Herbert G. Mayer, PSU CS
Status 8/11/2012
Slides derived from prof. Wu-Chang Feng
1

 What is IP?
 Paradox Dealing with IP
 1. Trade Secret
 2. Trade Mark TM
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3. Patents
4. Copyright © or (c)
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Fair Use
Four Factors of Fair © Use
 Cases
 Digital Millennium Copyright Act (DMCA)
 Bit Torrent
 SW Patents
2

1.) Intangible property that is the result of someone ’s creativity, e.g. patents, trademarks, or copyrights wordnetweb.princeton.edu/perl/webwn
2.) Intellectual property refers to creations of the mind: inventions, literary and artistic works and symbols, names, images, and designs used in commerce
3.) Unique product of the human intellect that has commercial value
 Books, songs, movies, paintings, inventions, formulas, shapes, computer programs
3

John Locke - 2 nd Treatise of Government (1632-1704)
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People have the right to property of their own person
No one has the right to own another person
People have the right to their own labor , and that labor should be to their own benefit
–nobody can hold slaves; labor for others is to be paid
Right to anything that is harvested from nature through own labor
–nobody can snatch the gold you mined, except the state

Note: from nature ! Not from the neighbor
’s back yard or employer’s office
Physical property
 A person labors to cut down a tree in nature and chops it into pieces
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Person now owns the chopped wood, if she had right to tree possession
Does not mean: OK to steal a tree; i.e. cut down a city tree or your neighbor ’s 
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That person has exclusive rights to the chopped wood
Unless she didn ’t own the tree
4

Simultaneous inventions
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Intellectual property can be invented simultaneously!
Can only give exclusive rights (e.g. patent) to one of them
E.g. first production of aluminum in France and the US
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1886: Two unknown young scientists, Paul Louis Toussaint Heroult (France) and Charles Martin Hall (USA), working separately and unaware of each other's work, simultaneously invented a new electrolytic process, the Hall-
Heroult process, which is the basis for all aluminum production today
Both discovered: if one dissolves aluminum oxide (alumina) in a bath of molten cryolite and passes an electric current through it, then molten aluminum is deposited at the bottom of the bath
Differing notions of “stealing”
 Intellectual property can be
“stolen” without taking property away
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Some ideas can be copied against wish of the person having the initial ideas
Only true way to prevent such copying is to keep the original idea hidden, i.e. confidential
5

“… promote the Progress of Science and useful Arts by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries ”
 Allows persons to control distribution and use of their IP
 Encourages hard work and creativity by allowing inventor to reap benefits from work
 Rights are limited to a fixed period of time before entering public domain
» Inventor must be rewarded so that innovation is encouraged
» Society must eventually benefit from the innovation
» Note the “useful” qualifier in US Constitution; debatable examples exist, e.g. so called “Piss Christ”, having received monetary award from US National Endowment of Arts in 1989
6

1. Trade Secret
2. Trademark
3. Patent
4. Copyright
7

Well-kept secret
 Formulae, processes, proprietary designs, customer lists, strategic plans
 Must take active steps to keep confidential
 Does not expire as long as kept confidential
Example: Coca Cola formula
 Locked in a bank vault in Atlanta
 Merchandise 7X has been a secret for ~100 years
Problems with trade secret:
 Someone needs to work with the “secret”
 Reverse engineering is possible
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Employees leaving the company leave with the secret
Can ’t use it for things like movies or software, where public use or display is necessary in order to obtain any benefit
8

TM
Word, symbol, shape, picture, sound, or color used by a business to identify goods
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Government grants the right to use it and the right to prevent other companies from adopting for their purposes
Allows a company to establish a “brand name”
A Brand Name constitutes a real, tangible value, e.g.
Sample brand names:
 Bandaid™, Xerox™, IBM, Intel, Coca Cola
Can become “commonized” resulting in loss of trademark right
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Aspirin, yo-yo, escalator, thermos
Must always be used as an adjective to describe the brand rather than a noun or a verb
 Adobe cracking down on the use of “Photoshopping”
 “I am stuck on Band-Aid brand”
 Kleenex brand facial tissue
 As adjective, cannot form plural, like a noun: e.g. Oreo Cookies, NOT Oreos!
9

