Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.
Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.
OCR for page 284
Global Dimensions of Intellectual Property Rights in Science and Technology 12 A Case Study on Computer Programs PAMELA SAMUELSON HISTORICAL OVERVIEW Phase 1: The 1950s and Early 1960s When computer programs were first being developed, proprietary rights issues were not of much concern. Software was often developed in academic or other research settings. Much progress in the programming field occurred as a result of informal exchanges of software among academics and other researchers. In the course of such exchanges, a program developed by one person might be extended or improved by a number of colleagues who would send back (or on to others) their revised versions of the software. Computer manufacturers in this period often provided software to customers of their machines to make their major product (i.e., computers) more commercially attractive (which caused the software to be characterized as "bundled" with the hardware). To the extent that computer programs were distributed in this period by firms for whom proprietary rights in software were important, programs tended to be developed and distributed through restrictive trade secret licensing agreements. In general, these were individually negotiated with customers. The licensing tradition of the early days of the software industry has framed some of the industry expectations about proprietary rights issues, with implications for issues still being litigated today. In the mid-1960s, as programs began to become more diverse and complex, as more firms began to invest in the development of programs, and as
OCR for page 285
Global Dimensions of Intellectual Property Rights in Science and Technology some began to envision a wider market for software products, a public dialogue began to develop about what kinds of proprietary rights were or should be available for computer programs. The industry had trade secrecy and licensing protection, but some thought more legal protection might be needed. Phase 2: Mid-1960s and 1970s Copyright law was one existing intellectual property system into which some in the mid-1960s thought computer programs might potentially fit. Copyright had a number of potential advantages for software: it could provide a relatively long term of protection against unauthorized copying based on a minimal showing of creativity and a simple, inexpensive registration process.1 Copyright would protect the work's ''expression," but not the "ideas" it contained. Others would be free to use the same ideas in other software, or to develop independently the same or a similar work. All that would be forbidden was the copying of expression from the first author's work. In 1964, the U.S. Copyright Office considered whether to begin accepting registration of computer programs as copyrightable writings. It decided to do so, but only under its "rule of doubt" and then only on condition that a full text of the program be deposited with the office, which would be available for public review.2 The Copyright Office's doubt about the copyrightability of programs 1 Under the federal copyright statute in effect in 1964, the law was mainly used to protect published works from unauthorized copying and distribution. Protection lasted 28 years, but could be renewed for an additional 28 years. After that, the work could be freely copied. Upon publication, a copyright notice had to appear on each copy of the work (or else the work would be considered to have been dedicated to the public domain). The author would generally register the work with the Copyright Office upon publication. The Copyright Office would give the work a cursory examination to determine that it met copyright's modest substantive standards. After this examination, and upon payment of a modest fee, the office would issue a certificate of registration. Unpublished works were generally protected by state law. Under the Copyright Act of 1976, the rights of copyright attach to original works of authorship from the moment of their first fixation in a tangible medium and last for the life of the author plus 50 years. Registration with the Copyright Office remains a simple inexpensive process; registration is necessary to bring an action for copyright infringement, but not for rights to attach. See 17 U.S.C. sec. 101 et seq. (1988), and 17 U.S.C. sec. I et seq. (superseded). 2 See Samuelson, CONTU revisited: The case against copyright protection for computer programs in machine-readable form, 1984 Duke L.J. 663 (1984). The Copyright Office will deny registration to works that are clearly uncopyrightable but, on occasion, will register works about whose "copyrightability" the office has some doubt, leaving to the courts the ultimate question as to whether the work qualifies for copyright protection. The registration certificate issued for such a work will reflect that its issuance was under the rule of doubt.
OCR for page 286
Global Dimensions of Intellectual Property Rights in Science and Technology arose from a 1908 Supreme Court decision that had held that a piano roll was not an infringing "copy" of copyrighted music, but rather part of a mechanical device.3 Mechanical devices (and processes) have traditionally been excluded from the copyright domain.4 Although the office was aware that in machine-readable form, computer programs had a mechanical character, they also had a textual character, which was why the Copyright Office decided to accept them for registration. The requirement that the full text of the source code of a program be deposited in order for a copyright in the program to be registered was consistent with a long-standing practice of the Copyright Office,5 as well as with what has long been perceived to be the constitutional purpose of copyright, namely, promoting the creation and dissemination of knowledge.6 Relatively few programs, however, were registered with the Copyright Office under this policy during the 1960s and 1970s.7 Several factors may have contributed to this. Some firms may have been deterred by the requirement that the full text of the source code be deposited with the office and made available for public inspection, because this would have dispelled its trade secret status. Some may have thought a registration certificate issued under the rule of doubt might not be worth much. However, the main reason for the low number of copyright registrations was probably that a mass market in software still lay in the future. Copyright is useful mainly to protect mass-marketed products, and trade secrecy is quite adequate for programs with a small number of distributed copies. Shortly after the Copyright Office issued its policy on the registrability of computer programs, the U.S. Patent Office issued a policy statement concerning its views on the patentability of computer programs. It rejected the idea that computer programs, or the intellectual processes that might be embodied in them, were patentable subject matter.8 Only if a program was 3 White-Smith Music Co. v. Apollo, 209 U.S. 1 (1908). 4 See infra notes and accompanying text. 5 The collection of the Library of Congress was built in substantial part with copies of copyrighted works deposited with the Copyright Office. The office remains a subunit of the Library of Congress. 6 See, e.g., Office of Technology Assessment, Intellectual Property Rights in an Age of Electronics and Information (1986). 7 National Commission on New Technological Uses of Copyrighted Works, Final Report (1979) (cited as "CONTU report") (reporting about 1,200 registrations of computer programs between 1964 and 1978). 8 Only machines, manufactures, compositions of matter, and processes are patentable subject matter under 35 U.S.C. sec. 101 (1988). Processes that can be carried out in one's head or with aid of pen and paper, even when embodied in a writing, have been considered unpatentable as "mental processes." See Samuelson, Benson revisited: The case against patent protection for algorithms and other computer program-related inventions, 39 Emory L.J. 1025, 10331040 (1990).
