreds of thousands of copyright infringement lawsuits per minute: according to these statistics, 684,478 pieces of content are shared on Facebook every minute.
The small exception is that the license that you grant to Facebook says that it is “sub-licensable” but it does not say that it can only be sublicensed for non-commercial purposes. Technically, this could mean that Facebook could publish a book of best photographs and comments. There are a few safeguards, however. On the one hand, the license automatically terminates when a user deletes the post (unless someone else has reposted and not deleted the post). On the other hand, it’s hard to imagine that Facebook is run by suicidal people. How many people are going to continue posting about their private lives if Facebook does anything even closely resembling publishing such book?
Fourth, when you share your information with anybody but yourself, there is always a risk that someone else will make that public. We all have heard the horror stories about someone accidentally hitting REPLY ALL instead of just REPLY. We’ve all heard stories about someone forwarding too much of a confidential correspondence to the wrong person. Even if you tell Facebook to disallow others to “share” your content, there is always such thing as “copy-paste”.
The answer is very simple, if you want your stuff to remain private, don’t post it on the web, ever – not through Facebook, not via Twitter, not on your blog, not on your website, not in YouTube comments, not through a game server of a new cool app – EVER!
There is always a balancing act between privacy and convenience. Think about your desktop computer. You may use a single password on all of your platforms, save all the cookies and have no passwords wherever possible. This will save a lot of time but your system will be a hacker’s dream.
On the other hand, you can install firewalls, unique 30-character passwords for every website, social media and email account, disconnect from the internet unless you are actively using it, never store any personal information on computers with internet access, etc. This will make things much safer, but much less fun to use.
Facebook is no exception. You can’t expect to be selectively social. You can’t push the toothpaste back in the tube. If you want to be on Facebook, use your brains and don’t post stuff that you wouldn’t want someone 3 years down the road to see. Don’t expect someone else, including Facebook, to fix things for you. Take responsibility for your actions.
Don’t get me wrong. I’m a sucker for conspiracy theories about Google, Facebook, communist implant in the White House and the global caliphate. But I also love the gadgets, the apps, and the web.
Yet, I know that everything I post will leave a trace, however weak that trace may be. So I approach the web accordingly, knowing full well that if I want a guarantee that something does not become public, I just keep it to myself. And if I post something, I am prepared to face the consequences.
Like anything about law, it’s all about risk management.
I will be delivering an information-packed presentation on intellectual property at the VBN (Vancouver Business Network) meetup on December 4, 2012.
You will walk away with at least:
– 5 big ideas about intellectual property and the law in general that will answer 80% of your questions about IP;
– 5 reasons to register your trademarks;
– 7 one-word shortcuts that will allow you to instantly identify different types of intellectual property.
You will never be intimidated by IP and IP lawyers again!
Please RSVP for the event at MEETUP.COM.
This is an event you and your business can’t afford to miss.
This is to let you know that you can now view Canadian Copyright, Trademarks and Patent Regulations on our website:
Industrial Designs Regulations
Patent Designs Regulations
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Tags:Small BusinessNew Copyright ActFair DealingCollectivismPhilosophy