William Carleton, Counselor @ Law

Michael Atkins' IP Law Reports from China

Trademark attorney and blogger Michael Atkins has been posting recently about a trip he made to China for what sounds like a very intense, 7 day IP law conference.

The kind of conferences lawyers go to in the US typically span one or two days at most. Most often, attendees leaf indifferently through presentation materials in three ring binders while presenters grimly read the words off a powerpoint deck.

But Atkins describes a conference where the participants worked, ten hours a day, over seven successive days.

He reports that Chinese judges and lawyers are committed "to developing best practices in intellectual property law." And that Chinese judges and lawyers are dealing with some of the same issues US judges and lawyers are dealing with:

"Chinese IP judges are struggling with the same IP issues our courts are struggling with. One judge commented that China has decided cases involving online auctions and keyword advertising similar to Tiffany and Rosetta Stone. With a huge IP docket, it’s no wonder China’s top judges are at the intersection of law and technology much like some of our judges are here."

Perhaps the most interesting point in Atkins' reporting is that China seems to be adopting the "famous brands" legal doctrine  - something the US has been asking China to do, in order to extend legal protection for US brands even in places where they do not do business (yet).

This is ironic, Atkins points out, insofar as the US itself does not (always) do the same for the famous brands from other nations that are (arguably) usurped in the US. He cites the case of "a famous Indian restaurant with no U.S. presence against a copycat restaurant that opened in New York," which the Second Circuit decided against the famous Indian brand. "The Second Circuit held no U.S. trademark rights means a foreign trademark owner can’t prevail here — precisely the opposite conclusion we’re encouraging China to adopt," Atkins notes.

Chinese judges read key opinions of US courts, Atkins says, and he reports that one high judge in particular said Chinese judges would read even more, were more American judicial opinions translated into Chinese.

"Note to the U.S. government," Atkins writes. "[I]f you want to influence thinking in the Chinese judiciary, translate important U.S. cases into Chinese."

Photo: "Court of Customs and Patent Appeals Reports (Patent Cases) in a large DC law library," by Mr. T in DC.

Crowd-drafting legislation via Reddit (the Freedom of Internet Act)

Reddit users are drafting proposed legislation to protect the internet and what people do on and via the internet.

It's called, the "Freedom of Internet Act."

At first, that sounds wrong, syntactically, but if you dwell on it, "internet" starts to function as a verb, which is interesting. Like "worship," or "speaking."

Here's the sub-reddit that helps catch up with the latest and greatest on the effort.

The draft takes a dim view of prior restraint. This from Title II, Article I, Clause B:

"Censorship may only be enforced after illegal material has been found, and no steps can be taken to monitor data being uploaded."

The problem of assessing when derivatives of copyrighted work should be censor-able is handled, in part, as though it can be quantified. This from Title II, Article II, Clause B(2):

"If the new products are released as a series of parts then combined content should contain at a minimum of 40% of the original content to be illegal content."

There is an unflinching mens rea component here. That is to say, you can't be culpable for violation of the Act unless you actually know, ahead of time, that what you are doing is illegal. This from Title II, Article II, Clause E:

"No user shall be held liable for the upload of data unless it can be shown that the User has certain knowledge that the data was not legal to upload in the country or countries where the upload was initiated and/or completed."

If the Act passes in its current form, gone will be the days when web services can simply take down user content without notice. This from Title II, Article IV, Clause B:

"Notice must be given to an administrator of the information system and to the uploader of the content if possible at least 30 days in advance of any deletion of data from any information system or service, or within 24 hours of the transfer of the data in question from publicly accessible storage to privately accessible storage."

Privacy is important to the drafters. This from Title II, Article VII, Clause A:

"1) No data collected by an Information System under claim that it is collected to help the user to use the service (for example mobile numbers to aid password recovery) may be demanded, used or shared in a way that may lead to the user losing their anonymity.
"2) Information systems have to explicitly specify the data that they may use and share to help in identifying the user, the IP address is excepted from this and is bound by condition in Article V [B.1]."