OCR for page 287
Global Dimensions of Intellectual Property Rights in Science and Technology claimed as part of a traditionally patentable industrial process (i.e., those involving the transformation of matter from one physical state to another) did the Patent Office intend to issue patents for program-related innovations.9 Patents are typically available for inventive advances in machine designs or other technological products or processes on completion of a rigorous examination procedure conducted by a government agency, based on a detailed specification of what the claimed invention is, how it differs from the prior art, and how the invention can be made. Although patent rights are considerably shorter in duration than copyrights, patent rights are considered stronger because no one may make, use, or sell the claimed invention without the patent owner's permission during the life of the patent. (Patents give rights not just against someone who copies the protected innovation, but even against those who develop it independently.) Also, much of what copyright law would consider to be unprotectable functional content ("ideas") if described in a book can be protected by patent law. The Patent Office's policy denying the patentability of program innovations was consistent with the recommendations of a presidential commission convened to make suggestions about how the office could more effectively cope with an "age of exploding technology." The commission also recommended that patent protection not be available for computer program innovations.10 Although there were some appellate decisions in the late 1960s and 9 Id. But see Chisum, The patentability of algorithms, 47 U. Pitt. L. Rev. 959 (1986). 10 Report of the President's Commission on the Patent System, "To Promote the Progress ... of the Useful Arts" in an Age of Exploding Technology 13 (1966), quoted in Gottschalk v. Benson, 409 U.S. 63, 72 (1972): Uncertainty now exists as to whether the statute permits a valid patent to be granted on programs. Direct attempts to patent programs have been rejected on ground of nonstatutory subject matter. Indirect attempts to obtain patents and avoid the rejection, by drafting claims as a process, or a machine, or components thereof, programmed in a given manner rather than as a program itself, have confused the issue further and should not be permitted. The Patent Office now cannot examine applications for programs because of a lack of classification technique and the requisite search files. Even if these were available, reliable searches would not be feasible or economic because of the tremendous volume of prior art being generated. Without this search, the patenting of programs would be tantamount to mere registration and the presumption of validity would be all but nonexistent. It is noted that the creation of programs has undergone substantial and satisfactory growth in the absence of patent protection and that copyright protection for programs is presently available. Some would argue that the report's conclusions are as valid today as they were 25 years ago. See, e.g., Kahin, The software patent crisis, Technology Review (April 1990) at 53.
OCR for page 288
Global Dimensions of Intellectual Property Rights in Science and Technology early 1970s overturning Patent Office rejections of computer program-related applications, few software developers looked to the patent system for protection after two U.S. Supreme Court decisions in the 1970s ruled that patent protection was not available for algorithms.11 These decisions were generally regarded as calling into question the patentability of all software innovations, although some continued to pursue patents for their software innovations notwithstanding these decisions.12 As the 1970s drew to a close, despite the seeming availability of copyright protection for computer programs, the software industry was still relying principally on trade secrecy and licensing agreements. Patents seemed largely, if not totally, unavailable for program innovations. Occasional suggestions were made that a new form of legal protection for computer programs should be devised, but the practice of the day was trade secrecy and licensing, and the discourse about additional protection was focused overwhelmingly on copyright. During the 1960s and 1970s the computer science research community grew substantially in size. Although more software was being distributed under restrictive licensing agreements, much software, as well as innovative ideas about how to develop software, continued to be exchanged among researchers in this field. The results of much of this research were published and discussed openly at research conferences. Toward the end of this period, a number of important research ideas began to make their way into commercial projects, but this was not seen as an impediment to research by computer scientists because the commercial ventures tended to arise after the research had been published. Researchers during this period did not, for the most part, seek proprietary rights in their software or software ideas, although other rewards (such as tenure or recognition in the field) were available to those whose innovative research was published. Phase 3: The 1980s Four significant developments in the 1980s changed the landscape of the software industry and the intellectual property rights concerns of those who developed software. Two were developments in the computing field; two were legal developments. The first significant computing development was the introduction to the market of the personal computer (PC), a machine made possible by improvements in the design of semiconductor chips, both as memory storage 11 Gottschalk v. Benson, 409 U.S. 63 (1972) and Parker v. Flook, 437 U.S. 584 (1978). These cases are discussed at length in Samuelson, supra note 8. 12 Id
OCR for page 289
Global Dimensions of Intellectual Property Rights in Science and Technology devices and as processing units. A second was the visible commercial success of some early PC applications software—most notably, Visicalc, and then Lotus 1-2-3—which significantly contributed to the demand for PCs as well as making other software developers aware that fortunes could be made by selling software. With these developments, the base for a large mass market in software was finally in place. During this period, computer manufacturers began to realize that it was to their advantage to encourage others to develop application programs that could be executed on their brand of computers. One form of encouragement involved making available to software developers whatever interface information would be necessary for development of application programs that could interact with the operating system software provided with the vendor's computers (information that might otherwise have been maintained as a trade secret). Another form of encouragement was pioneered by Apple Computer, which recognized the potential value to consumers (and ultimately to Apple) of having a relatively consistent "look and feel" to the applications programs developed to run on Apple computers. Apple developed detailed guidelines for applications developers to aid in the construction of this consistent look and feel. The first important legal development—one which was in place when the first successful mass-marketed software applications were introduced into the market—was passage of amendments to the copyright statute in 1980 to resolve the lingering doubt about whether copyright protection was available for computer programs.13 These amendments were adopted on the recommendation of the National Commission on New Technological Uses of Copyrighted Works (CONTU), which Congress had established to study a number of "new technology" issues affecting copyrighted works. The CONTU report emphasized the written nature of program texts, which made them seem so much like written texts that had long been protected by copyright law. The CONTU report noted the successful expansion of the boundaries of copyright over the years to take in other new technology products, such as photographs, motion pictures, and sound recordings. It predicted that computer programs could also be accommodated in the copyright regime.14 Copyright law was perceived by CONTU as the best alternative for protection of computer programs under existing intellectual property regimes. Trade secrecy, CONTU noted, was inherently unsuited for mass-marketed products because the first sale of the product on the open market would dispel the secret. CONTU observed that Supreme Court rulings had cast 13 Whether computer programs were protectable under copyright law prior to the 1980 amendments has been the subject of some dispute. See Samuelson, supra note 2. 14 See CONTU report, supra note 7.