10
Google it?

Public document providing a detailed description of a piece of intellectual property
 U.S. government provides inventor with exclusive right to IP for a limited, defined time
 Prevents making, using or selling the invention for the life of a patent, typically 20 years
Companies sue other companies for infringement
 Instant photography
 Polaroid vs. Kodak (1970s)
 Careful about Patent Trolls, and Patent Pirates
It may at times be beneficial for patent-owner to license its IP
 Sun
’s SPARC architecture transferred to SPARC International which then licensed it to many HW manufacturers
11

(c)
U.S. government provides authors with certain rights to original works they have written
 Major revisions in 1976 and 1998
5 principal rights
 right to reproduce work
 right to distribute copies of work to public
 right to display copies of the work in public
 right to perform work in public
 right to produce new works derived from © work
Owner can authorize others to exercise these rights
 e.g. radio stations to play songs without originator losing ownership rights
12

Sonny Bono Copyright Term Extension Act (1998)
 Works created before 1/1/1978 protected for 95 years
 After 1/1/1978, protected for authors ’ lifetimes plus 70 years after their deaths
 11 th extension in 40 years
 Timed to save Mickey Mouse from becoming public domain 
Copyright creep
 Protection applied to musical scores and their embodiment
(piano rolls, records)
 Protection continually being extended
13

Fair use – legal to reproduce copyrighted work without permission of holder under certain conditions
US Copyright Act (CA) does not specify what types of copying constitute “fair use”
 courts rely on precedent, based on section 107 of CA
Examples
 Citing short excerpts for teaching, scholarship, research, criticism, commentary, and news reporting
14

Section 107 of the Copyright Act
1.
What is the purpose and character of the use?
 Educational versus commercial
 Educational uses are more permissible
2.
3.
4.
What is the nature of the work being copied?
 Fiction versus non-fiction; fiction being “more protected”
 Published versus non-published
 Non-fiction is more likely permissible to be copied
What ’s the amount of the copyrighted work is being used?
 Amount copied relative to total size of the work
 Easiest to determine!
How will this use impact the market for the copyrighted work?
 Is THE heart of fair use, but hardest to measure definitively
15

`1960s song: Hotel California by “The Eagles” http://www.youtube.com/watch?v=NUbTW928sMU
Are we violating © laws when listening to this song?
See note at Youtube, when listening to this song:
Copyright Disclaimer Under Section 107 of the Copyright Act
1976, allowance is made for "fair use" for purposes such as criticism, comment, news reporting, teaching, scholarship, and research. Fair use is a use permitted by copyright statute that might otherwise be infringing. Non-profit, educational or personal use tips the balance in favor of fair use.
16

Kinkos (1991)
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“Professor publishing” practice
 Photocopying copyrighted materials for students
 Not fair-use even though purpose is educational
 Full copy that impacts market of original significantly
MIT student making commercial software available free
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Charges dropped because the student did not profit, rendering current law inapplicable
Note inconsistency: “Professor publishing” did not benefit the professor
 No Electronic Theft Act (1997)
 Closed this loophole
 Criminal offense to reproduce or distribute more the $1000 worth of copyrighted material in a 6 month period.
17

