grellas

Dylan himself was something of a hustler in his own way (not being negative here: he was also quite an amazing person) but he worked hard at his craft, delving deeply into Lord Byron and many others to hone his poetic skills - and it showed! So many artists gained fame doing his songs owing to the limitations of his own signing voice (his has a raw quality that is appealing in its own right but probably more for specialized audiences as compared to what the signing groups with more of a popular bent could achieve). "Can't sing, can't play" was one putdown popular in that era. But oh how this music soared from one with a raw force, a poetic inspiration, and a truly superb talent whatever the technical limitations - and all wrapped up with the zeitgeist of the times, perfectly capturing the sense and urgency of the civil rights movement.

Very nice to see the accolades now being bestowed on a man who effectively changed a generation in profound ways.

But the significance of this breach is not the only thing that caught my eye.

These litigants have been entrenched in scorched-earth litigation for years now in which the working M.O. for both sides is to concede nothing and make everything the subject of endless dispute. Big firm litigators will often do this. It is a great way to rack up bills. Clients in these contexts do not oppose it and very often demand it. And so a lot of wasteful lawyering happens just because everyone understands that this is an all-out war.

To me, then, it seems that the big problem here (in addition to the improper disclosures of highly important confidential information in a public court hearing) was the resistance by the lawyers who did this to simply acknowledging that a big problem existed that required them to stipulate to getting the transcript sealed immediately. Had they done so, it seems the information would never have made the headlines. Instead (and I am sure because it had become the pattern in the case), they could not reach this simple agreement with the other lawyers to deal with the problem but had to find grounds to resist and fight over it.

I know that we as outside observers have limited information upon which to make an assessment here and so the only thing we can truly say from our perspective is "who knows". Yet, if the surface facts reflect the reality, then it is scarcely believable that the lawyers could have so lost perspective as to take this issue to the mat, resulting in such damage to a party. Assuming the facts are as they appear on the surface, this would be very serious misconduct and I can see why Judge Alsup is really mad that it happened.

AMT has since emerged to devour the value of this benefit. By having to include the value of the spread (difference between exercise price and fair market value of the stock on date of exercise) as AMT income and pay tax on it at 28%-type rates, an employee can incur great tax risk in exercising options - especially for a venture that is in advanced rounds of funding but for which there is still no public market for trading of the shares. Even secondary markets for closely held stock are much restricted given the restrictions on transfer routinely written into the stock option documentation these days.

So why not just pass a law saying that the value of the spread is exempt from AMT? Of course, that would do exactly what is needed.

The problem is that AMT, which began in the late 60s as a "millionaire's tax", has since grown to be an integral part of how the federal government finances its affairs and is thus, in its perverse sort of way, a sacred cow untouchable without seriously disturbing the current political balance that is extant today.

And so this half-measure that helps a bit, not by eliminating the tax risk but only by deferring it and also for only some but not all potentially affected employees.

So, if you incur a several hundred thousand dollar tax hit because you choose to exercise your options under this measure, and then your venture goes bust for some reason, it appears you still will have to pay the tax down the road - thus, tax disasters are still possible with this measure. Of course, in optimum cases (and likely even in most cases), employees can benefit from this measure because they don't have to pay tax up front but only after enough time lapses by which they can realize the economic value of the stock.

This "tax breather" is a positive step and will make this helpful for a great many people. Not a complete answer but perhaps the best the politicians can do in today's political climate. It would be good if it passes.

Edit: text of the bill is here: https://www.congress.gov/bill/114th-congress/house-bill/5719... (Note: it is a deferral only - if the value evaporates, you still owe the tax).

Today, it is all different. We are all hyper-connected and the old barriers are much diminished. This means a founder in Silicon Valley, where the infrastructure is solid, can continue to do incredible things but, now, so too can founders everywhere. Yes, it can help to be geographically at the heart of it all but it is no longer an indispensable part of startup success.

I think Stripe's Atlas takes a huge additional step in helping to remove the accident of a founder's location from the list of barriers to entry in the world's startup club. I have explained my views in more detail here: https://news.ycombinator.com/item?id=11166417#11168750

And what a felicitous teaming between Patrick and Stripe to help further that goal. Great people all round, working to achieve great goals! I cannot imagine a better combination. Very exciting and congrats to all.

It is available free as a Kindle ebook: https://www.amazon.com/Over-Top-Arthur-Guy-Empey-ebook/dp/B0... (some reviews can be found here: http://www.goodreads.com/book/show/1517707.Over_The_Top)

Empey was an American who managed to get in the mix with the British soldiers before America entered the war. His account is based entirely on his own first-hand experiences. His last patrol depicts an utterly futile foray at night in which dozens of his comrades lost their lives and he (and I believe one another) survived. I am going from memory here on something I read quite a while back and so my summary may be imprecise. But anyone wanting to get a sense of the horrors of what it meant to fight in such battles will most certainly get it through this account.

The strange thing is that this became a runaway bestseller in America in 1917 and 1918. Far from recoiling at the horrors, the public chose to celebrate the heroism of the soldiers who put themselves in such incredible danger.

It is in any case a bone-chilling account to read this and all the more so because its style is almost detached and matter-of-fact, even clinical in describing one horror after another.

