Chapter 4:

Intellectual
Property

Based on slides prepared by Cyndi Chie,

Sarah Frye and Sharon Gray.
Copyright © 2018, 2013, 2008 Pearson Education, Inc. All Rights Reserved Fifth edition updated by Timothy Henry
 Wix gets caught “stealing” GPL code
from WordPress
• WordPress’ code is open source, but it is published under
the GNU Public License (GPL).

• “[Wix’s] editor is based on the WordPress mobile app’s

editor.” If I were being honest, I’d say that Wix copied
WordPress without attribution, credit, or following the
license.” — WordPress Founder, Matt Mullenweg

• Wix application was closed and proprietary—not

published under the same GPL license

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 What We Will Cover
• Principles, Laws, and Cases

• Responses to Copyright Infringement

• Search Engines and Online Libraries

• Free Software

• Patents for Inventions in Software

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 Principles, Laws, and
Cases
• What is Intellectual Property?

• The intangible creative work, not its particular physical

form

• Value of intelligence and artistic work comes from

creativity, ideas, research, skills, labor, non-material
efforts and attributes the creator provides

• Protected by copyright and patent law

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 Principles, Laws, and
Cases
• U.S copyright Law (Title 17 of U.S. Code) gives copyright holder following
exclusive rights:

• To make copies

• To produce derivative works, such as translations into other languages or

movies based on books

• To distribute copies

• To perform the work in public (e.g. music, plays)

• To display the work in public (e.g. artwork, movies, computer games,

video on a Web site)

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 Principles, Laws, and
Cases
• Challenges of New Technology

• Digital technology and the Internet make copyright infringement

easier and cheaper.

• New compression technologies make copying large files (e.g.

graphics, video and audio files) feasible.

• Search engines make finding material easier.

• Peer-to-peer technology makes transferring and sharing files

easier.
The content industries claim that about one-
quarter of Internet traffic worldwide consists of
copyright-infringing material.

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 Principles, Laws, and
Cases
• Challenges of New Technology

• Broadband connections make transferring files easier and enable

streaming video.

• Miniaturization of cameras and other equipment enable audience

members to record and transmit events.

• Scanners allow us to change the media of a copyrighted work,

converting printed text, photos, and artwork to electronic form.

• New tools allow us to modify graphics, video and audio files to make
derivative works.

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 Principles, Laws, and
Cases
• What does it mean to solve the problems of
technology’s impact on intellectual property
rights?

• We should recognize that “the problem” looks

different from different perspectives.

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 Principles, Laws, and
Cases
• A bit of history

• 1790 first copyright law passed

• 1909 Copyright Act of 1909 defined an unauthorized copy as a form that could be
seen and read visually

• 1976 and 1980 copyright law revised to include software and databases that
exhibit "authorship" (original expression of ideas), included the "Fair Use Doctrine"

• 1982 high-volume copying became a felony

• 1992 making multiple copies for commercial advantage and private gain
became a felony

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 Principles, Laws, and
Cases
• A bit of History

• 1997 No Electronic Theft Act made it a felony to willfully infringe

copyright by reproducing or distributing one or more copies of
copyrighted work with a total value of more than $1,000 within a six-
month period

• 1998 Digital Millennium Copyright Act (DMCA) prohibits making,

distributing or using tools to circumvent technological copyright
protection systems and included protection from some copyright
lawsuits for Web sites where users post material

• 2005 Congress made it a felony to record a movie in a movie theater

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 Principles, Laws, and
Cases
• Fair Use Doctrine

• Four factors considered

• Purpose and nature of use – commercial (less likely) or nonprofit purposes

• Nature of the copyrighted work

• Amount and significance of portion used

• Effect of use on potential market or value of the copyright work (will it reduce sales
of work?)

• No single factor alone determines

• Not all factors given equal weight, varies by circumstance

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 Principles, Laws, and
Cases
• Ethical arguments about copying

• Copying or distributing a song or computer

program does not decrease the use and
enjoyment any other person gets from
his or her copy.

• Copying can decrease the amount of money that

the copyright owner earns.
Value of intellectual property is not just the
direct use and enjoyment one gets from a copy.

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 Principles, Laws, and
•
Cases
Ethical arguments about copying

• Copying enables users to try out products, benefiting the

copyright owner by encouraging sales.

• Businesses and organizations should make their own decisions

about marketing products, not consumers who want free
samples.

• Fair use guidelines are useful ethical guidelines.

• There are many arguments for and against unauthorized

copying.
Arguments people make supporting personal
copying or posting on the Web without
authorization are listed, along with some
counterpoints to consider, on page 189.
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 Principles, Laws, and
Cases
• Discussion Questions

• How is intellectual property like physical property?

