See a lawyer while your startup is young

Disclaimer: This post is taken from a presentation I gave at the first EFF Bootcamp for Startups. It is not specific legal advice and is directed at small startups. Big start-ups have different concerns, huge start-ups, such as Google (where I work), have still different concerns.

Don’t Win at the Supreme Court
Don’t see a lawyer if your goal is for your technology to be vindicated as “legal” at the Supreme Court. If that’s your goal, quit your start-up, do three years of law school and join the EFF. Vindication at the Supreme Court does not have a place on the “goals” list of a startup because your users don’t care, its expensive (you can't afford it), it takes too long and it doesn’t give you a competitive advantage (because others can use your win to do what you are doing). Hopefully you stopped reading at “your users don’t care.” No-one has ever used a service or bought a product because it won a court case.* And, to top it all off, winning a court case is hard and time consuming. If winning at the Supreme Court is one of your goals you are very likely to forget the others (the important ones that matter to your users).
You should see a lawyer for two basic reasons: money (both going out and coming in) and the environment.

Money Going Out
Lawyers are expensive. Even if we win. ReplayTV once said that the difference between Brobeck (a law firm that went bankrupt when the tech bubble burst) and Fenwick (a firm that is still thriving) was that ReplayTV was a client of Fenwick. That was not because Fenwick was basking in the fame of winning the ReplayTV case (in fact, it never got to a ruling on the merits) but because ReplayTV said that they were paying Fenwick $3M/quarter. Fenwick was not a particularly expensive firm and the ReplayTV case was not a particularly expensive case. Do you have an extra twelve million dollars a year?
If not, get some good legal advice early.

Money Coming In
Lawyers and money people are a lot alike. They can both be quite conservative and they work together. When you get money, either from venture capitalists, bankers or through an acquisition, you can bet that they will have some lawyers taking a look at your business practices. If you’ve already been sued, the lawsuit may make the
deal harder to do. If you are taking a lot of legal risks, the investors will have to jibe your risk tolerance with their own. You may have been willing to “bet the company” on a decision but it is unlikely that a VC firm will want to “bet the fund.” With lawsuits targeting investors and parent companies becoming more prevalent, this will become a bigger and bigger issue.
Another reason your deal will be harder if you don’t get good legal advice early is personal. The people doing the deal are vouching for it. No one wants to have invested in a company bankrupted by legal bills. The people doing the deal are also likely to be the ones that will have to clean up your mess. No-one likes cleaning up messes. It is not sexy work and it is much easier to prevent a mess than clean it up afterwards.

The Environment
Finally, you should be concerned about the environment. Though the legal environment is not a paradise for innovation, it is much closer than it might otherwise be. Immunities such as the Communications Decency Act Section 230(c) and Safe Harbors such as the Copyright Act’s Section 512 are designed to give you enough protection to
innovate and thrive. Maybe not paradise, but you could make it worse. That’s because, companies that are less incented to want innovation see suing you as an easy way to shape the law to their ends. That is because they think they can count on you to be sloppy, not to have done your legal work and not to have the money to effectively defend your case. They are often right.
The point is that, like the physical environment, the legal environment can change. Don’t be a careless polluter.

So What Should You Do?
Don’t take this rant to mean that you should NEVER do something that you might get sued over. Anyone could sue you for anything and I am definitely NOT saying that you should do nothing. You should do lots of things. You have a relatively high risk tolerance. Absent personal liability or criminal charges the only thing you have to lose is your startup. If you are a small startup, there is a relatively high chance of that happening already, without any lawsuits (the vast majority of startups don’t get killed by lawsuits).
What you shouldn’t do is take legal risks carelessly. The value you bring to users may be entirely dependent on the legality of some business practice. If that’s the case, you may want to proceed even though the legality is contested by some. Some of the file-sharing services are good examples (here I am thinking of everything from Microsoft shares to Grokster). The value they bring to legitimate users in making non-infringing files quickly and cheaply available would not exist if they are liable for their users’ infringement. So their choice is either a) find another business or b) take the legal risk. It may be a smart business move for some businesses to choose (b) as Microsoft has and Grokster did (indeed, even Grokster won at both lower courts). However, it is unlikely to ever be essential to a business to advertise itself as being the "the Next Napster." Indeed the Supreme Court held in Grokster [pdf] that though the technology may have been OK, intent as evidenced by unnecessary statements such as that one might create liability.
Think hard about what legal risks are essential to your business and which are not. Lawyers can usefully help with that thought process, so see a lawyer while your startup is still young.

Credits for Images
These beautiful public domain illustrations were digitized as part of Google Book Search.
Benjamin Clarke, The British Gazetteer, Political, Commercial, Ecclesiastical and Historical, H.J. Collins, London (1852), original from Oxford University Library.
Robert L. Wade (ed.), The Illustrated Family Magazine for the Diffusion of Useful Knowledge, Bradbury, Soden & Co., Boston (1846), original from Harvard University Library.
John Cumming, The Lives and Lessons of the Patriarchs Unfolded and Illustrated, John F. Shaw & Co., London (1865), original from Oxford University Library.

* I say virtually none because I own a few Diamond Rios and "What a Long Strange Trip: The Illustrated History of the Grateful Dead" for precisely those reasons.

