Property Rights and Software
Chapter 7. Property Rights and Software
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7.1 Scenarios
7.1.1 Scenario 1: Pirated Software from Abroad
Bernie works for a large consulting company. When he was on holiday in South East Asia he found an Office suit that looks identical to Microsoft Office. The package he found costs R50 compared to the price tag of R3000 back home. Bernie knew that the seller does not honour US copyright law. Despite the documentation looking like it has been photocopied, he decided to buy it and returned home with it.
Activity 1
Do you think Bernie has done anything wrong? Do you think the customs will confiscate it should they find out? Discuss.
7.1.2 Scenario 2: Stealing an Idea
It is 1980 and Bingo software has just developed a new operating system called BOS. BOS is better than anything else around but Bingo is a small firm and needed venture capitol to start up. It spent 3 years bringing the product to the market, after which it launched and sold well for a year. At this point, it has recovered about 25% of initial investments. Pirate Pete entered the market with PPOS which is cheaper and has more features than BOS – but it appears to be a copied or slightly modified version of BOS. In addition to this, copying of BOS is rampant with customers making copies. Bingo didnot last long and went bankrupt within a year.
Activity 2
Do you think that this is unfair? Has PPOS wronged Bingo? Have the customers wronged Bingo? Discuss.
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Property Rights and Software
7.1.3 Scenario 3: Improving Software
Earl develops a virus tester which is very good. It detects and repairs all known viruses. He makes the software and its source code available on the web for free and he also publishes an article on it. Jake reads the article and downloads a copy. He figures out how it works, downloads the source code and makes several changes to enhance it. After this, Jake sends Earl a copy of the modified software together with an explanation. Jake then puts a copy on the web, explains what he has done and gives appropriate credit to Earl.
Activity 3
Discuss whether or not you think Earl or Jake has done anything wrong?
Activity 4
There are some issues that you should think about before proceeding further. Write down any thoughts you might have on each of the following:
•Distinction between hardware and software is often blurred.
•Macro issues – should software be owned? Should it be protected like property?
•Micro issues – are (unauthorised) copies illegal? (Ultimately it will be argued that copying is wrong because it is illegal not because there is some
•Legal and moral issues – descriptive (what the law says) versus normative (what the law should say)
7.2Some Definitions
•Algorithm – abstract method of solution
•Source Code – step by step solution to a problem, usually in high level programming language. It is usually created by a programmer employing one or more algorithms.
•Object Code – actuates the setting of switches to enable the computer to perform the underlying algorithm
7.3Current Legal Position
7.3.1 Copyright versus Patent Laws
Consider the Bingo scenario where by PPOS copies BOS and sells it for cheaper. PPOS is able to do that because its development costs were lower. It also seems unfair that PPOS used BOS without paying. What is the solution to this problem? A simple one is to give Bingo legal exclusive right to its software – the problem is then limited to copyright and patent law. This is indeed what happened in the past.
There are currently three mechanisms to deal with scenarios like Bingo: copyright, trade secrecy and patent.
7.3.2 Copyright
Copyright is a form of ownership which excludes others, for a limited amount of time, from copying without permission. Only expression of an idea, and not the idea, can be copyrighted. There is often a fine distinction between the two. In computing, both source and object codes are thought of as ‘literary works’ and are copyrightable because they are expressions of ideas.
However, there are problematic issues which arise in computing field and not (as much) in others. It is relatively simple to make minor change to a piece of software – making it into a new application. Does this mean that copyright only apply to the old version or just part of the new version that contains the old code? Are copyright
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Property Rights and Software
owner required to reapply every time a new piece of code is added? This has lead to many course cases. It has been suggested that the literary analogy is not suitable for dealing with software copyright.
Activity 5
Discuss the main difference between software and literature? Apart from the constantly evolving nature of software, what else can you say about software that would make the literature analogy inappropriate?
You can find a discussion of this Activity at the end of this chapter.
