26.

Intellectual Property DefinitionPros/ Cons Key Points Examples Solution

26.1 Intellectual Property Rights

Intellectual property rights (IPRs) are the rights granted to people to protect their inventions
and products. (not include creative ideas)

IPRs are important because they discourage others from infringing our rights over the work
created by us

IPRs consist of a group of intangible property rights:

● Trademark
○ A sign which distinguishes a product or service from that provided by other
traders
● Patent
○ An exclusive legal right granted to the inventor or the patent owner for an
invention
● Design
○ The appearance and design of products that can be registered to protect the
products from being copied by others
● Copyright
○ The right given to the owner of an original work. Once a work is created, the
copyright is automatically granted to the owner.
○ The right protects: Original literary/ Dramatic/ Musical/ Artistic works/ Published
editions of works/ Sound recordings/ Films/ Broadcasts/ Computer programs
(available on the Internet/ stored on web servers/ in printed form/ stored on any
other media ⇒ all are protected in the same way)
○ Only the copyright owner can legally reproduce, sell and distribute the copyright
material
■ Transmitting software over a telecommunication line or displaying a work
in public usually involves duplication ⇒ Require the consent of the
copyright owner if you want to distribute or download copyright material
on the Internet

Hong Kong's Copyright Ordinance

Intellectual Property department is responsible for educating public about IPRs
● E.g. Pirated CDs will be confiscated
● E.g. Duplicating software for backup purpose is an exception
● Copyright owners can take a civil lawsuit against any person who infringes their copyright
● An owner may seek an injunction to prevent further infringements and may be able to
claim damages
● E.g. A person who sells, distributes or merely possesses infringing copies is liable to
○ A fine of HK$50,000 in respect of each infringing copy
○ Imprisonment for 4 years
● E.g. Offences relating to the manufacturing of equipment for making infringing copies

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○ A fine of up to HK$500,000
○ Imprisonment for 8 years:

Intellectual Property infringement for non-commercial purposes

● E.g. A person commits an offence if he distributes an infringing copy of the work without
the licence of the copyright owner to such an extent as to affect prejudicially the rights
of the copyright owner
● E.g. uncertain ⇒ if the question did not state whether the uploader obtain the consent
or not
● Solution: Ask the permission from the copyright owner before using any articles or
photos on the Internet

BitTorrent (BT) service

● BT is a file-sharing technology designed for efficient distribution of large files or large
amounts of data through the Internet
● BT is a communication protocol for peer-to-peer file sharing (P2P)
● When several computers are downloading the same file at the same time, each
computer is also passing (or uploading) the portions of the file to other computers
● As a result, the speed of downloading is faster from just one single source ⇒
● BitTorrent terms:
○ Seed: A peer or downloader becomes a seed when it completely downloads all
the data and continues/starts uploading data for other peers to download from
● BT technology is neutral in nature. E.g. 1 : if the user uses BT to download or
upload infringing copies of a work, his acts will be illegal.
E.g. 2: if he uses BT to share his own works with others (or share works with the consent
of the copyright owners), then it will be a perfectly lawful use of BT.
● BitTorrent, how it works?

26.2 Copyright of Software

● Proprietary software / Closed source software

○ Example of proprietary software or closed source software: Microsoft Office
○ We do not have the source code of the software we buy ⇒ Reason: The software
developers hope to prevent other developers from developing similar software
based on the source code of their software
● Open source software
○ Some software designers like to share source codes with other designers. They
allow users to use, modify and redistribute the software
○ Example: Linux (Operating System) (Feature: CLI - Command Line interface)
○ Open source software can usually be downloaded from the Internet

● Software licence
○ When you buy a software, you only pay for a licence to use the software, you do

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not really get all the rights over the software

