Notice

Just a reminder, these posts are not legal advice. This site is the personal blog of Mark Radcliffe and the opinions expressed are those of Mark Radcliffe and not those of his clients, DLA Piper or the clients of DLA Piper.

About Me:

Mark Radcliffe

I have been practicing law in Silicon Valley for over thirty years assisting startups and global companies develop and market innovative products and services. I have participated in multiple business cyles in Silicon Valley from hardware to software to internet to cloud. My projects have included developing the dual licensing business model for open source startup, developing the original domain dispute resolution policy for NSI and assisting Sun in open sourcing the Solaris operating system. Recently, I served on the US Japan Innovation and Entrepreneurship Council (one of ten members) to develop a plan to encourage the innovation in Japan and the United States. I have been working with the same attorneys since 1986 although we have merged with other law firms several times. I am now a partner at DLA Piper, a (relatively) new global law firm formed in 2005 from the merger of three law firms. The firm now has 4200 lawyers in 31 countries and 77 cities. My experience in corporate securities (particularly venture capital) and intellectual property enables me to assist companies structure the financing and intellectual property strategy for developing ane exploiting a new product or service. I and my team work with fifty startups at one time as well as Global Fortune 100. I have been fortunate enough to work with companies in software, cloud computing, semiconductor, health care IT and Web 2.0.

The recent decision in Software Freedom Conservancy Inc. vs. Best Buy, et al (see http://sfconservancy.org/docs/2010-07-27_dj-opinion.pdf ) has been greeted with hosannas by many in the open source community as “proving” that the GPLv2 is enforceable. I don’t want to be negative, but the value of the precedential value of the case is very limited because it is “default” judgment.  The ruling is effective between SFC and Westinghouse Digital Electronics, LLC, but will have little effect on disputes between other parties. The decision has two lessons: (1) register your copyright as soon as possible (see below) and (2) don’t annoy a federal judge by dropping out of case. The decision does emphasize the importance of registering the copyright in open source software in the Copyright Office because it enables the copyright owner to seek statutory damages (avoiding the difficult question of how to determine “lost profits” for a software programs distributed for free) as well as attorneys’ fees.

The court ruled that Westinghouse Digital Electronics, LLC (“Westinghouse”) had infringed on the copyright in the BusyBox software by failing to comply with the terms of the GPLv2 in its distribution of the Westinghouse high definition televisions (“HDTV”). Although Westinghouse had originally “answered” the complaint, it then withdrew from participation in the suit, apparently due to financial difficulties, and ceased to respond to discovery requests from the plaintiff. If the failure to respond to discovery requests is due to “willfulness, bad faith or fault,” the court can grant a default judgment and Judge Scheidlin granted the motion. The financial problems of Westinghouse are evident through its use of  the “assignment for benefit of creditors” procedure.  The “assignment for benefit of creditors” is a California state law procedure similar to federal bankruptcy law to wind down companies. In this procedure, the company assigns its assets to a third party licensed by California who, then, disposes of the assets and then pays off the creditors of the company. Unlike bankruptcy law, the assignment for benefit of creditors does not “stay” litigation.

As part of the default judgment, the court granted four different forms of relief: an injunction prohibiting Westinghouse from copying and distributing the BusyBox software; statutory damages of $30,000 which it tripled to $90,000; “reasonable attorneys’ fees and costs; and forfeiture of all Westinghouse HDTVs which contain BusyBox software. Statutory damages are unique to copyright law; if the infringement takes place after the “registration” of the copyright in the software (or other work) in the Copyright Office, the copyright owner may seek such “statutory” damages rather than “actual damages” (which are the general basis for damages in the common law system). In addition, the copyright owner who is eligible for statutory damages can also obtain the award of reasonable attorneys’ fees and costs (the award of attorneys’ fees and costs is very unusual under US law).  

The default judgment requires that all of the “well pleaded facts” in the complaint are accepted as true. The court also noted that Westinghouse’s failure to participate in discovery meant that the court could not determine appropriate damages and, thus, awarded the maximum damages and, then, trebled the damages on the basis that the infringement by Westinghouse was “willful”. As a default judgment, the decision has little precedential value because all of the facts are taken as “true”. 

