by Kim, Lahey & Killough Law FirmUsing A.I. to Slash Shipping Costs | 2019 Supply Chain Innovation Award Winner
You’ve heard of SEO. How about SCO? It stands for Shipping Cost Optimization, a patent pending method of using artificial intelligence to slash shipping costs. This homegrown innovation, called IntelliPack, has thrust local entrepreneur, John Peck, CEO, President, & Co-Founder of FastFetch Corporation into the national spotlight.
Peck joined Katie Neau, RCI Supervisor of Snap-on Tools at the Council of Supply Chain Management Professionals’ (CSCMP) EDGE 2019 Conference on September 18, 2019, in Anaheim, California, for their presentation about “Using Artificial Intelligence to Slash Shipping Costs.” They beat out Silicon Valley giant Intel Corporation, as the winners of the 2019 Supply Chain Innovation Award (SCIA) .
Snap-on Tools is saving 11% annually on total shipping costs at its distribution center in Crystal Lake, IL. The initiative employs artificial intelligence to minimize wasted space in shipping cartons as well as new logistical processes to cut corrugated material costs by 20%, dunnage costs by 27% and packing labor costs by 30%. Peck says companies like Snap-on Tools often save an average of $18,000 per month on small parcel carrier shipping costs using his patent pending packing process.
It took Peck about six months to develop the new method. He says, “You have to be able to calculate the best box size for shipping an unpredictable collection of items of given sizes in less than a second. When someone orders online, that one order may have eight to 10 things in it. Each comes in different shapes and sizes and there are more than 100 boxes to choose from. Using the right size box is important.”
Doug Kim represents FastFetch. He says, “Because it’s our job to help with intellectual property protection, we get to see these inventions very early on. It’s exciting to see our clients be successful, to see an idea go from conception to commercialization.”
Peck’s method of using A.I. to slash shipping costs can virtually figure out how to place the items in the best sized box. “It’s going to make e-commerce affordable,” says Peck. “Consumers want free shipping, but someone has to pay for it. Our method ensures there is minimal wasted space. Smaller boxes means more packages can fit in each shipment. Instead of needing multiple trips, using multiple trucks or airplanes, now more can fit into each trip and that will help shipping companies become more efficient too.”
Congratulations to the entire FastFetch team! Watch the video below to see SCO in action.
by Kim, Lahey & Killough Law FirmIncrease in Software License Disputes Expected to Continue in 2019
In our practice we are seeing an increase in software license disputes between software vendors and users. It seems that the main reason for the increase in disputes is the change in technology, which has changed the way in which software is created, distributed and used. This problem is aggravated by either current license agreements not being updated to reflect these changes or by vendors making license terms more onerous for users.
Technology is creating a need to modify and update license agreements.
The technological changes that are at the root of this increase in disputes include the rapid increase in cloud computing and virtualization of software. License agreements that were user based, seat based or even enterprise based do not fit well with the cloud/virtualization model. In response, software vendors are seeking to identify the actual number of user or copies by exercising their audit rights which users typically try to resist, thus creating tension between the vendor and the user. When creating, distributing or using software, it is wise to focus on the licensing model being used as well as how it fits into the existing IT system. As more and more software moves to the cloud and license agreements are not updated, we can expect to see license disputes increase.
Vendors are changing their licensing terms.
For example, Java, one of the most widely adopted programming languages (Indeed reported in 2016 that it was the second most sought after skill for programming) had its license changed so that Oracle JDK is free to individuals for use, development, testing, prototyping and demonstrations, but now requires a commercial license to avoid the GPLv2+CE license. The GLPv2 license requires that all the source code be made public, which completely removes any ability to prevent others from using your source – an outcome not very popular with most software vendors seeking to license their software.
We are also seeing license terms being used aggressively where some vendors are seeking to make up for lost revenues caused by the open source model. Software developers, that charge for their time, turn to open source for efficiencies that can increase profits and allow savings to be passed to customers. However, some of the open source licensing is being modified without the user’s knowledge, creating significant legal and financial issues.
For example, some software licenses have clauses along the lines of “[Vendor] expressly reserves the right to modify the Terms of Service at any time in its sole discretion by including such alteration and/or modification in these Terms of Service, along with a notice of the effective date of such modified Terms of Service.” The issue is that the individual in an organization that approves licenses is typically not the user that would encounter the “modified Term of Services.” So terms change without the company’s knowledge. In one case, we saw the license go from free to thousands of dollars per user. The user simply would not have used the software in the first place, had it known of this change and is now in the process of removing the software from its product.
The Recent Supreme Court may increase Software copyright disputes.
In March, the Supreme Court clarified that to bring a copyright infringement case, the copyright holder must have the copyright registration in hand. This changed the rule in many areas of the country that allowed for the copyright holder to simply have an application on file. If software vendors begin to apply for and secure copyrights upon the creation of software (as they should), they will be entitled to attorney fees and statutory damages (recovery up to $150K per infringement without proving actual damages). Under the old rule, where only the application in file was needed, the ability to recover attorney fees and statutory damages we largely lost. Knowing that the recovery of attorney fees and statutory damages are available, vendors may not be likely to use copyright infringement to more aggressively enforce their licensees or even instigate litigation.
What’s next? Prevention!
- Review the policies within your organization as to how software is used and downloaded. For example, can anyone download software and click “I Agree” and bind the company to the licenses?
- Review the existing license agreement and amendment, renegotiate or even cancel as appropriate. We are even seeing software vendors elect to use the laws of other countries to benefit for more advantageous legal structure than those in the US. For example, because Canada can allow for the modification of the license with only notice to the user, some vendors are electing to use Canadian law (localization). In 1984, Louisiana enacted the Software License Enforcement Act (SLEA) which, among other terms, state that a software license agreement can ONLY be enforced if: (a) the user can clearly read a software license notice on the software packaging; (b) the software license notice indicates that by opening the package or using the software the end user accepts the terms of the enclosed license agreement and (c) the notice states that the software may be returned if the end user does not accept the license agreement. Note how this law does not fit cloud-virtualization very well.
- At the software design stage for customer software, understand the open source used, third party software used, third party licenses needed, and the effect of the rest of the IT system already in place. For example, does the custom project legally allow for cloud-virtualization? Does the software architecture need seat licenses, enterprise, cloud, or some other license structure?
- Work with an experienced attorney that understands software, software licensing and the trends in this area.
- Act early, users can typically have a better position in negotiating when the potential issues are identified pre-dispute and can resolve the potential dispute with the vendor. Vendors can better service users when the business and legal relationship is clearly understood, and unauthorized use is avoided.
If you have any questions regarding this article, contact Doug Kim, 864-973-6699, doug@kimandlahey.com or Cherish Benton, cherish@kimandlahey.com.
Doug Kim, a Physics major from Davidson College, began his professional career as a computer programmer and software engineer. His intellectual property career began in 1998, when he combined his business experience with his legal education and was involved with enforcing a client’s patent against multiple infringers. Since then, Doug has created a well-rounded IP practice that provides legal solutions and strategies tailored to each client from multinational corporations to start-ups. Doug provides his clients with strategies to protect inventions (patents), brands (trademarks), websites, software, apps, music, photos, and websites (copyright, licenses and Internet law), and trade secret (the “secret sauce”).
These materials have been prepared for informational purposes only and are not legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Internet subscribers and online readers should not act upon this information without seeking professional counsel.