IP Foundations of OSSIP Foundations of OSSIntellectual Property (IP) Aspects of Intellectual Property (IP) Aspects of

Software:Software:

Copyrights, Trade Secrets & PatentsCopyrights, Trade Secrets & Patents

OSS as Composite of IPsOSS as Composite of IPs

CopyrightCopyright Trade SecretsTrade Secrets PatentsPatents Technology TransferTechnology Transfer

Licenses are Contracts too!Licenses are Contracts too! Reverse Engineer RightsReverse Engineer Rights

How are these Ltd?How are these Ltd? DMCA standard technical protectionsDMCA standard technical protections EULA de-compilation restrictionsEULA de-compilation restrictions Unlicensed “practicing” Unlicensed “practicing”

OSS as Overcoming the IP StraightJacketOSS as Overcoming the IP StraightJacket

Proprietary vs. Public GoodsProprietary vs. Public Goods

IncentivesIncentivesBenefit CaptureBenefit CaptureControl Control Access Access

Some ImmutablesSome Immutables

IPIP Royalty Rates & Business ModelsRoyalty Rates & Business Models InfringementInfringement

But Software is a “Build Thing”But Software is a “Build Thing”

Industrial OrganizationIndustrial Organization AntitrustAntitrust Viscerality of Feudalism Viscerality of Feudalism

““Royalty” againRoyalty” again

Licensing is Complex (GNU, GPL v.x.y)Licensing is Complex (GNU, GPL v.x.y) No Royalties this timeNo Royalties this time

Creative Communities are Fun Creative Communities are Fun

1st Creators, Follow-On 1st Creators, Follow-On Innovators & IPInnovators & IP

Every innovation has a first creator and potential follow-Every innovation has a first creator and potential follow-on innovatorson innovators

Creating or restricting rights of first creators or follow-on Creating or restricting rights of first creators or follow-on innovators through IP rights are just like taxing one or innovators through IP rights are just like taxing one or the otherthe other

Too high a tax on either group results in under- Too high a tax on either group results in under- production of innovation production of innovation

Every first creator is “Standing on the shoulders of Every first creator is “Standing on the shoulders of giants” (Newton) “S/W Development is a Build Thing” giants” (Newton) “S/W Development is a Build Thing”

There are far more follow-on innovators than first There are far more follow-on innovators than first creators and they may bring new insightscreators and they may bring new insights

The key task of IP Policy balancing to produce the The key task of IP Policy balancing to produce the greatest possible innovationgreatest possible innovation

What IP is in Open Source?What IP is in Open Source?

Copyright Still Exists in SoftwareCopyright Still Exists in Software And the Open Source Development Model is And the Open Source Development Model is

Premised on ThatPremised on That Copyright is an intangible right – it exists Copyright is an intangible right – it exists

independent of the codeindependent of the code Copyright Attaches On Creation of Original CodeCopyright Attaches On Creation of Original Code

Copyright Notice and Registration Not RequiredCopyright Notice and Registration Not Required Ownership Initially Vests in Authors or InstitutionOwnership Initially Vests in Authors or Institution

Patentable process/method claims (UCT)Patentable process/method claims (UCT) Trade Secrets protected by EULA, DMCA…Trade Secrets protected by EULA, DMCA…

CopyrightCopyright

Originality Originality Min. personal creativity/intellect requiredMin. personal creativity/intellect required

Works of Authorship Works of Authorship General categories under §102(a) General categories under §102(a)

Fixation in Tangible MediumFixation in Tangible Medium Expression Expression Generally Facts/Data Not Copyrightable Generally Facts/Data Not Copyrightable

Bundle of Rights under Copyright Bundle of Rights under Copyright

Reproduce Reproduce Derivative Works Derivative Works Distribution Distribution Performance Performance Display Display License License Assignment Assignment

Types of Types of Copyrightable WorksCopyrightable Works

Literary worksLiterary works

Architectural worksArchitectural works

Sound recordingsSound recordings

Motion pictures and A/V works

Motion pictures and A/V works

Pictorials, graphics, and sculptures

Pictorials, graphics, and sculptures

Musical worksMusical works

Dramatic worksDramatic works

Pantomimes and choreography

Pantomimes and choreography

Non-copyrightable MaterialNon-copyrightable Material

Ideas are not copyrightable – only the Ideas are not copyrightable – only the expression of ideas.expression of ideas.