7.3.3 Trade Secrecy Laws
Laws governing trade secrecy vary from country to country. The central idea is to grant companies the right to keep certain kinds of information secret (e.g. a secret recipe), with the aim of allowing them to keep a competitive edge. The laws were not designed with computer technology in mind.
In order for a piece of information to be considered trade secret, it be possible to show that:
•It is novel.
•Represents an economic investment to the claimant.
•Have involved some effort in development.
•The claimant has made some effort to keep it secret.
Trace secrecy laws can be applied to software. This is usually done using
In Bingo’s case, trade secrecy would have helped.
7.3.4 Patent Protection
This is potentially the strongest form of protection because a patent:
•Gives inventor monopoly on use of the invention – even if someone else makes the same product in a different way; they are excluded from using it.
•Grants patent owner the right to licence others to make, sell or use the invention.
•Legitimise a monopoly
•Is granted for a limited number of years (17 in the USA)
The main aim of the patents is not only to ensure inventor, but to advance useful arts and science as well. This will foster inventions and encourage others to learn from and build on inventions. It also promotes disclosure of inventions and assures that ideas already in the public domain remain there.
However, it must be noted that patent does not guarantee financial success. This is only achieved if the product is accepted by the market. Additionally one can not patent an abstract idea, an algorithm or a scientific principle.
To qualify for patent protection, the object in question must satisfy the following criteria:
•Falls into a category of permissible subject matter
•Satisfies the three tests of having utility, novelty and
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7.3.5 Software and Patents
In the 1970s, there was great reluctance in granting patent on software on the basis of:
•Fear of ownership of mental process
•Fear of patenting a mathematical algorithm
Both fears have since been overcome. After the US court case of Diamond versus Diehr was settled in 1981, many patents have been granted on software. However, there is still concern that patents must not be granted for building blocks of science and technology.
7.4 Software as Property
Software has challenged the traditional notion of property and ownership. There have been two theories:
•Consequentialist: Property rights are good because they lead to good consequences
•Kantian: Everyone has the right to be autonomous. From this one can derive a right to property (Labour theory of Property)
The idea of natural rights is also applicable. This idea is derived from Locke’s Labour theory and states that a person has a natural right to what he/she produces. This can be applied to software as well. Recall the Bingo case. PPOS copied BOS and as such they stole Bingo’s labour. Bingo has lost the capacity to sell (and make money from) its creation.
Note: John Locke
Probably the most famous justification of property in general comes from John Locke, who argued that if one mixed one's labour with something then one had legitimate claim to it.He did, it must be said, place some restrictions on the right to appropriation. There had to be, for example, "enough and as good left for others". The main weakness to this argument is that it is not obvious why we should gain what we mix our labour with, rather than simply losing our labour. John Weckert (1996) illustrates this point:
'If I poured a can of tomato juice, which I owned, into the sea, clearly I would not thereby own the sea. I would merely become juice less.'
There have also been arguments against software ownership. The main point is that ownership of a program leads to ownership of the mental steps that make up the program. If such mental steps are owned then this means that others can not use them and this might interferes with freedom of thoughts (e.g. consider if someone were to ‘own’ the IF statement). Some people reject this idea because the level of knowledge that was considered is generic and common.
The absence of ownership might also cause bad consequences. Claim has been made that lack of ownership will lead to lack of incentive to produce software. However, software writers are not always in it for the money – consider freeware and shareware.
Activity 6
Find out more about freeware and shareware if you do not know these terms. You can find a discussion of this
Activity at the end of this chapter.
The idea of software ownerships allowed for application of copyright, trade secrecy and patent laws. Together, these encourage invention, innovation, new products and creative invention.
7.4.1 Is it wrong to copy proprietary software?
In general the answer is yes. However, copying might be allowed in the licence in certain including fair use and
• Criticisms or comments
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Property Rights and Software
•News reporting
•Teaching
•Scholarship or research
•Some governmental purposes such as parliamentary or judiciary proceedings and commissions and statutory inquiries.
Fair use of proprietary software is not considered wrong or illegal in most countries. Additionally making a copy to prevent serious harm might also not attract legal consequence in many jurisdictions.
