GPM TechLaw 1.0: WARNING: Technology and the Law can be a Dangerous Mix. Agenda. TechLaw Quarterly Programs
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1 GPM TechLaw 1.0: WARNING: Technology and the Law can be a Dangerous Mix Doug Ramler doug.ramler@gpmlaw.com Kate Nilan kate.nilan@gpmlaw.com Agenda Introduction Launching Your Business (Doug) Policies No One Reads But Are Important (Kate) Top 5 Legal Developments Ask a Lawyer Networking 2 TechLaw Quarterly Programs Quarterly sessions in September, December, March and June We want feedback: us at techlaw@gpmlaw.com Working on TechLaw updates or newsletter with contents from programs 3 1
2 Launching a Venture - Planning Phase I: Planning Develop a Business Plan Assess Current Status Understanding Among Founders Roles/expectations Contributions Ownership 4 Launching a Venture - Planning Obtaining Rights to Intellectual Property What is IP? (see Attachment A to handout) Ownership/Rights Creator Employer Contracting Company Protection Filings Nondisclosure Agreements Assignment 5 Launching a Venture - Planning Selecting a Name Domain name Business Name Trademark/Brand 6 2
3 Launching a Venture - Organize Phase II: Organization Set Up a Business Entity Why? Types Factors Organizational Documents Hiring Personnel Employee vs. Independent Contractor Agreements 7 Launching a Venture - Organize Contribution and Ownership IP, Cash, Service Agreements Assignment Subscription/Contribution Agreement Restricted Equity Agreement Founder/Owner Agreement 8 Launching a Venture - Organize Raising Capital Debt vs Equity Common, Preferred or Convertible Debt Documentation MN Angel Tax Credit Securities Law Compliance Contracts (suppliers, distributors, etc.) Location 9 3
4 Launching a Venture - Launch Phase III: Launch Marketing Business Model Customer Agreements Risk Assessment/Minimization Raising Additional Capital 10 Launching a Venture - Mistakes Ten Common Legal Mistakes No Business Entity Poor Allocation or Restriction of Equity Not Considering Tax Implications Failure to Comply with Securities Laws No Written Assignment of IP 11 Launching a Venture - Mistakes Not Protecting IP No Written Agreements Misclassification of Employee/Contractor Copying/Pasting Terms of Use and Privacy Policy Not Engaging an Experienced Attorney 12 4
5 The Fine Print: Privacy Policies Not required by federal law (except certain industries) Required by some states (California), so basically required to operate in US FTC is on the prowl 13 The Fine Print: Privacy Policies Privacy Policy must be accurate and truthful Both IT and marketing at the table to draft May apply to mobile app and website Don t accept data from kids (under 13) Should not make false promises: Your data will be extra safe with us 14 The Fine Print: Privacy Policies FTC and California AG lawsuits: Jerk.com (harboring data from Facebook) Delta mobile app (missing privacy policy) Under CalOPPA, $2,500 per downloaded app without privacy policy Marketing and behavioral advertising is next frontier 15 5
6 The Fine Print: Terms of Use Privacy Policy = your practices Terms of Use = controlling your user s practices Protect your IP and software May serve as End User License Agreement (EULA) in mobile application 16 The Fine Print: Terms of Use Special considerations: Serve as a license for content (beware of consent issues!) Guidelines for user contents 17 The Fine Print: Terms of Use Special considerations: Serve as a license for content (beware of consent issues!) Guidelines for user content Digital Millennium Copyright Act (DMCA) Lots of boilerplate language 18 6
7 The Fine Print: Click Through Agreements Quasi-Terms of Use/Actual Agreement Recommended for unique terms Certain terms may require consent under other laws (Canada s CASL) If you re doing something complicated, talk to a lawyer. 19 Top 5 Legal Developments 1. Data Privacy and Security The FTC has authority (Wyndham case) Shifting prevention to mitigation Cyberliability insurance Third party vendors are a major loophole 20 Top 5 Legal Developments 2. Restriction on Payment of Patent Royalties Kimble v. Marvel Entertainment (toy string-shooting spider man) No payment of royalties beyond life of patent No exceptions 21 7
8 Top 5 Legal Developments 3. Employment: Hiring and Compensation Do you have employees or contractors? Uber, Homejoy, the assault on franchise systems 22 Top 5 Legal Developments 4. Equity Crowdfunding in Minnesota MN State Law in Effect Waiting on Regulations 23 Top 5 Legal Developments 5. New Minnesota LLC Statute New LLCs: Effective August 1, 2015 Existing LLCs: Effective January 1, 2018 or sooner if elected Consider review of existing documents 24 8
9 Q & A and Parting Thoughts Thank you. We ll see you in December We want to hear from you: techlaw@gpmlaw.com 25 9
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