Lessons learned about Licensing Agreements
This page relays my experience negotiating a source code license agreement with a company where I was doing research for my dissertation. During the entire process all parties were attempting to “do the right” thing and we tried for the minimum amount of hassle. This document mainly describes the process I went through and lessons I learned from it.
Background:
I started interning at the company in June 2000, working on one of the group’s existing projects. Things went well and they asked if I was interested if I would like to continue working on the project as my PhD. dissertation work. I thought this was a terrific idea and agreed. Then came the tricky part: how to pay me for my work, deal with the source code licensing, and make sure that I could publish the work and defend publicly it.
Licensing
Agreement:
Lesson 1: These things take a lot of time to arrange (so start early).
In our first attempt we tried to gather information from the companies lawyers and on the UW side from my advisor, department chair and OTL. Basically we ran out of time to put the agreement together before the fall quarter and instead my internship was extended (with its strict NDA and source code all belonging to the company).
Lesson 2: Avoid
getting UW funding involved unless necessary.
One of the first issues was how I would be paid (and I learned a lot about university funding, but I won’t go into that now). This isn’t directly related to licensing agreements, but by not going through UW grants and services we tried to avoid confusion with involving IP from UW. I was going to be spending most of my time at the company and using their equipment, so we figured out it made the most sense for me to take a temporary job at the company (as a contractor actually employed by a separate temporary agency). My salary was calculated to include money to pay my own tuition. This decision apparently also affected the type of agreement the lawyers wanted to write so it was an important step.
Side note: You want to be careful to consider all the disadvantages and advantages of an extended internship and paying your own tuition. In particular, I went through a big hassle with health insurance, and also needed to file a bunch of stuff to be a resident of Washington (which I hadn’t done before because I had been on leave out of state).
The next step was figuring out a source code licensing agreement. Our department chair spoke with OTL and outlined the following general guidelines:
These guidelines made sense to everyone involved. My main manager had been in academia for many years and understood the whole thesis process.
Understanding patent and copyrights issues was pretty confusing to me. Basically, I was willing to give all my rights as long as I could openly publish, and continue working in the area after my thesis. I thought this would make the whole process easier (and perhaps it did – it was still painful). It turns out that with patents each inventor can commercialize independently so the company (because I worked with their employees) could commercialize without needing to license from UW. For copyright, UW policy is that students own their own code and so I planned to assign my rights over to the company (in exchange for publishing and continued work in the area) and everything was set there.
With these parameters the company’s legal department worked for a while (or rather there was a delay while we waited for them to do something). While I firmly don’t believe anyone was purposely trying to keep me in the dark, I did have to keep poking and prodding until I got a preliminary agreement. Things at this company (and probably at most) tend to be deadline driven so it was important to keep reminding everyone of the upcoming deadlines.
Eventually I received a draft agreement written in strict legalese. I read this a number of times very carefully and also asked the department chair and my advisor to read it. They were both very helpful. In the end I felt, I basically understood what the agreement stated and in particular the parts I felt where important were there: a section on publishing the research (the company has the right to review it), a section giving me a personal license to the source code, and no non-compete issues for continuing research in this area.
Lesson 4: A quick attorney consult can be very helpful
However, just to be on the safe side I sent a copy to my father who is an attorney. I’m very glad I did this and I would urge other people in this type of situation to have the agreement reviewed by an attorney if possible. He didn’t actually suggest a huge number of changes, but provided sanity checking in a couple of places and could explain any confusing parts to me. Also, when I went back to negotiate with the lawyers I had a list of mostly minor changes, which made it easy to compromise on some of them while sticking firm on the others. I also believe that because I talked with a lawyer the company’s lawyers took me more seriously.
So the last bit of confusion came up when I went to the orientation for the temporary agency (which would be contracting my services to the original company). They had their own NDA’s and forms, and I went into a bit of a panic that if I signed anything for them, it would conflict with the agreement I had just signed with the company and might cause problems. I ended up in a furious round of faxing with the companies lawyers and learned that due to the wording of my original agreement it would override anything with the temporary agency. This is definitely something to watch out for and understand yourself since the HR people handing you the forms may not know anything about them (as they didn’t in this case).
Final thoughts:
So that’s where we are right now, the process was painful and confusing but in the end worked out. The original agreement expires after a few months at which point I may switch back to interning and my hope is that we don’t have to go through anything like this again. I just want to finally stress that everyone at the company and at UW was actively interested in working this all out so that we did the right thing. I shudder to think how this process would go if this weren’t the case.