Sony vs. Universal Studios
 Time shifting via VCR (betamax)
1.
Purpose
2.
3.
4.
Nature
Amount
Market impact
 Supreme court decision 1984 decided in favor of Sony, since copying and “time-shifting” actually increased the audience of viewed films, thus increasing the studio ’s profit through ads!
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Exact copies are a bad thing… particularly digital!
 Technology radically increased the impact of copying
 A single copy *could* be easily distributed and affect the commercial market of work
Audio Home Recording act of 1992
 Copies for personal and non-commercial use OK
 Royalty paid on the sale of recording devices and divided among players
 Limited copying through smart card management systems
(SCMS) --prevents someone from copying a copy of a work
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Mid-90s saw advent of mp3 encoders and decoders
 Rio mp3 player developed
 RIAA asked for injunction, preventing Rio sales, since it did not include SCMS
 Rio was not a recording device, so it did not fall under Audio
Home Recording act of 1992
 Software encoder on computer!
 Judgment also approved “space-shifting”
 Copying in order to make portable
 Fair use and consistent with copyright law
20

Kelly
 Photographer with a web site full of copyrighted works
Arriba Soft
 Image search engine that created thumbnails of Kelly ’s photos upon crawling the site
Fair use?
1.
Purpose
2.
Nature
3.
4.
Amount
Market impact
21

Google scanning and digitizing entire libraries
 Michigan, Harvard (initially), New York Public Library, etc.
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If book is in public domain, then entire book can be accessed via PDF
If book is still copyrighted, then only excerpts are made available
Fair use?
1.
Purpose
2.
Nature
3.
4.
Amount
Market impact
22

Sued in 2005 by Authors Guild
 Objected to Google scanning copyrighted books
 Massive infringement
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Google eventually settled (e.g. paid off) the suit
 Some believe this was the intended strategy à priori
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$125 million settlement
Registry to allow authors to “opt-out” of agreement
Still controversial
Did Authors Guild own all books, present and future?
23

Professor posting a journal article on a passwordprotected web site for his class to access
1.
Purpose
2.
3.
4.
Nature
Amount
Market impact
Professor takes photographs of paintings shown in a book; uses photos for lectures
1.
Purpose
2.
3.
4.
Nature
Amount
Market impact
24

YouTube
 HD-captures of copyrighted material
 Low fidelity copies
 Derivative works
 Guitar Hero performances
 What is fair use?
Deeplinking of content
 Bypasses advertising of content provider
Google News excerpting and fast flip?
 Especially for paid sites such as WSJ and NYT?
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Illegal for consumers to circumvent encryption schemes placed on digital media
 Effectively makes copies of any digitally recorded work for any purpose illegal
 Covers music broadcast over Internet
Illegal to sell or discuss software that circumvents copy controls
Brought the US in compliance with international copyright statutes
Strategy was for everyone to adopt Secure Digital Music Initiative
 Copy-protected CDs and secure digital downloads
 Failed!
 mp3 vendors began to exert pressure against it
 Scheme was cracked by researchers in Princeton
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DeCSS
 DVDs encrypted with Content Scrambling System (CSS)
 DVD players/computers built with hardware to unscramble DVDs
 DeCSS allowed DVDs to be played on a Linux box
 Written by 16 year old Norwegian programmer
MP studios sued 2600 Magazine for publishing DeCSS
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Successfully sued under DMCA
Appeals court ruled that computer code is “speech” but limited because it ’s functional rather than expressive
 Right to free speech outweighed by potential harm of increasing illegal copying
 What ethical framework?
DeCSS is illegal in the US today
 Author was acquitted in Norway eventually
 DeCSS has both legal and illegal purposes
27