Includes ideas, procedures, processes, Includes ideas, procedures, processes, systems, methods of operation, concepts, systems, methods of operation, concepts, principles, or discoveries.principles, or discoveries.

The The idea-expression dichotomyidea-expression dichotomy rule rule states that creators can maintain control states that creators can maintain control over ideas only if they qualify as over ideas only if they qualify as patentable or remain as trade secrets.patentable or remain as trade secrets.

Bundle of Bundle of Exclusive RightsExclusive Rights

ReproductionReproduction: prepare work in a tangible and : prepare work in a tangible and permanent mediumpermanent medium

RIAA v. Diamond MultimediaRIAA v. Diamond Multimedia Derivative workDerivative work: adapt or change original work : adapt or change original work

for another market or mediumfor another market or medium DistributionDistribution: initial public transfer of copyright : initial public transfer of copyright

work through sale, rental, lease, or other work through sale, rental, lease, or other transfertransfer

PerformancePerformance: public viewing using sensory : public viewing using sensory receptionreception

Bundle of Bundle of Exclusive RightsExclusive Rights

DisplayDisplay: showing by mechanical means: showing by mechanical means Digital transmissionDigital transmission: digital broadcast of : digital broadcast of

sound recordingssound recordings LicenseLicense: temporary, revocable transfer of : temporary, revocable transfer of

right to use workright to use work AssignmentAssignment: permanent and irrevocable : permanent and irrevocable

transfer of elements of bundletransfer of elements of bundle

Digital Millennium Copyright Digital Millennium Copyright Act (DMCA)Act (DMCA)

DMCA creates civil and criminal DMCA creates civil and criminal prohibitions against tampering with copy prohibitions against tampering with copy protection or billing data.protection or billing data.

DMCA does not add new exclusive rights DMCA does not add new exclusive rights to the bundle held by copyright owners.to the bundle held by copyright owners.

DMCA applies to a variety of digital DMCA applies to a variety of digital works.works.

Universal City Studios v. CorleyUniversal City Studios v. Corley (DeCSS)

Copyright Ownership Copyright Ownership

Author Presumed to Hold Bundle of RightsAuthor Presumed to Hold Bundle of Rights Usually Assigned to Publisher/LabelUsually Assigned to Publisher/Label Works Made for Hire Works Made for Hire

Prepared by emp’e w/in scope of empl Prepared by emp’e w/in scope of empl Employer or commissioner of work owns Employer or commissioner of work owns

Independent contractors vs. employees Independent contractors vs. employees Commun. Creative Non-Violence v. ReidCommun. Creative Non-Violence v. Reid

Joint Works - Multiple Owners if: Joint Works - Multiple Owners if: Contributions inseparable Contributions inseparable

Moral Rights Moral Rights

The Moral Rights Principle: The Moral Rights Principle: Authorship includes right to prevent distortion, Authorship includes right to prevent distortion,

mutilation or modification mutilation or modification Author’s discretion derivatives damage original’s Author’s discretion derivatives damage original’s

artistic integrity, & author’s reputation or honorartistic integrity, & author’s reputation or honor

Stronger in Europe than in U.S. Stronger in Europe than in U.S. Berne Convention & U.S. implementation Berne Convention & U.S. implementation Alternate U.S. bases: trademark & privacy Alternate U.S. bases: trademark & privacy

Fair Use DefenseFair Use Defense Infringement Excused, w/o PermissionInfringement Excused, w/o Permission: :

Criticism, comment, news reporting, teaching, Criticism, comment, news reporting, teaching, scholarship or research.scholarship or research.

