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into the complaints made by Dorian that illegal copies of proprietary software were hitting the market.

PROGRAM AND DATA THEFTS

This is the first known prosecution of this type in the UK. Previously, Kansas City Systems admitted in the UK High Court to infringing the copyright of programs produced by A J Harding etc, but the litigation was settled out of court on payment of E2000.

Mobile, Alabama - Max Coffee, an ex-employee of Applied Systems Inc, was found guilty of stealing programs belonging to his ex-employer. He was fined $50 000, and an appeal is pending. The trial, which was before a jury, concerned the theft of eight general business programs, developed by Applied Systems Inc. Coffee left the company and took a number of ASI's customers with him by offering them cheaper processing and support rates. He formed his own company called Data Plus Inc.

New programs for oZd In his defencer Coffee said that he had regenerated and redeveloped the programs, using his own resources in his new company. The jury did not believe him, considering that there had been insufficient time between his termination from ASI and the offer for sale of the programs by Data Plus Inc. Expert witnesses were called on behalf of the prosecution, and obviously succeeded in getting their message over to the jury.

Glendale, California - Three years after starting legal action against Business Information Systems Inc, a small vendor called Mini Computer Business Applications Inc has succeeded in protecting its software. Early in 1978 the suit was filed alleging that BISI had misappropriated software for DEC and PDP equipment developed by MCBA. The Court in Tampa, Florida, found in favour of MCBA and made orders preventing BISI from selling or leasing software developed by MCBA for a period of 10 years; preventing advertising or disclosure of MCBA's packages; requiring BISI to provide a list of people to whom it had sold software, or advertised it; requiring BISI to return all MCBA software and documentation. The

Claim for damages claim for damages will be heard in mid January.

MCBA is taking an aggressive line against four other companies it believes to have pirated or misused its packages, and is offering one free package to any person or company that comes forward with information that enables it to take action against any other pirate.

Atlanta, US District Court - Programmed Closing Systems Inc, a small real estate company, filed suit against Minnesota Title Financial Corporation alleging the theft of programs. Under a contract, signed in January 1978, MTFC received the licensing rights of certain programs developed by PCS, for a Mortgage Information and Servicing System. The conditions of the agreement were such that MTFC would pay PCS royalties on programs it relicensed to other users. MTFC also agreed not to alter the program coding in any way. The suit alleged that MTFC stuck to neither of these conditions.

Stormy relationship The relationship between the two companies had been difficult. In August 1978, PCS was "confronted" by MTFC and threatened that unless it backed off the agreement MTFC "would harass PCS by instituting

spurious legal claims and would disparage the product and discourage other companies from doing business with PCS". Instead of backing

off, PCS brought charges of Larceny of Trade Secrets, and breach of

foOIll Volume 3 Number 2 @ Elsevier Sequoia SA. Lausanne. Switzerland.

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Open to abuse

TroubZe with bugs

Advice for small firms...

. ..And Zarge ones

contract, and sought damages of $4 million, an injunction to prevent further misuse and an accounting of profits on previ0u.s sales.

Licensing arrangements of the type entered into by PCS and MTFC can be open to misinterpretation and abuse. The usual situation is that a small software outfit develops a package that is either unique or has some other special features that puts it ahead of its competitors

Sales start off in a small way, and a reputation is established. A larger firm offers to form a joint venture or take on marketing or licensing for a particular area or market segment. The small developer seldom has any depth of commercial experience and is flattered at the interest in its product. The deal may start off well, but more usually the product does not live up to the expectations of the investor; not all of the bugs will be ironed out. When the small company was operating by itself and had a small market and personal contact with its clients, these problems could be corrected. But on a large scale the investor becomes disillusioned, and the product gets a bad name. Strain is put on the agreement, and both parties may try to back off.

So if you are a small firm or individual and you have developed a marketable piece of software or a system, take care:

)c Make sure that the system does what you say it does. Iron out as many of the bugs as possible before you licence or joint venture it. Give your potential partner the minimum of excuse for backing down.