Just because a home computer might be hacked does not mean that an average user doesn't expect his experience on that computer to be private. Every area of life might be breached by determined intruders and, if that were the test of having a expectation of privacy, then every area of life would flunk it. Your home, your car, your bathroom, your bedroom, you name it. In reality, of course, break-ins, hacks, and other intrusions are the exception and not the rule in the areas we commonly regard as private. If the legal test on protecting privacy were to turn on whether break-ins or hacks were a regular element of the environment (however infrequent), then the exception swallows the rule and privacy is no more. This judge's ruling essentially embraces such logic and is thus wildly out of line with existing law regarding protection against unreasonable searches and seizures.

Also bad judging in reaching the issue gratuitously: the main issue here was whether a particular warrant was misused; it was unnecessary to decide what would have happened without a warrant of any kind. Yet the judge reached to inject his obiter dictum into the analysis as a sort of by-the-by, "here is what I would rule if other issues were before me."

Why such an outcome? As the lawyers say, "hard facts make for bad law." You have a despicable perp doing vile things and the natural instinct is to want to nail him. Just as, conversely, when you have a sympathetic person who has being seriously wronged, the natural instinct is to do what you can to help him get justice. In either case, judges and juries will be more prone than otherwise to engage in results-oriented jurisprudence and will thus try to bend and shape the law to that purpose even if the law objectively says otherwise. This factor may help explain why the judge did what he did. It does not make it right.

Finally, bad judging means, in this case, bad precedent and this decision will surely have pernicious effects until the day comes when its run is ended by a higher court. For this case, that day will surely come. It is a bad decision all around.

What the former CEO did amounted to a form of fraud on the investors. They thought they were investing in a company they thought was worth x but whose real value was less than half the value of x. The company had actual or constructive knowledge of the facts underlying the fraud, to wit, that there was in place an automated program that facilitated and attempted to cover over blatant regulatory violations. This was a material fact known to the then CEO and the company, legally speaking, is charged with his knowledge. Therefore, it constructively knew the truth as well and failed to disclose it to investors when they invested in the prior round (Series C). Since this was highly material to their investment, the sale of securities to such investors without such disclosure amounted to securities fraud.

Now, when something like this has happened, people can sometimes let it slide but the impact here was huge and the investors have easily lost at least half the value of their investment.

So what does new management do? With the historic problem cleaned up, it reprices the shares in the previous round to set the valuation at the level it should have been (or least much closer to it) had all facts been known and disclosed to investors. This is speaking hypothetically, of course, because investors of this type do not invest in a company that is committing serious legal wrongs and they would not have actually invested here had they known all the facts at the time of their original investment. But, given that the damage had already been done, the proposal made to investors gives them the chance after-the-fact to affirm their investment, release their legal claims, and take the hypothetical value that presumably would have more accurately reflected the real value of the company at the time of their investment had all facts been known and disclosed to them.

Is this a perfect solution? No, of course it cannot be. This is a real mess and the wrongs committed were serious. But it gives investors a path through repricing to get more than double the shares they had bought at the prior pricing. The trade-off: they must release all legal claims against the company.

Now the carve-outs: if any given investor sees this as an imperfect solution, they can always just say no and file suit against all parties, including the company; and, even for investors who take the deal, there is no absolving of the former CEO in that the release of claims does not extend to him - hence, they reserve all rights to sue him if they like.

On top of all this, employees are given RSUs that help minimize the effect of the dilution that is built into this for the benefit of investors. Again, not perfect but another indicator that this has been carefully thought out. If the company revives and its stock value goes up, the employees will essentially be paid bonuses via the RSUs to help make up the difference.

This is actually a pretty elegant attempt to salvage what must have been seen by many as a situation beyond repair, first (and formally), by setting up a mechanism to prevent the company from being swamped by lawsuits and, second (and much more importantly) by taking a good faith (and, for the company, painful) step in order to save its relations with its key investors.

People should not flippantly dismiss this action just because it is unusual. It may wind up being right or it may wind up being wrong but it clearly is a carefully thought-out attempt to deal with an exceedingly difficult set of circumstances in a creative and constructive way. If it does work, it will be because the investors perceive the business model of the company as fundamentally sound in spite of the earlier illegality and corner-cutting. It is their opportunity to register a vote of confidence for new management to give it another try, this time with an honest respect for the relevant regulatory environment even as the company attempts to disrupt its target market.

Whether it works or not, only time will tell.

There is a general lesson here for startups as well.

If you have an important mark, do consider doing an intent-to-use (ITU) application earlier rather than later to prevent poaching of the mark by others.

If you haven't actually used the mark in commerce (e.g., if you are in pure development phase), anybody can go out and file an ITU application for your mark and thereby effectively poach it - even if the person doing it is just trying to extort you (of course, they won't say this is their motive). During this phase, you are vulnerable to such poaching risks. For the vast majority of startups, it probably doesn't matter because no one cares about the typical mark or marks they plan to use when there is nothing yet noteworthy about them. But it can and does happen. Autocad got poached in this fashion when it first started. I had a client that had the domain name gmail.net, planning to use if for "graphics mail" back in the day and they could have blocked Google had they filed a "Gmail" ITU application (they didn't). Particularly if your mark is distinctive and fanciful, and tied to a credible venture, you should not be lax on this issue. At least give it some careful thought even if your decision is to take the poaching risk to avoid what you see as unnecessary up-front costs on legal items. Remember: an ITU application gives priority over someone who has not yet used a mark and it gives it to anyone and his uncle who happens to file it even if they have done nothing yet in your field.

