Chapter 6 Intellectual Property See My Pointers (Local Access only)

Chapter 6 - Intellectual Property Chapter 6 - Objectives Define intellectual property. Discuss copyrights, patents, and trade secrets. Define reverse engineering. Summarize the purpose of the Uniform Computer Information Transactions Act. Distinguish competitive intelligence from industrial espionage. Outline a strategy to protect your organization from cybersquatting. Chapter 6 - Intellectual Property

Intellectual Property Intellectual property includes works of the mind such as art, books, films, formulae, inventions, music, and processes that are distinctive and that are “owned” or created by a single entity. Copyrights, patents, and trade secrets are used to protect intellectual property. Chapter 6 - Intellectual Property

Chapter 6 - Intellectual Property Copyright A copyright is a form of protection provided by law that grants the authors of “original works of authorship in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of machine or device, the exclusive right to distribute, display, perform, or reproduce the work in copies or to prepare derivative works base upon the work.” 1976 Copyright Act prevents others from reproducing the work for the authors life plus 70 years. Chapter 6 - Intellectual Property

Chapter 6 - Intellectual Property Fair Use Doctrine Four factors to determine whether a copyright is a fair use: The purpose and character of the use (e.g., is the use for commercial or nonprofit, educational purposes) The nature of the copyrighted work The portion of the copyrighted work used The effect of the use upon the value of the copyrighted work Fair Dealing – Wikipedia Chapter 6 - Intellectual Property

Software Copyright Protection Software copyright is “tricky”. To prove infringement, the copyright holder must show a resemblance that could only be explained by copying. Developing a software package without prior knowledge is difficult to prove or disprove. Chapter 6 - Intellectual Property

Digital Millennium Copyright Act November 1998 To comply with the global copyright protection treaty from the World Intellectual Property Organization - Part of the United Nations. Penalties of 5 years in prison and/or fines of up to $500,000. Chapter 6 - Intellectual Property

Chapter 6 - Intellectual Property Legal Overview - DeCSS Content Scramble System (CSS) is an encryption-based security and authentication system used in DVDs. DeCSS software breaks the encoding system used in digital video disks. In 2000, eight movie studios sued 2600:” The Hacker Quarterly for posting the DeCSS program. Chapter 6 - Intellectual Property

Legal Overview – DeCSS (contd.) The Motion Picture Association of America filed injunctions to block the Internet distribution of DeCSS software. Courts ruled that unauthorized reverse engineering of the DVD system violated copyright and trade secret laws. Chapter 6 - Intellectual Property

Chapter 6 - Intellectual Property Patents A patent enables the inventor to take legal action against those who, without the inventor’s permission, manufacture, use or sell the invention during the period of time the patent is in force. The United States Patent and Trademark Office reviews patent applications and issues patents to approved inventions. Patents in Canada Chapter 6 - Intellectual Property

Chapter 6 - Intellectual Property Patented Invention It must fall into one of five statutory classes of things that can be patented. It must be useful. It must be novel. It must not be obvious to a person having ordinary skill in the art to which said subject matter pertains. Chapter 6 - Intellectual Property

Chapter 6 - Intellectual Property No Patent Protection The U.S. Supreme Court has ruled that there are three categories of subject matter for which one may not obtain patent protection: Abstract ideas Laws of nature Natural phenomena Chapter 6 - Intellectual Property

Chapter 6 - Intellectual Property Software Patents Since the 1980s, the USPTO has granted a large number of software-related patents. Examples include: Applications and business software Compilation and system software Edit, control, and operating system software Software patents – Canada Chapter 6 - Intellectual Property

Chapter 6 - Intellectual Property Trade Secrets The UTSA defines a trade secret as “information, including a formula, pattern, compilation, program, device, method, technique, or process that: Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by persons who can obtain economic value from its disclosure or use Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy Trade Secrets – Canada Chapter 6 - Intellectual Property

Chapter 6 - Intellectual Property Trade Secret To qualify as a trade secret, the secret must have Economic value Must not be readily ascertainable The trade secret owner must take steps to maintain its secrecy Chapter 6 - Intellectual Property

