Chapter 4:

Intellectual Property

Slides prepared by Cyndi Chie and Sarah Frye. Fourth edition revisions by Sharon Gray.
What We Will Cover
 Principles, Laws, and Cases
 Reponses to Copyright Infringement
 Search Engines and Online Libraries
 Free Software
 Patents for Inventions in Software

Corresponding page number: 179

Principles, Laws, and Cases
What is Intellectual Property?
 The intangible creative work, not its particular
physical form
 Value of intelligence and artistic work comes
from creativity, ideas, research, skills, labor, non-
material efforts and attributes the creator
provides
 Protected by copyright and patent law

Corresponding page number: 180

Principles, Laws, and Cases
 U.S copyright Law (Title 17 of U.S. Code) gives
copyright holder following exclusive rights:
 To make copies
 To produce derivative works, such as translations
into other languages or movies based on books
 To distribute copies
 To perform the work in public (e.g. music, plays)
 To display the work in public (e.g. artwork,
movies, computer games, video on a Web site)

Corresponding page number: 182

Principles, Laws, and Cases
Challenges of New Technology
 Digital technology and the Internet make
copyright infringement easier and cheaper.
 New compression technologies make copying
large files (e.g. graphics, video and audio files)
feasible.
 Search engines make finding material easier.
 Peer-to-peer technology makes transferring and
sharing files easier.

Corresponding page number: 183

Principles, Laws, and Cases
Challenges of New Technology (cont.)
 Broadband connections make transferring files
easier and enable streaming video.
 Miniaturization of cameras and other equipment
enable audience members to record and transmit
events.
 Scanners allow us to change the media of a
copyrighted work, converting printed text, photos,
and artwork to electronic form.
 New tools allow us to modify graphics, video and
audio files to make derivative works.

Corresponding page number: 183

Principles, Laws, and Cases
 What does it mean to solve the problems of
technology’s impact on intellectual property
rights?
 We should recognize that “the problem” looks
different from different perspectives.

Corresponding page number: 182-185

Principles, Laws, and Cases
A bit of history
 1790 first copyright law passed
 1909 Copyright Act of 1909 defined an unauthorized
copy as a form that could be seen and read visually
 1976 and 1980 copyright law revised to include software
and databases that exhibit "authorship" (original
expression of ideas), included the "Fair Use Doctrine"
 1982 high-volume copying became a felony
 1992 making multiple copies for commercial advantage
and private gain became a felony

Corresponding page number: 185-186

Principles, Laws, and Cases
A bit of History (cont.)
 1997 No Electronic Theft Act made it a felony to willfully
infringe copyright by reproducing or distributing one or
more copies of copyrighted work with a total value of
more than $1,000 within a six-month period
 1998 Digital Millennium Copyright Act (DMCA) prohibits
making, distributing or using tools to circumvent
technological copyright protection systems and included
protection from some copyright lawsuits for Web sites
where users post material
 2005 Congress made it a felony to record a movie in a
movie theater

Corresponding page number: 186

Principles, Laws, and Cases
Fair Use Doctrine
 Four factors considered
 Purpose and nature of use – commercial (less likely)
or nonprofit purposes
 Nature of the copyrighted work
 Amount and significance of portion used
 Effect of use on potential market or value of the
copyrighted work (will it reduce sales of work?)
 No single factor alone determines
 Not all factors given equal weight, varies by circumstance

Corresponding page number: 187

Principles, Laws, and Cases
Ethical arguments about copying
 Copying or distributing a song or computer
program does not decrease the use and
enjoyment any other person gets from
his or her copy.
 Copying can decrease the amount of money that
the copyright owner earns.

Corresponding page number: 187-188

Principles, Laws, and Cases
Ethical arguments about copying (cont.)
 Copying enables users to try out products,
benefiting the copyright owner by encouraging
sales.
 Businesses and organizations should make their
own decisions about marketing products, not
consumers who want free samples.
 Fair use guidelines are useful ethical guidelines.
 There are many arguments for and against
unauthorized copying.

Corresponding page number: 188-189

Principles, Laws, and Cases
Significant Cases
 Sony v. Universal City Studios (1984)
 Supreme Court decided that the makers of a device
with legitimate uses should not be penalized because
some people may use it to infringe on copyright
 Supreme Court decided copying movies for later
viewing was fair use
 Arguments against fair use
 People copied the entire work
 Movies are creative, not factual

Corresponding page number: 190-191

Principles, Laws, and Cases
Significant Cases
 Sony v. Universal City Studios (1984) (cont.)
 Arguments for fair use
 The copy was for private, noncommercial use and
generally was not kept after viewing
 The movie studios could not demonstrate that
they suffered any harm
 The studios had received a substantial fee for
broadcasting movies on TV, and the fee depends
on having a large audience who view for free