Once you begin to use a mark in interstate commerce, then you get common law protections by which the person who is first to use a mark in a given geographical area automatically gets priority to the mark with that area. This happened with an outfit called Amazon Books in the Minneapolis area at the time Amazon.com launched and they eventually got a settlement payout from Amazon for infringement of their common law trademark rights in that area by the bigger organization. Thus, if you are indeed using a mark in this way, and someone comes along and tries to register a mark (whether ITU or otherwise), you keep your priority over the late arrival and can sometimes even block them from getting the registration (or have it set aside through a formal legal fight). But this is a path with many potential pitfalls. Unless your actual use was open, prominent, and notorious, you may have proof issues to establish it or to establish its extent. Even if you can prove first use and broad extent, you still may have to fight the latecomer and incur large legal expenses in the process. Moreover, if you have not registered your mark, you do not get a "presumption of validity" for it and this leaves it more vulnerable to a legal argument that the mark is not protectible at all (meaning that many people can use it without infringing on others' rights). Or it can be argued that it is at most entitled to weak protection so that a use by another is a slightly unrelated field will not cause customer confusion and hence not infringe even if the mark is protectible. And so on and so on. The situation is just not clean in this scenario or at least can more readily be gummed up by a determined adversary who has "lawyered up."

As someone who has worked for years with early-stage startups, I would be the last to say "go out right away and spend away on legal things" to cover a bunch of theoretical risks. This poaching risk, for most startups, remains primarily theoretical and should not cause you to have to run out and spend a bunch of money on trademark filings before you know if you even have a viable venture. But, for the right cases (good mark, credible venture), it usually pays to be attentive to this issue up front and eliminate the risk through some proactive action.

ISRG is non-profit and its use of this mark was open and widespread. So I can see why they did not go out and incur trademark filing costs to protect a mark that I assume they believed no one could in good faith possibly challenge. This was probably the right judgment to make for their situation. Yet, in hindsight, we can see that the failure to do their own filing has left them vulnerable - not to poaching (as I said, they likely will win) but to having to go through an otherwise unnecessary legal fight to defend what is legitimately theirs.

It is unfortunate and I hope people will give support as needed. In all too many cases, underfunded people or organizations who are in the right do wind up getting overwhelmed by people who simply have more resources and who are determined to make life difficult. Even with a likely winning legal position, someone in this position can wind up having to do some compromise (such as a trademark co-existence agreement) giving the other party significant rights just to resolve the fight. Better to avoid that pressure here if it means enough to the relevant community.

DAO strives to execute through code an idealized pooled investment system by which contract issues are resolved entirely by code and wholly apart from any external societal legal or enforcement mechanisms.

All well and good but, where people are involved, code simply cannot define all the relations needed to capture what the law does (and, indeed, and in spite of its flaws, does very well indeed).

Consider the argument that the exploit here is not a flaw at all but just another variation on what the code does, with the result that investors who suddenly are $50M lighter in their wallets have not been harmed at all and should have no recourse to any remedy to restore their funds to them. The idea here is that the code is the contract and, if that is what the code does, well, that is what you bargained for, whether this is good or bad from any particular moral perspective. Right at the entry point of the system is a prominent disclaimer that says this in exact words. So a contract is a contract. If you don't like the result, tough.

The participants here are wealthy and presumably sophisticated investors. What if they aren't? What if this were marketed to a lot of gullible small investors who were induced to part with their money through various representations stating that their funds were entirely safe, subject only to normal investment risks relating to the underlying companies they funded? What does society do when people like this lose their life savings when some newly discovered "feature" of the code allows a sharpie to walk away with their funds? Are they to have no legal recourse because a "contract is a contract," especially if it embodied in code?

And what happens if a system is set up and the person or persons who find the new "feature" enabling them to walk away with other people's funds are the very people who organized the fund? Does law from the broader world step in to provide a remedy to those who lost their money? Or does the "contract is a contract, especially in code" logic work to deny any remedy to the participants here as well?

And, setting aside any of the more extreme examples, what if it is simply the case that those who did participate had reasonable expectations that any code that would define and limit their rights would do all that was expected in terms of defining their investments but would include safeguards that would prevent anyone from simply coming in to remove their funds altogether (dare I say "steal")? What if they were misled into having such expectations by promoters of the venture who said or implied that such safeguards existed? Is it enough to say that none of this matters because of some disclaimer buried in fine print? Is all of this simply irrelevant just because a "contract is a contract, especially in code"?

Contracts are part of any system of law that includes private property, and a very important part at that.

But contracts can never define the totality of the law that applies to a given situation, even if the parties swear up and down that that is their intent.

That is why securities laws exist, to help investors who get swindled by sharpies with well-honed contracts.

That is why the laws relating to fraud exist, to help those who are misled by others to their financial detriment.

Indeed, that is why a sophisticated body of laws exists relating to contracts themselves, to cover cases where the intent of the parties is sometimes so frustrated by one thing or another as to make it inequitable to enforce a contract.

Law is and always has existed in multiple layers. Legislatures pass statutes but courts exist to interpret them to cover specific cases as disputes arise. The same with administrative regulations promulgated by agencies. Even within the courts themselves, common law courts would declare legal "rules" only to have courts of equity intervene to correct things where the "rules" led to harsh or inequitable results.

Basically, all of this is another way of saying that human relations are complex and any system of laws and justice needs to be able to handle such complexity if it is to be worthy of being a system of justice.

Perhaps in narrow cases, things such as DAO can be set up to create a rich guy's playground of sorts in which, for the overwhelming number of cases, outside laws play no part within the self-contained system. Perhaps there is even an ideal of some type to be realized here (get rid of lawyers, etc.).