OCR for page 290
Global Dimensions of Intellectual Property Rights in Science and Technology doubts on the availability of patent protection for software. CONTU's confidence in copyright protection for computer programs was also partly based on an economic study it had commissioned. This economic study regarded copyright as suitable for protecting software against unauthorized copying after sale of the first copy of it in the marketplace, while fostering the development of independently created programs. The CONTU majority expressed confidence that judges would be able to draw lines between protected expression and unprotected ideas embodied in computer programs, just as they did routinely with other kinds of copyrighted works. A strong dissenting view was expressed by the novelist John Hersey, one of the members of the CONTU commission, who regarded programs as too mechanical to be protected by copyright law. Hersey warned that the software industry had no intention to cease the use of trade secrecy for software. Dual assertion of trade secrecy and copyright seemed to him incompatible with copyright's historical function of promoting the dissemination of knowledge. Another development during this period was that the Copyright Office dropped its earlier requirement that the full text of source code be deposited with it. Now only the first and last 25 pages of source code had to be deposited to register a program. The office also decided it had no objection if the copyright owner blacked out some portions of the deposited source code so as not to reveal trade secrets. This new policy was said to be consistent with the new copyright statute that protected both published and unpublished works alike, in contrast to the prior statutes that had protected mainly published works.15 With the enactment of the software copyright amendments, software developers had a legal remedy in the event that someone began to mass-market exact or near-exact copies of the developers' programs in competition with the owner of the copyright in the program. Unsurprisingly, the first software copyright cases involved exact copying of the whole or substantial portions of program code, and in them, the courts found copyright infringement. Copyright litigation in the mid- and late 1980s began to grapple with questions about what, besides program code, copyright protects about computer programs. Because the "second-generation" litigation affects the current legal framework for the protection of computer programs, the issues raised by these cases will be dealt with in the next section. As CONTU Commissioner Hersey anticipated, software developers did not give up their claims to the valuable trade secrets embodied in their programs after enactment of the 1980 amendments to the copyright statute. 15 See, e.g., Raskind, The uncertain case for special legislation protecting computer software, 47 U. Pitt. L. Rev. 1131 (1986).
OCR for page 291
Global Dimensions of Intellectual Property Rights in Science and Technology To protect those secrets, developers began distributing their products in machine-readable form, often relying on "shrink-wrap" licensing agreements to limit consumer rights in the software.16 Serious questions exist about the enforceability of shrink-wrap licenses, some because of their dubious contractual character17 and some because of provisions that aim to deprive consumers of rights conferred by the copyright statute.18 That has not led, however, to their disuse. One common trade secret-related provision of shrink-wrap licenses, as well as of many negotiated licenses, is a prohibition against decompilation or disassembly of the program code. Such provisions are relied on as the basis of software developer assertions that notwithstanding the mass distribution of a program, the program should be treated as unpublished copyrighted works as to which virtually no fair use defenses can be raised.19 Those who seek to prevent decompilation of programs tend to assert that since decompilation involves making an unauthorized copy of the program, it constitutes an improper means of obtaining trade secrets in the program. Under this theory, decompilation of program code results in three unlawful acts: copyright infringement (because of the unauthorized copy made during the decompilation process), trade secret misappropriation (because the secret has been obtained by improper means, i.e., by copyright 16 Shrink-wrap licensing agreements are printed forms inserted between the box containing the discs on which the software is loaded and the clear plastic covering the box. The forms typically have boldface instructions to read the form before opening the package, and inform the consumer that by opening the package, the consumer agrees to all of the terms contained in the form, some of which pertain to warranties, and others of which pertain to uses that can and cannot be made of the software. Shrink-wrap agreements typically inform the consumer that he or she is not the owner of a copy of the software, but a licensee of the software, and that breach of any term of the licensing agreement will terminate all of his or her rights to use of the program. Depriving the consumer of the status of an "owner of a copy" of the software is said to be the way to avoid the provisions of 17 U.S.C. sec. 117 that grant certain rights to modify and make backup copies of the software—rights that are granted only to "owners" of copies. 17 See, e.g., Hazen, Contract principles as a guide for protecting intellectual property rights in computer software, 20 U.C. Davis L. Rev. 105 (1986). 18 One appellate court decision has struck down portions of a state law purporting to validate shrink-wrap restrictions as a matter of contract law because the court thought the statute was in conflict with policies underlying the federal copyright law. See Vault Corp. v. Quaid Software, Ltd., 847 F.2d 255 (5th Cir. 1988). See also Rice, Licensing the use of computer program copies and the Copyright Act's first sale doctrine, 30 Jurim. J. 157 (1990). 19 Harper and Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539 (1984) (fair use rarely available as to unpublished works). But see LaST Frontier Conference Report on copyright protection for computer software, 30 Jurim. J. 15 (1989) (reporting a consensus of intellectual property scholars that unless there are valid contractual provisions to the contrary, decompiling a program to study its contents should be treated as a "fair use").
