1. 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?
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2. 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

3. 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)

4. 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

5. 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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6. 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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7. 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
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8. 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.

9. 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
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10. 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

11. 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

12. 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

13. 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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14. 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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15. 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?
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16. 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

17. 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

18. 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

19. 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

20. Recent Patent Cases NTP vs. RIM (Blackberry) Verizon vs. Vonage (VoIP)
NTP (a patent troll) held patent related to 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

21. In Closing More information:
Lee Hollaar is an expert in this whole copyright, intellectual property business
He teaches a class on it and is well worth attending
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