IP Foundations of OSS
Intellectual Property (IP) Aspects of
Software:
Copyrights, Trade Secrets & Patents
OSS as Composite of IPs
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Copyright
Trade Secrets
Patents
Technology Transfer
 Licenses are Contracts too!
 Reverse Engineer Rights
 How are these Ltd?
 DMCA standard technical protections
 EULA de-compilation restrictions
 Unlicensed “practicing”
 OSS as Overcoming the IP StraightJacket
Proprietary vs. Public Goods
 Incentives
 Benefit Capture
 Control
 Access
Some Immutables
 IP
 Royalty Rates & Business Models
 Infringement
 But Software is a “Build Thing”
 Industrial Organization
 Antitrust
 Viscerality of Feudalism
 “Royalty” again
 Licensing is Complex (GNU, GPL v.x.y)
 No Royalties this time
 Creative Communities are Fun
1st Creators, Follow-On
Innovators & IP
 Every innovation has a first creator and potential followon innovators
 Creating or restricting rights of first creators or follow-on
innovators through IP rights are just like taxing one or
the other
 Too high a tax on either group results in underproduction of innovation
 Every first creator is “Standing on the shoulders of
giants” (Newton) “S/W Development is a Build Thing”
 There are far more follow-on innovators than first
creators and they may bring new insights
 The key task of IP Policy balancing to produce the
greatest possible innovation
What IP is in Open Source?
 Copyright Still Exists in Software
 And the Open Source Development Model is
Premised on That
 Copyright is an intangible right – it exists
independent of the code
 Copyright Attaches On Creation of Original Code
 Copyright Notice and Registration Not Required
 Ownership Initially Vests in Authors or Institution
 Patentable process/method claims (UCT)
 Trade Secrets protected by EULA, DMCA…
Copyright
 Originality
 Min. personal creativity/intellect required
 Works of Authorship
 General categories under §102(a)
 Fixation in Tangible Medium
 Expression
 Generally Facts/Data Not Copyrightable
Bundle of Rights under Copyright
 Reproduce
 Derivative Works
 Distribution
 Performance
 Display
 License
 Assignment
Types of
Copyrightable Works
Literary works
Pictorials, graphics,
and sculptures
Musical works
Motion pictures and
A/V works
Dramatic works
Sound recordings
Pantomimes and
choreography
Architectural works
Non-copyrightable Material
 Ideas are not copyrightable – only the
expression of ideas.
 Includes ideas, procedures, processes,
systems, methods of operation, concepts,
principles, or discoveries.
 The idea-expression dichotomy rule
states that creators can maintain control
over ideas only if they qualify as
patentable or remain as trade secrets.
Bundle of
Exclusive Rights
 Reproduction: prepare work in a tangible and
permanent medium
RIAA v. Diamond Multimedia
 Derivative work: adapt or change original work
for another market or medium
 Distribution: initial public transfer of copyright
work through sale, rental, lease, or other
transfer
 Performance: public viewing using sensory
reception
Bundle of
Exclusive Rights
 Display: showing by mechanical means
 Digital transmission: digital broadcast of
sound recordings
 License: temporary, revocable transfer of
right to use work
 Assignment: permanent and irrevocable
transfer of elements of bundle
Digital Millennium Copyright Act
(DMCA)
 DMCA creates civil and criminal
prohibitions against tampering with copy
protection or billing data.
 DMCA does not add new exclusive rights
to the bundle held by copyright owners.
 DMCA applies to a variety of digital
works.
 Universal City Studios v. Corley (DeCSS)
Copyright Ownership
 Author Presumed to Hold Bundle of Rights
 Usually Assigned to Publisher/Label
 Works Made for Hire
 Prepared by emp’e w/in scope of empl
 Employer or commissioner of work owns
 Independent contractors vs. employees
 Commun. Creative Non-Violence v. Reid
 Joint Works - Multiple Owners if:
 Contributions inseparable
Moral Rights
 The Moral Rights Principle:
 Authorship includes right to prevent distortion,
mutilation or modification
 Author’s discretion derivatives damage original’s
artistic integrity, & author’s reputation or honor
 Stronger in Europe than in U.S.
 Berne Convention & U.S. implementation
 Alternate U.S. bases: trademark & privacy
Fair Use Defense
 Infringement Excused, w/o Permission:
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Criticism, comment, news reporting, teaching,
scholarship or research.
 Transformative uses
 The four factors of fair use
1.
2.
3.
4.
Purpose and character of use
Nature of copyrighted work
Amt/substantiality of used portion
Effect of use on potential market
 A&M Records, Inc. v. Napster
Clean Room Techniques
 Chinese Wall: Dissectors &
Designers
 Dirty room reverse
engineering, decompilation,
dissection
 Ideas & unprotectable
expression transmitted to
clean room
 Clean room builds new
expression
 Idea-Expression
determinations determinative
but risky
 Sega Ent., Ltd. v. Accolade,
Inc.