OCR for page 292
Global Dimensions of Intellectual Property Rights in Science and Technology infringement), and a breach of the licensing agreement (which prohibits decompilation). Under this theory, copyright law would become the legal instrument by which trade secrecy could be maintained in a mass-marketed product, rather than a law that promotes the dissemination of knowledge. Others regard decompilation as a fair use of a mass-marketed program and, shrink-wrap restrictions to the contrary, as unenforceable. This issue has been litigated in the United States, but has not yet been resolved definitively.20 The issue remains controversial both within the United States and abroad. A second important legal development in the early 1980s—although one that took some time to become apparent—was a substantial shift in the U.S. Patent and Trademark Office (PTO) policy concerning the patentability of computer program-related inventions. This change occurred after the 1981 decision by the U.S. Supreme Court in Diamond v. Diehr, which ruled that a rubber curing process, one element of which was a computer program, was a patentable process. On its face, the Diehr decision seemed consistent with the 1966 Patent Office policy and seemed, therefore, not likely to lead to a significant change in patent policy regarding software innovations.21 By the mid-1980s, however, the PTO had come to construe the Court's ruling broadly and started issuing a wide variety of computer program-related patents. Only "mathematical algorithms in the abstract" were now thought unpatentable. Word of the PTO's new receptivity to software patent applications spread within the patent bar and gradually to software developers. During the early and mid-1980s, both the computer science field and the software industry grew very significantly. Innovative ideas in computer science and related research fields were widely published and disseminated. Software was still exchanged by researchers, but a new sensitivity to intellectual property rights began to arise, with general recognition that unauthorized copying of software might infringe copyrights, especially if done with a commercial purpose. This was not perceived as presenting a serious obstacle to research, for it was generally understood that a reimplementation of the program (writing one's own code) would be 20 Compare Hubco Data Products Corp. v. Management Assistance Corp., 219 U.S.P.Q.(BNA) 450 (D. Idaho 1983) (decompilation was infringement) and E.F. Johnson Co. v. Uniden Corp., 623 F. Supp. 1485 (D. Minn. 1985) (decompilation was not infringement). However, the Ninth Circuit Court of Appeals' decision to dissolve an injunction against Accolade Software in a suit brought by Sega Enterprises, which had alleged infringement on the sole ground that a copy had been made to make a compatible program, may be influential in persuading other courts to treat decompilation as fair use. 21 Diamond v. Diehr, 450 U.S. 175 (1981). For a discussion of the PTO's change in interpretation of the patentability of program-related inventions after Diehr, see Samuelson, supra note 8.
OCR for page 293
Global Dimensions of Intellectual Property Rights in Science and Technology noninfringing.22 Also, much of the software (and ideas about software) exchanged by researchers during the early and mid-1980s occurred outside the commercial marketplace. Increasingly, the exchanges took place with the aid of government-subsidized networks of computers. Software firms often benefited from the plentiful availability of research about software, as well as from the availability of highly trained researchers who could be recruited as employees. Software developers began investing more heavily in research and development work. Some of the results of this research was published and/or exchanged at technical conferences, but much was kept as a trade secret and incorporated in new products. By the late 1980s, concerns began arising in the computer science and related fields, as well as in the software industry and the legal community, about the degree of intellectual property protection needed to promote a continuation of the high level of innovation in the software industry.23 Although most software development firms, researchers, and manufacturers of computers designed to be compatible with the leading firms' machines seemed to think that copyright (complemented by trade secrecy) was adequate to their needs, the changing self-perception of several major computer manufacturers led them to push for more and "stronger" protection. (This concern has been shared by some successful software firms whose most popular programs were being "cloned" by competitors.) Having come to realize that software was where the principal money of the future would be made, these computer firms began reconceiving themselves as software developers. As they did so, their perspective on software protection issues changed as well. If they were going to invest in software development, they wanted "strong'' protection for it. They have, as a consequence, become among the most vocal advocates of strong copyright, as well as of patent protection for computer programs.24 22 Samuelson and Glushko, Comparing the views of lawyers and user interface designers on the software copyright "look and feel" lawsuits, 30 Jurim. J. 121 (1989) (reporting the results of a survey reflecting this view). 23 Id. 24 IBM Corp., Apple Computer Corp., and Digital Equipment Corp. have been especially prominent advocates on these intellectual property issues. IBM, several other computer manufacturers, and a computer manufacturers association argued to the U.S. Supreme Court during the Benson appeal in the early 1970s that patent protection should not be available for computer program innovations. This is not their position today.
