Software piracy on the high-tech seas...better or worse?
We noted that the problem of software piracy
had reached near-epidemic levels in some places; this is a problem that persists today.
Although this was written in
May 1981
, not much has changed. See the ad on page 47 of this month's magazine: Aladdin Software Security proclaims "Software Piracy Burns Your Profits". And from Stephen Becker:
Legal Protection for Computer Hardware and Software
by Stephen A Becker
Picture the following:
Tinkering at your home, you develop a program or hardware innovation that, you believe, can be sold for a handsome sum. When you consider marketin
g your development, justifiable paranoia strikes, as it becomes painfully apparent that an unscrupulous competitor could easily copy your program (by exact reproduction) or hardware (by duplicating the schematic diagram or by employing
reverse engineering
).
Question:
How can a hobbyist or small businessman, with limited resources, guarantee that the law will provide protection against such unfair competition?
Answer:
There are no guarantees.
Patents
,
, and
trade secrets
are the three basic forms of legal protection that are primarily applicable to computer-related innovations. Unfortunately, there is no single form of protection for all the different varieties of hardware and software that is entirely satisfactory to the small businessman. In fact, this also applies to large businesses with virtually unlimited resources.
The following discussion provides some general legal background on a very complex and
growing subject. However, I encourage you to confer with a patent attorney (registered with the United States Patent and Trademark Office,
http://www.uspto.gov/
) who specializes in all forms of intellectual property protection, prior to entering the marketplace. Also remember that this discussion concerns US law only. If you have an international market, professional advice is even more essential.
Patents
Patents provide a formidable protection for innovations that meet the rather stringent legal requirements of patentability. The right to a patent is fragile and can be lost by certain avoidable acts, such as public disclosure or an offer for sale more than one year before the patent is applied for. A patent, once granted, gives the patent owner the exclusive right to make, use, or sell the
patented innovation in this country for 17 years. The patent owner has the right to stop others from infringement and collect damages even if the infringer later developed the same invention independently. After the 17-year period has expired, the innovation is considered to be in the public domain and available to all without limitation.
In order to qualify for a patent, the invention must be
new
,
useful
, and
unobvious
in view of existing technology. In fact, before a patent is granted by the United States Patent and Trademark Office, a patent examiner conducts technological research to determine whether the invention is adequately different from the existing technology to merit an award of "Letters Patent." About one dozen patent examiners, who specialize in computer technology, work for The Patent and Trademark Office.
Unfortunately, the procedure of applying for a patent is very expensive. In most cases, a patent attorney or agent must be retained to prepare a patent
application and to submit arguments in favor of patentability before the Patent and Trademark Office during the approximately 18-month period of examination. During this time no patent protection exists. Patent rights are created only when a patent is actually issued. Furthermore, there is no guarantee that you will receive a patent. The Patent and Trademark Office may rule that the invention does not qualify for patent protection. They may do this for one of two reasons: because the invention is not the type that patents are designed to protect (eg: mathematical algorithms) or because the invention is simply too close to existing technology to be considered "unobvious."
It is definitely possible to obtain a patent on hardware innovations, such as peripherals, interface circuitry, or construction techniques. There is considerable uncertainty, however, concerning what types of computer software, if any, can be protected by a patent. In 1972 and 1978, Supreme Court litigation between patent applicants an
d the Patent and Trademark Office resulted in denials of patent protection on programs that are essentially mathematical algorithms, such as numerical conversion.
But in more recent cases (in 1980 and 1981) the Supreme Court begged the question of whether or not other types of software may be patentable. The Court of Customs and Patent Appeals (CCPA), which reviews Patent and Trademark Office decisions and is highly regarded for its competence in patent matters, has held that certain other types of software may be patentable. Issuance of patents has been denied by the CCPA only on software that is essentially algorithmic in nature. Thus, it is still unclear what types of software will ultimately be considered patentable if and when that broad issue is considered by the Supreme Court.
On the other hand, the courts have held that inventions are not unpatentable merely because they involve programming. For example, consider a microprocessor-based system that is programmed to operate with an array of
sensors to monitor a physical parameter in a unique way and to process sensor-generated data in accordance with a stored program, generating machine-control signals. This system is patentable if it satisfies the three basic criteria of novelty, usefulness, and non-obviousness. Thus, patent protection is available to computer-related innovations involving programming so long as the invention is in the overall system and not solely in the program.
