Intellectual Property

Smart Things?

Questions: Have you ever given a CD that contained a copy of a program to

someone? Have you ever recorded a televised movie or show so that you can

view it later? Have you downloaded music or a movie files from the WWW without

paying for it? Have you e-mailed a copy of an on-line newspaper or magazine

article to friends? Have you set up a web site about your favorite band or actor, and use

short videos from their performances?

1) Who “holds the rights” to the work in question. the owner may not necessarily be the creator of the work.

2) Knowing if the owner of the copyrighted work has given permission. some owners have this information posted on their website.

What is Intellectual Property? if the essence of an object or work can't be touched, then it's

considered an "intangible" object or work. the physical form of an intellectual property is the medium that it is

stored in. (e.g. paper, cd, dvd, cassette) Intellectual Property is an intangible (or abstract) object or work

resulting from an intellectual or creative effort. intellectual property is protected by the copyright laws.

intellectual properties are easy to copy. the concept of stealing an intellectual property is different from that

of a physical property. the value of an intellectual work can be greater than the total cost of

the process of putting it onto a physical medium.

U.S. Copyright Law:

“limited Times” is the lifetime of the author plus 70 years (for general copyrights) and 95 years (work for hire).

– If the copyright holder dies, their heirs inherit the copyright.

– once the time limit is up, the work goes into the "public domain" where anyone can use it for any purpose.

Facts, ideas, concepts, processes, and methods of operation are not copyrightable.

The Congress shall have Power To ... 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 ...

• U.S. Constitution, Article I, Section 8

Exclusive Rights:(defined under Title 17 of the U.S. Code)

to produce copies or reproductions of the work and to sell those copies (including, typically, electronic copies)

to import or export the work to create derivative work (works that adapt the original work) to perform or display the work publicly to sell or assign these rights to others to transmit or display by means of digital audio transmission

(XM Satellite Radio, Sirius)

The Fair-Use Doctrine One type of defense against copyright infringement. Fair-Use grants the public some of the exclusive rights given to

copyright holders.

– Fair use do not require the permission of the copyright holder

– Fair use rights take precedence over the copyright holder's interest.

– Examples of fair use: making backup copies of software, producing reviews or critiques that quote part of a copyrighted work.

Generally, fair use allows uses of copyrighted material that contribute to the creation of new work and uses that are not likely to deprive copyright holders of income.

fair use was codified for the first time in the 1976 Copyright Act.

Four Factors to consider in determining whether a particular use is a fair-use:

1) The purpose and nature of the use.

copying for commercial purposes is less likely to be fair use

2) The nature of the copyrighted work.

creative work has more protection than factual work

3) The amount and significance of the portions used.

4) The effects of the use on the potential market for or value of the copyrighted work.

will this deprive copyright holders of possible income

Sony vs. Universal City Studios (and the Walt Disney Company),1984

Decided by the Supreme Court.

Lawsuit originally started in 1976 in the U.S. District Court of California.

Universal & Disney accused Sony of contributing to copyright infringement because its Betamax video cassette recording device allows its customers to record televised copyrighted movies. (customers claim that the purpose was to view it at a later time)

Sony vs. Universal City Studios (Continued)

Court applied the 4 factors.

Against fair-use (2) the movie in question was a creative work and not factual.

(3) the entire movie was copied.

In Favor of fair-use:(1) private, noncommercial

(2) the studios needed viewers in order to profit from the

televised movie

(4) the studios could not demonstrate they've suffered any

financial harm

Sega Enterprises Ltd vs. Accolade, Inc.,1992

Decided by the Federal Appeals Court. Sega sued Accolade (a video game company), accusing them of

copyright infringement because Accolade copied the machine code off of the Sega Genesis console (for the purpose of reverse engineering) so that they can make their own video games that can run on the popular console.

reverse engineering: the process of decompiling a program from the machine code (or object code) to a higher language that's more readable and understandable (like a source code)

The court viewed Accolade's activities as fitting the purpose of fair use, i.e. to encourage production of new creative work. Accolade was not selling copies of Sega's games but new originals.