But no such system can ever be utterly divorced from the rules of the broader society. Ideal or no ideal, this is just not how the law works. Apart perhaps from some survivalist society or other, people simply cannot exempt themselves from the general rules of law no matter how much they desire to do so. They can limit the application of such broader laws to a degree but, when key bounds are transgressed, the law will apply in its full force regardless of their intentions.

So, I would say that the curators here probably had no choice. It was either do what they did or watch as lawsuits followed, probably in abundance. This may have violated some ideal in play here but it was a pragmatic necessity given how law in reality works (and always will work).

Utility-style regulation gives regulators plenary authority over the internet - meaning full and complete. Their power to do this or to forbid that is highly discretionary and essentially boundless.

This in turn gives a gatekeeper role to the regulators: you play by their rules or you don't play. And that means they have final say over what happens across the internet, at least within U.S. jurisdiction.

So today they say net neutrality rules.

Tomorrow maybe it is price controls in the name of consumer fairness. Or maybe it is mandated compliance with government snooping orders in the name of national security. Or who knows what not?

Why not? With a utility-style regulatory framework, you essentially have a form of administrative law run wild, legally speaking. Standards are exceedingly vague, power is wildly broad, and (in the end) he who has the most power and pull to control the regulators winds up having the final say over what the law is or is not as it affects the internet.

This is the exact antithesis of the largely hands-off idea of what the government could do with respect to the internet over the past several decades.

Of course law tends to conform in the short term to what people want and, today, most people truly do want a free and open internet. Therefore, the risk of any existential threat to internet freedom is either minimal or non-existent in the short term.

But if your idea of preserving maximum internet freedom is in effect to place a loaded gun to its head and then declare it is not a problem because it is the good guys who control it and who therefore will use it only for good purposes, then you have what you want with utility-style regulation of the internet.

It might just work great as long as the good guys are in control. But what happens when it changes some day? And, if you think it cannot, then you have far, far more faith in human nature than I can possibly summon.

Welcome to the brave new world.

1. The pressure point here was a court ruling declining to stay enforcement of the $140M judgment pending appeal. This left Gawker having to post a $50M bond in order to avoid enforcement proceedings by which its assets could have been seized and its business literally dismantled. Gawker may or may not ultimately prove to have a successful basis upon which to get this judgment reversed but, without a stay of enforcement, it had no way of staying alive until it could have the matter decided by the appellate courts. No stay, no hope.

2. The bankruptcy filing, then, forces Gawker to give up its business but gives a vehicle by which the parties in interest behind the company can get $100+M by which to continue the fight through appeal in hopes of getting the judgment reversed and presumably leaving them with some significant value to salvage from what is now a desperate situation.

3. Concerning the social policy question here, it has repeatedly been framed as whether it is proper for a super-wealthy individual to fund another party's litigation to get payback or for some other suspect reason and what implications this has on the news media. This is a proper question but it is framed too narrowly. The broader question is whether the law should permit any third-party funding of litigation where the funder has otherwise has no connection with the merits of the dispute. Historically, the answer to that question was an emphatic no. Indeed, that sort of activity was defined as a crime - specifically, the crime of "maintenance." The statutes defining this crime originated in England and dated back the 1200's and so could truly be called ancient of origin. Basically, the idea back then was that feudal lords should not be permitted to use their wealth to interfere with legal process and thereby to potentially corrupt. By the 1700's, William Blackstone summed up the nature of the offense (as part of his famous work summing up all of the English common law) by defining maintenance as "officious intermeddling in a suit that no way belongs to one" and called it an "offense against public justice, as it keeps alive strife and contention and perverts the remedial process of the law into an engine of oppression." In contrast to this long-established hostility toward the interfering use of wealth to influence the judicial process, modern attitudes (dating back at least 50 years) came to see more litigation as being good for society as it could be used as a tool to help correct inequities in society - hence the litigation explosion. Owing to this changed attitude, many erstwhile barriers to open-ended litigation came tumbling down and along with them came the near-universal repeal of the crime of maintenance (and the related offenses of "champerty" and "barratry"). With this repeal, it became open season for any wealthy person wanting to fund anybody else's litigation for whatever purpose suited him. If people have a problem with that, that is the issue that should be addressed and not a narrow issue involving added protections for the press only. Litigation abuse is litigation abuse; if it is bad for the press, it is bad as well for other victims in society.

4. To illustrate how this sort of intermeddling tainted the processes in this case: lawyers routinely will add claims that will bring in insurance defense coverage to ensure that they can collect on any judgment but here the lawyers were directed to exclude a claim that would have allowed Gawker to bring in its insurer to cover costs of defense and potentially any judgment; parties also routinely will make serious efforts to settle any high-stakes litigation at various critical points but here it was all scorched-earth all the way to the bitter end with no prospect of the parties achieving a reasonable settlement along the way.

I don't think too many people will shed a tear over the demise of Gawker but the public policy issue here is an important one. Can the modern mindset - so enamored with the supposed benefits of expanding redress through litigation - ever go back to reinstating laws forbidding "maintenance"? I doubt it. But perhaps the time is right for a debate and reconsideration. I think we are otherwise left a little unsettled over what the promiscuous scattering of third-party money throughout the courts might do. Whatever it is, it likely is not good.

Here, one very wealthy individual used his money to fund someone else's lawsuit. He did so secretly. He did so against an organization that had harmed him and against which he presumably wanted payback but that also had done a gratuitously damaging and sleazy act as part of a pattern of sleazy acts upon which it had built its erstwhile presumably profitable venture, hence presumably deserving payback.

