Chapter 7. Contracts and Licenses

It may seem strange to have a chapter on contracts and licenses in an intellectual property book. Contracts and licenses are not themselves intellectual property and are generally considered to be a distinct discipline, not part of the same area of law as intellectual property.

Nevertheless, contracts are essential to our system of intellectual property. They are the means by which you share intellectual property. Everything that we have talked about up to this point has been about how to keep intellectual property inside your organization.

The problem is that simply keeping knowledge to yourself is neither very profitable nor very socially constructive. Our economy runs on trading things, and in the intellectual property market that means sharing. Contracts and licenses are the means by which people let their intellectual property out in a controlled way.

Licenses and Firewalls

Security professionals usually recommend that firewalls be designed around the so-called German model: anything not expressly permitted is forbidden. An administrator usually starts by screening out all traffic in both directions. She then creates access rules that selectively allow in DNS traffic, web traffic, remote logins, and other allowed network uses. By using an appropriate set of rules, the administrator can have very fine-grained control over all traffic that goes across the network.

Intellectual property is similar. By default, users have (almost) no rights, so (almost) ...

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