any unique product of the human intellect that has commercial
value . Examples of intellectual property are books, songs, movies, paintings, inventions,
chemical formulas, and computer programs.
distinguish between intellectual property and its physical manifestation
in some medium. If a poet composes a new poem, for example, the poem itself
is the intellectual property, not the piece of paper on which the poem is printed.
John Locke (1632-1704) developed an influential theory of
property rights. In The Second Treatise of Government, Locke makes the following case
for a natural right to property.
Locke's description of a natural right to property is most useful at explaining how
virtually unlimited resources are initially appropriated. It
Is there a natural right to intellectual property?
However, since Locke was talking about the ownership
of physical objects and we are talking about the ownership of ideas, we must resort
to an analogy. We'll compare creating a piece of intellectual property to making a belt
buckle . In order to make a belt buckle, a person must mine ore, smelt it down, and
cast it. To write a play, a playwright "mines" words from the English language, "smelts"
them into stirring prose, and "casts" them into a finished play.
First, every intellectual property is one-of-a-kind. Second, copying a piece of intellectual property is different
from stealing a physical object.
Benefits of Intellectual Property Protection
may choose to grant intellectual property rights to people because of the beneficial
Article I, Section 8, of the U.S. Constitution gives
Congress the 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
Limits to Intellectual Property Protection
Hence there is a tension between the need to reward the creators of intellectual property by giving them exclusive rights to their ideas and the
need to disseminate these ideas as widely as possible.
Congress has traditionally addressed this tension is through a compromise.
It has granted authors and inventors exclusive rights to their writings and
discoveries, but only for a limited period of time
At the end of that time period, the intellectual property enters the public
Protecting Intellectual Property
Today, there are four different ways in which individuals and organizations protect
their intellectual property: trade secrets, patents, copyrights, and trademarks/service
confidential piece of intellectual property that provides a company
with a competitive advantage
The right of a company to protect its trade secrets is widely recognized by governments
around the world. In order to maintain its rights to a trade secret, a company must
take active measures to keep it from being discovered
An advantage of trade secrets is that they do not expire. A company never has to
disclose a trade secret
word, symbol, picture, sound, or color used by a business to identify
mark identifying a service
By granting a trademark or service mark, a government gives a company the right
to use it and the right to prevent other companies from using it. Through the use of a
trademark, a company can establish a "brand name."
When a company is the first to market a distinctive product, it runs the risk that its
brand name will become a common noun used to describe any similar product. When
this happens, the company may lose its right to exclusive use of the brand name. Some
trademarks that have become generic are "yo yo," "aspirin," "escalator," "thermos," and
Companies strive to ensure their marks are used as adjectives rather than nouns
A patent is a way the U.S. government provides an inventor with an exclusive right to
a piece of intellectual property.
patent is a public document that provides a detailed description of the invention. The
owner of the patent can prevent others from making, using, or selling the invention for
the lifetime of the patent, which is currently 20 years. After the patent expires, anyone
has the right to make use of its ideas.
POLAROID V. KODAK
Kodak had infringed on seven of Polaroid's original ten
patents; six years later Kodak paid Polaroid a $925 million settlement
copyright is how the U.S. government provides authors with certain rights to original
works that they have written. The owner of a copyright has five principal rights:
1. The right to reproduce the copyrighted work
2. The right to distribute copies of the work to the public
3. The right to display copies of the work in public
4. The right to perform the work in public
5. The right to produce new works derived from the copyrighted work
Copyright owners have the right to authorize others to exercise these five rights
with respect to their works.
NO ELECTRONIC THEFT ACT
Since he had not profited from his actions, he had not violated
copyright law. To close this legal loophole, Congress passed the No Electronic Theft Act
of 1997, which made it a criminal offense simply to reproduce or distribute more than
$1,000 worth of copyrighted material in a six-month period
The government and groups representing the entertainment industry, including
The Walt Disney Co., the Motion Picture Association of America, and the Recording
Industry Association of America, argued that Congress does have the Constitutional
authority to extend the terms of existing copyrights .
