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? CS 3500

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

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. CS 3500

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 CS 3500

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 CS 3500

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.

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 CS 3500

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

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 CS 3500 L19 - 13 13

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 CS 3500 L19 - 14 14

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? CS 3500 L19 - 15 15

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) Verizon vs. Vonage (VoIP) 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

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 CS 3500