OCR for page 294
Global Dimensions of Intellectual Property Rights in Science and Technology CURRENT LEGAL APPROACHES IN THE UNITED STATES Software developers in the United States are currently protecting software products through one or more of the following legal protection mechanisms: copyright, trade secret, and/or patent law. Licensing agreements often supplement these forms of protection. Some software licensing agreements are negotiated with individual customers; others are printed forms found under the plastic shrink-wrap of a mass-marketed package.25 Few developers rely on only one form of legal protection. Developers seem to differ somewhat on the mix of legal protection mechanisms they employ as well as on the degree of protection they expect from each legal device. Although the availability of intellectual property protection has unquestionably contributed to the growth and prosperity of the U.S. software industry, some in the industry and in the research community are concerned that innovation and competition in this industry will be impeded rather than enhanced if existing intellectual property rights are construed very broadly.26 Others, however, worry that courts may not construe intellectual property rights broadly enough to protect what is most valuable about software, and if too little protection is available, there may be insufficient incentives to invest in software development; hence innovation and competition may be retarded through underprotection.27 Still others (mainly lawyers) are confident that the software industry will continue to prosper and grow under the existing intellectual property regimes as the courts "fill out" the details of software protection on a case-by-case basis as they have been doing for the past several years.28 25 One thing that distinguishes software from other commodities distributed in the general marketplace is the rarity of outright sales of software to customers. Most commodities in the marketplace are distributed on a sale basis. Publishers sell copies of copyrighted books; manufacturers sell machines embodying patented components; but software developers overwhelmingly distribute programs on what purports to be a licensing-only basis. Even shareware and freeware are distributed on a conditional basis. Another thing that distinguishes software from other commercial products is that so many different legal mechanisms seem to be available to it. Even after enactment of the Copyright Act of 1976, which for the first time extended federal copyright protection to unpublished works, copyright is still—software excepted—largely utilized by those who commercially distribute their works in a manner that inevitably forecloses trade secret protection for the work (since publication discloses the contents of the work). Nor has patent protection previously been available to the intellectual processes embodied in a copyrighted writing. 26 Samuelson and Glushko, supra note 22 (reporting the results of a survey of user interface designers). 27 See, e.g., A. Clapes, Software, Copyright, and Competition (1989). 28 Maier, Software protection—integrating patent, copyright, and trade secret law, 28 Idea 113 (1987).
OCR for page 308
Global Dimensions of Intellectual Property Rights in Science and Technology design, or even a biogenetically altered organism may thus bear its know-how on its face, a condition that renders it as vulnerable to rapid appropriation by second-comers as any published literary or artistic work. From this perspective, a major problem with the kinds of innovative know-how underlying important new technologies is that they do not lend themselves to secrecy even when they represent the fruit of enormous investment in research and development. Because third parties can rapidly duplicate the embodied information and offer virtually the same products at lower prices than those of the originators, there is no secure interval of lead time in which to recuperate the originators' initial investment or their losses from unsuccessful essays, not to mention the goal of turning a profit.68 From a behavioral standpoint, investors in applied scientific know-how find the copyright paradigm attractive because of its inherent disposition to supply artificial lead time to all comers without regard to innovative merit and without requiring originators to preselect the products that are most worthy of protection.69 Full copyright protection, however, with its broad notion of equivalents geared to derivative expressions of an author's personality is likely to disrupt the workings of the competitive market for industrial products. For this and other reasons, Professor Reichman argues that a modified copyright approach to the protection of computer programs (and other legal hybrids) would be a preferable framework for protecting the applied know-how they embody than either the patent or the copyright regime would presently provide. Similar arguments can be made for a modified form of copyright protection for the dynamic behavior of programs. A modified copyright approach might involve a short duration of protection for original valuable functional components of programs. It could be framed to supplement full copyright protection for program code and traditionally expressive elements of text and graphics displayed when programs execute, features of software that do not present the same dangers of competitive disruption from full copyright protection. The United States is, in large measure, already undergoing the development of a sui generis law for protection of computer software through case-by-case decisions in copyright lawsuits. Devising a modified copyright approach to protecting certain valuable components that are not suitably protected under the current copyright regime would have the advantage of allowing a conception of the software protection problem as a whole, rather than on a piecemeal basis as occurs in case-by-case litigation in which the 68 Id. at 269. 69 Id. at 271.
OCR for page 309
Global Dimensions of Intellectual Property Rights in Science and Technology skills of certain attorneys and certain facts may end up causing the law to develop in a skewed manner.70 There are, however, a number of reasons said to weigh against sui generis legislation for software, among them the international consensus that has developed on the use of copyright law to protect software and the trend toward broader use of patents for software innovations. Some also question whether Congress would be able to devise a more appropriate sui generis system for protecting software than that currently provided by copyright. Some are also opposed to sui generis legislation for new technology products such as semiconductor chips and software on the ground that new intellectual property regimes will make intellectual property law more complicated, confusing, and uncertain. Although there are many today who ardently oppose sui generis legislation for computer programs, these same people may well become among the most ardent proponents of such legislation if the U.S. Supreme Court, for example, construes the scope of copyright protection for programs to be quite thin, and reiterates its rulings in Benson, Flook, and Diehr that patent protection is unavailable for algorithms and other information processes embodied in software. INTERNATIONAL PERSPECTIVES After adopting copyright as a form of legal protection for computer programs, the United States campaigned vigorously around the world to persuade other nations to protect computer programs by copyright law as well. These efforts have been largely successful. Although copyright is now an international norm for the protection of computer software, the fine details of what copyright protection for software means, apart from protection against exact copying of program code, remain somewhat unclear in other nations, just as in the United States. Other industrialized nations have also tended to follow the U.S. lead concerning the protection of computer program-related inventions by patent 70 For example, some questionable conduct by lawyers for Atari Games in obtaining a copy of the source code of a Nintendo program that was on deposit with the Copyright Office (which was used by Atari Games' engineers to figure out how to make a compatible program) strongly influenced the trial judge who ruled that Nintendo had made a strong enough showing of copyright infringement to get a preliminary injunction against Atari Games' distribution of Nintendo-compatible cartridges. See Atari Games Corp. v. Nintendo of America, Inc., 18 U.S.P.Q.2d (BNA) 1935 (N.D. Cal. 1991). The future of interoperable software under U.S. copyright law may well hang in the balance of the resolution of this case.
