Indiana Software Litigation

Firm Joins Innovation Summit as a Sponsor

Wednesday, August 11, 2010 by Lainey Scheetz

FIRM JOINS INNOVATION SUMMIT AS SPONSOR

For the second year in a row, the firm committed to this year’s Innovation Summit as the Plenary Panel Sponsor.

This annual event brings together entrepreneurs, executives and policymakers for learning, dialogue and debate on the central challenge of today’s economy – turning today’s ideas into tomorrow’s business breakthroughs. The Summit includes keynote speakers, breakout sessions on a variety of innovation related topics, and dozens of trade and industry booths.

Innovation Summit will feature iconoclastic technology writer Nicholas Carr as the keynote speaker, author of the recently released book, The Shallows: What the Internet Is Doing to Our Brains. Agree or disagree with him, Carr makes us think – and that’s the first step towards innovation.

“There is no other event in the city that brings together this unique blend of people. The end result is sure to be an unprecedented amount of thought leadership in the innovation realm. Alerding Castor Hewitt, LLP could not be more excited to be a corporate partner,” comments David Castor, founding partner of Alerding Castor Hewitt, LLP.

Annual attendees include: Chief Executive Officers, CIO, CFO, CTO Executives, University Presidents, Association Leaders, Marketing Executives, Leading Educators and Scientists & Engineers.

Firm at a Glance:

Practice Areas: business counsel, licensing and technology legal counsel, software litigation

Headquarters: 47 S. Pennsylvania St., Suite 700

Founded: April 2007

Partners: Michael Alerding, David Castor, Brian Hewitt

Employees: 17, nine of them attorneys

Clients: 300, including Compendium Blogware, Iasta, First Merchants Bank, Indiana Bank and Trust, MainSource Bank

ALERDING CASTOR HEWITT, LLP CLIENT NAMED 10TH FASTEST GROWING PRIVATE COMPANY IN INDIANA FOR THIRD TIME

Friday, July 23, 2010 by Lainey Scheetz

FOR IMMEDIATE RELEASE
July 23, 2010
Contact: Lainey Scheetz
317.403.9012
lscheetz@alerdingcastor.com

ALERDING CASTOR HEWITT, LLP CLIENT NAMED 10TH FASTEST GROWING PRIVATE COMPANY IN INDIANA FOR THIRD TIME

Indianapolis, IN – Iasta, the leading provider of eSourcing software and solutions, was titled as the 10th Fastest Growing Private Company in Indiana for 2010 by the Indianapolis Business Journal (IBJ). A third time honoree, Iasta boosted its three-year growth rate at 134 percent.

The report profiled Iasta’s founding’s, current offerings and future outlook.

The IBJ ranks companies by their revenue growth over the last three consecutive years, which must exceed $1 million annually. In 2009, Iasta ranked 17th and in 2008 they ranked 14th. The award is based on revenue growth of the last three consecutive years. Iasta has thrived in a market where many others have been forced to make budget cuts and layoffs. “We’ve established a lot of credibility and there’s a lot of growth yet to be had,” said Bush.

Iasta experienced very rapid growth in its younger years at 80 to 90 percent a year. These days, the company still grows at 30 to 40 percent annually. Bush attributes the success of Iasta to flexibility and high quality in both software and services.

Dave Castor has represented Iasta as general counsel since 2002.

Firm at a Glance:

At Alerding Castor Hewitt, LLP, the attorneys focus on business law, litigation and technology law services. The firm has unique experience in niche markets such as software and technology licensing, e-commerce and Internet law and international business law.

For additional information, please visit www.alerdingcastor.com.

Facebook ownership lawsuit results in asset-freezing TRO

Wednesday, July 14, 2010 by Chris Stephen

This one is a fun little piece of pseudo-software litigation. The basic facts are that Facebook and its majority stockholder Mark Zuckerberg have been sued by Paul D. Ceglia, who claims 84% ownership in the website juggernaut. The part of this story that has been clogging the Net is that a state court judge in New York actually issued a temporary restraining order ("TRO") prohibiting Zuckerberg and Facebook, Inc. from disposing or selling any of its assets. This has produced the viral "Facebook assets frozen". Interestingly, Ceglia has produced a written contract, making this suit slightly more interesting than prior software litigation involving Facebook ownership in which former students at Harvard claimed Zuckerberg stole the idea from them (which a court ultimately found to be "dorm room chit-chat").

One aspect that the technology legal counsel in me finds interesting is that the Court granted the TRO. Generally speaking a TRO is an injunctive mechanism that can be used to stop someone from doing something. In order to get a TRO, you generally have to show that you have a basis for your claim and that you have a likelihood of success on the merits. I don't know for sure that New York is the same standard as Indiana, but I suspect that it is. That means that a court looked at the documents and found that there might be something here. I find that very intriguing. I will note, however, that Facebook's attorneys filed a motion to dissolve the TRO and noted that it was ex parte, meaning that it was entered without Zuckerberg or Facebook being given the opportunity to respond. It also sets forth that the only evidence presented to support the TRO was a "scant" affidavit. But, one must conclude that the Court nevertheless did the appropriate analysis.