Even "[m]onitoring of traffic inside of an anonymizing network is prohibited." (Title II, Article VII, Clause D(2).)

Drafting legislation is a good thing for citizens to do, a skill to develop. Just as you don't really address tricky legal and business issues until you move from the bullet point list or term sheet into drafting the definitive contract, so, too, do you not really have to surface the nuance and start making hard choices in policy matters until you put quill to parchment.

Photo: "a leaf of the Corpus iuris civilis . . . used to cover . . . volume of legal statutes from the Duchy of Savoy"; Yale Law Library, Rare Books Blog.

What Do Angels Think of Crowdfunding?

What do angel investors think of the prospect of a new crowdfunding securities exemption? Good news, or bad?

It depends on the angel you ask.

I wanted to find a way to articulate the range of reactions I've been hearing from angels, in the months since a crowdfunding exemption first gained traction in Congress.

So, late Wednesday afternoon, I emailed a three-question SurveyMonkey poll to fourteen currently active angel investors. Eight have responded as of this writing (Thursday afternoon).

The poll, and the answers, are still very much in the realm of the anecdotal. But the results help me focus a bit better on how any crowdfunding exemption might better overlap with the Reg D Rule 506 paradigm to which serial entrepreneurs, angel investors and startup lawyers are accustomed. (I still think crowdfunding deals, to work, have to be set up in a way that bypasses lawyers.)

The results, and some interspersed commentary, below:

While angels are likely to have a generally positive view of crowdfunding, some feel strongly that crowdfunding should not extend to the sale of stock in startup companies. "In general, I think it’s a bad idea," one of the survey respondents wrote. "These are highly risky assets."

One respondent told me that the the interests of entrepreneurs should come first. "I am in favor of crowdfunding because I think it will help entrepreneurism to flourish. I also realize that it may create competition for the angel investors however."

Last comment from another of the respondents, who is generally okay with the idea but not convinced of the need: "I really don't think there's a shortage today for funding good ideas."

Outing Startup Legal Docs

The prominent law firm, Gunderson Dettmer, is populating the Docracy site with templates for startup legal documents!

As of this writing, forms Gunderson Dettmer has posted include IP assignments, consulting agreements, NDAs and an employment offer letter.

This could be a very big deal.

Here's what I think is significant:

Rather than post forms to its own site or other platform tied in with the firm's branding, Gunderson is entrusting a third party with custody of the docs and, presumably, with the expectation that they will be subject to open curation.

I am not saying that Docracy is or is not the perfect platform - I don't understand their business model just yet - though I heartily applaud Docracy for taking the dream farther than anyone else to date. But whatever the eventual, optimum landscape for openly sourced legal docs may turn out to be, moving the activity to a venue independent of any single law firm is the necessary first step.

Imagine other firms do likewise. It would blow the doors off the virtual Victorian safes in which law firms sequester legal templates.

From my brief experimenting with the Docracy site, I take it that the forms they host are typically set up so that they can not only be accessed and downloaded, but also edited. In the case of the Gunderson forms, it looks like the editing function, per se, has been removed, though a "branch" function is retained, that appears to permit you to create a variant based on the Gunderson form. I need to experiment further with this (maybe I will attempt to make a "branch" of the employee IP assignment doc that would include a notice required by Washington law). 

It is essential to the cause of open sourced startup legal docs that the hosting platform and the contributing law firms permit others to edit, mash up, borrow from, and otherwise iterate at will. Total freedom is the manner in which we will be able to both verify standards and measure degrees of variation.

Docracy seems to be set up for the use case that people will want to sign and deliver documents through the service. Perhaps that is how Docracy currently plans to make money - from transaction fees on signed and delivered deals. To me, that is less interesting than the availability of the forms, and the promise that the forms may be freely manipulated.

Suppose DLA Piper, Cooley, Wilson Sonsini, and one or two other firms get all their comparable forms up there. Then Kingsley Martin (or others following his lead) could put his (their) software to work, and we might end up with a mash up of an actual, definitive, industry standard for each form.

More to think and write about this subject. More to come.

Photo: Jon Lorquet, Wikimedia Commons.

Send Twitter $1.00: The Campaign Website

Inspired by an exchange of tweets between two Twitter employees - mocking a user who had sent the company a dollar bill as payment - I’ve started a campaign blog, “Send Twitter $1.00,” on Tumblr.

And I got my own letter and dollar in the mail to Twitter yesterday.

Below is the final text of the letter I sent. It is based on the anonymous letter that the two Twitter employees had mocked, but it also reflects my particular disdain for how advertising is polluting social media.

Dear Twitter:

I use Twitter avidly and I do not want it to become just one more media vehicle driven by advertising. Please accept this monetary contribution of $1 US as a token of my willingness to pay Twitter for the service. I would be willing to pay any reasonable fee for the service Twitter provides, so that Twitter and its partners do not feel entitled to pollute my Twitter timeline with “promoted tweets,” “sponsored tweets,” or other advertising. I am doing this because social media is more meaningful, and the user experience is more empowering, when advertisers are not permitted to override user control of the distribution of content. I encourage all people who use Twitter to take the same action. I want more people to become aware of this idea because Twitter is uniquely positioned to destroy advertising, instead of perpetuating it.

Thank you!

If you decide to join in, I hope you post your own letter to the Tumblr site.

More Amazon

"Amazon," wrote Brier Dudley yesterday in the Seattle Times, "tends to share about as much information as an introverted teenager, but it's turning 18 this year and finally putting down roots."

He's referring to the news that Amazon is buying three contiguous blocks of urban real estate, situated between downtown and the current Amazon campus in the South Lake Union Neighborhood.

Yesterday was President's Day, which for me means my parking garage downtown was closed, which means I drove around town for twenty minutes looking for free street parking (metered parking is gratis on President's Day). Lo and behold if I didn't end up parking just a block north-west of the reported Amazon purchase. So I checked out the lay of the land and took these photos on the walk into downtown.

This would be the northern-most tip of the new parcel, at the corner of 8th Avenue and Blanchard. I wonder if the tree will survive the construction.

Now looking southwest from 8th Avenue, just before Westlake crosses 8th. On the block to the back of the one in the foreground, between 7th and 6th Aves., is another lot full of cars. The construction on the horizon, south of 6th Ave., must be something besides Amazon.

This is the southernmost block of the parcel. Viewed here from Lenora just south of 7th Ave., one can readily appreciate how the new Amazon campus will abut and effectively extend Seattle's downtown. Pretty exciting!

Twisting your head over your right shoulder from the prior vantage point, or turning about 160 degrees if you'd rather not strain your neck, here is a view of the block bordered by 6th, 7th, Blanchard and Lenora. The King Cat Theatre, current home of Ignite Seattle, is the tan, squat building toward the left of frame. Always good to reference the Space Needle. If you are familiar with the current Amazon-ville, you know the splendid view of the Space Needle from Thomas St., looking west.

Last shot. This is from 6th Ave., just south of the corner of Lenora, looking due north across portions of all three blocks in the parcel. It is a heck of a lot of space.

F-Commerce

Yesterday, two people I follow on Twitter linked to an article that criticizes Facebook for failing to make its site a viable place from which big box retailers can successfully sell products(!).

For credibility, the piece cites this tweet from Chris Dixon.

"'F-commrece failed'. not surprising. Facebook is like Starbucks where everyone hangs out but no one ever buys anything. cdixon.org/2010/03/25/sti…"

— chris dixon (@cdixon) February 19, 2012

These folks all must be a step of me. Here I thought Facebook was a faux social network, corrupting the category by polluting social distribution with advertising. But if the site is supposed to be the Amway version of eBay or Amazon, and failing at that to boot, then (in the immortal words of Franklin Roosevelt via the poet Douglas Crase) there is nothing to fear.

I'm hoping Twitter will stay in the category Vinod Khosla has termed, "interest-based networks" (as opposed to "social networks," the idea being people are drawn to communicate about common interests, ideas or passions, and not where they went to high school). Though interests beget friends . . . 

Photo: Ninja M./Flickr.