Transformative usesTransformative uses The four factors of fair useThe four factors of fair use

1.1. Purpose and character of usePurpose and character of use2.2. Nature of copyrighted workNature of copyrighted work3.3. Amt/substantiality of used portionAmt/substantiality of used portion4.4. Effect of use on potential marketEffect of use on potential market

A&M Records, Inc. v. NapsterA&M Records, Inc. v. Napster

Clean Room Techniques Clean Room Techniques Chinese Wall: Dissectors & Chinese Wall: Dissectors &

Designers Designers Dirty room reverse Dirty room reverse

engineering, decompilation, engineering, decompilation, dissection dissection

Ideas & unprotectable Ideas & unprotectable expression transmitted to expression transmitted to clean room clean room

Clean room builds new Clean room builds new expression expression

Idea-Expression Idea-Expression determinations determinative determinations determinative but risky but risky

Sega Ent., Ltd. v. Accolade, Sega Ent., Ltd. v. Accolade, Inc. Inc. Dirty room intermediate Dirty room intermediate

copying is fair usecopying is fair use

0

10

20

30

40

50

60

70

80

90

1stQtr

2ndQtr

3rdQtr

4thQtr

East

West

North

Infringement AnalysisInfringement Analysis Coping or Violation of Any 1 in BundleCoping or Violation of Any 1 in Bundle Proof of Copying - Expert Testimony Proof of Copying - Expert Testimony

Access to original suggests copying possible & Access to original suggests copying possible & explains similaritiesexplains similarities

Proof of Illicit Copying - No Experts Proof of Illicit Copying - No Experts Substantial similarity in expression only Substantial similarity in expression only Idea-expression dichotomy Idea-expression dichotomy Qualitatively vital elements “essence”Qualitatively vital elements “essence” Eliminate unprotected ideas, scenes a faireEliminate unprotected ideas, scenes a faire

Abstraction/Filtration/ Abstraction/Filtration/ Comparison Analytics Comparison Analytics

Abstraction Abstraction Dissect structure: code to functions Dissect structure: code to functions

Filtration Filtration Remove from infringement consideration: Remove from infringement consideration:

Ideas & their incidents Ideas & their incidents External factors (interface, IEEE, RS232, VGA)External factors (interface, IEEE, RS232, VGA) Public domain Public domain

Comparison Comparison Core of protectables left compared Core of protectables left compared

Copyright Infringement Copyright Infringement Remedies Remedies

Injunction: copying, sales of copies Injunction: copying, sales of copies Destruction of infringing copies Destruction of infringing copies Actual damages or Infringer’s profits Actual damages or Infringer’s profits Statutory damages-$500 to $20,000Statutory damages-$500 to $20,000

Willful: up to $100,000 Willful: up to $100,000

Attorney’s fees & costs Attorney’s fees & costs Criminal penalties for willful violationsCriminal penalties for willful violations

$500,000 &/or 10 yrs. imprisonment $500,000 &/or 10 yrs. imprisonment

Trade SecretsTrade Secrets

InformationInformation (formula, pattern, (formula, pattern, compilation, program, device, method, compilation, program, device, method, technique or process) technique or process)

Derives Derives independent economic valueindependent economic value from from secrecysecrecy or by proper means or by proper means discovery by potential competitors, and discovery by potential competitors, and

Subject of efforts, reasonableSubject of efforts, reasonable under the under the circumstances, to circumstances, to maintain secrecymaintain secrecy

Misappropriation is Wrongful Misappropriation is Wrongful

Acquired through Acquired through improper means improper means Acquired from another Acquired from another knowing knowing improper improper

means was used means was used Use or disclosure knowing Use or disclosure knowing violates duty of violates duty of

silence silence Use or disclosure knowing Use or disclosure knowing acquired by acquired by

improper means improper means Use or disclosure knowing Use or disclosure knowing acquired acquired

through fiduciary breach through fiduciary breach

Proper Means of Discovery Proper Means of Discovery

Reverse EngineeringReverse Engineering Exceptions: DMCA, EULA restrictionExceptions: DMCA, EULA restriction

Independent InventionIndependent Invention Exposure from Public View or DisplayExposure from Public View or Display Discovered from Published Literature Discovered from Published Literature Discovered from License, Unless Discovered from License, Unless