OCR for page 310
Global Dimensions of Intellectual Property Rights in Science and Technology law.71 Some countries that in the early 1960s were receptive to the patenting of software innovations became less receptive after the Gottschalk v. Benson decision by the U.S. Supreme Court. Some even adopted legislation excluding computer programs from patent protection. More recently, these countries are beginning to issue more program-related patents, once again paralleling U.S. experience, although as in the United States, the standards for patentability of program-related inventions are somewhat unclear.72 If the United States and Japan continue to issue a large number of computer program-related patents, it seems quite likely other nations will follow suit. There has been strong pressure in recent years to include relatively specific provisions about intellectual property issues (including those affecting computer programs) as part of the international trade issues within the framework of the General Agreement on Tariffs and Trade (GATT).73 For a time, the United States was a strong supporter of this approach to resolution of disharmonies among nations on intellectual property issues affecting software. The impetus for this seems to have slackened, however, after U.S. negotiators became aware of a lesser degree of consensus among U.S. software developers on certain key issues than they had thought was the case. Since the adoption of its directive on software copyright law, the European Community (EC) has begun pressing for international adoption of its position on a number of important software issues, including its copyright rule on decompilation of program code. There is a clear need, given the international nature of the market for software, for a substantial international consensus on software protection issues. However, because there are so many hotly contested issues concerning the extent of copyright and the availability of patent protection for computer programs yet to be resolved, it may be premature to include very specific rules on these subjects in the GATT framework. 71 See, e.g., Dreier, Patent protection for computer programs in Europe, and Ozawa, Patent protection for program-related inventions in Japan, Proceedings of the SOFTIC Third International Symposium on Legal Protection of Software (1991) (cited hereinafter as "SOFTIC proceedings"). 72 H. Hanneman, The Patentability of Computer Software (1985). Many European nations and the European Patent Convention have rules against the patenting of computer programs per se (as does the PTO) but will issue patents for processes that utilize computer programs as long as the processes achieve a "technical effect." 73 See generally Trade-related aspects of intellectual property, 22 Vand. J. Transnat'l L. 223384 (1989).
OCR for page 311
Global Dimensions of Intellectual Property Rights in Science and Technology Europe Prior to the adoption of the 1991 European Directive on the Protection of Computer Programs, there was general acceptance in Europe of copyright as a form of legal protection for computer programs. A number of nations had interpreted existing copyright statutes as covering programs. Others took legislative action to extend copyright protection to software. There was, however, some divergence in approach among the member nations of the EC in the interpretation of copyright law to computer software.74 France, for example, although protecting programs under its copyright law, put software in the same category as industrial art, a category of work that is generally protected in Europe for 25 years instead of the life plus 50-year term that is the norm for literary and other artistic works. German courts concluded that to satisfy the "originality" standard of its copyright law, the author of a program needed to demonstrate that the program was the result of more than an average programmer's skill, a seemingly patentlike standard. In 'addition, Switzerland (a non-EC member but European nonetheless) nearly adopted an approach that treated both semiconductor chip designs and computer programs under a new copyright-like law. Because of these differences and because it was apparent that computer programs would become an increasingly important item of commerce in the European Community, the EC undertook in the late 1980s to develop a policy concerning intellectual property protection for computer programs to which member nations should harmonize their laws. There was some support within the EC for creating a new law for the protection of software, but the directorate favoring a copyright approach won this internal struggle over what form of protection was appropriate for software. In December 1988 the EC issued a draft directive on copyright protection for computer programs. This directive was intended to spell out in considerable detail in what respects member states should have uniform rules on copyright protection for programs. (The European civil law tradition generally prefers specificity in statutory formulations, in contrast with the U.S. common law tradition, which often prefers case-by-case adjudication of disputes as a way to fill in the details of a legal protection scheme.) The draft directive on computer programs was the subject of intense debate within the European Community, as well as the object of some intense lobbying by major U.S. firms who were concerned about a number of issues, but particularly about what rule would be adopted concerning decompilation of program code and protection of the internal interfaces of 74 See, e.g., Verstrynge, Protecting intellectual property rights within the new Pan-European framework: Computer software, SOFTIC proceedings, supra note 69.
OCR for page 312
Global Dimensions of Intellectual Property Rights in Science and Technology programs. Some U.S. firms, among them IBM Corp., strongly opposed any provision that would allow decompilation of program code and sought to have interfaces protected; other U.S. firms, such as Sun Microsystems, sought a rule that would permit decompilation and would deny protection to internal interfaces.75 The final EC directive published in 1991 endorses the view that computer programs should be protected under member states' copyright laws as literary works and given at least 50 years of protection against unauthorized copying.76 It permits decompilation of program code only if and to the extent necessary to obtain information to create an interoperable program. The inclusion in another program of information necessary to achieve interoperability seems, under the final directive, to be lawful. The final EC directive states that "ideas" and "principles" embodied in programs are not protectable by copyright, but does not provide examples of what these terms might mean. The directive contains no exclusion from protection of such things as processes, procedures, methods of operation, and systems, as the U.S. statute provides. Nor does it clearly exclude protection of algorithms, interfaces, and program logic, as an earlier draft would have done. Rather, the final directive indicates that to the extent algorithms, logic, and interfaces are ideas, they are unprotectable by copyright law. In this regard, the directive seems, quite uncharacteristically for its civil law tradition, to leave much detail about how copyright law will be applied to programs to be resolved by litigation. Having just finished the process of debating the EC directive about copyright protection of computer programs, intellectual property specialists in the EC have no interest in debating the merits of any sui generis approach to software protection, even though the only issue the EC directive really resolved may have been that of interoperability. Member states will likely have to address another controversial issue—whether or to what extent user interests in standardization of user interfaces should limit the scope of copyright 75 IBM was among the U.S. firms that joined the Software Action Group for Europe, which lobbied during the time the EC directive was pending. This group lobbied against decompilation and for the protection of interfaces. Sun Microsystems was among the American firms that were members of the European Committee for Interoperable Systems that lobbied in favor of a decompilation privilege and against protection of interfaces. Sun Microsystems is among the founding members of the American Committee for Interoperable Systems which recently filed an amicus brief in Computer Associates, Inc. v. Altai litigation in support of Altai's position on the copyright issues: the district court's decision in favor of Altai is on appeal to the Second Circuit Court of Appeals. 76 For programs authored by individuals, the EC directive provides that protection should last for the life of the author plus 50 years. If member states adopt a "work for hire" provision giving employers ownership of software developed by employees, the firm is to be given 50 years of protection from the time the program is first made available to the public.