Because the costs involved in obtaining patent protection are high and the law of software protection is still uncertain, I do not recommend patents as an avenue of protection of programming by the personal computer experimenter or small businessman. However, if the invention involves more than just programming (eg: a complete system involving programming, or a new piece of hardware) and there is a significant commercial potential associated with the invention, then Letters Patent should be considered to increase the likelihood of success in the commercial envir
onment.
Copyrights
.) After you fill it out, mail it with two copies of the program as ori
ginally published (or publically disseminated) and a $10 registration fee.
As a practical matter, however, there is no penalty for non-deposit in the absence of registration, unless the Copyright Office specifically demands a deposit. Details on software registration can be obtained directly from the United States Copyright Office or from an attorney specializing in intellectual property law.
Although the cost and
(
Editor's Note:
ware Problem, "page 128.
)
Trade Secrets
A trade secret is commonly defined as a formula, process, mechanism, compound, or compilation of data, not patented, but known only to certain individuals using it in business to obtain a commercial advantage. In order for there to be a trade secret that will be enforced by the courts, a secret must exist and there must be a duty on the part of all persons who learn the secret not to disclose it. Confidential relationships are generally established between employers and employees or between businesses cooperating in a technical development by a type of contract known as a confidential disclosure agreement. For example, if you, a small businessman, wish to submit your unpatented innovation to a corporation for evaluation you may request that a corporate officer sign a confidential disclosure agreement. Such an agreement states that the corporation agrees to use your disclosure only for the purpose of evaluation and to disclose it outside t
he company only with your express written approval. The agreement will require the company to bind all its employees to confidentiality. However, the agreement must not be too restrictive to prevent the company from properly evaluating your innovation. Some companies may not be willing to sign a confidential disclosure agreement and, in fact, may even require you to agree to non-confidentiality before they will review an outside innovation.
A trade secret automatically exists between a patent applicant and the Patent and Trademark Office during the period of examination of the patent application. The Patent and Trademark Office is required by law to maintain the application in secrecy.
The Coca-Cola formula is an example of a successful trade secret which has never been patented and is known only to some internal personnel. For a trade secret to exist the subject matter must, in fact, be maintained in secrecy. But trade secrets are easy to lose. Once the secret becomes public, for example, legal p
rotection is lost. It may become public through your own carelessness or through commonplace and legal competitive means, such as reverse engineering. A trade secret is not lost, however, if a competitor obtains the secret by unfair means, such as industrial espionage. The courts are filled with lawsuits involving piracy of trade secrets -- including cases that involve theft of software and data by such means as tapping communication lines.
Unless you are in a position to maintain your software in secrecy and to bind all parties involved in confidentiality by contract, a trade secret is
greements. Even then, once the program is deposited with the Copyright Office, trade-secret protection may be lost.
Protection
The type or types of protection that should be considered for
programs and computer-related developments depend upon several
factors. These are:
--
the nature of the development, that is, whether it is basically
a mathematical algorithm of some other type of program or
computer-based system merely involving programming
--
the commercial importance of the invention
--
the commercial lifetime of the invention
--
the importance of exclusivity in the marketplace
Patent protection should be considered for hardware, or for computer-based systems, when the novelty involves more than merely the programming, if there is significant commercial potential and there is a commercial lifetime of at least several years.
Software should bear the co
Whenever possible, software should be sold under restrictive licenses between you and your customers. Under the license terms, the software remains your property, while the customer is permitted to use it but not reproduce the program for
use by others. A patent attorney will be able to draft a restrictive license to meet your particular requirements.
photo_link (84 Kbytes)
Stephen A Becker has a master of science degree in electrical engineering. He has been granted two patents for his work in electronic control syst
ems while working as a research engineer. After obtaining a law degree in 1975, he entered the field of patent law. Attorney Becker specializes in the protection of intellectual property innovations, with particular emphasis on computers, and is a partner in the patent law firm of Lowe, King, Price & Becker.
15 Years Ago in BYTE