HD-DVDs encrypted with Advanced Access Content
System (AACS)
 Rather than post code, the encryption key was posted in
January 2007 on digg.com
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09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0
AACS threatened to sue…digg took post down
 Virally spread anyway
 Key revoked eventually which forced HD-DVD and Blu-Ray player owners to update to work with new key
Lesson: Technological fixes have a history of failure
 Eventually on-line music stores dropped DRM (even iTunes)
 Amazon mp3
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Networks for exchanging files and resources between computers
Napster (1999)
 Facilitated the exchange of music files (mp3s)
 Hosted a central directory of peers and the files they had
 Peers connected directly to each other to download
 Sued in 1999 by RIAA
 Injunction granted in February 2001
 Napster forced in June 2001 to block 100 percent of all copyrighted material transfers or disable all transfers
 Went offline in July 2001 and shut down in Sept. 2002
 Re-emerged as a subscription music service later
Ethical analysis
 Kant
 Act utilitarianism
 Rule utilitarianism
 Social contract theory
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FastTrack (Kazaa, Grokster)
 Hosting central directory killed Napster
 Decentralize directory across peers
 Only distribute software to create P2P file sharing network
RIAA response
 Use fake accounts to poison downloads and track activity
 Targeted ISPs and universities to get user information
 Sued Verizon to get real user information (success in June 2003)
 Started suing users who downloaded > 1000 files
 But, appeals court later ruled in Dec. 2003 that RIAA has no right to user information from Verizon
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Sued individual universities to get student information
Universities either started to ban P2P (PSU) or subscribe to legitimate services (Napster)
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Injunction against distribution of Grokster software
 Initial ruling compared P2P software to legal home recording devices and denied injunction
 Overturned by US Supreme Court unanimously in June 2005
 Distributor who promotes a product ’s use to infringe copyright is liable for acts of infringement by parties using the software
 Software company profits via advertising
 Gains when there are more users
 More users come when high-value copyrighted material available
 Unlawful objective is unmistakable
 Fair use rules on the side of the copyright holder
 Grokster shut down in November 2005
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Technology to transfer large files quickly
 Peer to Peer file sharing protocol
 Developed 2001 to distribute large amounts of data quickly
 By Bram Cohen, born 1975
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Who now owns the BitTorrent company in San Francisco, CA
Used for ~½ of all internet traffic
 http://www.bittorrent.com/btusers/download
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Extends P2P to allow multiple peers to serve one file
Still requires a way for a user to “search” for content
 Used for many legitimate purposes
 Achilles heel
 Must be able to find torrents
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Software copyrights
 Copyright act of 1976 explicitly recognized software
 Protects
 Expression of idea
– copyright implementation, not the idea
 Protects object code, not source code (typically the source code is considered
“confidential”. Exception: open-source software
Violations of software copyrights
 For example, it is not a violation:
 To copy a program from CD-ROM to hard disk to run
 To copy a program from hard disk to RAM during execution
 Generally ii is a violation if:
 Copying a program onto a CD is done to give/sell it to someone else
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Preloading a program onto a computer being sold
Distributing programs over the Internet
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Newer E nd U ser L icense A greements stipulate copyright and other things:
 Can install on only one computer
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May phone home
May collect “aggregated data” and other things
 Automated work
 1. OVERVIEW. At the time the tool is running, the software checks your device for certain malicious software listed at http://go.microsoft.com/fwlink/?LinkId=39249
( “Malware”) and if detected, the software removes Malware from your device. The tool must be run again on the specific device to detect and remove subsequent
Malware updates….
 Anything
 “It is further agreed and understood that such conditions are not exhaustive and that
Virtual Reach may from time to time **impose further conditions outside of this
EULA**.
” Virtual Reach
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Apple vs. Franklin computer
 Franklin Ace 100, 1000, and 1200 were Apple II clones, thus
Apple II compatible
 Franklin copied OS functions from Apple ROM to ensure this
 Apple sued Franklin 1983, judge ruled initially in favor of
Franklin, appeals court ruled in favor of Apple 1988
 Franklin held liable – establishing copyright for object programs
 He gist: OS object code is copyright-able
Sega vs. Accolade
 Accolade disassembled object of Sega game to determine how to interface their own game with a Sega console
 Ruled in favor of Accolade
 Reverse engineering considered fair-use
 Public benefit from more video games on a Sega!
35

