Software Licensing Essay Example For Students

Software Licensing Essay In 1993 worldwide illegal copying of domestic and international software cost $12.5 billion to the software industry, with a loss of $2.2 billion in the United States alone. Estimates show that over 40 percent of U.S. software company revenues are generated overseas, yet nearly 85 percent of the software industrys piracy losses occurred outside of the United States borders. The Software Publishers Association indicated that approximately 35 percent of the business software in the United States was obtained illegally, which 30 percent of the piracy occurs in corporate settings. In a corporate setting or business, every computer must have its own set of original software and the appropriate number of manuals. It is illegal for a corporation or business to purchase a single set of original software and then load that software onto more than one computer, or lend, copy or distribute software for any reason without the prior written consent of the software manufacturer. Many software mana gers are concerned with the legal compliance, along with asset management and costs at their organizations. Many firms involve their legal departments and human resources in regards to software distribution and licensing. Information can qualify to be property in two ways; patent law and copyright laws which are creations of federal statutes, pursuant to Constitutional grant of legislative authority. In order for the government to prosecute the unauthorized copying of computerized information as theft, it must first rely on other theories of information-as-property. Trade secret laws are created by state law, and most jurisdictions have laws that criminalize the violations of a trade-secret holder=s rights in the secret. The definition of a trade secret varies somewhat from state to state, but commonly have the same elements. For example, AThe information must be secret, Anot of public knowledge or of general knowledge in the trade or business, a court will allow a trade secret to b e used by someone who discovered or developed the trade secret independently or if the holder does not take adequate precautions to protect the secret. In 1964 the United States Copyright Office began to register software as a form of literary expression. The office based its decision on White-Smith Music Co. v. Apollo , where the Supreme Court determined that a piano roll used in a player piano did not infringe upon copyrighted music because the roll was part of a mechanical device. Since a computer program is textual, like a book, yet also mechanical, like the piano roll in White-Smith, the Copyright Office granted copyright protection under the rule of doubt. In 1974, Congress created the Natural Commission on New Technological Uses (CONTU) to investigate whether the evolving computer technology field outpaced the existing copyright laws and also to determine the extent of copyright protection for computer programs. CONTU concluded that while copyright protection should extend beyond the literal source code of a computer program, evolving case law should determine the extent of protection. The commission also felt copyright was the best alternative among existing intellectual property protective mechanisms, and CONTU rejected trade secret and patents as viable protective mechanisms. The CONTU report resulted in the 1980 Computer Software Act, and the report acts as informal legislative history to aid the courts in interpreting the Act. In 1980 The Copyright Act was amended to explicitly include computer programs. Title 17 to the United States Code states that it is illegal to make or to distribute copies of copyrighted material without authorization, except for the user=s right to make a single backup copy for archival purposes. Any written material (including computer programs) fixed in a tangible form (written somewhere i.e. printout) is considered copyrighted without any additional action on the part of the author. Therefore, it is not necessary that a copy of the software program be deposited with the Copyright Office in Washington, D.C. for the program to be protected as copyrighted. With that in mind then a copyright is a property right only. In order to prevent anyone from selling your software programs, you must ask a court (federal) to stop that person by an injunction and to give you damages for the injury they have done to you by selling the program. The Software Rental Amendments Act Public Law 101-650) was approved by Congress in 1990, this Act prohibits the commercial rental, leasing or lending of software without the express written permission of the copyright holder. An amendment to Title 18 to the United States Code was passed by Congress in 1992. This amendment. Known as Public Law 102-561 made software piracy a federal offense, and instituted criminal penalties for copyright infringement of software. The penalties can include imprisonment of up to five years, fines up to $250,000 or both for unauthorized reproduction or distribution of 10 or more copies of software with a total retail value exceeding $2,500 or more. Under United States law duplicating software for profit, making multiple copies for use by different users within an organization, and giving an unauthorized copy to someone else is prohibited. Under this law if anyone is caught with the pirated software, an individual or the individual=s company can be tried under both civil and criminal law. A Civil action may be established for injunction, actual damages (which includes the infringer=s profits) or statutory damages up to $100,000 per infringement. The criminal penalties for copyright infringement can result in fines up to $250,000 and a jail term up to five years for the first offense and ten years for a second offense or both. When software is counterfeit or copied, the software developer loses their revenue and the whole software industry feels the effect of piracy. All software developers spend a lot of time and money in developing software for public use. A portion of every dollar spent in purchasing original software is funn eled back into research and development of new software. Software piracy can be found in three forms: software counterfeiting, which is the illegal duplication and sale of copyrighted software in a form that is designed to make it appear to be a legitimate program; Hard disk loading, whereby computer dealers load unauthorized copies of software onto the hard disks of personal computers, which acts as an incentive for the end user to buy the hardware from that particular dealer; and downloading of copyrighted software to users connected by modem to electronic bulletin boards and/or the Internet. When software is pirated the consumer pays for that cost by new software and/or upgrade version being very expensive. Federal appellate courts in the U.S. have determined that operating systems, object code and software cotained in ROMs are protected by copyright, and some lower federal courts have also determined that microcode (the instructions set on microprocessor chips), and the look and feel of computer screens is subject to copyright protection. Which leads to the problems of the widespread development of multimedia applications that has brought out major problems in clearing copyright for small elements of text, images, video and sound.. The United States Government has been an active participant in protecting the rights of the software industry. When the Business Software Alliance (BSA) conducts a raid, Federal Marshals or local