So what does this say about Silicon Valley? Well, nothing at all, really. Both before and after this incident, Silicon Valley was, is and remains a place where multiple tech entrepreneurs and those who back them financially have built amazing ventures (and fortunes) that have reshaped all of world commerce even while many others failed. The thing that is new and different is the tech and the ways of using it to disrupt old-style business models. What is not different is the people. As with people everywhere, some are great, others sleazy, still others ravenously greedy, still others amazingly kind and gracious - in short, people who come in all shapes and sizes. I guess they are on average more educated and accomplished than average folks but the personal traits that define them, both good and bad, are pretty much the same as with people everywhere.

I don't know Mr. Thiel and don't know any more about him than what the headlines say. He may be fully justified in taking this action (it is a perfectly legal thing to do) or he may be displaying traits deserving our opprobrium. What I am sure of is that his actions here, good or bad, have little or nothing to do with what other prominent tech entrepreneurs do or how they think or how they run their companies.

So the logic of this piece - Mr. Thiel did x as a private act in his life, therefore all Silicon Valley tech billionaires stand indicted, therefore the public will now see them as no different than robber barons - seems to rest on multiple non sequiturs that really need to be more carefully thought through.

I guess we are conditioned to accept this sort of sloppy reasoning when it comes to discussing the very rich but this seems like a way-over-the-top overreaction to an individual episode that is what it is but that reflects very little on the broader environment surrounding it (or, if it does, not in ways that can be generalized in the crazy ways the author does here).

As to the first round that occurred 4 years ago, the decision was Judge Alsup's. Here is my analysis of that decision at that time: https://news.ycombinator.com/item?id=4050490#up_4051761

Of course, in the verdict that just came down, the decision was that of the jury's and, yes, Google's use is fair even if API's are copyrightable - that is what fair use means.

It is right that the author of a creative work get protection for having conceived that work and reduced it to tangible form. Developers do this all the time with their code. So too do many, many others. Many today disagree with this because they grew up in a digital age where copyright was seen as simply an unnecessary impediment to the otherwise limitless and basically cost-free capacity we all have to reproduce digital products in our modern world and hence an impediment to the social good that would come from widespread sharing of such products for free. Yet, as much as people believe that information ought to be free, it is a fact that simply letting any casual passer-by copy and distribute any creative work with impunity would certainly work to rob those who may have spent countless hours developing such works of the commercial value of their efforts. I will grant that this is a social policy judgment on which the law could come down on either side. I stand with the idea of copyright protection.

Even granting the correctness of copyright as a body of law that protects certain property interests, there are still many abuses in the way it is implemented and enforced. Copyright terms have been extended to the point of absurdity, and certainly well beyond what is needed to give the original author an opportunity to gain the fruits of his or her labor. Enforcement statutes are heavy-handed and potentially abusive, especially as they apply to relatively minor acts of infringement by end-users. And the list goes on.

The point is that many people are fed up with copyright law as currently implemented and, when there is widespread discontent in society over the effects of a law, the time is ripe for a change.

I believe this is where copyright law is today.

The Bono law may have slipped through Congress with nary a dissent in its day but this will not happen again, whatever the lobbying power of Disney and others. And the same is true for the scope of copyright law as it applies to APIs.

Ours is a world of digital interoperability. People see and like its benefits. Society benefits hugely from it. Those who are creatively working to change the world - developers - loath having artificial barriers that block those benefits and that may subject them to potential legal liabilities to boot. Therefore, the idea that an API is copyrightable is loathsome to them. And it is becoming increasingly so to the society as a whole.

The copyright law around APIs had developed in fits and starts throughout the 1980s and 1990s, primarily in the Ninth Circuit where Silicon Valley is located. When Oracle sued Google in this case, that law was basically a mess. Yet Judge Alsup, the judge assigned to this case, did a brilliant synthesis in coming up with a coherent and logically defensible legal justification for why APIs in the abstract should not be protected by copyright. He did this by going back to the purpose of copyright, by examining in detail what it is that APIs do, and by applying the law in light of its original purpose. The result was simple and compelling (though the judicial skill it took to get there was pretty amazing).

Legal decisions are binding or not depending on the authority of the court making them and on whether a particular dispute in under the authority of one court or another when it is heard.

The decision by Judge Alsup is that of a trial judge and hence not legally binding as precedent on any other judge. It could be hugely persuasive or influential but no court is bound to follow it in a subsequent case.

The Federal Circuit decision that reversed Judge Alsup and held APIs to be copyrightable is not that of a trial judge and has much more precedential effect. Yet it too has limited authority. The Federal Circuit Court does not even have copyright as its area of jurisdiction. It is a specialty court set up to hear patent appeals. The only reason it heard this case was because the original set of claims brought by Oracle included patent claims and this became a technical ground by which the Federal Circuit Court gained jurisdiction to hear the appeal. But there are many other Federal Circuit courts in the U.S. and the effect of the Federal Circuit Court decision concerning copyrights is not binding on them. There is also the U.S. Supreme Court. It has the final authority and its decisions are binding on all lower federal courts as concerns copyright law.

The point is that the battle over this issue is not over. It is true that the Federal Circuit decision was a large setback for those who believe APIs should not be subject to copyright. Yet there remains that whole issue of social resistance and that is huge. It will undoubtedly take some time but the law can and does change in ways that tend to reflect what people actually think and want, at least in important areas. No one has a stake in seeing that Oracle be awarded $9 billion in damages just because it bought Sun Microsystems and found an opportunity through its lawyers to make a big money grab against Google. But a lot of people have a stake in keeping software interoperability open and free and many, many people in society benefit from this. Nor is this simply an issue of unsophisticated people fighting the shark lawyers and the big corporations. Many prominent organizations such as EFF are in the mix and are strongly advocating for the needed changes. Thus, this fight over APIs will continue and I believe the law will eventually change for the better.

