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Where the Innovation Stops

Some time ago a rather large US entertainment company bought a few licenses for my HTML5 Game Engine Impact. They used it for internal prototyping and, as they told me, were quite happy with it.

A few month later I got an email from the company's legal department. They asked me to sign an amendment to the Impact Software license agreement with three additional terms. I assume they wanted to publish a game they made with Impact.

The first term stated that I would not be allowed to use their company's name in marketing material. Fine with me. I wouldn't do that without asking beforehand anyway.

The other two terms however felt a bit strange.

But let's back off for a second. As you may know, I'm the sole author of Impact. I'm based in Germany and self employed. It's a one man show. I'm providing Impact without any warranty and I'm not liable for any damages my software may cause (6. & 7. in the license agreement). Pretty standard.

Now, the license amendment I was to sign stated that my software "does not use, embed or incorporate any software which is subject to any open source or other similar types of license terms". What? Why? How? Is there any software out there that truly honors this term?

At this point it's already clear that I can't sign this. Impact uses John Resig's Simple Inheritance, Array.erase and Function.bind as found in MooTools, parts of DOMReady as found in jQuery and some more snippets and boilerplate code that I would consider public domain.

Typical Huge Company™ I thought. Kind of cute.

The last term however is where it gets truly frightening. In short, I would be held liable for "all damages, liabilities, losses, costs and expenses (including attorneys' fees) relating to any claim, action, suit or proceeding brought by a third party based on any actual or alleged infringement or misappropriation of such third party's intellectual property rights in connection with the use of the software." This goes on for a few more paragraphs.

Let's ignore for a minute that this legalese is written so vaguely that I could be held liable if the company published a game, using my game engine, with art assets they stole from another company. Let's ignore that this multi-billion-dollar company only bought software worth a few hundred USD from me, yet they still want me to pay their legal fees. Ignore that.

The core of the problem is another one: The US Legal System and Patent Law.

Quite frankly, the US Legal System scares me. A Legal System that is vague enough, emotional enough to have spawned a whole subcategory of dramatic movies is not a good indicator for true justice. The notion that the party with more money wins a trial, the whole jury selection process, the fact that there even is a jury. It all seems so absurd from our perspective.

Maybe I have watched too many Hollywood movies. But maybe it really is like this. Just look at the recent Apple vs. Samsung case – a supposedly boring patent trial made convoluted and emotional.

If I ever get sued in the US, who knows what will happen. It's truly unpredictable.

And in the US there's always a reason to get sued. Impact probably (unknowingly) infringes a whole lot of US software patents. All trivial, all with prior art. Yet, proving so in a court case would absolutely ruin my business and me financially.

It's understandable that this entertainment company wanted me to sign their license amendment. It absolutely made sense from their perspective. They are deep in this circus and wanted a bit of certainty that their legal system couldn't provide.

I told them I couldn't sign their amendment and never heard back.

Sometimes I have the feeling that I'm missing out by not being in Silicon Valley, in the epicenter of Startup culture. I was there for a visit and it was extremely energizing and motivational. I loved the people, the mentality, the atmosphere. Instead, I'm in a small and boring town in Germany.

But then again, I feel safer here; I have the freedom to experiment, to innovate. I'm glad that we don't have impeding software patents. Glad that our Legal System is still sane. Glad that my business is based in Germany and not in the US.

Friday, August 31st 2012

11 Comments:

#1Placebo – Friday, August 31st 2012, 14:05

Legal issues, when experiments become production code :/... Too bad really, Impact and yourself deserves at least 15 minutes.

How would a company twist their business model, to get out of this predicament?

#2TigerJ – Friday, August 31st 2012, 14:14

It's a greed issue over here. When two companies in the United States are both making profits they use that money to attack one another in addition to the normal thing companies do with profits.

google "Pepsi sues Coke" and you will see it is a never ending "part of doing business" on a large scale. If you are a BIG company in the USA you are in court. a lot.