○ A software licence is a legal contract defining the ways in which a user may use a
computer program
○ Two common licence types are:
■ Single-user licence
● Limits the use of software to only one machine at a time
● It is illegal for two or more users to use the software on a network
simultaneously
■ Multi-user licence / site licence
● Permits the use of the software by multiple users at a specific
location, such as within an office or a school
○ Licence schemes: (Depending on the restriction and the method of distribution of
software)
■ Commercial software
● Sold for profit
● Can be purchased from its official web sites or retail stores
● Usually more expensive than other types of software
● Usually provides better services in maintenance and technical
support
■ Shareware
● Copyright software which is free of charge during the trial period
● Users can evaluate whether the software meets their needs before
purchasing it
● After the trial period, users have to pay for the shareware for any
further use
● Illegal if you use the shareware after the trial period without
paying it (e.g. modifying it to extend the trial period)
● A scaled-down version of the original software
○ Users cannot enjoy the fully functional product during the
trial period unless they pay for it ⇒ part of the functions
will be disabled
○ May include advertisements
■ Freeware
● Copyright software provided at no cost for an unlimited time
● Some freeware are used under restricted conditions such as for
non-commercial purposes only
● Some freeware cannot be distributed freely to other users
● Authors of freeware often want to ‘contribute to the community’,
but also want credit instead of money for their software
● Developers usually provide only very limited support or no support
at all ⇒ may contain many bugs unsolved
● Some freeware is developed by unknown developers ⇒ The source
is not very reliable and freeware may contain viruses
■ Open source software / Public domain software
● Software has no copyright restriction
● Anyone can download and redistribute the software to others at

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no cost
● Sometimes, the source code of software is provided for users to
customise the software for individual needs.
● More reliable as it has been widely debugged by many
programmers publicly

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Type Method of distribution Cost Trial period Licence Example

Commercial - Through resellers - Relatively more ​Some have a trial period - Different types of - Microsoft
software - Downloaded from software expensive as more which is normally not molicence are offered to Office
publisher’s web site or authorized user support is than 2 months suit different users’ - Adobe
online stores provided - Some only provide a de needs (single user / Photoshop
version which has limited multi-user)
functions

Shareware - Mainly distributed through the - Relatively cheaper - Usually have a trial - Similar to commercial - WinZip
Internet as shareware is period software
- Commonly accompanied with usually developed by - Some allow you to
books or magazines smaller developers or use indefinitely, but
- Users are allowed to transfer the independent writers random
software to others - Required to pay advertisements on the
after the trial period screen are displayed

Freeware - Mainly distributed through the - Free to use for - No trial period - Copyright software - Adobe
Internet personal purpose carries a restricted reader
- May not be free to licence - Skype
be copied, studied,
- Free to use under
modified or
certain conditions
redistributed

Open Source - Mainly distributed through the - Free of charge - No trial period - The source code is - Audacity
Software Internet usually available for - Mozilla
- Usually distributed with source studying, changing and firefox
code improving (e.g. -MySQL
additonal functions) the -Calligra

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software Suite

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26.3 Piracy

Plagiarizing copyright material

= you use other’s intellectual property without permission

● e.g. If you plagiarize copyright software, you are guilty of software piracy

Software piracy
= The unauthorized and illegal duplication of copyright software

pirated software
= Illegal copies of software
● e.g. It is illegal to install pirated software in your computer systems
-may contain virus

Copyright infringement of software

● e.g. Violate the terms of a software licence
● e.g. Give or sell copies of commercial software to others, without removing the
programs from your computer first.
● e.g. Continue to use shareware after the trial period, without paying for it.
● e.g. Make copies of software under a site licence for home use
● e.g. If a person is sued for using pirated software, he may have to pay a fine to the
software developers or even be imprisoned

Social, legal and economic implications (Think from different aspects)

● The trend of using pirated software is rising
● With CD duplication machines, people can mass-produce pirated CDs from the
original one in a short time
● Increasing numbers of computer users seem to believe that sharing copies of
copyright products illegally is permissible because many people are doing it.
● It is difficult for the police to arrest users at home for using pirated software.
● It is very easy for computer users to erase the proof of their guilt to avoid being
arrested.
● Pirated software will reduce the profit of software developers and the software
industry will gradually diminish
● Fewer companies will be willing to invest and develop new software
● End-users will not be able to enjoy more functional and innovative computer
software
● Industries relying on new software will become less competitive than those in
other countries.