+ Have some form of unique coding that enables you to identify your work from anything else that might follow.

* Use the copyright sign on all documentation, on source and object listings, on the outer packing of disk packs, tapes or cassettes. Make it clear that your product is protected.

* Make sure the agreement, whether licence, joint venture or commission, is as water-tight as you can make it. Although relationships may be friendly and both parties have "given their words", remember that things can change. Then the agreement may be the only protection you have.

+ Have the agreement permit you to examine and audit your partner's books, including associated and overseas companies that might become involved in the marketing of your products.

* Think, before you sign the agreement, how you will be able to enforce it and detect violations.

Looked at the other way round: if you are thinking of taking on the marketing or licensing of a small company's product:

* Make sure that the company has the rights to the product and has not copied it from someone else.

* Make sure the software does what it is supposed to do and that it can be maintained.

* Remember that an employee of the potential partner may have developed the system, and assigned it to his company: what would happen if he left? Are there restrictions preventing him starting up in competition?

Volume 3 Number 2 @ Elsevier Sequoia SA, Lausanne. Switzerland

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Often, companies with the best of intentions enter into arrange- ments without making the checks they should beforehand. In buying, selling or assigning software, caution will be repaid in full.

SCREWDRIVER IN Sandvik UK, a West Midlands company concerned with the manufacture

THE WORKS of saws and other tools, is totally computer-dependant. In 1979, it relied on Burroughs hardware, but had begun the gradual transfer of data to an IBM system. The computer was used to process the company's payroll, stock control records, invoices and orders.

Early in 1979, Senior Management and Security staff at the Halesowen, Birmingham plant began to think they had a well educated poltergeist or ghost on their hands. Suddenly the number of 'computer malfunctions, normally two a year, soared to an unacceptable level.

At first most of the malfunctions could be traced to failures in Hostile environment environmental equipment. Smoke detector circuits would fail

causing air conditioning units to close down. odd switches in the room ventilation system would be mysteriously switched off, the humidifiers were interfered with. All these happenings had a similar effect: the computer crashed.

The resulting chaos was catastrophic for the company; salaries could only be paid with the help of other computer users in the area, they fell behind with invoicing and deliveries and their overtime bill spiralled as computer staff struggled to keep abreast of the work. Yet there was worse to come. Suddenly the 'poltergeist' switched its attention from the environmental equipment to the computer itself. Between June and September 1979,

Burroughs caZled in malfunction followed malfunction. Burroughs engineers investigated each failure and in September 1979 they reported to the management of Sandvik that the problems were caused by:

“1. High average voltage supply (surges or 'spikes'); 2. Hot spots in the computer room: 3. The humidity balance in the room."

Sandvik was not convinced, but by this time it was desperately in need of a solution. 'They hired a Dransetz transient line analyser at E90 per week to detect any fluctuations in voltage, they installed a E4000 voltage stabilizer and they spent considerable time and money keeping the environmental equipment in peak condition. Still the failures continued. Burroughs flew

Specialists consulted specialists in from the States and Sandvik consulted Professor J G Henderson of the Department of Electronic and Electrical Engineering, Birmingham University. Still the failures continued.

By this time some senior personnel at Sandvik suspected sabotage. They began to look closely at the overtime bills of those people who were responsible for 'tidying up' after each disaster. Eventually the firm's security manager, Mr E Dukes, voiced his suspicions to the local police.

The police had a considerable work load at that time, but they were able to loan the company sophisticated tv surveillance equipment

Keeping a fish-eye with fish-eye lenses which was installed in the ceiling of the

on things computer room. Security personnel used this equipment to monitor those shifts with large overtime bills. It was not long before

their effort was rewarded, and they filmed a terminal operator removing panels from the machine and inserting a screwdriver.

CONE= Volume 3 Number 2 @ Elsevier Sequoia SA, Lausanne, Switzerland.