A very philosophical argument puts across the idea that the act of copying software in itself is not wrong because there is nothing intrinsically wrong with the act. It’s the act of using the copied software that is the problem. While the person who has been licensed for the software may not have been harmed (copying does not deprive the person of the procession) but the authors are deprived of payment for their labour.
7.5 Fair Use in the Electronic Age
The purpose of this section is to outline the lawful uses of copyrighted works by individuals, libraries, and educational institutions in the electronic environment. Representatives of the following associations advocate the arguments below:
American Association of Law Libraries, American Library Association, Association of Academic Health Sciences Library Directors, Association of Research Libraries, Medical Library Association and the Special Libraries Association.
'The primary objective of copyright is not to reward the labour of authors, but "to promote the Progress of Science and useful Arts." To this end, copyright assures authors the right to their original expression, but encourages others to build freely upon the ideas and information conveyed by a work. This result is neither unfair nor unfortunate. It is the means by which copyright advances the progress of science and art.' - US Supreme Court Justice Sandra Day O'Connor
It follows that the benefits of the new technologies should flow to the public as well as to copyright proprietors. As more information becomes available only in electronic formats, the public's legitimate right to use copyrighted material must be protected. In order for copyright to truly serve its purpose of "promoting progress," the public's right of fair use must continue in the electronic era, and these lawful uses of copyrighted works must be allowed without individual transaction fees.
Without infringing copyright, the public has a right to expect:
•to read, listen to, or view publicly marketed copyrighted material privately, on site or remotely
•to browse through publicly marketed copyrighted material
•to experiment with variations of copyrighted material for fair use purposes, while preserving the integrity of the original
•to make or have made for them a first generation copy for personal use of an article or other small part of a publicly marketed copyrighted work or a work in a library's collection for such purpose as study, scholarship, or research
•to make transitory copies if ephemeral or incidental to a lawful use and if retained only temporarily Without infringing copyright,
•to use electronic technologies to preserve copyrighted materials in their collections
•to provide copyrighted materials as part of electronic reserve room service
•to provide copyrighted materials as part of electronic
•to avoid liability, after posting appropriate copyright notices, for the unsupervised actions of their
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users
Users, libraries, and educational institutions have a right to expect:
•that the terms of licenses will not restrict fair use or other lawful library or educational uses
•that U.S. government works and other public domain materials will be readily available without restrictions and at a government price not exceeding the marginal cost of dissemination
•that rights of use for
Carefully constructed copyright guidelines and practices have emerged for the print environment to ensure that there is a balance between the rights of users and those of authors, publishers, and copyright owners. New understandings, developed by all stakeholders, will help to ensure that this balance is retained in a rapidly changing electronic environment.
The above working statement addresses lawful uses of copyrighted works in both the print and electronic environments.
7.6 Answers and Discussions
7.6.1 Discussion of Activity 5
Most arguments seem to evolve around the fact that a piece of software’s behavior in itself is useful, even without the presence of a user. This is not true with literary work.
Another issue is that copyright does not give a monopoly of control of a literary work – someone else, independently can do the same thing. As long as the work was created independently and is literally different there is no copyright infringement. In computing, however, striking resemblance is enough for a court to declare a copyright infringement. Here are some infringement cases:
•Franklin versus Apple (1984): Franklin copied Apple’s operating system, in many cases this was done line by line. He was found guilty of copyright infringement.
•Whelan versus Jaslow (1987): Whelan developed a program for Jaslow in Fortran, but bothagreed that Whelan would Own it. Jaslow then redid the program line by line in Pascal. Whelan sued and even though Jaslow’s program is literally different and arguably a different expression of thesame idea, the court found in favour of Whelan (Comprehensive
7.6.2Discussion of Activity 6
Freeware are software which anyone can used without paying the author. People do produce this type of software for fun or just because they want the software themselves. Shareware are software that is provided for use or a trial basis. After the trial period is over, users may pay a small amount to carry on using it and/or for support. They must remove the software from their system if they do not intend to pay.
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