In this immediate case, I believe the jury likely applied common sense in concluding unanimously that, notwithstanding Oracle's technical arguments, the use here was in fact benign given the ultimate purposes of copyright law. I leave the technical analysis to others but, to me, this seems to be a microcosm of the pattern I describe above: when something repels, and you have a legitimate chance to reject it, you do. Here, the idea of fair use gave the jury a big, fat opening and the jury took it.

This is no small feat.

I can't tell you how often in my many years of working with startups I have had foreign founders reach out to me in bewilderment over how to solve even the most basic problems as they sought to grow internationally and to gain a U.S. presence. It is not that the challenges are daunting or insurmountable. Many companies have dealt with them before. But they have had to do so in the context of having to grope around in the dark until they could figure things out. This cost them time. It cost them money. And it often meant they made mistakes that could set them back.

With a platform such as Atlas, they will now have a turnkey solution to this traditional problem. The solution is standardized and this means it has its limits. In solving the "step one" problem efficiently and at what appears to be low cost, however, it represents a major advance over current solutions and is very impressive indeed. For foreign founders doing amazing things on the talent side but needing to gain greater exposure and take next steps, it is basically a platform for greater credibility. You gain a U.S. presence. You expand your money handling capabilities. You position for greater funding. And you connect with experts who can be there to guide as needed.

The legal piece on this is vital but almost in tow, as it were. A standard Delaware C corp is the only option, which is adequate for a start but will clearly not meet the needs of a potentially huge number of founding teams that may have differing circumstances. It seems that this range of choices will be broadened on the Atlas platform over time. For now (and over time), founders are told to link up with legal counsel (either their own or a default provider) to sort through these issues. This, along with good CPA support, is vital to make sure the right tax and other decisions are made along the way. The platform simplifies the process enormously but significant complexities remain in the substance of what needs to be done. What Atlas does in this regard is to give founders a foundation from which they are well positioned to "take it from there." In this sense, it is a tool, not a legal or CPA resource as such (as it should be).

Stripe appears to have sought out a way to expand demand for its payments processing services and has come up, in effect, with a way of creating a sort of virtual Silicon Valley for the world's startup entrepreneurs. This will not be for everyone but it looks like it will be a great solution for many.

One can say kudos for that but that would almost seem to be a form of understatement. I look forward to seeing how it will continue to develop.

There is one error I caught, where it says that "restricted" stock is called "restricted" owing to the fact that securities laws restrict one's right to resell such stock.

While it is true that the securities laws do use this terminology to describe the stock of closely-held companies (and in that sense the use of the term of is accurate), all common stock granted in a closely-held company is restricted in this sense, whether or not it is subject to vesting - that is, it must generally be held for a stipulated period as set forth under Rule 144 before it can be resold by the recipient (Rule 144 technically applies only to public company stock but applies by analogy to that of closely-held stock).

In the startup context, "restricted" stock refers to stock that is granted to a recipient but made subject to a repurchase option by which the company may repurchase it at cost on termination of a service relationship. That is, the stock is subject to a substantial risk of forfeiture until it vests. For tax purposes, such stock is not deemed to be owned, and is not subject to tax, until the risk of forfeiture goes away (i.e., it vests). This in turn creates a substantial tax risk to the holder of the stock because there is an immediate tax on the value of the spread (difference between what was paid for the stock and its fair market value at each vesting point), a risk that is eliminated if a timely 83(b) election is filed within 30 days of grant but not otherwise.

If stock is granted without any vesting requirements (i.e., an outright grant) it is referred to in common startup parlance as an "unrestricted" grant. Such stock is "restricted" stock in the securities law sense that it generally can't immediately be resold or transferred without complying with the Rule 144 tests. But this is a technical issue for the lawyers. For every practical purpose relevant to founders and employees, it can be treated, as the street parlance says, as an "unrestricted" grant because there are no vesting requirements.

Sorry if this is too technical for this thread. But this is an important technical point that is mis-stated in this guide.

A brief observation: when stock options first became widely useful in the startup world in the 1980s, ISOs conferred a huge benefit to employees because you could be assured that you could exercise them when they vested without any practical tax risk whatever. Over the years, however, AMT, though first enacted in the 1960s as a "millionaire's tax" to ensure that the wealthy could not easily manipulate tax deductions to avoid paying any tax whatever, evolved into a general catch-all tax that is now used to fill serious deficiencies in the U.S. tax code and that now ensnares many people making pretty average incomes. Once that happened, it effectively killed many of the once-very-special tax advantages of ISOs for employees and turned ISOs into a form of equity compensation that is only slightly more favorable for employees and is often a real disadvantage (for example, the notorious 90-day tail for exercising vested options on termination of employment derives directly from tax-code rules imposed as special restrictions on ISOs alone but today functions to entrap many employees into having to stay in undesirable employment situations far beyond what they intended on pain of losing their vested options altogether if they quit).

