The Anti-NDA for Idea Submissions (Instead of the “Feedback License”)

In an earlier post, I explained that the standard “feedback license” arises out of a misunderstanding of IP—and generally asks too much from the would-be licensor. After some kvetching in the comments from Professor Eric Goldman, I suggested a “Disclaimer of Idea Restrictions” instead of a feedback license. Since then, I’ve expanded on that idea and drafted more detailed terms for such a disclaimer. The clause below could appear in a larger contract or serve as the central clause in an agreement about feedback and idea submissions: a contract I now call the “Anti-NDA.” (Apologies to those who didn’t follow the earlier posts. You’ll clear up any confusion if you review the first post, linked above.)

Section _. FEEDBACK. Company has not agreed and does not agree to treat as confidential any suggestion or idea provided by Discloser (any “Feedback”), and nothing in this Agreement or in the parties’ dealings arising out of or related to this Agreement will restrict Company’s right to use, profit from, disclose, publish, or otherwise exploit any Feedback, without compensating Discloser. 

(a) No IP. Without limiting the generality of the foregoing, Discloser agrees that its provision of Feedback does not give it any intellectual property or any other right, title, or interest in or to software, inventions, or other assets created by Company, even if such Feedback leads Company to create the software, invention, or other asset. This Section __ does not give Company a license to any patent or copyright Discloser may have in Feedback.

(b) No Obligations re Feedback. Company shall have no obligation to incorporate Feedback into any product or service, and Discloser shall have no obligation to provide Feedback.

A final note. The last sentence of Subsection (a) protects the discloser. If this becomes your company’s standard form, you might not worry about protecting the discloser: the other party. But some smart disclosers will insist on this clarification.

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© 2013 by David W. Tollen. All rights reserved.

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Don’t Send Write-Protected Contracts

A lot of companies send their partners contract drafts with write-protection: with word processing protections that force the user to track changes through redlining. This tells your partners that you don’t trust them to point out all their contract revisions. Why do that when no one needs write protection to avoid under-cover edits? If your partner sends back a revised contract draft without redlining, you can always run your own redline, comparing the new draft against your original, to reveal all the changes. Continue reading

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Avoid Licenses to “Use” Software

A lot of software licenses grant the recipient the right to “use” software. But the use license springs from a misunderstanding of copyright law. As a result, it’s not clear. A use license may give broader rights than the provider intends or narrower rights than the recipient needs. I’m going to suggest a better, simpler way to draft licenses. (This post expands on a point made in The Tech Contracts Handbook—something that comes up in many of my trainings.) Continue reading

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Who Should Indemnify Whom, and for What?

When does an indemnity clause belong in an IT agreement? Without some rule or guiding principle, you’ll find it difficult to negotiate indemnity requests. You’ll find it hard to know when the other party’s request is reasonable, or when your own indemnity request makes sense and you should stick to your guns. Fortunately, the logic of indemnity does reveal a guiding principle. An indemnity makes sense where one party creates a risk that the other will be sued—and the suit is either very likely or would cost a lot to resolve. Continue reading

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Instead of a “Feedback License,” Draft a Disclaimer of Idea Restrictions

In last week’s post, I addressed the myth of idea ownership. I explained that no one can own an abstract idea. I also argued that, therefore, no one needs a “feedback license.” In a feedback license, a company’s contractors or partners give it a license to any suggestions they provide about the company’s products or services. Since no one can own an abstract idea, the premise behind a feedback license makes no sense. There’s nothing to license. But some companies still worry about receiving feedback; they worry that rights of the contractor or partner will keep them from using the idea. I think the concern is far-fetched in a relationship with another business (perhaps less so in a consumer relationship), but it’s not nonsensical. (And the Supreme Court made the problem slightly worse in Bilski v. Kappos by failing to provide a comprehensible definition of “abstract.”) The main worry is that some sort of unwritten contract will restrict use of feedback. Fortunately, there’s a solution so easy that it’s worth the effort, even if the concern is far-fetched. Instead of a feedback license, draft a disclaimer of any obligation not to use feedback. Continue reading

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No One Can Own an Abstract Idea (So You Don’t Need a “Feedback License”)

Technology companies often worry about ownership of ideas they hear. If a contractor or partner gives us an idea, do we need a license to use it? What if it’s an idea about our own product or service? The concern often prompts a “feedback license”: a sentence or two tacked onto a contract about professional services or co-marketing or something like that, granting a license to “any idea Contractor may develop related to Company’s products.”

The good news is that you don’t have worry about ownership of feedback or other abstract ideas. You don’t need a feedback license, and in fact, they don’t even make sense. In the United States (and most other countries), ideas belong to everyone—at least to everyone who hears them legally. Continue reading

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The Contract Negotiator’s #1 Tool: MS Word Redlining

This post departs from our usual discussion of contract terms and talks about redlining and redlining software. A redline (sometimes called a “blackline”) provides a quick and easy view of the differences between a new contract draft and an old one. Usually, redlining software underlines added terms and strikes through (crosses out) deleted terms, but leaves the deleted terms legible. Redlining isn’t difficult, but doing it wrong can delay negotiations and even lead you to sign terms you didn’t mean to accept. Continue reading

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