I left the Techonomy Conference early (and very reluctantly) because I had committed to assist my friend Greg La Follette to launch his new brand several months ago. We had a dinner for forty wine lovers. I have enjoyed Greg’s wines for over ten years (in fact, I even assisted him with harvest for two years). Greg has been wine maker for some of the finest Pinot Noir wineries in California, from Flowers to Tandem. He has worked with many of the same vineyards for over 20 years. He was born in Europe, growing up with an old-world view that wine is raised rather than “made”. After studying at UC Davis, he continued on-the-job studies at Beaulieu Vineyard as research viticulturist/enologist with famous Russian wine master, Andre Tchelistcheff. He is particularly adept at explaining the complex interplay between farming (including clonal selection and trimming) and wine making (including yeast selection and fermentation).
The new wines are great. I particularly enjoyed the Sangiacomo Chardonnay and the Van Der Kamp Pinot Noir. If you are interested you can order them from www.lafollettewines.com.

I attended the first day and a half of the Techonomy Conference at Lake Tahoe last week (more about that later). http://techonomy.com/program-outline/. It was great, the most thought provoking conference that I have attended in my professional career. The conference is based on the concept of the fusion of Technology and Economy; unlike most conferences, it has a theme because the organizers, David Kilpatrick, Peter Petre and Brent Schlender, fundamentally conceive of humans as “natural innovators and outsize consumers” and the critical question is “How can we continue to create more abundance for all of us”. The location is spectacular, with expansive views of the mountains from the Ritz Carlton. The organizers framed the issue in the introduction by describing the dichotomy between a world in which technology has provided the individual with more power and choice than any other time, yet the threats to civilization from climate change, new weapons technology and population growth have rarely been greater.   

The conference has a star studded group of speakers from John Doerr, the celebrated venture capitalist from Kleiner Perkins Caufield and Byers, to Eric Schmidt, the CEO of Google, Inc. but it also included more eclectic speakers such as David Christian, the Australian professor who founded the idea of “Big History” and Brian Arthur from the Santa Fe Institute. The panels ranged from discussions of the future of innovation to reinventing the energy economy. 

The first panel provided an example of the Conference’s approach: it included Kevin Kelly, the founder of Wired, Debby Hopkins, Chief Innovation Officer of Citigroup, Eric Schmidt, CEO of Google and Dr. Lisa Randall, a theoretical physicist from Harvard.  Kevin Kelly, founder of Wired, described how technology has enabled humans to succeed in dominating the planet’s ecosystem and, at the same time, this success has changed humans (the rise of cooking and agriculture has reduced the size of human teeth). Eric Schmidt focused on the increasing rapidity of technological change: he noted that humanity had created 2 exabytes of data in all of history up to 2002, but 2 exabytes of data are now created every 2 days and the rate is accelerating. The accelerating amount of data and its accessibility through the Internet to most of human society represents a dramatic change from history when most important information was only available to societal elites.  Debby Hopkins discussed the challenges of bringing new technology into a traditional industry, banking, as well as the changes in fundamental nature of money.  Dr. Randall noted that although fundamental research in physics may appear to have a limited impact on society, such research has the potential for profound effects: she used the example of quantum mechanics, an obscure theory at its beginning,  which became the basis for the transistor which is essential to the development of modern computers. 

Dr. Christian discussed the concept of “Big History” which looks at the history of human beings across multiple time scales and through multiple disciplines, from the beginning of the Universe to the more traditional beginning of history with the rise of civilization. It puts this history in context by the effect of humans on the larger ecosystem and the effect of the ecosystem on humans. For example, the entire history of civilization, 5,000 years, is only 2% of the human experience. http://www.teach12.com/ttcx/CourseDescLong2.aspx?cid=8050.   Bill Gates has recommended his lectures and Dr. Christian is preparing a version for high school students funded by the Gates Foundation.  

The first evening included a great discussion guided by John Doerr and Dean Kamen (the inventor). The discussion covered a wide range of topics from the challenge of how best to encourage innovation to how to build great companies. They were able to call on audience members such as Jeff Bezos, founder and CEO of Amazon.com and Eric Schmidt, CEO of Google, Inc.  

This conference comes at a critical inflection point for the economy and technology and it provided a great framework to think about these issues. As I mentioned, the conference was excellent and I strongly recommend it to anyone interested about the future of the technology industry. Unfortunately, I had to leave on the second day for a prior engagement, a wine dinner for forty friends to launch a new wine label for my friend and favorite wine maker, Greg La Follette (more about that in my next post).