A final theoretical observation on best types of grants in order of preference: first, unrestricted grants (here, you own it all and can't theoretically ever lose it and you usually have zero tax risk while trying to hold for long-term capital gains); second, restricted stock at a cheap price with a timely 83(b) election (while it vests, and you can forfeit it, the tax picture is near-ideal in giving you a path to long-term capital gains tax treatment with no landmines along the way); third, ISOs with a low strike price and an early exercise privilege (with these, you exercise early, file an 83(b) election, and in effect get the equivalent of a restricted stock grant); fourth, ISOs or NQOs without a 90-day tail on termination (these give you maximum flexibility to trying to work around or at least postpone potentially detrimental tax events while being able to wait as long as 10 years before being at risk of losing vested options); fifth, and worst of all from a tax standpoint, RSUs (which really are a super-high-value startup's way of granting very nice bonuses to employees in situations where the very high price of its stock makes it tax-prohibitive to use any other more favorable equity compensation vehicle). Of course, this is theoretical only and you get what you get in the real world depending on whether you are a founder, an early-stage employee, or a later-stage employee and depending as well on what is negotiated with investors concerning any restrictions they may insist upon as conditions to their investments.

Just a few thoughts on what is, overall, a nice guide to equity compensation.

To wit, in law, even in formal contexts, lawyers dish off all sorts of slop in legal briefs, etc. but this really is sub-standard lawyering. To do your job right, you need to meet standards of excellence in making sure you have sound analysis, careful factual recitation, and skilled application of law to facts as you make arguments or seek to achieve some other professional writing goal. This is true as well in less formal professional settings such as writing emails/letters to clients. It may not absolutely matter what you say in terms of precision if a client is not likely to pick up the fine points but it really does matter in terms of maintaining a consistent pride in your professional work. Slop is slop and, when people will evaluate you by how well you are representing a client, it is critical not to be slipshod in your writing.

When writing on the internet, in contrast, you of course want to avoid putting out slop there as well but a lot less precision is needed to make your points. If you make a legal point, it is implied by context that you are making a statement that may not be accurate down to the finest level of detail, that you may be simplifying, or generalizing, or simply venting an opinion that the law may or may not support. Law in itself will vary, even greatly, from jurisdiction to jurisdiction, and this means that much of what you may be saying is really setting forth broad principles while avoiding a specific application to a given case. For these purposes, there is no need to be defensive, not in the slightest. And I certainly try not to be. Am I ever wrong? Of course, on occasion, yes - I have had a doozie or two in my time, perhaps a number of them. But you try to feel secure about such lapses, knowing that we all err occasionally, and try as a whole to conform to an overall solid record of being as accurate and insightful as possible. While you get the occasional harsh attack, for the most part I have found that people will be charitable knowing that you may have spent no more than 10 or 15 minutes trying to address a sometimes complex topic. Better to give people the benefit of your insights if it is an area where you can do so than it is to leave something in the internet conversion that is wrong or off simply hanging out there. That is a great benefit of the internet. Back in the day, you had to dig deep to find out what people with expertise in their field were thinking and access to this was severely limited. The internet has changed all that. There may be a lot of slop out there but there are also many gems that are there for the taking. As writers, we should be ready to share, if not gems, at least our best thoughts on topics where people might find them helpful.

If I were to stray from my professional topics, then maybe I would be more defensive as well. But the author of this piece emphasizes how the internet may hinder academic writing and I see legal writing as at least broadly similar. So, my experience differs pretty markedly.

Just my two cents.

Every actor/celebrity (indeed, every person in theory) has a right to control what others do with his name, image, and likeness - this is what the law calls the "right of publicity."

So you can't just paste a photo or drawing of a famous person onto mugs, etc. and sell them for profit.

That is, apparently, unless that person is Bill Murray. He certainly could act to stop this but he hasn't.

I guess this fits with his eccentric-oddball persona. Very odd, legally speaking, but a nice way to relate to the people. Don't know the first thing about the man personally but this is the kind of thing that makes me want to know someone who can be so engagingly goofy.

It wasn't that far back that the "simpler is better" approach was de rigueur: "if you can use 'said'," it was said, "don't strain for some artificial substitute." This advice would be followed by laughable examples in which a lamentable student effort would be cited as an example of strained dialog (e.g., so-and-so "ejaculated" and another so-and-so "emitted", all in an obviously strained effort to avoid having to say "said").

This article indicates that writing teachers today are going out of their way to teach students to avoid using lists of simple words that pretty much say what they say but do not do it in a colorful manner.

What is missing here is obvious to me. A good writing style uses simple words, and sometimes even copiously, but also uses pace and rhythm to mix colorful or even arresting words in with them.

It is as big a mistake to strive artificially to avoid simple words as it was in the past to say that all writing should be reduced to such words in the name of directness.

Neither approach is natural and neither works. Yes, strive to lift yourself up from the banal, the trite, or the Valley Girl modes of expression. But don't avoid perfectly good words for expressing perfectly good ideas just because they are widely used. By all means, do use such words. Just learn to vary your expression selectively so that you do not become boring or lifeless in how you say what it is you want to say. In other words, use your imagination and vary your language accordingly but do so against a backdrop that uses everyday words in their usual way. In that way, your reader's attention will be drawn to the part that counts and not to the backdrop part that doesn't need either emphasis or attention.

At least that is how I see it.

The advice to vary simple words merely for the sake of varying them is bad advice. Avoid it.

This obviously has an important bearing on whether someone is competent to practice law and that is why such exams are universally used as a minimal condition for entering the profession.

That said, the tests are in some respects arbitrary in that they fail to test for a wide variety of other traits that qualify one for practicing law, they fail miserably to screen many who do prove to be utterly incompetent practitioners, they bar others from practicing who in fact would be very able practitioners but who cannot pass the formal testing mechanism, and they limit the supply of legal services available to those who are least able to afford them, thus serving as an integral part of a guild system that may be seriously outdated in a modern world in which technology might be better able to be used to help people in legal matters if such barriers did not exist.

