Your Challenge

Customer Environment

1. Less experience
2. Urgency
3. Less incentive
4. Relationship
5. Tradition
6. Bad process/no process
7. Wired deals
8. A “solution” is acquired
9. Renegade decisionmakers
10. Standardized on one vendor
11. Don’t understand how software is protected

Our Worthy Opponent

1. Full-time
2. Highly trained
3. Information advantage
4. Very motivated
5. Team advantage
6. Superior product knowledge
7. Changing pricing and usage models

Relationship Dynamics

1. Customer objectives
2. Vendor objectives

Risk Allocation

1. Customer
2. Vendor

Defective Process – What’s Wrong

1. Evaluation
2. Selection
3. Negotiations

The Solution – The Managed Acquisition Process

1. Form team
2. Establish decision criteria
3. Determine relationship architecture
4. Gain management approval
5. Develop contract
6. Issue request for proposal
7. Conduct bidders’ conference
8. Evaluate potential vendors
9. Implement the Zone of Consideration
10. Manage the contract

How Software Is Protected

1. The four key types of intellectual property law
   1. Copyrights
      • What they protect
      • Protection requirements
      • When protection attaches
      • Protection duration
      • Copyright holder’s rights
      • Other information
        • Assignments
        • Berne Convention
        • First Sale Doctrine
        • Work made for hire
   2. Patents
      • What they protect
      • Protection requirements
      • Patent holder’s right
      • Types of patents
      • Protection duration
      • Other information
        • Assignments
        • Paris Convention
        • First Sale Doctrine
        • No independent creation
   3. Trade secret
      • Definition
      • Examples
      • Protection requirements
      • Protection duration
      • When protection attaches
   4. Trademarks
   • Definition
   • What they protect
   • Types
2. Summary

Key Licensing Ingredients

1. Introduction
   1. Identify the context of the negotiation
   2. Contracting principles
2. Issue spotting and negotiation strategies
   1. Parties to the contract
      • Who is the licensor?
      • How is licensee defined?
   2. Grant of license
      • Do defined terms limit use?
      • Other common restrictions
   3. Payment terms
      • Pay for performance
      • Acceptance tests
      • Aggregate purchases
   4. Warranty
      • Do UCC warranties matter?
      • What warranties should be included?
   5. Documentation
      • Defining your rights to use/modify
      • Is the vendor obligated to update?
   6. Training
      • Included?
      • Hidden charges
      • Scheduling
   7. Maintenance
      • Mandatory?
      • What is included/excluded?
      • Has the licensor subcontracted?
      • Methods of delivery
      • Levels (Silver, Gold, Platinum)
      • Caps on increases
   8. Indemnification
      • Distinguish among
        • Indemnify
        • Defend
        • Hold harmless
      • Who is protected?
      • What is excluded?
      • Specific to intellectual property
      • Which versions of the software are covered?
   9. Assignment
      • Consent required?
      • What are each party’s interests?
   10. Source code escrow
       • Limitations
       • Usefulness
       • Rights
       • Under seal agreement
   11. Termination
       • Who can?
       • When?
   12. Limitation of liability
       • Carve-outs
       • Reasonableness of the limit
   13. Confidentiality
       • What should be protected?
       • Reasonable duration
       • What should be disclosed

Software Development

1. Why have software developed? —
   Five reasons,including:
   1. Want ownership
   2. Don’t have expertise in-house
2. What does software development encompass?
   1. New software
   2. Customization of your software
   3. Customization of the vendor’s software
3. Decide results or resources deal
   1. Determining responsibility
   2. For the outcomes
   3. For the project management
4. Other important issues— Fourteen key considerations, including:
   1. Payment triggers
   2. Acceptance testing
   3. Infringement protection
   4. Remedies

Pricing Models & Strategies

1. Pricing models
   1. Power
   2. Value
   3. Production
   4. Device/site
   5. Duration of license
   6. Volume of purchases
   7. Number of users/devices
   8. Other emerging models
2. Strategies
   1. Bundled pricing
   2. Long-term commitments
   3. Control of price increases
   4. Defining terms
   5. Forced upgrades
   6. Archaic pricing structures
   7. Other common vendor ploys

Avoiding Litigation

1. Reviewing rights
2. Understanding applicable laws such as UCITA
3. Defining terms appropriately
4. Determining scope of use
5. Identifying potential users
6. Recognizing hidden pitfalls
7. Establishing audit provision limitation