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Intellectual Property

Intellectual Property (IP) = “product of the mind” The Congress shall have Power To … promote the Progress of

Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries …

- U.S. Constitution, Article I, Section 8

Ways to protect intellectual property:– Copyright– Patent– Trademark– Trade secret

What does this have to do with software engineering?

Exclusive Rights of Copyright Holder

To make copies of the work To produce derivative works To distribute copies To perform the work in public To display the work in public

Notice that copyright protects expression, not ideas Not all of these rights apply to every category of work There are many special exceptions

Categories of Works

Musical works Sound recordings Literary works (including computer programs) Dramatic works Movies/audiovisual Pantomime/choreography Pictoral/graphic/sculpture Architecture

Note: Many protections may apply to a single work (consider a song, for example)

Fair Use Factors

Purpose of use: educational vs. commercial

Nature of work: factual vs. creative

Amount of work used: small vs. large

Effect of use on value of work: little vs. lot

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Sony v. Universal (1984)

Universal sued Sony, the developer of the first VCR, because users taped movies– 1: Noncommercial (but not educational) use

– 2: Movies are creative works

– 3: Users taped entire movies

– 4: Universal couldn’t show financial harm

– Supreme Court ruled 5-4 that videotaping is legal

Supreme Court ruled that you can’t sue a company for a device that has many legitimate uses but can be used illegally.

Digital Millennium Copyright Act has eroded this ruling significantly.

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Sega v. Accolade (1992)

Accolade reverse engineered Sega games in order to create new games to run on Sega platform

Sega sued Accolade and lost– Accolade did not sell copies; it sold new games

– Fits guiding principle of fair use – new creative work

Same result in Atari v. Nintendo Same result in Connectix vs Sony

– Reverse engineered Sony Playstation to allow playing Playstation games on a computer with Connectix software

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Napster (2001) Napster had 50 million users/100 million MP3 files in

2000

Napster was sued by 18 record companies

Napster claimed fair use, but:– 1: Copies weren’t for educational purposes

– 2: Copies were of creative material

– 3: Entire songs were copied

– 4: Sales of CDs went flat in 2000

Napster claimed Sony v. Universal as precedent, but:– Napster maintained a central list of available music

MGM v. Grokster (2005)

Grokster and similar services provided peer-to-peer copying without a central server

Like VCRs, such a service has many legal and productive uses

Lower courts ruled in favor of Grokster

But Supreme Court ruled unanimously that companies could be sued for encouraging copyright violation as a business model.

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Computer Software

Piracy varies from low of 21% in U.S. to highs of 95% in Armenia (estimated for 2006)

Rampant copying outside of the US– Many different copyright laws

– Difficulty of prosecution

Copy protection schemes have (in general) totally failed

Digital Media Have Changed the Playing Field

Before the 90s, large-scale copyright violation required large capital investment

But things have changed because– Digital copies are perfect

– Digital copies are extremely inexpensive

– Digital copies can be compressed

– Digital copies can be distributed via the Internet

The cost is no longer proportional to the harm

Digital Millennium Copyright Act

DMCA enacted in 1998

Created four “safe harbors” for ISPs:– Transitory communications– System caching– Information stored at direction of users– Information location tools

To take advantage of safe harbors, ISPs must participate in notice and takedown

Also contains an anticircumvention provision

DMCA: Notice and Takedown

ISP must designate an agent Copyright holder can ask agent to take down

infringing material ISP must remove material expeditiously and notify

the user who put the material up Upon counter notification from user, ISP must

inform the copyright holder and restore the material between 10 and 14 days after counter notice.

The two parties are then aware of each other and can deal directly

Provision to sanction abuse of notification

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DMCA: Anticircumvention Prohibits making, distributing, or using tools (devices,

software, or services) to circumvent technological copyright protection schemes used by copyright holders”

DeCSS– 15 year old Norway programmer developed to defeat DVD protection

– 2600.com operator was sued to remove DeCSS from its web site

– Judge ordered removal under DCMA

Researchers at Princeton responded to challenge to break Secure Digital Music Initiative– Professor was to present paper, but SDMI threatened to sue

– Researchers sued back the recording industry and government but case was tossed because paper never presented

Company in Russia sold program to break Adobe e-book code– Developer arrived in US to present paper and was arrested

– Criminal case pursued, defendants acquitted for variety of reasons

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Ethical Arguments About Copying I cannot afford to buy the product The company is a large, wealthy corporation

– Doesn’t justify stealing; also what about programmers, writers, musicians, actors?

I wouldn’t buy it at the retail price anyway. The company is not really losing a sale.– You are still taking something for nothing

Making a copy for a friend is an act of generosity– It is not your “right” to be generous, it is the copyright’s owner

The violation is insignificant compared to the billions of dollars lost to piracy by dishonest resellers making big profits– Still doesn’t make it ethically right

Everyone does it. You would be foolish not to.– Doesn’t determine what is right

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So, How Do You Feel About This? Some people view downloading music and movies

for free as an ok thing to do As a software developer, how would you feel about

someone stealing your software?– Isn’t this the same as what a musician must feel?

Some view that all software should be free– So, how does one get paid as a software professional?– A lot of “free” software is developed by people in their spare time,

while during the day they are paid to develop software– If everything is free, how do you develop software that takes a

very long time to figure out, research, and build?

What business models should we have for software and music and ???– Services, support, training for software?– Promotional, merchandising for movies and music?

Patent Protection Can patent an invention that is:

– Not obvious to someone skilled in the art– Has a useful purpose and works (can’t patent “gears” or “time

machine”)– Not a discovery about the natural world, nor a plant or animal, …

Software patents in U.S. first started appearing in 1970s– But inventor of first spreadsheet (VisiCalc) was advised he

couldn’t patent his idea

To obtain a patent, the invention must be disclosed

Gives inventor a 20-year monopoly on the invention

Process of Obtaining a Patent

File patent application with USPTO Examiner takes the case, looks for “prior art” New examiner spends ~80 hours, experienced one

~20 hours Process takes ~18 months Process is not adversarial, but others can

contribute opinions Hard to invalidate a patent after it is granted

Problems with Patent Process

Not enough examiners Examiners aren’t paid enough, so they aren’t

necessarily technically competent Insufficient prior art in the form of patents in case of

software patents Rise of patent “trolls”: companies that are in

business only to acquire and enforce patents Various reforms have been proposed

Examples of Patents

US 6,935,954: Sanity System for Video Game

US 5,960,411: Method and System for Placing a Purchase Order Via a Communications Network

Recent Patent Cases

NTP vs. RIM (Blackberry) – NTP (a patent troll) held patent related to e-mail that was infringed by

the Blackberry– RIM didn’t take NTP seriously– Settled for $612 million in 2006

Verizon vs. Vonage (VoIP)– Vonage’s VoIP service infringed on three patents held by Verizon– Verizon awarded $58 million in damages in 2007

MercExchange vs. eBay– MercExchange holds patent related to “Buy it Now”– MercExchange sought injunction prevent using of “Buy It Now”– Supreme Court ruled that injunction is not required, hurting trolls– eBay bought patents from MercExchange in 2008

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In Closing

More information:– http://digital-law-online.info/index.html

Lee Hollaar is an expert in this whole copyright, intellectual property business– He teaches a class on it and is well worth attending