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Copyright Registrations = Copyright Free

The U.S. Copyright Office has confirmed that U.S. Copyright Registrations are in the public domain. Marybeth Peters, the Register of Copyrights, writes: "There is no copyright protection in these records -- they are in the public domain." This is a good clear answer for which Marybeth, Carl Malamud of Public Resource and Peter Brantley of the Digital Library Federation should be heartily thanked.
In celebration (and thanks) I have put one of their Copyright Registration feeds on this blog. Already it has payed dividends with my discovery of an assignment of a security interest in "Four Dogs Playing Poker" between Mercantile National Bank and International Entertainment Corporation. More history of the work is available from the Copyright Office. I had thought that "Four Dogs Playing Poker" was the title of the famous painting of four dogs playing poker, but in fact, it isn't. What I was thinking of is a series of sixteen paintings by C. M. Coolidge commissioned to advertise cigars. Maybe the subject of the assignment is the movie by that name (a thumbnail of its poster is incorporated here, click on the image to purchase the DVD) but that's unclear from what I could find.

Larry and Sergey Interview

A good interview of Larry Page and Sergey Brin (the two founders of Google) being themselves. I particularly like what I can only assume to be Larry making a "swoosh" sound to connote javascript and flash flying around at 16:03.

In Defense of Alpha Flight

My co-worker Mike slams the Canadian superhero team Alpha Flight as not ready for a feature length movie. Perhaps I am biased (being both Canadian and American and a big fan of the original Alpha Flight comics) but I would welcome an Alpha Flight film. That comic had depth and great characters. I'd also remind Mike that Wolverine, a part-creation of the Canadian government and one-time member of Alpha Flight, has already been seen in three X-Men movies (and those movies would have been much worse without him).

Really Modern Library Brainstorming

Over at if:book, Ben Vershbow writes about a set of brainstorming sessions about how to kickstart thinking about a "Really Modern Library" (something I have thought about some as part of the Google Book Search team). From the post:
Over the course of this month, starting Thursday in Los Angeles, we're holding a series of three invited brainstorm sessions (the second in London, the third in New York) with an eclectic assortment of creative thinkers from the arts, publishing, media, design, academic and library worlds to better wrap our minds around the problems and sketch out some concrete ideas for intervention.
The goal of this project is to shed light on the big questions about future accessibility and usability of analog culture in a digital, networked world.

An interesting project that will no doubt come up with some useful ideas but...
for reasons both practical and political, we've considered restricting this contest to the public domain
Of course I understand that it may be easier to deal with all of the other issues they've identified without adding copyright (for one thing, they would have to add some lawyers to their eclectic assortment of thinkers) but I worry that their focus on the public domain means that the "Really Modern Library" will be missing any way to discover "Really Modern" books.
Still I wish them well and look forward to hearing the results of their discussions. One of the really good things that our announcement almost three years ago helped to do in encouraging reaction to it is increase the focus on digitization and the next generation of libraries. We weren't the only ones, or the first and didn't claim that we were trying to change what a library is, but I think we have been useful in helping raise the profile of the discussion.

Updating Feed

I've updated my feed serving to Feedburner.

IP in a Canadian Penny > $47K USD

The Canadian penny recently crossed the one cent USD threshold for the first time in a long time. Now comes news that the Royal Canadian Mint is asserting that pictures of it are worth a lot more.
Boing Boing and the Globe and Mail have the story that the Canadian Mint is attempting to assert intellectual property rights in pictures of Canadian pennies and use of the phrase "one cent" in a Toronto fundraising campaign. Seems wrongheaded, but one question not discussed is whether this could fly in the US.
The quick answer to whether a picture of a US penny is copyright infringement in the US is no. Under US copyright law a picture of a coin may be protectable based on the protection of the image on the coin itself, but if that image is the work of the US Government, then it is not protectable in the US because of 17 USC 105 which reads:

Copyright protection under this title is not available for any work of the United States Government, but the United States Government is not precluded from receiving and holding copyrights transferred to it by assignment, bequest, or otherwise.

You might get the opposite answer if the coin was developed by a non-employee and was not a work for hire, or if the copies were made outside of the US (for example, if Toronto had used a US penny in its campaign), or if US copies were made of Canadian coins. And that doesn't even begin to address the potential for a claim in trademark.
In each case, regardless of the legal analysis, enforcement would be wrongheaded.
Update: Howard Knopf has an very smart post on this subject in the Canadian context with the further suggestion that the image on the coin may have rejoined the public domain in Canada because it may have been "authored" in 1937. Also, his title is better than mine: "Excessive Non Cents about "One Cent""

Image of Canadian penny courtesy of miguelb Attribution who also has a website.

Congratulations to Creative Commons

Creative Commons, just announced the hiring of a new General Counsel (and it should be said that the GC role at Creative Commons has and will always be more than merely a GC). This is wonderful news for them and for the world.
As Professor Lessig points out in his blog post, I've been lucky enough to have the two of the former Creative Commons General Counsel, Glenn Brown and Mia Garlick, decide to come to Google as Product Counsel. Both Glenn and Mia are phenomenal lawyers and great to work with. They get products and are zealous advocates for users. From what I've heard about the new General Counsel, Virginia Rutledge, she is cut from the same cloth and will serve Creative Commons very well.