A recent federal district court decision denied a motion to dismiss a complaint brought by Artifex Software Inc. (“Artifex”) for breach of contract and copyright infringement claims against Defendant Hancom, Inc. based on breach of an open source software license. The software, referred to as Ghostscript, was dual-licensed under the GPL license and a commercial license. According to the Plaintiff, those seeking to commercially distribute Ghostscript could obtain a commercial license to use, modify, copy, and/or distribute Ghostscript for a fee. Otherwise, the software was available without a fee under the GNU GPL, which required users to comply with certain open-source licensing requirements. The requirements included an obligation to “convey the machine-readable Corresponding Source under the terms of this License” of any covered code. In other words, under the open source license option, certain combinations of proprietary software with Ghostscript are governed by the terms of the GNU GPL. Continue Reading
On April 5, 2012, President Obama signed into law the landmark Jumpstart Our Business Startups Act (JOBS Act), for the purpose of encouraging the funding of startups and small businesses throughout the United States. Title III of the JOBS Act, otherwise known as Regulation Crowdfunding or Reg CF, received the most attention because it legalized investment crowdfunding. The purpose of Reg CF was to make it easier for startups and small businesses to access capital, to give more people the ability to participate in investment opportunities, and ultimately, to create jobs and stimulate economic growth.
On October 26, 2016, the Securities and Exchange Commission amended its existing safe harbor rule for intrastate investing, Rule 147, and added a new intrastate safe harbor, Rule 147A in an effort to reflect the realities of modern business. While these changes could provide a useful tool for small businesses, the SEC’s evolving stance on nationwide crowdfunding and lack of coordination with existing state law may hinder their usefulness to any business beyond those looking for local or niche investors.
On October 26, 2016, the SEC amended Rule 504 of Regulation D under the Securities Act of 1933 (the “Securities Act”) to increase the maximum amount of securities that may be sold thereunder in any 12-month period from $1 million to $5 million. Consequently, the rarely used Rule 504 may now prove useful to issuers of securities in smaller capital raising and M&A transactions.
The combined experience of these panelists was incredible, and we heard some great advice about how to build and manage teams, which sometimes requires ignoring conventional thinking. The following are five of those suggestions.
Summarizing the week Jared writes, “Lewis Carroll famously said, ‘Begin at the beginning, go on to the end, and then stop.’ But that is hard advice to follow when one’s head is spinning…” It would have been just as apt if Jared had added that “here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!” Because, at the end of Season 3 Pied Piper is in pretty much the same place as at the end of Season 2, and about to begin at the beginning all over again. (But at least it’s a promising place to start!)
Regulation A+, which became effective on March 25, 2015, permits the offering of up to $50,000,000 in securities in any twelve-month period, subject to the certain requirements (a “Tier 2 Offering”). Tier 2 Offerings are not subject to state securities laws registration and qualification requirements due to federal preemption provided by Section 18 of the National Securities Market Improvement Act of 1996 (NSMIA) because such securities are offered or sold to a “qualified purchaser” (as defined by the Commission).
“Not much to report this week, dear readers! Everything is perfectly fine.” Or so says Jared. But as Gilfoyle is quick to point out, “That’s a lie.” The problem is that even though the Pied Piper product has incredible buzz, and celebrates half a million downloads, regular people can’t stand using it once they have it. Pied Piper has a scant 19,000 daily active users, and the product is being savaged in focus groups. Richard pours his efforts, and almost all of Pied Piper’s remaining funding, into trying to educate the public about what Pied Piper is and how to use it. But all his efforts yield only one convert, Bernice… and “Pipey,” a horrifying animated flute that pops up to give tips on using the product. In other words, Pied Piper is “fine” in the same way someone who lost their job and their dog in the same day is “fine”—they’re wretched and nearly broke. In desperation, Jared goes rogue and secretly starts buying daily users from a “click farm” in Bangladesh.
Alas, poor Erlich! We knew him; ‘a fellow of infinite jest, of most excellent fancy; he hath borne us on his back a thousand times; and now,’ as Jared poetically recounts, “Erlich’s Bachmanity boondoggle has led to his being unceremoniously bucked off the Pied Piper unicorn, [lock-] stock-and-Board-seat-wise.” Unfortunately, Erlich’s lavish over-spending of Bachmanity’s capital, combined with his personal liability for Bachmanity’s debts, have brought Erlich to the brink of bankruptcy. He’s so desperate for funding he’s willing to sell his Pied Piper shares to dig himself out of his hole. But yet again, the “onerous terms” that Richard accepted when he took Russ Hanneman’s investment rear their ugly head. Previously these terms enabled Raviga to take control of Pied Piper’s board and fire Richard. Now Laurie uses the terms to block Erlich from selling half his shares to Russ for $5 million, and forces Erlich to sell all his shares to Raviga Capital for the exact amount of Erlich’s debts ($713,000). This leaves Erlich with nothing except extreme public ridicule.
In this week’s episode of Silicon Valley, Richard enjoyed an unprecedented run of success, culminating with the official launch of Pied Piper’s platform. Richard has suffered so many setbacks, it’s little wonder he is initially reluctant to launch even a beta version—certain that the platform is buggy and will only subject Pied Piper to further mortal embarrassment. But the team convinces him to try a very limited, private beta, and the embarrassment never comes. Everyone loves it, from the beginning to the shockingly happy ending… everyone, except Monica. (But that doesn’t matter because her dissatisfaction just convinces us that we aren’t dreaming.) The team even manages to foil Gavin Belson’s attempt to steal the beta, turning the tables on him and leaving him screaming to “cut the power to building” in order to shut down the team’s zip bomb.