IP & Companies

2 Summary: the Company vs Classic S.à r.l. January 23th, 2009 Classic S.à r.l.The Company Shareholders 1 to 40 (legal persons and/or individuals) 1 to 40 individuals Share CapitalMinimum € 12,394.68€ 1 to € 12, PurposeAny commercial purpose (including holding activities) Limited to activities requiring a business license (handcraft, industrial and/or commercial activities) IncorporationNotarial deedNotarial deed or private deed Minimum costsAt least € 12,800€ 191

3 Classic pitfalls / recommendations Avoid establishing your registered office at your domicile or conclusion of a lease agreement dedicating one room of your house to the company Risk: in the event of bankruptcy, it could be considered that every asset in your house belongs to the bankrupt company Avoid including the corporate form in the company’s name Keep the corporate/accounting books at the registered office Do not confuse your assets and those of the company (a company is a legal person distinct from you) Execute agreements as a company representative (specifying your title) acting in the name and on behalf of the company Avoid a 50/50 shareholding in private limited liability companies Any financing to the company does not have to result in an increase of the share capital of the company

4 Specific pitfalls / recommendations (1-1-1 company) Do not exceed the maximum share capital: consider the share premium (additional contribution attached to shares but distinct from them No multiple companies Risk: becoming jointly and severally liable for the debts of the other companies

5 Golden rules with respect to IP Keep your work confidential until disclosure is required Keep evidence of your work : consider sending a registered letter to yourself (including the IP) or even better use the “I-DEPOT” so as to evidence your priority Carefully consider your market(s), the places where registrations should be made, the scope of the protection sought (e.g. classes of products for trademarks). Do not aim too high or too low Check the originality of your work / ensure that it is original You do not have to transfer the IP to your company, licencing may be contemplated

6 Study Case: The hairdresser & the song writer Their work can be copyrighted It shall be expressed (in writing or by a performance) => evidence of the expression & of its date shall be kept If they are original : “original work has to reflect, or be stamped by, its author’s personality ” No tests as to the qualitative or aesthetic merits of the program should be applied The work shall not be dictated by technical considerations, rules or constraints which leave no room for creative freedom (e.g. French case law re: haircut : Court of Appeal of Aix-en-Provence, June 11, 1987) Consider whether a transfer of the IP / license to the company is relevant

7 The Programmer (Part 1) Source code and preparatory design material can be copyrighted. Preparatory design material means “ the computer draft of a program as long as it is sufficiently advanced to contain subsequent developments in embryo ” Keep evidence of your work : consider sending a registered letter to yourself (including the IP) or even better use the “I-DEPOT” so as to evidence your priority Consider whether open source elements are used => compliance with their license terms & conditions The originality: “ software copyright protection is substantially in the hands of experts, as the originality of a software, the counterfeiting, are almost impossible to be properly assessed by lawyers ” Court Order of the Luxembourg District Court rendered on July 13, 2007 case n°109031

8 The Programmer (Part 2) The software sold by the employer but made by employee s of a company, under the direction of, and initiated by, the employer belongs to the employer (moral and economic rights). Otherwise, the employees are the author. When a software is developed by an employee, the employer benefits from the IP economic rights (provided the employee acted within the scope of his employment agreement or on the initiative of the employer). The employee retains the moral rights (right of authorship & right to object to distortions, modifications impacting his honour and/or reputation ). The moral right to object to the disclosure is excluded. The economic rights and almost all the moral rights over the software can be transferred under Luxembourg law to the employer/company (except for offences against the author’s honour and reputation). Consider the registration of a trademark for the software.

Thank you for your attention ! AMMC Law, S.A. registered with the Luxembourg Bar 2-4, rue Eugène Ruppert L-2453 Luxembourg