Advantages of Trade Secrets No time limitations on the protection of trade secrets No need to file an application, make any disclosures, or otherwise disclose a trade secret to outsiders Patents are frequently ruled invalid by courts, meaning that the then-disclosed invention no longer has protection Chapter 6 - Intellectual Property

Nondisclosure & Non-compete A nondisclosure clause requires employees to refrain from revealing secrets that they learn at work. A non-compete agreement requires employees to not work for any competitors for a set period of time. Chapter 6 - Intellectual Property

Intellectual Property Issues Reverse engineering is the process of breaking something down in order to understand it, build a copy of it, or improve it. A compiler is a language translator that converts computer program statements into machine language that a computer can execute. A decompiler is a software tool that reverse reengineers a software application. Chapter 6 - Intellectual Property

Intellectual Property Issues In 1999 the National Commissioners on Uniform State Laws approved the Uniform Computer Information Transactions Act. The UCITA applies uniform legislation to software licensing issues. Chapter 6 - Intellectual Property

Organizations That Support UCITA Software and Information Industry Association Information companies like Microsoft and AOL Others (Caterpillar, Circuit City, insurance companies) Chapter 6 - Intellectual Property

Organizations That Oppose UCITA Association for Computing Machinery Computer and Communications Industry Association Computer Professionals for Social Responsibility Digital Future Coalition Electronic Frontier Foundation International Communications Association Society for Information Management Chapter 6 - Intellectual Property

Chapter 6 - Intellectual Property UCITA The UCITA defines a software license as a contract that grants permission to access or use information subject to conditions set forth in the license. Shrink-wrap Click-on Active click wrap Chapter 6 - Intellectual Property

Competitive Intelligence The gathering of legally obtainable information that will help a company gain an advantage over its rivals. Competitive intelligence is not industrial espionage. Chapter 6 - Intellectual Property

Common Sources of Competitive Intelligence Annual reports Quarterly reports Press releases Promotional materials Web site Standard and Poor’s stock report Dun & Bradstreet credit report Interviews with suppliers, customers, former employees Calls to customer service Chapter 6 - Intellectual Property

Intellectual Property Issues A trademark is anything that enables a consumer to differentiate one company’s products from another. Trade Mark – Canada “A trade-mark is a name, symbol, or slogan which identifies or distinguishes a business or a product from the businesses or products of others.” Cybersquatters are people who register domain names to which they have no connection in the hope of profiting from the legitimate trademark owner. Chapter 6 - Intellectual Property

Chapter 6 - Intellectual Property Summary Intellectual property refers to works of the mind such as art, books, films, formulae, inventions, music, and processes. Copyrights, patents, and trade secrets provide a complex body of law regarding the ownership of intellectual property. Reverse engineering provides a means to gain access to information that another organization may have copyrighted or classified as a trade secret. Chapter 6 - Intellectual Property

Intellectual Property Issues A decompiler is a software tool that reverse reengineers a software application. The 1998 Digital Millennium Copyright Act explicitly outlaws technology that can defeat copyright protection devices, but permits reverse engineering encryption, interoperability, and computer security research. Chapter 6 - Intellectual Property

Chapter 6 - Intellectual Property Summary The UCITA is a controversial act that would apply uniform legislation to software licensing issues. Competitive intelligence is not industrial espionage. To avoid cybersquatting problems, organizations register their trademarks as soon as they know them. Chapter 6 - Intellectual Property

Chapter 6 - Intellectual Property Case 1- Napster Napster is a Web-based service founded in 1999 by Shawn Fanning. The goal is to provide music enthusiasts with an easy-to-use service for discovering and down loading music. The recording industry strongly objected to Napster. Chapter 6 - Intellectual Property

Chapter 6 - Intellectual Property Case 2 - Lotus v. Borland The Lotus v. Borland lawsuit lasted over five years going all the way to the Supreme Court and set a precedent that clarified the limits of software copyright protection. The case dealt with the “look and feel” of software. Chapter 6 - Intellectual Property