Confidentiality Term OtherwiseConfidentiality Term Otherwise

MisappropriationMisappropriation

Acquisition by Improper

means

Acquisition by Improper

means

ReceiptReceipt

DisclosureDisclosure

UseUse

Misappropriation Misappropriation

Acquired through Acquired through improper means improper means Acquired from another Acquired from another knowing knowing improper improper

means was used means was used Use or disclosure knowing Use or disclosure knowing violates duty of violates duty of

silence silence Use or disclosure knowing Use or disclosure knowing acquired by acquired by

improper means improper means Use or disclosure knowing Use or disclosure knowing acquired through acquired through

fiduciary breach fiduciary breach

Secrecy: Fundamental Secrecy: Fundamental ThresholdThreshold

Circumstances/fact specific Circumstances/fact specific Extent of industry knowledge Extent of industry knowledge Reprehensibility of conduct Reprehensibility of conduct Balancing equities Balancing equities Defined negatively: Defined negatively:

Public/general knowledge in relevant industryPublic/general knowledge in relevant industry Essentially a novelty issue Essentially a novelty issue

Not ascertainable publicly Not ascertainable publicly products, publications, copyrighted or patented material, products, publications, copyrighted or patented material,

proper meansproper means

Proof of Misappropriation Proof of Misappropriation

Improper Means of Discovery by Improper Means of Discovery by Illegal conduct: theft, fraud, trespass, bribery Illegal conduct: theft, fraud, trespass, bribery

Non-criminal, nevertheless commercially Non-criminal, nevertheless commercially reprehensible conductreprehensible conduct Industrial espionageIndustrial espionage

Admission Admission Eyewitness Testimony Eyewitness Testimony Discovery of stolen or admitting documents Discovery of stolen or admitting documents Circumstantial evidenceCircumstantial evidence

PatentPatent

Patentable Subject Matter Patentable Subject Matter Process (BMP, S/W)Process (BMP, S/W) Machine Machine Manufacture Manufacture Composition of Matter (bio-tech)Composition of Matter (bio-tech)

Novelty, Non-Obviousness, Utility Novelty, Non-Obviousness, Utility New, Useful & Human-made New, Useful & Human-made

Patentable Subject Matter Patentable Subject Matter

New, Useful & Human-made New, Useful & Human-made

1.1. Process Process

2.2. Machine Machine

3.3. Manufacture Manufacture

4.4. Composition of Matter Composition of Matter

Patentability: Areas of Non-Patentability: Areas of Non-Patentable Subject MatterPatentable Subject Matter

a/k/a Non-Statutory Subject Mattera/k/a Non-Statutory Subject Matter

Naturally occurring thingsNaturally occurring things

Abstract ideasAbstract ideas

Laws of natureLaws of nature

Mathematical formulaeMathematical formulae

Hot/Critical Areas Hot/Critical Areas of Patentabilityof Patentability

Methods of doing business

Computer software

Biotechnology

Computer Programs Computer Programs

Algorithms & Mathematical Formulas Algorithms & Mathematical Formulas Laws of nature & mental steps Laws of nature & mental steps Gottschalk v. BensonGottschalk v. Benson (1972) (1972) Parker v. FlookParker v. Flook (1978) (1978)

Significance of Post-Solution Activity Significance of Post-Solution Activity Diamond v. DiehrDiamond v. Diehr (1981) (1981) Arrhythmia Research Technology, Inc. v. Arrhythmia Research Technology, Inc. v.

Corazonix Corp.Corazonix Corp. (1992) (1992) In re AlappatIn re Alappat (1994) rasterizer (1994) rasterizer

Business MethodsBusiness MethodsAnything [Human-made] Under the Sun Anything [Human-made] Under the Sun Business Method Exception was Illusory Business Method Exception was Illusory BMP - 21st Century Gold Rush BMP - 21st Century Gold Rush Baker v. SeldenBaker v. Selden - No © for Acctg Sys - No © for Acctg Sys

Paper embodiment already known Paper embodiment already known Process Patents Long Disfavored Process Patents Long Disfavored Physicality Requirement Tradition Physicality Requirement Tradition