 Dirty room intermediate
copying is fair use
90
80
70
60
50
East
West
North
40
30
20
10
0
1st 2nd 3rd 4th
Qtr Qtr Qtr Qtr
Infringement Analysis
 Coping or Violation of Any 1 in Bundle
 Proof of Copying - Expert Testimony
 Access to original suggests copying possible &
explains similarities
 Proof of Illicit Copying - No Experts
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Substantial similarity in expression only
Idea-expression dichotomy
Qualitatively vital elements “essence”
Eliminate unprotected ideas, scenes a faire
Abstraction/Filtration/
Comparison Analytics
 Abstraction
 Dissect structure: code to functions
 Filtration
 Remove from infringement consideration:
 Ideas & their incidents
 External factors (interface, IEEE, RS232, VGA)
 Public domain
 Comparison
 Core of protectables left compared
Copyright Infringement
Remedies
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Injunction: copying, sales of copies
Destruction of infringing copies
Actual damages or Infringer’s profits
Statutory damages-$500 to $20,000
 Willful: up to $100,000
 Attorney’s fees & costs
 Criminal penalties for willful violations
 $500,000 &/or 10 yrs. imprisonment
Trade Secrets
 Information (formula, pattern,
compilation, program, device, method,
technique or process)
 Derives independent economic value
from secrecy or by proper means
discovery by potential competitors, and
 Subject of efforts, reasonable under the
circumstances, to maintain secrecy
Misappropriation is Wrongful
 Acquired through improper means
 Acquired from another knowing
improper means was used
 Use or disclosure knowing violates
duty of silence
 Use or disclosure knowing acquired by
improper means
 Use or disclosure knowing acquired
through fiduciary breach
Proper Means of Discovery
 Reverse Engineering
 Exceptions: DMCA, EULA restriction
 Independent Invention
 Exposure from Public View or Display
 Discovered from Published Literature
 Discovered from License, Unless
Confidentiality Term Otherwise
Misappropriation
Acquisition
by Improper
means
Receipt
Disclosure
Use
Misappropriation
 Acquired through improper means
 Acquired from another knowing improper
means was used
 Use or disclosure knowing violates duty of
silence
 Use or disclosure knowing acquired by
improper means
 Use or disclosure knowing acquired through
fiduciary breach
Secrecy: Fundamental
Threshold
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Circumstances/fact specific
Extent of industry knowledge
Reprehensibility of conduct
Balancing equities
Defined negatively:
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Public/general knowledge in relevant industry
Essentially a novelty issue
 Not ascertainable publicly
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products, publications, copyrighted or patented material,
proper means
Proof of Misappropriation
 Improper Means of Discovery by
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Illegal conduct: theft, fraud, trespass, bribery
 Non-criminal, nevertheless commercially
reprehensible conduct
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Industrial espionage
Admission
Eyewitness Testimony
Discovery of stolen or admitting documents
Circumstantial evidence
Patent
 Patentable Subject Matter
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Process (BMP, S/W)
Machine
Manufacture
Composition of Matter (bio-tech)
 Novelty, Non-Obviousness, Utility
 New, Useful & Human-made
Patentable Subject Matter
New, Useful & Human-made
1. Process
2. Machine
3. Manufacture
4. Composition of Matter
Patentability: Areas of NonPatentable Subject Matter
a/k/a Non-Statutory Subject Matter
 Naturally occurring things
 Abstract ideas
 Laws of nature
 Mathematical formulae
Hot/Critical Areas
of Patentability
Biotechnology
Methods of
doing business
Computer software
Computer Programs
 Algorithms & Mathematical Formulas
Laws of nature & mental steps
 Gottschalk v. Benson (1972)
 Parker v. Flook (1978)
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 Significance of Post-Solution Activity
Diamond v. Diehr (1981)
 Arrhythmia Research Technology, Inc. v.
Corazonix Corp. (1992)
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 In re Alappat (1994) rasterizer
Business Methods
 Anything [Human-made] Under the Sun
 Business Method Exception was Illusory
 BMP - 21st Century Gold Rush
 Baker v. Selden - No © for Acctg Sys
 Paper embodiment already known
 Process Patents Long Disfavored
 Physicality Requirement Tradition
 Vendible Substance under English law
 Physical Transformation under U.S. law
 Process Originally seen as Mere Collection of Ideas
 Safeguarding the Public Domain
BMP Parallels BioTech &
Software Patentability
 Early Stage
Unpatentable: naturally occurring - life
form, law of nature - algorithm
 Maturing
Contradictory caselaw aspiring toward
acceptance
 Recognition
Chakrabarty, Allapat, State Street
State St. Bank v. Sig. Fin.
 ‘056 Hub & Spoke Financial System
 Spokes Pool Funds into Hub Portfolio
 Facilitates Collective Fund Admin.
 Daily computation of spoke asset values,
income, expense, (un)realized gains/losses,
 Annual: income, expense, capital gain/loss
 Useful, concrete and tangible result
 OK to perform calculations or do “business”
 But now In re Bilski may eliminate BMP
 See:
http://faculty.ist.psu.edu/bagby/bmp/index.htm
Novelty
 Not in The Public Domain
 Statutory Bars:“Known or Used...Patented or
Published”
 Diligence
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Not abandon, suppressed or concealed
 The U.S. One Year Grace Period
No Public Use or Sale
 US: no use or sale
 World: no patent or publication
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 Public Knowledge Before Invention Date
Prior Art
Publicly known, publicly used, published or
patented before invention date
Prior user rights for business methods
Non-Obviousness
 Patent should not grant if the advancement is small,
merely minor improvements over prior art
 Not obvious at the time of invention to one skilled in
the art
 Graham v. John Deere:
1. Determine scope and content of the prior art
2. Determine differences between prior art and the
claim(s) at issue; and
3. Determine the level of ordinary skill in the pertinent art
 KSR
Non-Obviousness Objective
Factors
 Commercial success (not solely marketing)
 Unmet, long-felt need about problem in the
field which is solved or satisfied by the
invention
 Failure of others to solve the problem
 Invention copied by others
 Infringer’s abandonment of prior art in favor
of patented invention
 Must consider invention as a whole, no
dissection
Trademark
 Word, Name, Symbol,
Device
 Recently: color, sound,
smell
 Identifies Source of
Goods or Services
 Distinguishes from
competitors using
Spectrum of
Distinctiveness
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Generic
Descriptive
Suggestive
Arbitrary or fanciful