• How is intellectual property different than physical

property?

• Do you agree with the idea that someone can

"own" intellectual property?

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 Principles, Laws, and
Cases
• Significant Cases

• Sony v. Universal City Studios (1984)

• Supreme Court decided that the makers of a device with legitimate uses
should not be penalized because some people may use it to infringe on
copyright

• Supreme Court decided copying movies for later viewing was fair use

• Arguments against fair use

• People copied the entire work

• Movies are creative, not factual

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 Principles, Laws, and
Cases
• Significant Cases

• Sony v. Universal City Studios (1984)

• Arguments for fair use

• The copy was for private, noncommercial use and generally was not kept
after viewing

• The movie studios could not demonstrate that they suffered any harm

• The studios had received a substantial fee for broadcasting movies on TV,
and the fee depends on having a large audience who view for free

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 Principles, Laws, and
Cases
• Significant Cases

• Reverse engineering: game machines

• Sega Enterprises Ltd. v. Accolade Inc. (1992)

• Atari Games v. Nintendo (1992)

• Sony Computer Entertainment, Inc. v. Connectix Corporation (2000)

• Courts ruled that reverse engineering does not violate copyright if

the intention is to make new creative works (video games), not copy
the original work (the game systems)

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 Principles, Laws, and
Cases
• Significant Cases

• Sharing music: the Napster case

• Napster's arguments for fair use

• The Sony decision allowed for entertainment use to

be considered fair use

• Did not hurt industry sales because users sampled the

music on Napster and bought the CD if they liked it

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 Principles, Laws, and
Cases
• Significant Cases

• Sharing music: the Napster case

• RIAA's (Recording Industry Association of America) arguments against fair use

• "Personal" meant very limited use, not trading with thousands of strangers

• Songs and music are creative works and users were copying whole songs

• Claimed Napster severely hurt sales

• Court ruled sharing music via copied MP3 files violated copyright

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 Principles, Laws, and
Cases
• Significant Cases

• Sharing music: the Napster case

• Was Napster responsible for the actions of its users?

• Napster's arguments

• It was the same as a search engine, which is protected under the

DMCA

• They did not store any of the MP3 files

• Their technology had substantial legitimate uses

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 Principles, Laws, and
Cases
• Significant Cases

• Sharing music: the Napster case

• RIAA's arguments

• Companies are required to make an effort to prevent copyright

violations and Napster did not take sufficient steps

• Napster was not a device or new technology and the RIAA was not
seeking to ban the technology

• Court ruled Napster liable because they had the right and ability to
supervise the system, including copyright infringing activities

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 Principles, Laws, and
Cases
• Significant Cases

• File sharing: MGM v. Grokster

• Grokster, Gnutella, Morpheus, Kazaa, and others provided peer-to-peer (P2P)

file sharing services

• The companies did not provide a central service or lists of songs

• P2P file transfer programs have legitimate uses

• Lower Courts ruled that P2P does have legitimate uses

• Supreme Court ruled that intellectual property owners could sue the
companies for encouraging copyright infringement

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 Principles, Laws, and
Cases
• Discussion Question

• What do you think the impact would be on

creative industries, such as music, movies and
fiction novels, if copyright laws did not protect
intellectual property?

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 Principles, Laws, and
Cases
• Significant Cases

• “Look and feel”

• Refers to features such as pull-down menus,

windows, icons, and finger movements and
specific ways they are used to select or initiate
actions.

• Reflects major creative effort by programmers.

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 Principles, Laws, and
Cases
Does copyright apply to user interfaces? The internal structure and
programing could be entirely different.

In the 1980s and 1990s, some companies won copyright infringement

suits against others whose software had similar look and feel. An appeals
court, reversing one such case, ruled that menu commands are “a method
of operation,” explicitly excluded from copyright protection. They are, the
court said, like the controls of a car. The trend of court decisions has been
against copyright protection for “look and feel.”

The main argument in favor of protecting a user interface is that it is a

major creative effort. On the other hand, standard user interfaces increase
productivity of users and programmers.

