I help clients negotiate SAAS deals, and I like this as a template. It's better than 95% of the contracts I see. But since this is the internet, I will use the rest of this post to complain about things:
1. Formatting: One column of text is better than 2. It's digital, we don't need to cram words in to save paper.
2. Information Architecture. Contracts longer than 2 pages should have a table of contents. In most use cases, people are only looking for 1 or 2 specific terms in the contract. ToC helps.
3. Naming is Hard. Names should suggest some unique aspect of the thing they represent. In this contract, the parties are defined as "Company" and "Client." But both parties are companies. Using "Company" to refer to only one of the two companies invites confusion. Yes, it's defined. Yes, it's standard practice. But a better defined term might be "ASP" or "Host" or "Provider", etc.
4. "Herein." I don't like herein.
4.1 Herein is stuffy. No one talks like that.
4.2 Herein is ambiguous. http://www.adamsdrafting.com/herein/
4.3 Instead, use "in this agreement" or "in this paragraph."
5. Arbitration? Going to court is a hugely expensive distraction. Arbitration is slightly less expensive and distracting. Any reason not too ask for arbitration?
I have a personal rule never to throw MCSD at opposing's draft, but this is a form, so I'm down. Ken Adams has a posse. We should make t-shirts.
On the other hand, from a practical point of view, all the nits you pick add up to a certain kind of camouflage over the agreement. If the point is not what the contract says, but that YC said it, now it's "standard", and you can not think about it, then enlightened style is at odds with (facilitated indifference to) substance. For a first sale in particular, the immediate benefit of the fact of a sale probably outweighs probability times cost of any conceivable drafting flaw that doesn't produce uncapped liability, a cloud on IP, or some other existential threat.
When I look for a ray of hope, it's the number of blanks. If this thing has to go back and forth, and nobody is going to sign it as presented, then by all means make it as modern as possible. If it's going to be read and handled, it ought to read and handle well.
" For a first sale in particular, the immediate benefit of the fact of a sale probably outweighs probability times cost of any conceivable drafting flaw that doesn't produce uncapped liability, a cloud on IP, or some other existential threat."
I had to parse this sentence about 10 times and still don't entirely get what you're saying
Touche. Thanks for making such an effort to understand the sentence.
What I tried to convey is that the ability to say you've made a sale is worth a lot. It's a milestone, and it comes in the vulnerable make-or-break days of a company.
A flawed contract provision only hurts when circumstances force you to live by or enforce that provision. The chance of that happening for any provision of any particular contract is usually low. On the other hand, if the flaw in the language can shut your business down, even a small chance of that bad outcome is worth worrying about.
I assume that a very orthodox proposal will draw less attention, prompt less negotiation, and get more deals signed quickly. My conclusion is that, because the first sale is worth so much when you need it, you might be better off with a traditional, error-prone form that's easier to get signed than a modern, technically superior form that protects you in edge cases and after long negotiations. Your business might fail because you never sold, long before anyone has any reason to sue you.
In my defense, I don't choose to express myself personally in the style of my contracts. You'd probably have understood me better if I did, but no one should have to live that way.
Not every lawyer knows/understands IP and user interface design. But if you find a lawyer who specializes in the two, and you lay the groundwork before your design is copied, you should have a strong legal position when the copycats arrive.
For an early-stage startup, it may not make sense to sink a ton of $$ into design patents. But companies with more revenue/capital should think about it.
I disagree from a practical, as well as financial standpoint.
It's very difficult to patent a software interface design as you have to prove a lack of existence of prior art and the patent must describe the specifics of what you are patenting.
These days there's very little new under the sun. I don't see anything remarkably unique about that particular interface. I'm certainly not saying that it wasn't lifted by their competitor, but that analytics dash also bares a striking resemblance to Google Analytics and a host of others, not to mention Microsoft Excel. Okay, it's blue and has large Helvetica numbers- is that what you're going to patent? Okay, I'll change mine to a green color scheme with Arial fonts. Your patent is no longer enforceable, and your IP attorneys who tend to be paid quite well will charge you tens of thousands of dollars to prove that.
I can imagine it feels like a major violation and annoying to be ripped off, and I don't condone that strategy, but I doubt that CB's competitive advantage is a color scheme and some data labels. A design patent would have basically no value in this scenario.
That's a great link to example of user design patents that proves your point. But reading that I feel like almost all the examples they show are not protecting innovation. It seems like the kind of thing that ought to be protected as trademarks, not patents. If Google makes a page that is distinctive enough to be its trademark and you make a paget that looks clese enough to that page that the average user coudl confuse them, it seems like you are doing the equivelent of infringing on a trademark.
> can't we just pass a law stating that "the patent is not being used for anything" is a valid patent suit defense?
That's how patent law worked until the 1940s. It was called the "paper patent doctrine." i.e., if you're patent was just on paper, and not used in industry, then the patent was dead.
Patent trolls have been getting trounced in court for the last few months, especially in NY and CA. I suspect RPX is offering patent troll insurance now because their payout risk (exposure?) is now much lower.
The RPX insurance might still be a good idea. Just be sure to re-evaluate the current state of patent troll risk before you buy a $10,000 policy.
> judges here decide based on 'gut feeling' whether a title infringes or not, and then look for justification after the fact.
I think that's a fair assessment of how a lot of court cases are decided, especially where the law involves an imprecise weighing and balancing of several competing factors.
http://tsdr.uspto.gov/#caseNumber=74021095&caseType=SERIAL_N...