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Internet piracy
= Downloading or distribution of unauthorized copies of intellectual property such as
movies, television shows, music, games and software programs via the Internet
● Illegal downloads occur in many forms including peer-to-peer file sharing services,
pirate servers and file sharing websites.

File sharing websites

● Provide a platform for Internet users to share computer software, MP3 files,
images, video files or other multimedia information
● File sharing on the Internet can be legal as long as the shared materials are licence
free or have been authorised by the owners.
● E.g. YouTube, SoundCloud

Peer-to-peer file sharing services

● A network on the Internet that enables computers to connect directly to each
other in order to distribute and copy files
● P2P file sharing programs use these networks to search for and transfer files
among users on the network.
● When data is distributed, each recipient supplies pieces of data to the new
recipients
● Most people who are on the network are participating in the uploading and
downloading of files at the same time
● E.g. BitTorrent (BT)
● When you download a file containing licensed material from a P2P file sharing
service, you are a distributor of pirated goods.
○ ⇒ Consequences: 1) Exposing confidential information to others, 2)
Infection by computer viruses and Trojan horses

Ways to reduce intellectual property theft

1. Software licence agreement and registration
○ Software licence agreement:
● a user is asked to read and confirm the acceptance of the licence
agreement
● to educate users of the rights they have and the restrictions they
have to follow
○ Registration
■ A user is asked to register the software through mailing or the
software developer’s web sites
■ the information of a user is recorded in the software developer’s
server (same for all other solutions too)
2. CD key / serial number / product key
○ A sequence of characters required to activate software
○ helps prevent the software from being registered to different users
○ Offline: simply by entering the key

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○ Online: Better because it can prevent multiple people using the same key.
○ Illegal to share a CD key with others
○ Some illegal websites post lists of CD keys of various software ⇒ These
websites often come with viruses and pornographic advertisements
○ Cons: There are CD key generators ⇒ pirated software can still be activated
3. Machine dependence
○ The program captures the machine ID of the computer system during the
installation process ⇒ This machine ID will be sent to the software
developer’s server
○ If you attempt to install the program on another machine, the installation
program will check the machine ID and terminate the installation.
○ Some developers may ask users to send them a machine ID before the
installation. After the machine ID is verified, they will send users the CD key
required to install the software
4. Hardware key / dongle
○ A small hardware device that connects to a computer to authenticate a
piece of software
○ When the hardware key is not present, the software runs in a restricted
mode or refuses to run.
○ Prevent the usage of pirated software (as pirated software does not have
the dongle)
○ Cons: higher production cost
5. Digital watermarking
○ A technique which allows authors to add hidden copyright notices to digital
videos, audios, or images and documents
○ The notice can be a group of bits describing information (e.g. name, place)
of the author
○ Can be in a form of steganography
■ Steganography ⇒ data is hidden in the message
6. Digital signature
○ A digital code attached to a message that is used to identify the sender and
verify that the received message has not been altered during transmission
○ How to generate the signature?
1. Senders use their private keys to encrypt their digital
signature
2. Recipient of the message uses the sender's public key to
decrypt the digital signature.
Software cracking: use for removing the activation procedure from the software and
software protection/ security measures

Copyright infringement related to everyday life

● E.g. 1 : Copying HTML codes from a web page
○ Even though HTML codes themselves have no copyright, you should either
learn how to create them or use software to generate them for you.
● E.g. 2: Downloading graphic files from the Internet
○ Without obtaining permission from the image’s owner, you should not put

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other people’s work on your web site.

○ Learn to create your own graphics, or use graphics that are royalty-free.
● E.g. 3: Putting quotes from articles, books, movies, and other sources on your web
pages
○ If you use one paragraph or less from sources such as articles, books and
movies, place it in quotes and clearly state the source
○ Using more than a paragraph without acknowledgements: infringement of
copyright
○ If you directly use other’s work without referencing the source, you are
guilty of plagiarism
○ Solution: Always ask for permission or acknowledgement before using
materials that are likely to have copyright

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