Vendible Substance under English law Vendible Substance under English law Physical Transformation under U.S. law Physical Transformation under U.S. law

Process Originally seen as Mere Collection of Ideas Process Originally seen as Mere Collection of Ideas Safeguarding the Public DomainSafeguarding the Public Domain

BMP Parallels BioTech & BMP Parallels BioTech & Software Patentability Software Patentability

Early Stage Early Stage Unpatentable: naturally occurring - life Unpatentable: naturally occurring - life form, law of nature - algorithm form, law of nature - algorithm

Maturing Maturing Contradictory caselaw aspiring toward Contradictory caselaw aspiring toward acceptance acceptance

Recognition Recognition Chakrabarty, Allapat, State Street Chakrabarty, Allapat, State Street

State St. Bank v. Sig. Fin.State St. Bank v. Sig. Fin.

‘‘056 Hub & Spoke Financial System 056 Hub & Spoke Financial System Spokes Pool Funds into Hub Portfolio Spokes Pool Funds into Hub Portfolio Facilitates Collective Fund Admin.Facilitates Collective Fund Admin.

Daily computation of spoke asset values, income, Daily computation of spoke asset values, income, expense, (un)realized gains/losses, expense, (un)realized gains/losses,

Annual: income, expense, capital gain/lossAnnual: income, expense, capital gain/loss Useful, concrete and tangible resultUseful, concrete and tangible result OK to perform calculations or do “business”OK to perform calculations or do “business”

But now But now In re BilskiIn re Bilski may eliminate BMP may eliminate BMP See: http://faculty.ist.psu.edu/bagby/bmp/index.htmSee: http://faculty.ist.psu.edu/bagby/bmp/index.htm

Novelty Novelty Not in The Public Domain Not in The Public Domain Statutory Bars:“Known or Used...Patented or Published” Statutory Bars:“Known or Used...Patented or Published” Diligence Diligence

Not abandon, suppressed or concealedNot abandon, suppressed or concealedThe U.S. One Year Grace PeriodThe U.S. One Year Grace Period

No Public Use or Sale No Public Use or Sale US: no use or sale US: no use or sale World: no patent or publicationWorld: no patent or publication

Public Knowledge Before Invention DatePublic Knowledge Before Invention DatePrior ArtPrior Art

Publicly known, publicly used, published or patented before Publicly known, publicly used, published or patented before invention dateinvention date

Prior user rights for business methodsPrior user rights for business methods

Non-ObviousnessNon-Obviousness Patent should not grant if the advancement is small, Patent should not grant if the advancement is small,

merely minor improvements over prior artmerely minor improvements over prior art Not obvious at the time of invention to one skilled in Not obvious at the time of invention to one skilled in

the artthe art

Graham v. John DeereGraham v. John Deere::1. Determine scope and content of the prior art 1. Determine scope and content of the prior art 2. Determine differences between prior art and the 2. Determine differences between prior art and the

claim(s) at issue; claim(s) at issue; andand3. Determine the level of ordinary skill in the pertinent art3. Determine the level of ordinary skill in the pertinent art KSRKSR

Non-Obviousness Objective Non-Obviousness Objective FactorsFactors

Commercial success (not solely marketing)Commercial success (not solely marketing)Unmet, long-felt need about problem in the Unmet, long-felt need about problem in the

field which is solved or satisfied by the field which is solved or satisfied by the inventioninvention

Failure of others to solve the problemFailure of others to solve the problem Invention copied by othersInvention copied by others Infringer’s abandonment of prior art in favor Infringer’s abandonment of prior art in favor

of patented inventionof patented inventionMust consider invention as a whole, no Must consider invention as a whole, no

dissection dissection

TrademarkTrademark

Word, Name, Symbol, Word, Name, Symbol, DeviceDevice Recently: color, sound, Recently: color, sound,

smell smell

Identifies Source of Identifies Source of Goods or Services Goods or Services

Distinguishes from Distinguishes from competitors using competitors using Spectrum of Spectrum of DistinctivenessDistinctiveness

Generic Generic Descriptive Descriptive Suggestive Suggestive Arbitrary or fanciful Arbitrary or fanciful