Accolade's games competed with Sega's. And although there was the possibility that Accolade's games might reduce the market for Sega's games, the courts saw this as "fair competition"

New TechnologiesNew Technologies Electronic media

> Ease of transfer (web)> Ease of transfer (web)

> Inexpensive media and storage devices> Inexpensive media and storage devices

New Copyright Laws

> Photocopies are bulky and expensive where electronic> Photocopies are bulky and expensive where electronic media is cheap and easy. Laws are becoming more protective.media is cheap and easy. Laws are becoming more protective.

> Passing an article around as compared to software?> Passing an article around as compared to software?

> Reading books in bookstore or library, reselling book> Reading books in bookstore or library, reselling book

> Selling a book from one person to another is ok> Selling a book from one person to another is ok but the buyer cannot make copies, software is differentbut the buyer cannot make copies, software is different

Napster (napping?)

Was somebody caught “napping” (Italian Job)

Party like its 1999

> By the end of 2000: approximately 98 mil available MP3 files

> 40% of the U.S. colleges blocked access (clogged web)

> Survey of 4000 students found 75% used it at least once a month

> New bands liked it in order to get their music known

> Late 1999, 18 record companies sued, after a year in court old Nappy lost

I am a Thief!Take me

Away!

Is that a Song?

Very important case:

This showed everyone thatthe copyright laws are nothing to mess with! (Or big record company lawyers?)

Why was it so popular?

> Its free! (big mistake) > Individual songs (didn’t need to buy the whole CD)

> Get songs that were not commercially available

> On-line convenience (download from anywhere)> Info on musicians

Debate

Legal Arguments> Was it legal under fair-use guidelines?> Was Napster responsible for the actions of its users?

Copying for personal use > Listening with others (Sony v. Universal City 1992)> Copies for owners’ use or to give out to many others> Impact on the market (complaint of record companies) - Sales declined slightly (1.5%) in 2000 - Singles declined 46% in 2000 - Full CDs increased 2.5 %

Naptser’s Argument

Did not keep copies of songs

Users’ transferred songs from peer-to-peer to each other (with Napster’s software)

Sited the “Sony Betamax” case (Supreme court said “makers of the device are not liable for what the users do with it”)

Wanted to promote new bands willing to give out their own music

Better lawyers?

Sony’s relationship with the customer ended when Sony’s relationship with the customer ended when their machine was purchased, Napster interactedtheir machine was purchased, Napster interacted

Court said Napster knowingly encouraged copying..Court said Napster knowingly encouraged copying..

EFF (Electronic Frontier Foundation) said the EFF (Electronic Frontier Foundation) said the Napster case went too far overboardNapster case went too far overboard

Other music selling services: Gnutella, Morpheus Other music selling services: Gnutella, Morpheus allow peer-to-peer copying..allow peer-to-peer copying..

““Smart people in music are already working on Smart people in music are already working on ways to make a single playing too cheap to be ways to make a single playing too cheap to be worth stealing”worth stealing” - Holman W. Jenkins, Jr. - Holman W. Jenkins, Jr.

New Complications…New Complications…

Software Piracy

> Initial impact weakened copyrighting> Initial impact weakened copyrighting

> There is clarity coming.. Fear and Greed are not good!> There is clarity coming.. Fear and Greed are not good! (software, entertainment companies are losing millions)(software, entertainment companies are losing millions)

> Making copies is not clear yet, no mention in > Making copies is not clear yet, no mention in ConstitutionConstitution

> College professors can post articles on board but not > College professors can post articles on board but not web?web?

> There are many new approaches…> There are many new approaches…

> “control of reproduction is a means, not a goal.”> “control of reproduction is a means, not a goal.”

Software Piracy “Software Piracy” is the unauthorized use of computer software. Software piracy includes:

– the copying of software (and documentation) in large quantities for resale.

– illegal copying by business and organizations for their own use.– large-scale unauthorized distribution of software on the Web.