Corresponding page number: 190-191

Principles, Laws, and Cases
Significant Cases
 Reverse engineering: game machines
 Sega Enterprises Ltd. v. Accolade Inc. (1992)
 Atari Games v. Nintendo (1992)
 Sony Computer Entertainment, Inc. v. Connectix
Corporation (2000)
 Courts ruled that reverse engineering does not violate
copyright if the intention is to make new creative
works (video games), not copy the original work (the
game systems)

Corresponding page number: 191

Principles, Laws, and Cases
Significant Cases
 Sharing music: the Napster case
 Napster's arguments for fair use
 The Sony decision allowed for entertainment use
to be considered fair use
 Did not hurt industry sales because users sampled
the music on Napster and bought the CD if they
liked it

Corresponding page number: 192-193

Principles, Laws, and Cases
Significant Cases
 Sharing music: the Napster case (cont.)
 RIAA's (Recording Industry Association of America)
arguments against fair use
 "Personal" meant very limited use, not trading
with thousands of strangers
 Songs and music are creative works and users
were copying whole songs
 Claimed Napster severely hurt sales
 Court ruled sharing music via copied MP3 files
violated copyright

Corresponding page number: 192-193

Principles, Laws, and Cases
Significant Cases
 Sharing music: the Napster case (cont.)
 Was Napster responsible for the actions of its users?
 Napster's arguments
 It was the same as a search engine, which is
protected under the DMCA
 They did not store any of the MP3 files
 Their technology had substantial legitimate uses

Corresponding page number: 192-193

Principles, Laws, and Cases
Significant Cases
 Sharing music: the Napster case (cont.)
 RIAA's arguments
Companies are required to make an effort to

prevent copyright violations and Napster did not
take sufficient steps
 Napster was not a device or new technology and
the RIAA was not seeking to ban the technology
 Court ruled Napster liable because they had the right
and ability to supervise the system, including
copyright infringing activities

Corresponding page number: 192-193

Principles, Laws, and Cases
Significant Cases
 File sharing: MGM v. Grokster
 Grokster, Gnutella, Morpheus, Kazaa, and others
provided peer-to-peer (P2P) file sharing services
 The companies did not provide a central service or
lists of songs
 P2P file transfer programs have legitimate uses
 Lower Courts ruled that P2P does have legitimate
uses
 Supreme Court ruled that intellectual property
owners could sue the companies for encouraging
copyright infringement

Corresponding page number: 194-195

Principles, Laws, and Cases
Discussion Question
 What do you think the impact would be on
creative industries, such as music, movies and
fiction novels, if copyright laws did not
protect intellectual property?

Corresponding page number: 192-194

Principles, Laws, and Cases
Significant Cases
 “Look and feel”
 Refers to features such as pull-down menus, windows,
icons, and finger movements and specific ways they are
used to select or initiate actions.
 Reflects major creative effort by programmers.

Corresponding page number: 195-196

Responses to Copyright Infringement
Responses from the Content Industries
 Ideas from the software industries
 Expiration dates within the software
 Dongles (a device that must be plugged into a
computer port)
 Copy protection that prevents copying
 Activation or registration codes
 Court orders to shut down Internet bulletin boards
and Web sites

Corresponding page number: 196-198

Responses to Copyright Infringement
International Piracy
 Some countries do not recognize or protect intellectual
property
 Countries that have high piracy rates often do not have a
significant software industry
 Many countries that have a high amount of piracy are
exporting the pirated copies to countries with strict
copyright laws
 Economic sanctions often penalize legitimate businesses,
not those they seek to target

Corresponding page number: 197

Responses to Copyright Infringement
Responses from the Content Industries (cont.)
 Banning, suing and taxing
 Ban or delay technology via lawsuits
CD-recording devices

 DVD players
 Portable MP3 players
 Require that new technology include copyright
protections
 Tax digital media to compensate the industry for
expected losses

Corresponding page number: 198-200

Responses to Copyright Infringement
Digital Rights Management
 Collection of techniques that control uses of
intellectual property in digital formats
 Includes hardware and software schemes using
encryption
 The producer of a file has flexibility to specify
what a user may do with it
 Apple, Microsoft and Sony all use different
schemes of DRM

Corresponding page number: 200-201

Responses to Copyright Infringement
The Digital Millennium Copyright Act (DMCA) 1998
 Anticircumvention
 Prohibit circumventing technological access
controls and copy-prevention systems
 Safe harbor
 Protect Web sites from lawsuits for copyright
infringement by users of site