The right given to a copyright owner to reproduce a work is a limited right. Under some
circumstances, called fair use
it is legal to reproduce a copyrighted work without the
permission of the copyright holder. Examples of fair use include citing short excerpts
from copyrighted works for the purpose of teaching, scholarship, research, criticism,
commentary, and news reporting.
gOVERNEMNT AND FAIR USE
The United States Copyright Act does not precisely list the kinds of copying that are
fair use. Instead, what is considered to be fair use has been determined by the judicial
1. What is the purpose and character of the use?
An educational use is more likely to be permissible than a commercial use.
2. What is the nature of the work being copied?
Use of nonfiction is more likely to be permissible than use of fiction. Published
works are preferred over unpublished works.
3. How much of the copyrighted work is being used?
Brief excerpts are more likely to be permissible than entire chapters.
4. How will this use affect the market for the copyrighted work?
Use of out-of-print material is more likely to be permissible than use of a readily
available work. A spontaneously chosen selection is better than an assigned reading
in the course syllabus.
Sony v. Universal City Studios
that time shifting television programs
is a fair use of the copyrighted materials . It said that the private, noncommercial use
of copyrighted materials ought to be presumed fair use unless it could be shown that the
copyright holder would be likely to suffer economic harm from the consumer's actions
Digital Recording Technology
Someone with a digital recording device can copy a CD perfectly because it encodes
music digitally—as a stream of ones and zeroes. When consumers didn't have access
to digital recording devices, that wasn't a problem, but in the mid-1980s, Sony began
selling digital audio tape (DAT) recorders in Japan and Europe
Audio Home Recording Act of 1992
the Audio Home Recording Act
requires manufacturers of digital audio recorders to incorporate the Serial Copyright
Management System (SCMS). The SCMS allows a consumer to make a digital copy from
the original recording, but it prevents someone from making a copy of the copy.
RIAA v. Diamond Multimedia Systems Inc.
that space shifting, or copying a recording in order to make it portable, is fair use and
entirely consistent with copyright law (Figure 4.7).
Kelly v. Arriba Soft Corporation
1. Readers in the United States would have much easier access to millions of copyrighted
books, including millions of books that are out-of-print, by allowing readers
to search through them and preview them online.
2. The market for copyrighted books in the United States would grow by offering
Google Books users the opportunity to purchase online access to them.
3. People would gain online access to out-of-print books at designated computers in
U.S. public libraries and university libraries.
4. U.S. colleges and universities would have the opportunity to purchase subscriptions
that would enable their students to gain online access to the collections of some of
the world's greatest libraries.
5. Authors and publishers would receive payments earned from the online access of
their books, fees paid when people printed pages from their books, and advertising
As part of the settlement
Digital Millennium Copyright Act
The primary purpose of
the DMCA was to bring the United States into compliance with international copyright
agreements it had signed . Provisions in the DMCA significantly curtail fair use of
copyrighted material. The DMCA makes it illegal for consumers to circumvent encryption
schemes placed on digital media, and it is illegal to sell (or even discuss online) a
software program designed to circumvent copy controls .
Digital Rights Management
Digital rights management (DRM) can refer to any of a variety of actions owners of
intellectual property may take to protect their rights. As Christopher May puts it, "All
DRM technologies are aimed at tracking and controlling the use of content once it has
entered the market"
Criticisms of Digital Rights Management
DRM restrictions sometimes prevent libraries from reformatting materials to make
them more accessible to persons with disabilities. In addition, DRM protections, unlike
copyrights, never expire .
Finally, some DRM schemes prevent people from anonymously accessing content.