In other words, bar exams are all good in theory but in many ways serve to do more harm than good in limiting the potential for how legal services might ideally be provided now that the technical means are there for better standardizing them and for more efficiently delivering them. I don't believe this will change any time soon but who knows? Frustrations with the legal profession abound and maybe someday some of these guild-related elements will be re-examined. But I am not holding my breath.

The federal constitution defines the broadest formal structure to which all the rest must conform: it defines what powers and limitations apply to the national government (consisting of three co-equal branches) and leaves scope for state and local governments to function within their own realms of sovereignty and to define the rules by which they do so. In theory, federal sovereignty is strictly limited and any powers not expressly given to the federal authority by the constitution are reserved to the states. Within the scope of its express powers, the federal authority can but need not preempt all state and local law. States in turn have their own constitutions and these provide that state law can but need not preempt local laws. Where laws are not preempted, they can peacefully co-exist in a way that, in the aggregate, defines the broad scope of the American law as a whole.

Within this broad framework, you have the legislative, the judiciary, and the executive functions (again, existing in separate forms at the federal, state, and local levels). The legislature enacts statutes that set forth formal rules governing this or that in society, taken as a class. Courts decide particular cases and controversies and publish decisions that in turn can become binding law as precedents commensurate with the scope of authority vested in the court deciding the case (with decisions of the highest courts, e.g., the U.S. Supreme Court, having potential binding effect on the entire nation and with decisions of other appellate courts, both federal and state, having important but more restricted binding effect) and also interpret the meaning of legislative enactments as disputes arise as to their particular meaning in a given case or controversy. Legislative enactments can also set up administrative agencies that have full authority to administer a particular statutory scheme (e.g., the Federal Communications Act sets up the F.C.C., which has plenary authority to determine how the statutory scheme is implemented as defined by what Congress intended in enacting the statute).

To be a good U.S. lawyer, you need to be well educated and trained to function within this system. This means having a good logical mind that is able to understand and sort through the various formal systems and layers of law, to understand what they each mean, to understand how they relate to each other, and (most important) to discern how all of these apply to and affect any particular case (either in structuring a transaction or fighting a dispute). This, by the way, is why it is so difficult and even potentially treacherous for those who have not been so trained to read a few "rules" and just assume they know what they are doing in concluding that, because of this or that rule, this or that must follow. That approach can work well for many situations but can get you into big trouble if you are missing key pieces that might also apply to the particular situation and that you simply do not see (or do not appreciate the effect of). This is also why law has been so stubbornly resistant to the idea of being reduced to algorithmic solutions along engineering lines. Law certainly does have its patterns and can be reduced to algorithmic solutions in discrete areas but trying to do so across the spectrum of the different layers of sovereignty, the spectrum of legislative enactments and judicial decisions, and byzantine areas of administrative law (e.g., U.S. Tax Code regulations) is a difficult task of a very tall order.

In my day at law school (late 1970s - and I believe it is broadly similar today), American law schools primarily used the "case system" as the preferred approach to teaching students to learn to "think like a lawyer." In other words, you learned very little about the actual day-to-day practice of law but you studied intensely to learn all the formal structures and to read through, analyze, and master appellate level case law interpreting and applying that law in the form of particular cases and controversies. As a given important case would be decided, you would learn the legal principles it expounded, whether it was about tort law, contract law, real property law, criminal law, or whatever.

Back in that day, law schools would also offer limited offerings focusing on a few important legislative schemes and also giving very limited opportunities to do short internships giving some practical experience.

In general, what all this meant was that good law school graduates would master the formal aspects of the law and would be let loose into the real world knowing very little about how any of it actually worked.

Once you passed the bar exam and began actual real-world practice, it would typically take a full year or two before you could anything that resembled efficient practice, another couple of years before you learned to handle relatively simple things both competently and efficiently, and another several years before you could learn to do all of the above and, in addition, learn to think strategically. When you can finally do all of this, you are functioning at partner level.

In essence, then, all that I have described in the immediately preceding paragraph, is effectively a true apprenticeship. And this is a huge part of becoming a good lawyer.

Can you skip the formal education and still become a good or even a great lawyer? Absolutely. Is it easy to do? No, it is very difficult and that is the advantage of the formal education via law school. In essence, what you are buying through a good law education is (one hopes) expert guidance through a complicated thicket. It helps you focus and also learn through lectures what academics can teach about the fascination of legal logic. This does not always work well but, in really good law school, it does and it helps a lot. Is it indispensable? Not at all. There are many gifted people who have the right aptitude and can bypass the formal education without any detriment whatever. If they are properly apprenticed, they can learn all that is necessary in a real-world environment and supplement this with independent study. Strong auto-didactic skills are very much needed here. But with that, and a good mentor, you can master the practice of law without problem. After all, the vast bulk of what most formally educated lawyers learn is also through the apprenticeship part of their training. So, in important ways, the different paths do overlap.

Is it easy to market what you do having gone the pure apprenticeship route? I would say that, here as well, there are significant difficulties. It can be done but likely only if you are good enough to make a mark with clients while serving as an apprentice and thereby building a reputation such that clients will overlook the lack of a formal law school education. This works better in specialty fields than in others.

Am I saying the law school approach is better? It probably is and it certainly is a lot easier. But I am all for the apprenticeship approach for those who have the skill and the aptitude. There is enough of the guild system built into American legal systems and anything that gives people more choices is to be welcomed.