Also, having read the documents filed, there might be something to discuss. However, the biggest issue that I see at the outset is that the contract allegedly happened in April, 2003. It would seem to me that there are is a statute of limitations issue, which may kill this lawsuit before it gets into really fun electronic discovery.

Facebook has removed this case to Federal court, which I think is a smart move. We'll see what develops. But I would urge everyone to consider the reality that this case poses to the software developer or web-designer. From the "Zuckerberg" side, be extremely careful what terms you put in your contracts because you may have to rely on or defend them later (after you are a famous success). In this software litigation, Cegila is claiming 84% ownership in the company based on a damages provision that stated that he would get 1% ownership for each month after January 1, 2004 that the contract was fulfilled. And, if the case survives the statute of limitations issue, this may become hotly contested.

Thus, be careful that you hold tightly to your equity in your company. Don't give it away willy-nilly. And, above all else, get good technology legal counsel; specifically ones that understand what should be in a well-drafted contract and that have available the expertise to determine how that contract language will play out in court.

Ind. S. Ct. addresses lay witness v. expert witness - Technology litigation implications

Monday, April 12, 2010 by Chris Stephen

Your friendly neighborhood technology counsel here: The Indiana Supreme Court recently discussed the ability of a lay witness to provide "expert" opinions in Sibbing v. Cave, 922 N.E.2d 594 (Ind. 2010). In that case, counsel asked the plaintiff what she believed caused her pain. She responded something to the effect of "the bulging disc in my lower back", and the opposing party objected based on a lack of expert foundation. The basic argument to the trial court was that this lay person cannot provide a medical diagnosis of what caused her pain because she wasn't an expert. The Supreme Court, upholding the trial court, found that a recitation of one's personal belief regarding a fact (in this case, the source of her pain) was within the scope of Indiana Evidence Rule 701.

I can read your minds at this point of my blog. You are thinking, "What in the heck does this have to do with technology litigation, SaaS litigation, software litigation, or any of the stuff that you normally discuss?" The important point of this case is that it can be used to get to "expert" type opinions from a lay person. This is important in tech lit because most of our technology clients have some knowledge as to the x's and o's of what is happening behind the scenes of a given situation or product, but they don't necessarily have enough expertise to survive a full-blown Daubert challenge to their status as an expert. Using Sibbing, a tech litigator (i.e. me) can now ask the straight forward question of "why do you think the widget broke" or "how do you think this SaaS agreement harms your company" or "what do you think your damages are" and allow our clients to spout their opinions, and in the face of a challenge, cite this precedential case. As you can imagine, the potential of this ruling is huge.

Additionally, for those really interested in law-dorking out [yes, I made up that word, so what], there is also a good analysis in Sibbing of the use of the medical diagnosis exception to the hearsay rule found in IRE 803(4) that distinguishes the previously held standard set forth in Coffey v. Coffey, 649 N.E.2d 1074. Not overly important in tech lit, but a good read for any litigator.

TECHNOLOGY LEGAL COUNSEL SPONSOR 2010 TECHPOINT MIRA AWARDS

Thursday, April 8, 2010 by Lainey Scheetz

Given the firm's technology legal counsel and software litigation practice, it only makes sense that the firm would support the prestigious 2010 Techpoint MIRA Awards Gala taking place on Saturday, May 15th, 2010. It makes for a positive synergy between the two groups.

The TechPoint Mira Awards, presented by BKD, is the premier technology awards program in the state of Indiana. Since the turn of the century, TechPoint has honored Indiana businesses, schools and universities, and individuals for their contributions to the state’s technology-related economy. TechPoint’s prestigious Mira Awards program recognizes leaders and innovators in 11 different business categories.

“As a firm that offers technology legal counsel, we appreciate the opportunity to support TechPoint in an effort to further their mission,” says David Castor, partner at Alerding Castor Hewitt, LLP. “We enjoy supporting our clients as much as we can.”

Firm at a Glance:
Practice Areas: business counsel, licensing and technology, litigation
Headquarters: 47 S. Pennsylvania St., Suite 700
Founded: April 2007
Partners: Michael Alerding, David Castor, Brian Hewitt
Employees: 17, nine of them attorneys
Clients: 300, including Compendium Blogware, ExactTarget, Iasta, First Merchants Bank, Indiana Bank and Trust, MainSource Bank

Please Read Before You Click "I ACCEPT"

Wednesday, February 10, 2010 by Janet Monroe

SaaS litigation, software service level agreement, cloud computing law

How many times have you signed up for a service on-line, scrolled past all the legal jargon, and clicked "I Accept" or "I Agree" without taking the time to actually read the terms and conditions you're agreeing to?

Admit it. We all do it.