Online Music Stores Drop Digital Rights Management
A year later, Amazon became the first online music store to reach an
agreement with all four major labels to sell music free of DRM restrictions . Apple
followed suit in 2009 with an announcement that it, too, had reached an agreement with
all the major music labels to sell music without DRM restrictions 
peer-to-peer refers to a transient network allowing computers
running the same networking program to connect with each other and access
files stored on each other's hard drives (
submitted computer programs to be registered, reasoning that a computer program is
like a "how-to" book. The Copyright Act of 1976 explicitly recognizes that software can
Second, copyright usually protects the object (executable) program, not the source
program. Typically, the source code to a program is confidential, in other words, a
trade secret of the enterprise that developed
Violations of Software Copyrights
The holder of a copyright has a right to control the distribution of the copyrighted
material. Obviously, this includes making copies of the program
However, doing any of the following actions without authorization of the copyright
holder is a violation of copyright law:
1. Copying a program onto a CD to give or sell to someone else
2. Preloading a program onto the hard disk of a computer being sold
3. Distributing a program over the Internet
APPLE COMPUTER, INC. V. FRANKLIN COMPUTER CORP.
The U.S. Court of Appeals for the Third Circuit ruled in favor of
Apple Computer, establishing that object programs are copyrightable
SEGA V. ACCOLADE
Video game-maker Accolade wanted to port some of its games to the Sega Genesis
console. Sega did not make available a technical specification for the Genesis console,
so Accolade disassembled the object code of a Sega game in order to determine how to
interface a video game with the game console
court ruled that the software was patentable because the numbers being manipulated
by the computer program represented concrete values in the real world. Further court
rulings reinforced the idea that computer software and data structures could be patented
in the United States .
Some companies specialize in holding
patents and licensing the rights to use these patents. Patent-holding companies aggressively
use the courts to enforce their patent rights;
Consequences of Proprietary Software
. The copyright system was designed for an era in which it was difficult to create
copies. Digital technology has made copying trivial. In order to enforce copyrights
in the digital age, increasingly harsh measures are being taken. These measures
infringe on our liberties.
. The purpose of the copyright system is to promote progress, not to make authors
wealthy. Copyrights are not promoting progress in the computer software field.
. It is wrong to allow someone to "own" a piece of intellectual property. Granting
someone this ownership forces the users of a piece of intellectual property to choose
between respecting ownership rights and helping their friends.When this happens,the correct action is clear. If a friend asks you for a copy of a proprietary program,
you would be wrong to refuse your friend. "Cooperation is more important than
open-source movement is
the philosophical position that source code to software
ought to be freely distributed and that people should be encouraged to examine
and improve each other's code. The open-source software movement promotes a cooperative
model of software development.
alternative way of distributing software. Licenses for open-source
programs have the following key characteristics (there are others) :
1. There are no restrictions preventing others from selling or giving away the software.
2. The source code to the program must be included in the distribution or easily
available by other means (such as downloadable from the Internet).
3. There are no restrictions preventing people from modifying the source code, and
derived works can be distributed according to the same license terms as the original
4. There are no restrictions regarding how people can use the software.
5. These rights apply to everyone receiving redistributions of the software without the
need for additional licensing agreements.
6. The license cannot put restrictions on other software that is part of the same distribution.
For example, a program's open-source license cannot require all of the
other programs on the CD to be open source.
Beneficial Consequences of Open-Source Software
The first benefit of open source is that it gives everyone using a program the opportunity
to improve it.
Rapid evolution of open-source software leads to the second benefit: new versions of
open-source programs appear much more frequently than new versions of commercial
A third benefit of open source is that it eliminates the tension between obeying
copyright law and helping others
The fourth benefit is that open-source programs are the property of the entire
user community, not just a single vendor.
The fifth benefit of open source is that it shifts the focus from manufacturing to
service, which can result in customers getting better support for their software .
Critique of the Open-Source Software Movement
First, if a particular open-source project does not attract a critical mass of developers,
the overall quality of the software can be poor .
Second, without an "owner," there is always the possibility that different groups of
users will independently make enhancements to a software product that are incompatible
with each other.
Third, open-source software as a whole tends to have a relatively weak graphical
user interface, making it harder to use than commercial software products. This
Fourth, open source is a poor mechanism for stimulating innovation. Currently,
corporations invest billions of dollars developing new software products. By
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