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 Responses to Copyright Infringement

• Responses from the Content Industries

• Ideas from the software industries

• Expiration dates within the software

• Dongles (a device that must be plugged into a computer port)

• Copy protection that prevents copying

• Activation or registration codes

• Court orders to shut down Internet bulletin boards and Web sites

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 Responses to Copyright Infringement

• International Piracy

• Some countries do not recognize or protect intellectual property

• Countries that have high piracy rates often do not have a significant
software industry

• Many countries that have a high amount of piracy are exporting the
pirated copies to countries with strict copyright laws

• Economic sanctions often penalize legitimate businesses, not those

they seek to target

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 Responses to Copyright Infringement
• Responses from the Content Industries

• Banning, suing and taxing

• Ban or delay technology via lawsuits

• CD-recording devices

• DVD players

• Portable MP3 players

• Require that new technology include copyright protections

• Tax digital media to compensate the industry for expected losses

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 Responses to Copyright Infringement

• Digital Rights Management

• Collection of techniques that control uses of intellectual

property in digital formats

• Includes hardware and software schemes using encryption

• The producer of a file has flexibility to specify what a user may

do with it

• Apple, Microsoft and Sony all use different schemes of DRM

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 Responses to Copyright Infringement

• The Digital Millennium Copyright Act (DMCA) 1998

• Anticircumvention

• Prohibit circumventing technological access controls

and copy-prevention systems

• Safe harbor

• Protect Web sites from lawsuits for copyright infringement

by users of site

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 Responses to Copyright Infringement

• The DMCA vs. Fair Use, Freedom of Speech, and Innovation

• Lawsuits have been filed to ban new technologies

• U.S. courts have banned technologies such as DeCSS even though it

has legitimate uses, while courts in other countries have not.

• Protesters published the code as part of creative works (in haiku,

songs, short movies, a computer game and art)

• U.S. courts eventually allowed publishing of DeCSS, but prohibited

manufacturers of DVD players from including it in their products
Smartphones, tablets, game machines, and other devices have
mechanisms to prevent installation of software or use of services that
the maker of the device does not support or approve. Cracking such
mechanisms is sometimes called jailbreaking, unlocking, or rooting.
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 Responses to Copyright Infringement

• Safe Harbor

• Industry issues "take down" notices per the DMCA

• As long as sites like YouTube and MySpace comply with

take down notices they are not in violation

• Take down notices may violate fair use, some have

been issued against small portions of video being used
for educational purposes

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 Responses to Copyright Infringement
• Evolving Business Models

• Organizations set up to collect and distribute royalty fees (e.g. the

Copyright Clearance Center), users don't have to search out individual
copyright holders

• Sites such as iTunes and the new Napster provide legal means for
obtaining inexpensive music and generate revenue for the industry and
artists

• Revenue sharing allows content-sharing sites to enable the posting of

content and share their ad revenues with content owners in
compensation

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 Responses to Copyright Infringement
• Evolving Business Models

• Cloud storage raises copyright issues.

• Is copying legally purchased files to and from the cloud a fair

use?

• Will the companies operating the cloud services have any

responsibility for unauthorized content their customers store and
share?

• Since copyright holders do not see what is stored, they do not

have the option of sending takedown notices.

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 Responses to Copyright Infringement

• Evolving Business Models

• What does not work

• Zediva, a small startup in 2011, bought DVDs and rented

the content (not the physical DVD) to customers legally.
Court ordered Zediva to shut down.

• Pirate Bay

• Megaupload
Zediva argued that if it could rent the physical DVD without authorization from the studios, as do services such as
Netflix under the first sale doctrine, then it should be legal to rent it digitally over the Internet, streaming a movie
from one DVD to only one renter at a time. The movie studios argued that streaming a movie is a public
performance, which requires authorization. A court agreed with the movie studios and Zediva shut down. Does this
interpretation of the law make sense?
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 Search Engines and Online Libraries
• Search Engines

• Caching and displaying small excerpts is fair use

• Creating and displaying thumbnail images is fair use

• Google negotiated licensing agreements with news

services to copy and display headlines, excerpts, and
photos.

• Trademarked search terms

A group of Belgian newspapers claimed they lose revenue from subscription fees when Google displays headlines, photos, and excerpts
from their news archives. They won a lawsuit against Google (in a Belgian course) in 2007. In response to similar lawsuits and disputes
with other news services, Google negotiated licensing agreements to copy and display headlines, excerpts, and photos.

A company that makes software for learning foreign languages sued a competitor and Google over the issue of selling and purchasing
trademarked search terms. The case (Rosetta Stone Ltd v. Google Inc.), filed in 2009, is still in the courts.
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 Search Engines and Online Libraries
• Books Online

• Project Guttenberg digitizes books in the public domain

• Microsoft scanned millions of public domain books in University of

California's library

• Google has scanned millions of books that are in the public domain
and that are not; they display only excerpts from those still
copyrighted

• Some court rulings favor search engines and information access;

some favor content producers

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 Search Engines and Online Libraries

• Tools for authorized sharing

• Creative Commons: Enables an author to

specify permissions

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 Free Software
• What is free software?