"Warez" refers to illegal copies of software (typically software that had its copy-protection scheme cracked).

The software industry is represented mainly by 2 organizations:– the Software and Information Industry Association (SIIA)– the Business Software Alliance (BSA)

according to these 2 organizations, the value of software pirated worldwide has been roughly $11-13 billion per year for many years.

Technology, Markets, And Law

People are paid for time and effort for the intangible intellectual property products.

Companies dropped “copy protection” on diskettes because customer reject them.

There were instructions for disables the “activation” feature soon after Microsoft released Windows XP.

Technology encourage more flexibility, including free demos, low-priced, limited-use options.

SALE VS. LICENSE License have a time limit The License flexibility makes possible lower-

prices. License prohibiting telling others of flaw in

computer program, uses that are fair uses under copyright law.

Business software customers that invest huge amounts of money in systems, training have weak bargaining position when term expired to vendor.

Markets And Managements

ASCAP, BMI collect a lot of dollars in year in fee for live performances, recording of copyrighted songs played in commercial.

People ignore laws because they consider unreasonable, if socially acceptable and if enforcement is weak.

In 2002, DrinkOrDie pay more $2.5 million in damages and face jail up to 5 years.

Lawsuits and Taxes

Lobbied for a law banning digital audio tape (DAT) machine without built-in copy protection.

Television network and Walt Disney Corp sued digital-video for store TV programs on a hard drive.

Taxes in computers, printers, scanners and CD recorders.

DMCA VS. Fair Use And Freedom Of Speech

15 year old programmer wrote DeCSS that defeated the scrambling in movie by the Content Scrambling System (CSS).

DeCSS was the first major legal case to become the focus of the Digital Millennium Copyright Act (DMCA).

One court says that DeCSS is illegal, and later another court reversed an injunction because it says that First Amendment protects software.

DMCA VS. Fair Use And Freedom Of Speech

“Should we ban or restrict software, a technology, a device, or research because it has potential for illegal use, or should we ban only the illegal uses?”

“Do bans on publishing software violate freedom of speech?”

“Should a Web-site operator be liable for what is on other sites his or her site link to?”

DMCA VS. Fair Use And Freedom Of Speech

A Russia company develop and sold a program that circumvents controls embedded in electronic books using Adobe System’s control software.

Fair use of copyrighted material for research, education, etc.

Entertainment industry tries to ban, delay tax electronic devices and media that make copyright infringement.

Some cities ban Chewing gum, other ban spray paint, or guns.

The Future of Copyright

AOL police their own subscribers to avoid suits. People have trouble in looking for thing they

want Web and peer-to-peer technology making

impossible for anyone to protect intellectual property.

Free-Speech Issues

Ford sued ClassicVolvo.com for the name of Volvo.

Church of Scientology filed suit because the former members post document containing sacred teachings of the church on the Internet.

Copyrighting Tid-Bits

Poor Man’s Copyright Having the “U.S. Copyright Office” check

for you Groxter Case DMCA (Digital Millennium Copyright Act)

Trademarks are copyrighted

“Look and Feel”

Link on a website. Is the content of the other website the responsibility of this website?

Lots of links...Copyright forms:http://www.copyright.gov/forms/

Jackie & Arnold http://www.metacafe.com/watch/49608/schwarzenegger_ chan

_terminate_piracy/

Britshttp://www.youtube.com/watch?v=wdzD97AKxy0

Piracy is Bad...http://www.youtube.com/watch?v=281e8Wy71o0&mode=related&search=

Silly...http://www.youtube.com/watch?v=y6vHRn84Ejo&NR=1

Informative video..http://www.youtube.com/watch?v=rr9SQ4qkMMk&mode=related&search=

Class Discussion

Software developers often must copy some or all of another company's program as part of the process of developing their own products, which might compete with the other company's work. Is such copying fair or even legal?

Do you feel that copyright laws are too strict? Are big businesses just getting greedy?

Which factor will be more important for protection of digital intellectual property: strict copyright laws or technology-based protections (neither or both)?