Software, IP, Patents, Copyright and the Great Confusion
September 24th, 2008
What makes software special? Is it the fact that it’s coded into a machine instead of being a physically built machine itself? Is it the fact that the written material is electronic instead of printed on paper? Is it the fact that it is intellectual property (IP) written down within each work instead of written down in some lab notebook? Yes, it is all of these. Of course software is different in its creation and implementation; but, so are so many other creations in other industries. Other creations have their own protections such as patents, copyrights and other types of IP. Why are software programs afforded special protections that are not granted to those other creations?Â
The software industry pushed our politicians into providing special protections before most people understood that there really is nothing special about software. As a result, ridiculously constructed laws such as the DMCA in 1998 were passed. These laws protected general IP in such a way that, in practice, they treat the software program itself as the IP under something called DRM, instead of just providing copyright protections.
In all other industries, if unprotected IP, such as a trade secret, is made public then, for whatever reason, it is no longer owned by anyone anymore. This is the risk a company must take in protecting its trade secrets. Companies must either patent their inventions by making a public declaration, rely on copyright, or take the risk of hiding their information. If they unsuccessfully keep their information hidden, they receive no protections if the information becomes public.Â
Of course there are laws in place preventing and protecting all forms of IP from being made public. However there should be no laws protecting any such IP once it is made public. There are no such laws, except within the software industry. This exception is one that stems from the misapplication of the term IP to apply to the creations themselves (the software program) by the software companies instead of the writing within them. This is not the intent of IP protection and it blurs the line between unprotected IP and declared IP, such as patents and copyright, as well as confuses it with property law. Again IP should not be applied to the creations themselves, but to the creative work of the individual (the information itself, not the creation derived from that information). This misapplication of the term IP affords unfair protection on the software and to the software industry as a whole.
Along this line of reason, in most circumstances within capitalism, once you sell something, you give up your rights to control that item. This allows producers to profit from there creations. It also creates opportunities for others such as competitors, end-users, and other industries for the general benefit of our overall economy. This speaks to the individual freedoms we all take for granted. This is capitalism.
With this said, I whole-hearted disagree with Jeff Ray’s (CEO of SolidWorks Corp) comments in a recent CADalyst article about First-sale doctrine and the related court case lost by Autodesk. In the CADalyst article, Mr. Ray states:
“Most people have no problem abiding by [the license agreement], except the few who want to make a profit at the expense of others who abide by the law.”Â
In the context of the article, Mr. Ray appears to be referring to a belief that any violation of end-user license agreement (EULA) is a copyright violation and constitutes piracy. According to recent courts decisions and the traditions of capitalism, this is a not true.  There are no “profits at the expense of others” by the individual who won his First-sale doctrine case against Autodesk. The profiteering being condemned is nothing more than basic capitalism and not some malicious effort to defraud anyone. The law likely being referenced is DMCA and rules regarding First-sale doctrine. Ironically, it now appears that it is EULAs that violate the law, not the individual seeking to legally sell something they legally bought.   Actually believe it or not, for all its faults, the DMCA also bolsters First-sale doctrine (at least the lawmakers got one thing right).  An example of First-sale doctrine at work is when I buy a DVD movie. The material on that DVD is legally protected, yet I am able to buy or sell that DVD without regard to its manufacturer or any copyright holders, as long as the initial purchase was legally conducted and I am not making any illegal copies. The laws says that software should be treated no differently.
So the argument then evolves to the point where many software companies claim they are selling the use of a license, not the software itself. This may be about as close to fairyland fantasy as one can get. Image a car company claiming to sell the right to drive their car, but not the ownership of the car itself? Oh wait, they can! It’s a time-limited lease.  The recent court rulings uphold this. A company can say it is selling only the license if that license is for a limited time (i.e., a lease). If no time period is specified then it is a considered a sale of the product itself. Imagine going into a car dealership to buy a car and have the dealer not only demand that you pay for the car, but also restrict you from ever selling it or modifying it. The dealer will not even allow you to open the hood, but you are stuck with it for life unless you want to return it without any refund.  That is illogical. As it stands, in any other industry, I can buy and sell any used product with tons of IP built into it in the form of patents, copyrights and trade secrets, all without any say-so whatsoever from the manufacturer. In the context of capitalism, it is illogical for software companies to try to pretend they are some how different and that they have rights that are not afforded to anyone else.
A clue to the software industry’s confusion about this matter comes from a quote in the same CADalyst article by Arena Solutions vice-president of marketing, Douglass Bell, where he states:
“The software economy depends so much on IP protection…” Â
Again, this can show that the software industry is taking advantage of confusion about the differences between IP law and property law. Software companies get the best of both worlds right now in an unfair counter-competitive practice that seems un-Capitalistic. They should be forced to play by the same rules as everyone else.
The intent of the original laws regarding patents and copyrights were to find a balance between the producer’s rights and the rights of the users, competitors, and the public at large. Capitalism is based on the production of goods and services for sale to consumers in a competitive market. Keywords being production and consumers and market. These are the core aspects of supply and demand. If we ask ourselves what is being supplied by a software company that tries to retain control over their product once they sell it? Then we can safely answer: “Nothing”. Bottom line, there has to be something tangible behind the sale of a product.  The software industry is no different. EULA’s, by their very existence, defy tangibility.
With current EULA’s, in combination with yearly subscriptions, it’s as though the software industry is trying to get everyone to buy in on what can be termed as reverse-communism. Instead of each worker being given their daily bread by the authority, you have the authority demanding the yearly tithe from the worker with the threat of lost privileges if not paid. I guess another way to look at it is that software companies are trying to build religions with legally enforced servitude if one makes the choice to join. Can you say Dark Ages?
I understand that there are special risks within the software industry. For example, copying product without permission is very easy. But again, having special risks is not something unique to that industry. All industries have their own unique risks. Special considerations can be afforded to the software industry to fairly protect their inventions/investments. However, these protections should not be taken to the point and direction they have been taken. There are other ways to do this that are more competitive, fair to other companies (customers or otherwise), and fair to the public at large.
I didn’t write this article with the intention to attack anyone or any company. It is written to point out the systemic problems with the software industry and its special privileges. It is up to our citizens and other companies to step up to speak out against the special privileges this industry receives. I do not fault anyone for trying to take advantage of the system; however everyone should be playing by the same rules. No special privileges should be afforded to the software industry.  I don’t claim to have the answers to solve these issues right now. I just understand that the current solutions are not fair and run counter to our capitalist system.Â
We are all aware that we are living in a new age, often called the Information Age. There has already been huge paradigm shifts in our time. We just need to make sure that the shifts move us in a fashion that benefits the largest number of people and companies, while maintaining each individual’s fundamental rights. This needs to be done while allowing the software industry the ability to protect its investments. This is not something that can be or should be done at the cost of our fundamental rights. There has got to be some idea or system (yet to be discovered?) which can ensure fair protections to software companies without hindering the individual’s rights. In the meantime, software companies should not be complaining about losing their special privileges once the unfairness is discovered (as it is now). They need to find a way to run a software business that falls within capitalism and our fundamental freedoms, and not try to instead replace these principles.
Categories: Career, Complaints, Editorial | Tags: copyright, industry, IP, patents, software | 3 Comments
