Reference no: EM132308301
Below is the hypothetical fact pattern for you to analyze for your assignment:
Dora Foster is an avid hiker. For several years, Dora hiked the trails around San Francisco Bay every Saturday. One day while completing a solo hike, she was spooked by a cougar that ran across her path. The experience was so frightening that she stopped her weekly hikes altogether. Sadly, she spent every Saturday for the next several months staying in bed and watching YouTube videos.
One Saturday afternoon Dora stumbled upon a video of Michael Jackson brought to life as a hologram to perform on stage at the 2014 Billboard Music Awards. Dora was suddenly struck with an idea. She thought to herself, “what if I had a device strapped to my belt while hiking that could project a hologram of a large, angry roaring grizzly bear next to me that would scare away any cougar or other predator that crossed my path?”
Dora knew nothing about technology and couldn’t invent such a device herself. She didn't even know if such a thing could work or would be effective. For Dora, the device was nothing more than an idea.
Dora contacted her friend David Martin, an engineer, and asked whether he thought such a device could be created. David was skeptical, but he offered to put his engineering mind to work and explore the possibility.
A few weeks later, David sent Dora the following email:
"Hi Dora. After many hours of planning and testing, I’ve prepared a rough sketch of plans that I think can make this technology happen. However, it will take a lot of work and would be expensive. I’d charge you $300,000 to cover my labor and other invention costs necessary to develop the hardware and write the software to make it operate. In addition, the device would require that I incorporate certain hologram technology already invented by a company called Laser Creations Unlimited (“LCU”). LCU’s technology is commonly used in various types of hologram devices currently on the market. LCU's version of this technology is the best, and LCU constantly keeps it updated with cutting edge advancements. So we'd need to get permission to do that. Please let me know if you’re interested in me building this device for you. David”
Upon receiving David’s email, Dora realized that a single device for hiking would not justify the cost. She sent David the following response:
"Hi David. I don’t think a single device for my own hiking would justify the cost. However, would you be interested in forming a business to mass produce the device for commercial purposes? I have some friends who may want to invest in such a company. I look forward to hearing back from you. Dora"
David responded:
“Thanks for your response, Dora. That sounds like an intriguing idea. I’m definitely interested. I’d want to personally keep ownership rights to any technology I invent myself. So we would have to figure out a way that I be compensated for the company’s use of the technology. I’m not much of a business guy, so I won’t be able to help run the company. Nor do I have money to invest. But I’d like to share equally in the company’s ownership with any other owners. I look forward to hearing back from you. David”
Dora told David she would develop a proposed plan to include all his requests and then get back to him about the details.
Dora met with two of her wealthy, entrepreneurial-minded friends – Stella Jones and Lucas Wilmont – and they discussed a plan to form a limited liability company and invest in the technology for the production and sale of the device all across the United States.
Dora, Stella, and Lucas each expressed a desire to invest in the company as equal owners. The three wanted to share in the company’s day-to-day management, for which they would be compensated as employees. Dora, Stella, and Lucas each had $300,000 to invest in the company in exchange for their ownership shares. That initial investment would be more than enough to cover startup costs. Once the company began turning a profit, each owner would receive an equal share of profits.
Dora, Stella, and Lucas also discussed David’s involvement. They came up with a plan that would satisfy all of David’s requests. As part of that plan, David would be employed to continue research and development of the technology so that VPP could periodically release updated models in the future. The plan would also ensure that VPP have exclusive rights to use David’s developments. Dora contacted David, and the two of them negotiated an arrangement with David that addressed all these issues.
The owners named the business “Virtual Predator Protection.” They named their first hiking protection devise the “InstaGrizzly One.”
The owners contacted Ben Bronson, a highly regarded marketing specialist, and they hired Ben to develop marketing concepts. The arrangement with Ben provided that he be paid an annual salary and health benefits. Ben also was responsible for protecting VPP’s files, paperwork, and proprietary information. Ben’s arrangement provided that none of his creations within the scope of his employment would be Ben's own property.
Ben suggested that he could use some short-term help, and he suggested hiring highly skilled graphic designer Julie Nguyen to work with Ben for a few months. The owners and Julie agreed that Julie would assist Ben with the specific tasks of creating VPP's logos and initial marketing plan. When not working directly with Ben, Julie was free to work on her own schedule, and she would be paid a flat rate for the work. Once those tasks were completed, Julie's work with the company would be finished.
Ben And Julie created catchy logos for Virtual Predator Protection and the InstaGrizzly One. They also created a website, some written advertisements, and one viral video advertisement to immediately begin promoting the InstaGrizzly One.
After Julie's role with the company ended, Ben continued creating marketing concepts that VPP intended to use in the future. After David completed the invention of the first InstaGrizzly One, David developed plans for additional concepts that the company could use in the future. In the meantime, VPP planned to keep all information about tentative technology and marketing concepts only accessible to the company's owners and employees and safe from the reach of potential competitors.
Questions:
a) Identify and discuss the contracts between any of the mentioned parties that may be necessary to effectuate VPP’s business plan.
b) Identify and discuss any intellectual property protections that any of the parties mentioned in the below hypothetical may need as well as the legal requirements for those protections.