Corresponding page number: 201

Responses to Copyright Infringement
The DMCA vs. Fair Use, Freedom of Speech, and Innovation
 Lawsuits have been filed to ban new technologies
 U.S. courts have banned technologies such as DeCSS even
though it has legitimate uses, while courts in other
countries have not.
 Protesters published the code as part of creative works (in
haiku, songs, short movies, a computer game and art)
 U.S. courts eventually allowed publishing of DeCSS, but
prohibited manufacturers of DVD players from including it
in their products

Corresponding page number: 202-203

Responses to Copyright Infringement
Safe Harbor
 Industry issues "take down" notices per the
DMCA
 As long as sites like YouTube and MySpace
comply with take down notices they are not in
violation
 Take down notices may violate fair use, some
have been issued against small portions of video
being used for educational purposes

Corresponding page number: 204-206

Responses to Copyright Infringement
Evolving Business Models
 Organizations set up to collect and distribute royalty fees
(e.g. the Copyright Clearance Center), users don't have to
search out individual copyright holders
 Sites such as iTunes and the new Napster provide legal
means for obtaining inexpensive music and generate
revenue for the industry and artists
 Revenue sharing allows content-sharing sites to enable
the posting of content and share their ad revenues with
content owners in compensation

Corresponding page number: 206-207

Responses to Copyright Infringement
Evolving Business Models
 Cloud storage raises copyright issues.
 Is copying legally purchased files to and from the
cloud a fair use?
 Will the companies operating the cloud services have
any responsibility for unauthorized content their
customers store and share?
 Since copyright holders do not see what is stored,
they do not have the option of sending takedown
notices.

Corresponding page number: 207

Responses to Copyright Infringement
Evolving Business Models
 What does not work
 Zediva, a small startup in 2011, bought DVDs and
rented the content (not the physical DVD) to customers
legally. Court ordered Zediva to shut down.
 Pirate Bay
 Megaupload

Corresponding page number: 207

Search Engines and Online Libraries
Search Engines
 Caching and displaying small excerpts is fair use
 Creating and displaying thumbnail images is fair
use
 Google negotiated licensing agreements with
news services to copy and display headlines,
excerpts, and photos.
 Trademarked search terms

Corresponding page number: 208-210

Search Engines and Online Libraries
Books Online
 Project Guttenberg digitizes books in the public
domain
 Microsoft scanned millions of public domain books
in University of California's library
 Google has scanned millions of books, some of
which are in the public domain and some are not;
they display only excerpts from those still
copyrighted
 Some court rulings favor search engines and
information access; some favor content producers

Corresponding page number: 210-211

Search Engines and Online Libraries
Tools for authorized sharing
 Creative Commons: Enables an author to specify
permissions

Corresponding page number: 209

Free Software
What is free software?
 Free software is an idea advocated and supported by a
large, loose-knit group of computer programmers who
allow people to copy, use, and modify their software
 Free means freedom of use, not necessarily lack of cost
 Open source - software distributed or made public in
source code (readable and modifiable)

Corresponding page number: 211-213

Free Software
GNU project
 Began with a UNIX-like operating system, a sophisticated
text editor, and many compilers and utilities
 Now has hundreds of programs freely available and
thousands of software packages available as free
software (with modifiable source code)
 Developed the concept of copyleft

Corresponding page number: 211-213

Free Software
Should all software be free?
 Would there be sufficient incentives to produce the huge
quantity of consumer software available now?
 Would the current funding methods for free software be
sufficient to support all software development?
 Should software be covered under copyright law?
 Concepts such as copyleft and the GNU Public License
provide alternatives to proprietary software within
today's current legal framework

Corresponding page number: 213-214

Patents for Inventions in Software
Patent decisions, confusion, and consequences
 Patents protect inventions by giving the inventor a
monopoly for a specified time period.
 Laws of nature and mathematical formulas cannot be
patented.
 Obvious inventions or methods cannot be patented.

Corresponding page number: 215-216

Patents for Inventions in Software
A few cases
 Paul Allen, co-founder of Microsoft, and e-
commerce and Web-viewing
 Apple, Android, and tap-touch screens
 IBM , Amazon, and electronic catalogues

Corresponding page number: 217

Patents for Inventions in Software
Patent trolls
 Some companies accumulate thousands of
technology patents but do not make any
products.
 They license the patents to others and collect
fees.

Corresponding page number: 217

Patents for Inventions in Software
To patent or not?
 In favor of software patents
 Reward inventors for their creative work
 Encourage inventors to disclose their inventions
so others can build upon them
 Encourage innovation

Corresponding page number: 218-219

Patents for Inventions in Software
To patent or not?
 Against software patents
 Patents can stifle innovation, rather than
encourage it.
 Cost of lawyers to research patents and risk of
being sued discourage small companies from
attempting to develop and market new
innovations.
 It is difficult to determine what is truly original and
distinguish a patentable innovation from one that
is not.
Corresponding page number: 219