Intellectual Property Rights in
Software: What They Are and How the Law Protects Them
By Eric S. Freibrun, Esq.
People talk a lot in the information
technology business about "intellectual property rights." But what are they? How
do they apply to software technology? Why should you protect them? How do you protect
them?
Intellectual property rights are at the
foundation of the software industry. The term refers to a range of intangible rights of
ownership in an asset such as a software program. Each intellectual property
"right" is itself an asset, a slice of the overall ownership pie. The law
provides different methods for protecting these rights of ownership based on their type.
There are essentially four types of
intellectual property rights relevant to software: patents, copyrights, trade secrets and
trademarks. Each affords a different type of legal protection. Patents, copyrights and
trade secrets can be used to protect the technology itself. Trademarks do not protect
technology, but the names or symbols used to distinguish a product in the marketplace.
We'll save a discussion of trademarks for a later issue.
Patents
A patent is a twenty year exclusive
monopoly on the right to make, use and sell a qualifying invention. This legal monopoly is
considered a reward for the time and effort expended in creating the invention. In return,
the invention must be described in detail to the Patent Office, which publishes the
information, thus increasing the amount of technological knowledge available to the
public.
To obtain a U.S. patent, an inventor must
apply to the Patent Office and demonstrate that the invention is new (as compared to prior
technology), useful, and "nonobvious." An invention is nonobvious if it is more
than a trivial, obvious next step in the advance of the technology.
Software patents can be extremely
powerful economic tools. They can protect features of a program that cannot be protected
under copyright or trade secret law. For example, patents can be obtained for ideas,
systems, methods, algorithms, and functions embodied in a software product: editing
functions, user-interface features, compiling techniques, operating system techniques,
program algorithms, menu arrangements, display presentations or arrangements, and program
language translation methods.
Since patent rights are exclusive, anyone
making, using or selling the patented invention without the patent owner's authorization
is guilty of infringement. Penalties are stiff and include triple damages. Once a patent
for an invention is granted, subsequent "independent" (i.e., without access to
the patented technology) development of the invention by another inventor is still
considered infringement.
Copyrights
While a patent can protect the novel
ideas embodied in a software program, a copyright cannot. Copyright protection extends to
the particular form in which an idea is expressed. In the case of software, copyright law
would protect the source and object code, as well as certain unique original elements of
the user interface.
As discussed in last month's issue, the
owner of a copyrighted software program has certain exclusive rights (with some
exceptions): the right to copy the software, create derivative or modified versions of it,
and distribute copies to the public by license, sale or otherwise. Anyone exercising any
of these exclusive rights without permission of the copyright owner is an infringer and
subject to liability for damages or statutory fines.
As with patents, the exclusive rights
afforded under copyright law are intended to reward the creative and inventive efforts of
the "author" of the copyrighted work. The exclusive right to control duplication
protects the owner of copyrighted software against the competition that would result from
verbatim copying of the program's code. Copyright law also protects against indirect
copying, such as unauthorized translation of the code into a different programming
language.
Copyright protection arises automatically
upon the creation of an original work of authorship. There is no need to "apply"
for a copyright or register the copyrighted work in order for protection to exist.
Generally, the duration of a copyright is the author's life plus fifty years. In the case
of software created by an employee in the course of his or her employment, the resulting
"work made for hire" would be protected by copyright law for seventy-five years
from publication.
In contrast with patents, independent
development of a copyrighted work is a defense to an allegation of copyright infringement.
Imagine, though, how unlikely it would be for the same thousands of lines of code to be
created independently by one not engaged in unauthorized copying. Unlike patents,
copyright law affords no protection to the ideas underlying the program. Ideas and
concepts are fair game for competitors to the extent they are not protected by patents or
trade secrets.
Trade Secrets
A trade secret is any formula, pattern,
compound, device, process, tool, or mechanism that is not generally known or discoverable
by others, is maintained in secrecy by its owner, and gives its owner a competitive
advantage because it is kept secret. The classic example of a trade secret is the formula
to Coca-Cola.
A trade secret can theoretically last
forever -- for as long as its owner uses reasonable efforts to keep it secret and someone
else doesn't independently create or "discover" it.
Many features of software, such as code
and the ideas and concepts reflected in it, can be protected as trade secrets. This
protection lasts as long as the protected element retains its trade secret status. Unlike
patents, trade secret protection will not extend to elements of software that are readily
ascertainable by lawful means, such as reverse engineering or independent development.
Trade secrets are not subject to being
"infringed," as with patents and copyrights, but are subject to theft. Their
legal status as a protectable intellectual property right will be upheld if the owner can
prove the trade secret was not generally known and reasonable steps were taken to preserve
its secrecy.
Maximizing the economic value of a
software asset critically depends on understanding the nature of the intellectual property
rights involved and how best to use the available forms of legal protection to protect
those rights.
Attorney Eric Freibrun specializes in
Computer law and Intellectual Property protection, providing legal services to information
technology vendors and users. Tel.: 847-562-0099; Fax: 847-562-0033; E-mail: eric@freibrun.com.
Copyright © Eric S. Freibrun, Esq., Law Offices of Eric S. Freibrun, Ltd. All rights
reserved.
