This question was asked a few days ago (in different form) on LinkedIn. [Please note that the question is no longer available online because LinkedIn removed its Q&A feature.] The question was whether one can create a standard-form contract by starting with someone else’s standard-form contract.
The following is an edited version of the answer that I provided:
Case Outcome Depends on Facts
As is always the case with alleged copyright infringement, the outcome of the case will depend on the facts.
AFLAC v. Assurant, et al. illustrates where the line between what is protected and what is not protected can be drawn with respect to a standard-form contract. Here is a brief summary:
- AFLAC created, with substantial expenditure of personnel time, certain new insurance policies that, it felt, would provide a competitive advantage because of the narrative style used in the policies.
- Defendant insurance companies copied substantial portions of AFLAC’s policies for their own use.
- AFLAC sued, alleging copyright infringement.
- The Federal District Court found infringement of the non-boilerplate portions of the policies and enjoined the defendants from selling their infringing policies for the pendency of the suit.
What Your Standard-form Contract Can (or Cannot) Copy
The moral: There is not likely to be a problem if you copy routine legal or business terms when you create a standard-form contract. But if you copy unique provisions that are important to another company’s business, you might find yourself on the short end of a copyright infringement lawsuit.
Dana H. Shultz, Attorney at LawÂ +1 510 547-0545Â dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.