law enforcement officials participate also. An organization known as the Software Publishers Association (SPA) is the principal trade association of the PC software industry. SPA works closely with the FBI and has also an written enforcement manual for the FBI to help them investigate pirate bulletin board systems and organizations (audits). With the help of the FBI, the result of enforcement actions resulted in recoveries from anti-piracy actions totaling $16 million since the program started in 1990. Challenges and opportunities in agricultural marketing Essay2. Implement a software codes of ethics for everyone to adhere to. The ethics should state that copyrighted software, except for backup and archival purposes, is a violation of the law. 3. Establish a procedure for acquiring and registering software. Determine your companies software needs, evaluate software packages, and also have supervisors approve the plans. Keep the lines of communication open. 4. Establish and maintain a software log. The log should state the date of when the software was acquired, the registration of it, serial number, network version, location of where the software is in use, where the original is, licensing agreement and the location of the original disks. 5. Conduct periodic audits or on a as needed basis comparing the software log and/or other purchase records. 6. Establish a program to educate and train your employees about every aspect of software and its uses. 7. Maintain a library of software licenses and provide users with copies of the agreement. 8. Having done the above seven points, the company can benefit by having obtained software legally, receive full documentation, technical support when needed and also upgrade notices. Patents do not cover specific systems, instead they cover particular techniques that can be used to build systems or particular features that systems can offer. Patent grants the inventor a 17 year monopoly on its use. Once a technique or feature is patented, it may not be used in a system without the permission of the patent-holder even if it is implemented in a different way. Since a computer program usually uses several techniques and provides many features, it can infringe many patents at once. A computer program is built out of ideal mathematical objects whose behavior is defined, not modeled approximately, by abstract rules. An example of this is Borland International, Inc. complained in the 1st Federal District Court gave Lotus Development Corp. the benefit of patent protection to Lotus 1-2-3 menu commands and their order, but failed to require Lotus to meet the requirements of patent law, including novelty, examination and contribution to the prior art. The Supreme Court sid ed with the 1st Circuit decision that one entity cannot own the user interface to programs. Meaning such as file formats, menu structures and programming languages. Software license agreements emerged as the most popular means of protection of proprietary rights in computer software. They coexist with other forms of intellectual property rights as patent and copyright. Software license agreements serve several functions in transactions involving the transfer of computer technology. One of the most important legal functions is the protection of the proprietary rights of the licenser in the transferred software. Other functions include controlling the revenue generated by licensed software and determining the rights and responsibilities of the parties regarding the performance of the licensed technology. Issue related to these functions include the applicability of Article 2 of the Uniform Commercial Code, including offer and disclaimer of warranties, determining the appropriate types of licenses to utilize, such as single users/CPU licenses, Site/enterprise licenses and network/concurrent licensesTrade secret, copyright and patent law are emailpr otected forms of protection in the sense that they may exist independently of any underlying business transactions and do not necessarily require any transfer of intellectual property from one party to another. Whereas, the need for a license agreement usually arises as one of the contractual forms of protection when the underlying business transaction involves the transfer of intellectual property, such as computer software. Transactions involving the transfer of computer software are subject to both federal and state laws. Generally, state law governs contractual and trade secrets aspects of the transaction, while federal law governs aspects related to patent, copyright and antitrust issues. Each state has its own version of a doctrine of a trade secret, the common thread through these state-specific laws is that if you show that you are seriously treated information as confidential and that the confidential information helped your competitive position, you can stop others from us ing it if the information was improperly acquired by them, and even collect damages from the wrongdoers. A computer is useless without software. The two types of software typically found on a computer are operating systems software and application software. Operating system software emailprotected emailprotected that makes it easier to develop programs for the system by reducing the amount of code that must be written. The operating system acts as an interface between the computer hardware, application programs and the end user. Application software consists of one or more computer program that fulfill a specific function for the user like word processing, bookkeeping or financial analysis. Two legal cases recently within the last few years has brought to light the controversy regarding the copyright protection of software elements. Until 1992, most of the federal courts followed the decision in Whenlan v Jaslow Dental Laboratory as a precedent of similar cases. Whenlan, a small software company wrote a accounting program for Jaslow Dental Laboratory company. Jaslow rewrote the software to run on personal computers and proceeded to sell the product. The software was identical to Whenlans in the data structures, logic, and the program structure, except for the source code. Jaslow argued that the duplicated elements were part by the of the idea not the expression. The court in response felt that the data structures, logic, and the program structure comprised to make a single function of a computer program, therefore copyright protection should be given to those elements also. In 1992, this protection was weakened by Computer Associates v. Altai, Inc. , when Altai a softw are developer was accused of copying various modules of a software package developed by Computer Associates which controlled the running of applications on IBM mainframes. The court rejected Whelan=s premise that a computer program embodies one function because programs are made up of sub-routines that contain their own idea. The court recognized this would narrow the scope of software copyright protection and found this in accordance with Congressional intent of computer programs with copyright. This resulted in why currently software copyright is not as broad as it once was. Bibliography:Brandel, William, Licensing stymies users, URL:http://www.viman.com/license/license.html#policy, Viman Software, Inc., 1994. Business Software Alliance, Software Piracy and the Law, URL:http://www.bsa.org/bsa/docs/soft_pl.html, Business Software Alliance, 1995. Software Publishers Association, SPA Anti-Piracy Backgrounder, URL:http://www.spa.org/piracy/pi_back.htm, Software Publishers Association, 1995.