But, just as a warning to be careful the next time you're purchasing that new mp3, or more importantly signing your company up for something on-line... those shrink-wrap and click-wrap agreements have been held by the courts to be binding.

Contracting in cloud computing law doesn't necessarily require a signature these days. An affirmative acceptance of the provisions of a software service level agreement by an authorized agent can be given with a click of a button.

Take the recent trademark infringement case of Appliance Zone, LLC v. Nextag, Inc. for instance. Although this case was dismissed on grounds of jurisdiction (which, incidentally, was a term of the shrink-wrap agreement that was held by the court to be an effective document) the court discussed some important software litigation surrounding click-through agreements within it.

In essence, if the facts support a claim that a person (a) is authorized to enter into such a contract, and (b) had the intent to enter into it, then they will be held to terms of service they signed up for, including basic contracting terms such as jurisdiction, venue, etc, etc.

The court in this case cited Gallent Ins. Co. v. Isaac in ruling that there was authorized conduct that clearly demonstrated the acceptance of a valid contract by the 19 year old website manager of Appliance Zone who registered the company as a merchant on Nextag's website and clicked "I accept the Nextag Terms of Service" as part of the process.

While the enforceability of a contract can be destroyed with factors that make it unconscionable (such as inequality of bargaining power, or unreasonable or unknown terms) the court did not find those arguments sustainable in this case for a number of reasons, including the fact that clickable acceptance has become commonplace for on-line retail, and the registration process could not have been completed without the click-through acceptance.

The court in this Indiana technology litigation case fell back on Paper Exp., Ltd., Micrometl Corp. v. TranzAct Technologies, Inc. with the "fundamental principle of contract law that a person who signs a contract is presumed to know its terms and consents to be bound by them."

Next time, before you click "I Accept" make sure you really do.

Who Owns My Website?

Tuesday, December 1, 2009 by Janet Monroe

Indiana Internet Litigation, Indiana Technology Counsel

So you've launched your company and hired a web-developer to breathe life into the idea you've poured your heart and soul into developing over the past several months, perhaps even years...

Maybe you never even thought to ask the question, but at the end of the day who actually owns "your" website? You or the web designer?

Indiana software litigation in a ruling by the Supreme Court of Indiana, Conwell v. Gray Loon Outdoor Marketing Group, points to the fact that hiring a contractor for the development of content and programming of a website is considered a service rather than a purchase of a good.

In this case, the Indiana Supreme Court ruled that the independent contractor owns the property, while the hiring party owns a non-exclusive and perpetual license to use such property, unless of course, there is an agreement specifying otherwise.

Looking towards prior Indiana technology litigation the Supreme Court applied the definition of an implied non-exclusive license to the development of a website:

An implied non-exclusive license is granted when (i) a person (the licensee) requests the creation of a work; (ii) the creator (the licensor) makes that particular work and delivers it to the licensee; and (iii) the licensor intends that the licensee copy and distribute the work.

This definition applied to the facts surrounding the website development in this particular case ultimately led the court to its conclusion.

So, expect this to be the case (at least in Indiana) the next time you hire a webdesigner for your next project: upon final payment, the webdesigner owns the property, while you own the right to use it... forever.

(Unless, of course, you involve technology legal counsel first and negotiate otherwise.)

For an example of a newly developed Indiana-based website check out: GlobalToaster

SaaS Law - Indianapolis is a Great SaaS City

Sunday, April 19, 2009 by David Castor

There was a great post this last week in the Indianapolis Business Journal's blog on Indianapolis being a leading Internet marketing software city. Chris Baggott of Compendium Blogware was interviewed on his thoughts regarding the market.

Here is an excerpt:

Chris Baggott, who runs one of the companies developing the software, Compendium Blogware, says Indianapolis actually has emerged as a center of the budding industry.

Consider that the city also hosts ExactTarget and Aprimo, both of which have filed intentions to go public. There’s also 5 Buckets, Lights Out Intelligence and Market Path. Broaden the definition slightly, and there’s WebLink International, eTapestry and the well-established Interactive Intelligence.

All told, the micro cluster has more than 1,000 employees.

“Quietly we have become the Internet marketing software capital of the world,” Baggott says.

I am very proud of the SaaS market we have created in this city. We have the infrastructure, knowledge-base and, maybe most importantly, the community and culture where software licensing companies are encouraged to grow. Although I would like to see the city lend further support to this growing industry, the community to support entreprenuership, innovation and private equity investments in these businesses.

In addition to the companies cited by Chris, we have high-growth Indiana technology companies like Iasta and Vontoo and emerging SaaS companies such as Koi Systems, CareerScribe and P2P Solutions in Indianapolis.

As a final note, I am proud of the reference in the post to LightsOut Intelligence - a web intelligence SaaS business currently officed at the Alerding Castor business incubator.

~~~~~~

Alerding Castor is an Indianapolis law firm focusing on business law, information technology law (including SaaS law and legal technology consulting), private equity consulting, and business litigation.