TECHNOLOGY CONTRACTS GLOSSARY

Backup Assignment

See Assignment, Backup.

Bankruptcy

In the U.S., a legal process available to a company whose liabilities exceed its assets, enabling it to conduct an orderly liquidation of its business assets or to reorganize by eliminating or restructuring claims against it. Companies generally can file under two chapters of the U.S. Bankruptcy Code. (Title 11 of the United States Code). First, they may file under Chapter 7, which is solely for liquidation and in which an independent trustee will be appointed. Alternatively, they may file under Chapter 11 and the company's management generally will remain in control. Chapter 11 can be used to conduct an orderly liquidation or to reorganize by eliminating or restructuring claims against the company. Other legal proceedings are available to companies just short of bankruptcy.

Bankruptcy Code Section 365(n)

A statute that protects Licensees in the event that a Licensor of certain Intellectual Property rights files for Bankruptcy. Contracts that are not fully performed by both parties (i.e. that are known as "non-executory" under Bankruptcy law) are subject to "rejection" (in other words, termination) in Bankruptcy by a Bankruptcy trustee. Section 365(n) provides an exception, which benefits licensees of certain Intellectual Property from licensors who declare bankruptcy. It permits the licensee to keep the license as it existed at the time of the bankruptcy filing, to enforce exclusivity and, if the contract has proper legal provisions, to access supplementary rights (such as computer source code in escrow). To keep the license, the licensee must continue to pay any Royalties provided for in the contract and the licensee cannot obtain ongoing positive performance from the bankrupt company, such as ongoing software Updates or Maintenance and Support. Section 365(n) has gaps. It covers Trade Secrets and U.S. Patents and Copyrights, but does not cover Trademarks, most other Intellectual Property or most foreign Intellectual Property, or any future improvements and modifications (e.g. future software upgrades).

Berne Convention for the Protection of Literary and Artistic Works

An international treaty that governs Copyright rights, under which each country recognizes Copyrights of residents of other nations that have signed the treaty. Among other things, the Berne Convention eliminates many of the requirements for formalities such as Copyright Notice and registration. Also called Berne Convention. See the treaty text.

Berne Convention Implementation Act of 1988

The statute under which the United States joined the Berne Convention, on March 1, 1989. Among other things, this statute made certain copyright formalities, such as the use of a Copyright Notice, optional in the U.S. for some purposes (but they are still recommended).

Best Efforts

A level of diligence, or effort, exercised by a party in its performance of a contract. Best efforts has different meanings, depending on whether or not it is coupled with exclusivity. "When the best efforts obligation is coupled with an exclusive agreement, the level of diligence is akin to a fiduciary obligation, .. the highest duty found in the law, comparable to what an attorney owes a client or a doctor owes a patient." In a non-exclusive agreement, the meaning of best efforts is not clear, and may or may not be equivalent to Reasonable Efforts or to a higher standard. J. Pink, Divining the Meaning of "Best Efforts," California Lawyer (Jan. 2008). (The term is also used in California Uniform Commercial Code Section 2306(2) with respect to contracts for exclusive dealing of goods. ) Contrast with Reasonable Efforts.

Beta (version of software)

A release of software for end user testing, which usually includes all features, but may include minor errors (bugs). With the growth of web services and desktop software that can be updated over the web, some beta versions can be offered for years on end, blurring the distinction with commercial releases. See A Long Winding Road Out of Beta, by Paul Fasta, on ZDNet. See also a comprehensive article about the Software Release Life Cycle.

Beta Agreement

A contract for an end user or other evaluator to use Beta version software for testing. Because Beta software generally does have errors (even if they are only minor errors), these contracts are used to limit the liability of the company releasing the software. For proprietary software that will be publicly released later on a public launch date, beta agreements may include a Non-Disclosure Agreement, to preserve confidentiality before the launch. Open Source Software is not released under a beta agreement because the Open Source Software agreements already contain liability limitations and the software obviously is not kept confidential.

Bounty

A one-time payment for completing an action under a contract (such as bringing a qualified prospective customer to the other party). Compare against Revenue Share.

Breach (of Contract)

Violation of contract obligations by a party, which can result in Termination of the contract and imposition of money Damages. Lawyers focus on "Material Breach," in other words violation of significant provisions of an agreement that formed the basis of the bargain of the parties. Also known as Default.

Browsewrap

A type of "agreement" to which the user agrees (or agreement is implied by law) merely by visiting a web site. It is typically not negotiable. This type of "agreement" has not been enforced consistently by the courts, so other types of agreements such as Clickwrap agreements and Manually Signed agreements are more popular for important contracts.

BSD

One of the simplest, shortest and most permissive of the Open Source Licenses. It does not contain a Reciprocity Clause. Also known as the Berkeley Software Distribution license. The Open Source Initiative publishes a template for the BSD license.

Bundling and Integration (of technology)

The combination of technologies (especially computer software). Many innovative products and services require the combination of technologies from several companies. Technology transactions often include requirements for technologies or computer code to be technically integrated or bundled with other material. Bunding and integration are often used as synonyms, but bundling also can refer to inclusion of a product on a disk or in a package without any technical combination.