OCR for page 313
Global Dimensions of Intellectual Property Rights in Science and Technology protection for programs—as they act on yet another EC directive, one that aims to standardize user interfaces of computer programs. Some U.S. firms may perceive this latter directive as an effort to appropriate valuable U.S. product features. Japan Japan was the first major industrialized nation to consider adoption of a sui generis approach to the protection of computer programs.77 Its Ministry of International Trade and Industry (MITI) published a proposal that would have given 15 years of protection against unauthorized copying to computer programs that could meet a copyright-like originality standard under a copyright-like registration regime. MITI attempted to justify its proposed different treatment for computer programs as one appropriate to the different character of programs, compared with traditional copyrighted works.78 The new legal framework was said to respond and be tailored to the special character of programs. American firms, however, viewed the MITI proposal, particularly its compulsory license provisions, as an effort by the Japanese to appropriate the valuable products of the U.S. software industry. Partly as a result of U.S. pressure, the MITI proposal was rejected by the Japanese government, and the alternative copyright proposal made by the ministry with jurisdiction over copyright law was adopted. Notwithstanding their inclusion in copyright law, computer programs are a special category of protected work under Japanese law. Limiting the scope of copyright protection for programs is a provision indicating that program languages, rules, and algorithms are not protected by copyright law.79 Japanese case law under this copyright statute has proceeded along lines similar to U.S. case law, with regard to exact and near-exact copying of program code and graphical aspects of videogame programs,80 but there have been some Japanese court decisions interpreting the exclusion from protection provisions in a manner seemingly at odds with some U.S. Decisions. 77 See Karjala, Lessons from the computer software protection debate in Japan, 1984 Ariz. St. L. J. 53 (1984). 78 MITI, for example, thought that "moral rights" were inappropriate for programs because of their technical nature; MITI was also concerned about the market power that might be conferred as a result of the long term of copyright for what was essentially a functional work. Id. 79 Karjala, Copyright protection of computer software in the United States and Japan: Part II  E.I.P.R. 231 (1991). Among the other special provisions applicable to programs are ones limiting "moral rights" protection to authors of copyrighted programs, making rules about programs written in an employment setting, and giving users certain modification rights in programs. Id. 80 Id. at 232.
OCR for page 314
Global Dimensions of Intellectual Property Rights in Science and Technology The Tokyo High Court, for example, has opined that the processing flow of a program (an aspect of a program said to be protectable by U.S. law in the Whelan case) is an algorithm within the meaning of the copyright limitation provision.81 Another seems to bear out Professor Karjala's prediction that Japanese courts would interpret the programming language limitation to permit firms to make compatible software.82 There is one Japanese decision that can be read to prohibit reverse engineering of program code, but because this case involved not only disassembly of program code but also distribution of a clearly infringing program, the legality of intermediate copying to discern such things as interface information is unclear in Japan.83 Other Nations The United States has been pressing a number of nations to give "proper respect" to U.S. intellectual property products, including computer programs. In some cases, as in its dealings with the People's Republic of China, the United States has been pressing for new legislation to protect software under copyright law. In some cases, as in its dealings with Thailand, the United States has been pressing for more vigorous enforcement of intellectual property laws as they affect U.S. intellectual property products. In other cases, as in its dealings with Brazil, the United States pressed for repeal of sui generis legislation that disadvantaged U.S. software producers, compared with Brazilian developers. The United States has achieved some success in these efforts. Despite these successes, piracy of U.S.-produced software and other intellectual property products remains a substantial source of concern. FUTURE CHALLENGES Many of the challenges posed by use of existing intellectual property laws to protect computer programs have been discussed in previous sections. This may, however, only map the landscape of legal issues of widespread concern today. Below are some suggestions about issues as to which computer programs may present legal difficulties in the future. 81 Id. 82 Id. at 232-237. 83 Id. at 235. It is worth noting, however, that Japanese copyright law does not have a fair use provision; but see Durney, Reverse engineering under Japanese law, IP ASIA, 2-6 (March 15, 1990).