Until early 1980s, no software patents
 Programs are mathematical algorithms, not processes or machines
Diamand vs. Diehr (1981)
 Invention curing rubber using computer controlled heating
 Distinction based on data
 Manipulates values only (e.g. sorting numbers)
– not patentable
 Manipulates data representing measurements made in the real world
– patentable
 Software that takes EKG signals to drive pacemaker is patentable
Opens the floodgates
 Prior art is huge issue given the many decades of software before
1981
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Prior art searches typically review prior patents!
Many “bad” patents due to lack of knowledge of prior art
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General strategy
 Clean-room development environment
 Two teams work on project
 First team develops specifications of functionality based on working with the competitors products
 Second team creates code based upon specifications
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Proprietary software
 Government gives rights to those who produce software
 Benefit of profiting from licensing gives incentives for people to work hard, be creative, and eventually benefit society
 Copyright protects the initial, tangible benefit
 Digital technology makes it trivial to copy
38

Alternative software development and distribution model
 No restrictions on selling or even giving away the software
 For some licenses, source code must be published if modified and distributed
 No restrictions on final use
 Rights apply to all who receive redistributions
Benefits
 Anyone can improve the software
 Eliminates tension between obeying copyright law and helping others --since code is given away
 Code is property of the community and lives indefinitely --no EOL
 Turns software into service industry rather than a manufacturing one
39

Gnu General Public License: GPL v2
 Linux
 Vendor that distributes any code that uses GPLed code must publish all of their source code modifications as well
BSD
 You may modify and redistribute without publishing the source code
Other variants
 Combination licenses
 Free/GPL for non-commercial use, but commercial use requires a different license agreement
40

Critical mass of developers on a project
Forking of projects and fragmenting of the development community
Removing financial reward reduces innovation and investment from commercial software developers
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Should software get copyright and patent-protected to begin with?
Rights-based analysis
 Locke: mixing your labor with something gives you an ownership right
 Farmers having rights to crops they labor to produce
 Programmers having rights to software they labor to produce
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But….
 Pouring a can of tomato juice into the ocean will not make you owner of that same ocean!
 Copying intellectual property is different than stealing something physical
42

Utilitarian analysis
 Copied software reduces purchases
 Less software sold for profit means producers will be less motivated to invent other software
 Software benefits society so allowing copying is wrong
 Caveats pro and con
 Would those who copied the software have bought it or done without it? --e.g. Windows in China
 Stallman: freely exchanged/copied code stimulates innovation allowing developers to see each other ’s code –gnu and Linux live well!
43

Step 1: select a discussion leader from class rom!
Is it ethical to record a live concert and post it on the Internet?
Why? Why not? Measured how?
Is it ethical to copy a © CD solely for the purpose of validating my copy software? I.e. afterwards I am committed to deleting the copied material.
Is it ethical to use pirated software? I.e. I pirated the SW and use it on my computer
Is it ethical to download music files for songs that have not been purchased?
Was it ethical to post the 32-character decryption key for HD-DVDs?
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1.
John Locke: http://en.wikipedia.org/wiki/Two_Treatises_of_Government
2.
John Locke: http://plato.stanford.edu/entries/locke/
3.
Aluminum: http://www.alunet.net/shownews.asp?ID=490&type=3
4.
Trademark grammar: http://itre.cis.upenn.edu/~myl/languagelog/archives/000943.html
5.
Patent trolls: http://en.wikipedia.org/wiki/Patent_troll
6.
Defense of Patent Trolls: http://www.businessweek.com/technology/content/feb2010/tc2010021_
330487.htm
7.
Andy Kessler article on Patent Trolls in WSJ, 2012: http://www.ipwatchdog.com/2012/05/01/setting-the-record-straightpatent-trolls-vs-progress/id=24491/
8.
Critique of Andy Kessler ’s article: http://www.ipwatchdog.com/2012/05/01/setting-the-record-straightpatent-trolls-vs-progress/id=24491/
9.
Piss Christ: http://en.wikipedia.org/wiki/Piss_Christ
10.
AACS: http://en.wikipedia.org/wiki/AACS_encryption_key_controversy
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