The patent trolls usually don't go after the small guys, and if they do we usually just ignore them, they go away when they don't make their money fast enough.

Also this is a great related video: www.ted.com/talks/drew_curtis_how_i_beat_a_patent_troll.html

#3 – kinkfisher – Friday, August 31st 2012, 16:21

Umm... EU, and Germany especially, do have software patents. Unless you consider things like Microsoft's FAT patent (German patent number DE69429378) -- or any of the patents involved in the Microsoft / Apple / Android OEM spats (over which injunctions have already been issued) -- to not be "software" patents.

#4Daniel James – Friday, August 31st 2012, 17:29

Your mileage may vary, but I would re-consider moving to Silicon Valley / SF if you liked it. The issues that concern you are not a factor except for large companies trying to shell each other with lawsuits. Open source, software patents and so on are not a material impediment to the vast majority of startups and even most larger companies avoid legal activity as much as possible.

That's not to say that there's not a lot to be said for small German towns, or problems with the USA and California, but I wouldn't less this kind of legal ass-covering deter you from seeking opportunity... and opportunity there most certainly is in Silly Valley today. How long will it last? We'll have to see, but we won't be waiting, we'll be busy making mostly-useless but sometimes incredible stuff.

#5Troy Gilbert – Friday, August 31st 2012, 23:43

Very standard indemnification legalese. Any large business will require (and any smart business should) this when licensing software. The basic gist is that you are saying that the code you're giving them will not be responsible for getting them into legal trouble, and if it does, you'll shoulder the costs. That is to say, if you sold them software that actually infringed someone's copyright, without these disclaimers, they'd be stuck with the bill.

Now, the argument could be made that that's the big company's responsibility, and legally it is. And the way they handle it is requiring that you take on the responsibility. But the beauty of contracts is that its a mutual agreement between two parties. You don't want to take that risk, you don't sign it.

I would not cast this as an "evil" thing or a scary thing. Sure, there are lots of evil or scary things that giant corporations do, particularly in regards to little companies, but this is not one of them.

#6 – Strangepants – Saturday, September 1st 2012, 02:04

Or you could play their game? If they essentially want a new license, give them one: you provide indemnities and they provide a per-user royalty. Gives you a bit more in the war chest if they become successful and therefore an IP troll target.

#7 – Jon W – Sunday, September 2nd 2012, 04:54

You are probably small enough that nobody would actually come after you for money. No sense spending money wringing blood from a stone.

Maybe you should have said "that license requires the Enterprise Edition" at a non-refundable 1 million euro. Then make a corporation sign it and take the money. Then dissolve the corporation :-)

#8 – Andre K – Sunday, September 2nd 2012, 18:07

I vote for Jon W's solution. I think its very shameless of them to get a little software company to sign something like this for some change.

#9 – JDH – Tuesday, September 4th 2012, 11:16

Looks like fairly standard legalese in the business. Most software companies have insurance that covers this sort of thing subject to sensible precautions. Might be worth looking into if you're planning to sell more software.

#10 – David – Monday, September 10th 2012, 08:09

Since your game engine is getting a lot of attention in the U.S., it is definitely worth your while to hire an attorney. I'm sure most people are giving you their best advice but it can't compare to a professional and at the end of the day, if you get a good attorney it will be well worth it. It's the price of doing business in the U.S. I'm afraid. Who knows what that company is doing with your engine right now without your consent. Get an attorney and let her/him handle it. I bet you could find quite a few who would be willing to help you. Maybe even some of the people commenting. But at this point people are just giving you their opinion and you can't really rely on that. Best of luck regardless!

#11 – vaque – Tuesday, January 29th 2013, 03:35

you game Boilab destroeyr is good.
but I found one bag. when I am standing under moving platforma(up down), I don't killer of platfoma, but I penetrate throw it and stood on it.
it is funny

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