Source Code - Risk Losing Trade Secret Protection in Government Funded Projects

Lexology recently posted an interesting article concerning trade secret protection (or lack thereof) for source code developed exclusively using government funding. The federal court in Louisiana found that the defendants did not missapproptiate any trade secret because the source code was not a trade secret. Among other reasons cited by the court for its decision, the plaintiff had granted all rights in the source code to the government per the language in the contract and the plaintiff did not show any evidence that it had reserved any rights in the source code for itself. Here is the case - L-3 Communications Westwood Corporation. v. Robichaux Et Al.

ZapMedia Claims Apple iTunes Infringes Patents

Apple is being sued by ZapMedia Services, Inc. in the US District Court for the Eastern District of Texas. The complaint alleges that Apple's iTunes store and its consumer products infringe two patents that ZapMedia Services holds. ZapMedia Services contends that it had notified Apple of its infringing activity and had offered to license its patents to Apple. Clearly, both parties have a lot at stake in this matter. Apple has revolutionized the music industry with its iTunes store and related consumer products, and iTunes is one of the driving forces behind Apple's phenomenal growth story. If ZapMedia Services is successful in its claim against Apple, it stands to potentially receive significant (and potentially recurring) license fees for Apple's continued use of the patents. Here is a link to the case: http://marketing.justia.com/tos.html

Linux Open Source Distributed as Embedded Component in Hardware Found to be Violation of GPL

A German court found that VOIP phones running Linux software that were distributed without the source code and license text violated the terms of the General Public License (GPL) (Link to News). Skype was found guilty of violating the terms of the GPL for selling and distributing VOIP phones, which are manufactured by SMC Networks, without the source code or the text of the license. The court also found that SMC Networks' move to remedy the violation by distributing notice to buyers with reference to the license text and the location of the source code was inadequate. Interesting in this case is the fact that the reseller of hardware products (namely Skype) with embedded source code was found guilty of violating terms of a license. The court reasoned that, although Skype was not the manufacturer of the phone, the company was obligated to comply with the license and applicable law once it became aware of the violation. The case is subject to appeal and the suit against SMC Networks has not been heard. There will very likely be more news on this.

Absent Notice, Posting of Changes To Online Agreement Not Binding Says California Court

The United States Court of Appeals for the Ninth District applied basic contract principles in reversing a decision from the United States District Court for the Central District Court of California.

The Decision - http://pub.bna.com/eclr/0675424_071807.pdf.

What it Says - Parties to a contract have no obligation to periodically check if the other party has changed the contract terms. Online contracts are no different. Unilateral changes to online contact terms are not binding unless the changing party (in this case, Talk America) has given notice to the other party (in this case, Joe Douglas) and the other party has accepted the change.