OCR for page 315
Global Dimensions of Intellectual Property Rights in Science and Technology Advanced Software Systems It has thus far been exceedingly difficult for the legal system to resolve even relatively simple disputes about software intellectual property rights, such as those involved in the Lotus v. Paperback Software case. This does not bode well for how the courts are likely to deal with more complex problems presented by more complex software in future cases. The difficulties arise partly from the lack of familiarity of judges with the technical nature of computers and software, and partly from the lack of close analogies within the body of copyright precedents from which resolutions of software issues might be drawn. The more complex the software, the greater is the likelihood that specially trained judges will be needed to resolve intellectual property disputes about the software. Some advanced software systems are also likely to be sufficiently different from traditional kinds of copyrighted works that the analogical distance between the precedents and a software innovation may make it difficult to predict how copyright law should be applied to it. What copyright protection should be available, for example, to a user interface that responds to verbal commands, gestures, or movements of eyeballs? Digital Media The digital medium itself may require adaptation of the models underlying existing intellectual property systems.84 Copyright law is built largely on the assumption that authors and publishers can control the manufacture and distribution of copies of protected works emanating from a central source. The ease with which digital works can be copied, redistributed, and used by multiple users, as well as the compactness and relative invisibility of works in digital form, have already created substantial incentives for developers of digital media products to focus their commercialization efforts on controlling the uses of digital works, rather than on the distribution of copies, as has more commonly been the rule in copyright industries. Rules designed for controlling the production and distribution of copies may be difficult to adapt to a system in which uses need to be controlled. Some digital library and hypertext publishing systems seem to be designed to bypass copyright law (and its public policy safeguards, such as the fair use rule) and establish norms of use through restrictive access licensing 84 Samuelson, Digital media and the changing face of intellectual property law, 20 Rutg. Comp. and Techn. L. J. 323 (1990).
OCR for page 316
Global Dimensions of Intellectual Property Rights in Science and Technology agreements.85 Whether the law will eventually be used to regulate conditions imposed on access to these systems, as it has regulated access to such communication media as broadcasting, remains to be seen. However, the increasing convergence of intellectual property policy, broadcast and telecommunications policy, and other aspects of information policy seems inevitable. Networks There are already millions of people connected to networks of computers, who are thereby enabled to communicate with one another with relative ease, speed, and reliability. Plans are afoot to add millions more and to allow a wide variety of information services to those connected to the networks, some of which are commercial and some of which are noncommercial in nature. Because networks of this type and scope are a new phenomenon, it would seem quite likely that some new intellectual property issues will arise as the use of computer networks expands. The more commercial the uses of the networks, the more likely intellectual property disputes are to occur. More of the content distributed over computer networks is copyrighted than its distributors seem to realize, but even as to content that has been recognized as copyrighted, there is a widespread belief among those who communicate over the net that at least noncommercial distributions of content—no matter the number of recipients—are "fair uses" of the content. Some lawyers would agree with this; others would not. Those responsible for the maintenance of the network may need to be concerned about potential liability until this issue is resolved. A different set of problems may arise when commercial uses are made of content distributed over the net. Here the most likely disputes are those concerning how broad a scope of derivative work rights copyright owners should have. Some owners of copyrights can be expected to resist allowing anyone but themselves (or those licensed by them) to derive any financial benefit from creating a product or service that is built upon the value of their underlying work. Yet value-added services may be highly desirable to consumers, and the ability of outsiders to offer these products and services may spur beneficial competition. At the moment, the case law generally regards a copyright owner's derivative work right as infringed only if a recognizable block of expression is incorporated into another work.86 How- 85 Samuelson and Glushko, Intellectual property rights in digital library and hypertext publishing systems: An analysis of Xanadu, Proceedings of Hypertext '91 39 (1991). 86 See Lewis Galoob Toys, Inc. v. Nintendo of America, 780 F.Supp. 1283 (N.D. Cal. 1991) (game enhancement device not an infringing derivative work).
OCR for page 317
Global Dimensions of Intellectual Property Rights in Science and Technology ever, the ability of software developers to provide value-added products and services that derive value from the underlying work without copying expression from it may lead some copyright owners to seek to extend the scope of derivative work rights. Patents and Information Infrastructure of the Future If patents are issued for all manner of software innovations, they are likely to play an important role in the development of the information infrastructure of the future. Patents have already been issued for hypertext navigation systems, for such things as latent semantic indexing algorithms, and for other software innovations that might be used in the construction of a new information infrastructure. Although it is easy to develop a list of the possible pros and cons of patent protection in this domain, as in the more general debate about software patents, it is worth noting that patents have not played a significant role in the information infrastructure of the past or of the present. How patents would affect the development of the new information infrastructure has not been given the study this subject may deserve. Conflicts Between Information Haves and Have-Nots on an International Scale When the United States was a developing nation and a net importer of intellectual property products, it did not respect copyright interests of any authors but its own. Charles Dickens may have made some money from the U.S. tours at which he spoke at public meetings, but he never made a dime from the publication of his works in the United States. Now that the United States is a developed nation and a net exporter of intellectual property products, its perspective on the rights of developing nations to determine for themselves what intellectual property rights to accord to the products of firms of the United States and other developed nations has changed. Given the greater importance nowadays of intellectual property products, both to the United States and to the world economy, it is foreseeable that there will be many occasions on which developed and developing nations will have disagreements on intellectual property issues. The United States will face a considerable challenge in persuading other nations to subscribe to the same detailed rules that it has for dealing with intellectual property issues affecting computer programs. It may be easier for the United States to deter outright ''piracy" (unauthorized copying of the whole or substantially the whole of copyrighted works) of U.S. intellectual property products than to convince other nations that they must adopt the same rules as the United States has for protecting software.
OCR for page 318
Global Dimensions of Intellectual Property Rights in Science and Technology It is also well for U.S. policymakers and U.S. firms to contemplate the possibility that U.S. firms may not always have the leading position in the world market for software products that they enjoy today. When pushing for very "strong" intellectual property protection for software today in the expectation that this will help to preserve the U.S. advantage in the world market, U.S. policymakers should be careful not to push for adoption of rules today that may substantially disadvantage them in the world market of the future if, for reasons not foreseen today, the United States loses the lead it currently enjoys in the software market.
Representative terms from entire chapter: