As the author of this column, and as a high-tech Silicon Valley lawyer, I am often asked for guidance by start-up companies who need assistance with legal contracts. Such companies are often faced with a chicken-and-egg problem: They cannot divert from the core business venture the resources necessary to obtain handcrafted legal agreements stamped with a seal of approval; however, building a valuable business requires solid, enforceable contracts. This column will discuss online resources that include software-industry forms you can use in your business.
The Partner Package
Probably the best online source of legal contracts that exists today is Web*LawPartner. The site is divided into legal practice areas that cover all aspects of the high-tech industry, not just the Internet and software licensing. There are legal forms for a start-up business, computers and software, employment and consulting, partnerships, intellectual property, real estate, securities law, mergers and acquisitions, and commercial transactions, among other topics. This gives the end user access to a legal-forms database not unlike those maintained on a large law firm's intranet. Anyone can access the site without a subscription fee. You are free to surf the site, and look at the title, summary, and a brief preview of an unlimited number of documents. A typical preview for a twenty-page agreement consists of about a page and a half of the total agreement. To see more, you need to pay by credit card to download the document. The agreements are priced from $10 to $45 dollars. For example, under "computers and software," I found the subtopic "online and Internet," which included four types of agreements: for commerce, information providers, licensing, and Internet sites. The entire subtopic included only six agreements, but the site is relatively new and should continue to grow.
Most of the documents on the site come from major publishers of legal-form books, as well as materials published by state bar organizations or used by attorneys for continuing education. A large law firm will carry the overhead expense to purchase most of these books for its law library, in order to have access to various forms when a boilerplate version is necessary. For an entrepreneur or solo legal practitioner (another type of entrepreneur), the cost of this overhead is too great. In such circumstances, purchasing an individual form from Web*LawPartner now and then might make a lot of sense.
The forms' quality is probably as high as one can get in the context of legal fast food. The challenge for Web*LawPartner and its kin is to translate cutting-edge legal practice into forms quickly enough. For example, many Web entrepreneurs have been desperate for Web-site linking agreements. If it takes too long for a boilerplate form to be published, a substantial opportunity is lost to service this need.
Part of being on the cutting edge is watching the evolution of a type of business deal that later becomes standardized as a legal form. Before a sanitized boilerplate form exists, it is necessary to be working within a network of other industry professionals familiar with the evolving shape of the particular business deal. This creates a time-delay problem with printed form books, but it shouldn't take long for online form libraries to catch up.
Web*LawPartner also contains the basic documents necessary to start a business venture, including documents for forming a corporation in all fifty states, employment agreements, and documents designed for venture-capital financing. In addition, the site includes a variety of legal checklists, as well as a free listing and summary of reference works on each major topic category. At this point I should disclose that Mario Rosati, a name partner at my law firm, is on the advisory board of Web*LawPartner. This fact should reflect the caliber of the participants involved in this effort. The major benefit law firms derive from participating in this type of venture is goodwill within the industry.
More Form Sources
Another source of legal forms can be found at the Information Industry Association (IIA) Web site. The IIA publishes IIA's Contracts in the Information Industry III, a compilation of up-to-date model forms for the information industry. The IIA plans to offer these forms to both members and nonmembers on a pay-per-use basis. In July, the IIA inked an agreement to use Imark Technologies' metering and billing system at the IIA Web site. Even if the online pay-per-use system is not yet up and running, consider acquiring the print version of the IIA's valuable publication as a reference guide. (Also see " Online".)
Another helpful, albeit paper, resource is Web-Linking Agreements: Contracting Strategies and Model Provisions, from the American Bar Association (ABA). This book represents a substantial effort by the ABA to stay on the cutting edge by developing model contract provisions and commentary on Web-linking issues. The book covers the reasons for a Web-linking relationship, as well as types of Web links and sample provisions. It includes the duties and rights that arise in a linking arrangement, including the nature of the content and the links, and the conditions of access and use. Performance requirements such as permissible site downtime, bandwidth, and response time are also reviewed. The book also explores various types of revenue-sharing provisions, such as a general linking fee, a license fee, transaction revenues, membership or usage revenues, and third-party advertising provisions, as well as who should have the right to collect, use, and disseminate end-user data. The book is available from the ABA.
The Practicing Law Institute (PLI), which hosts continuing-education seminars for attorneys, is another good source of legal information. The coursebooks published with some of the seminars contain many examples of forms currently in use. The PLI materials are not form books per se, but they can offer a glimpse of the latest deals. I searched the PLI publications database for the term "Internet" and found over a dozen handbooks covering topics relating to doing business on the Internet.
The federal government should not be overlooked as a source of legal forms. The U.S. Patent and Trademark Office forms are available for download, and although processing these forms generally requires the assistance of an attorney, the information is available to everyone.
The Copyright Office maintains a collection of forms on its Web site, which also includes comprehensive information about copyright registration. Many people find that they do not need the assistance of an attorney in handling a simple copyright application. The Copyright Office does not render legal advice or engage in an examination process to verify the applicant's copyright claim, but in its correspondence with the applicant, it will state the grounds for rejection of a defective application, so that the applicant can address the problem. Of course, review by a lawyer will help avoid serious problems that can occur with a faulty copyright application. For example, if an application falsely states that all of a copyrighted work was authored by the applicant, when in fact part of it was a pre-existing work, the copyright registration could be invalidated as a "fraud" on the Copyright Office.
And Now, A Sample
Finally, following is a sample clause covering promotional efforts in a Web cross-marketing agreement. This clause is mostly boilerplate, however, insofar as the obligations are very generic and not tailored to any specific situation. It would need to be customized to fit the expectations of the parties, but could serve as a starting point for discussions.
Press releases and marketing activities. The parties shall issue a joint press release announcing this agreement within thirty (30) days after the effective date hereof. From time to time thereafter, the parties may issue joint press releases as mutually agreed upon. Each party shall have the right, but not the obligation, to include the other party's name in other press releases relating to the activities under this Agreement during the term of this Agreement, subject to approval, which shall not be unreasonably withheld. The parties will engage in joint marketing and promotional activities as mutually agreed upon from time to time. Such activities may include appearances at trade shows, joint mailings, joint advertisements, and similar activities. Each party shall bear its own costs and expenses in connection with the foregoing.
Hyperlinking/banner space. Each party shall cooperate with the other as reasonably necessary in developing and providing "hyperlinks" or "hot links" to the other party's Web site. The parties shall mutually agree upon the technical specifications required, and the design and placement of the icons used, to achieve such linking. In addition, each party shall provide to the other at no charge, according to a placement schedule to be mutually agreed upon by the parties, space on its Web site to place banner advertisements in which to advertise and promote the other party's products and services. Each party shall bear its own costs and expenses in connection with the foregoing.
Conclusion
Even with good boilerplate contracts, there is no substitute for the front-line experience of industry professionals who eat, breathe, and sleep the Internet. One example is WebRep of San Francisco, an online advertising representation firm where talk is constantly of "cookies, clicks, and CPMs (cost per thousand)." WebRep offers clients market information and access to the best possible deal, a competitive advantage against more diversified ad agencies.
In the end, the successful start-up entrepreneur is the one who knows how to deploy the right soldiers without incurring the expense of Roman legions.
Catherine is a cyberspace attorney with the law firm of Wilson Sonsini Goodrich & Rosati in Palo Alto, CA, and is solely responsible for the content of this column, which is not offered as legal advice. She can be contacted at [email protected].