• Free software is an idea advocated and supported by

a large, loose-knit group of computer programmers
who allow people to copy, use, and modify their
software

• Free means freedom of use, not necessarily lack of cost

• Open source - software distributed or made public in

source code (readable and modifiable)
Commercial software, often called proprietary software, is normally sold in object code, the code run by the computer, but
not intelligible to people. It is not modifiable by the end user. The source code is kept secret.

Critics (and some supporters) of free software point out some of its weaknesses. Much free software is not easy for ordinary
consumers to use. Often, there is no technical support number to call for help. Because anyone can modify free software,
there are many versions and few standards, creating a difficult and confusing environment for nontechnical consumers and
businesses.
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 Free Software
• GNU project

• Began with a UNIX-like operating system, a

sophisticated text editor, and many compilers and
utilities

• Now has hundreds of programs freely available and

thousands of software packages available as free
software (with modifiable source code)

• Developed the concept of copyleft

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 Free Software
Free software has many advantages. With freely distributed software, more people can use
and benefit from a program. With source code available, any of thousands of programmers
can find and fix bugs quickly. Users and programmers can adapt and improve programs.

Under copyleft, the developer copyrights the program and releases it under an agreement
that allows people to use, modify, and distribute it, or any program developed from it, but
only if they apply the same agreement to the new work. No one may develop a new program
from a copylefted program and add restrictions that limit is use and free distribution. Courts
have said a person can sue for an injunction against someone who uses copylefted software
without following the open source licensing agreement.
Free software is undoubtedly valuable, but does it provide sufficient incentives to produce the
huge quantity of consumer software available now? How are free software developers paid?
Programmers donate their work because they believe in the sharing ethic. Most programmers
work for a salary, even if they write free software on their own time. Would the extra services
for which a business could charge bring in enough revenue to support all software
development?

Richard Stallman believes that proprietary software – particularly, the aspect that prohibits
people from making copies and changes in programs without the software publisher’s approval
– is ethically wrong. He argues that copying a program does not deprive the programmer, or
anyone
Copyright else,2013,
© 2018, of use
2008of the program.
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 Free Software
• Should all software be free?

• Would there be sufficient incentives to produce the huge quantity of

consumer software available now?

• Would the current funding methods for free software be sufficient to

support all software development?

• Should software be covered under copyright law?

• Concepts such as copyleft and the GNU Public License provide

alternatives to proprietary software within today's current legal
framework

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 Patents for Inventions in Software
• Patent decisions, confusion, and consequences

• Patents protect inventions by giving the inventor a

monopoly for a specified time period.

• Laws of nature and mathematical formulas cannot

be patented.

• Obvious inventions or methods cannot be

patented. Using a patented invention or process requires permission from the patent
holder, even if another inventor independently came up with the same idea
or invention.

Businesses routinely pay license fees to use patented inventions in their

products.
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 Patents for Inventions in Software
• A few cases

• Paul Allen, co-founder of Microsoft, and e-

commerce and Web-viewing

• Apple, Android, and tap-touch screens

• IBM , Amazon, and electronic catalogues

Paul Allen (co-founder of Microsoft) sued several companies (Google, Facebook, Apple, eBay, Netflix, AOL, and others) for
violating four early patents related to now widely used e-commerce and Web-viewing features. A judge dismissed the suit
in 2011 while the Patent Office reconsiders the patents.

Apple won a patent case against a maker of Android phones. It covers technology that allows a user to tap a touch screen to
perform various tasks.

IBM sued Amazon for violating a patent on electronic catalogues that covers targeting advertising and recommending
specific products to a customer. Eventually, Amazon agreed to pay IBM a licensing fee.
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 Patents for Inventions in Software

• Patent trolls

• Some companies accumulate thousands of

technology patents but do not make any
products.

• They license the patents to others and collect

fees.
Some patent-licensing firms make all or a significant part of their income by suing other
companies for patent infringement (for hardware as well as software patents.)

Some see the existence of patent-licensing firms as an indication of a serious flaw in the
patent system. On the other hand, some inventors have neither the skills nor the desire
to market their inventions and negotiate contracts. In a highly specialized economy, the
existence of firms that buy and license patents is not in itself a negative thing.
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 Patents for Inventions in Software
• To patent or not?

• In favor of software patents

• Reward inventors for their creative work

• Encourage inventors to disclose their inventions

so others can build upon them

• Encourage innovation

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 Patents for Inventions in Software
• To patent or not?

• Against software patents

• Patents can stifle innovation, rather than encourage it.

• Cost of lawyers to research patents and risk of being sued

discourage small companies from attempting to develop and
market new innovations.

• It is difficult to determine what is truly original and distinguish a

patentable innovation from one that is not.

Many computer scientists see all algorithms as

mathematical formulas.
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