Ownership of Software and Computer-stored Data
| Publication year | 1984 |
| Pages | 577 |
1984, April, Pg. 577. Ownership of Software and Computer-Stored Data
The last decade has witnessed substantial growth in what has been termed the "high tech" industries. Indeed, in the areas of software and data processing in particular, that growth has been undeniably spectacular.(fn1) Despite the recent recession nationwide, the $1.2 billion on-line database industry is growing at the rate of 30 percent annually,(fn2) and the personal computer market has blossomed into a $6.1 billion a year industry.(fn3) No doubt, this is a true tribute to "Yankee ingenuity."
An unfortunate blight on the accelerating development of and growth in these lucrative markets, however, is the greatly increasing incidence of software theft, either outright or through copying. It is estimated that between 20 and 30 percent of industry revenue is siphoned off annually by the piracy and resale of software by other than the legitimate owners.(fn4) This boom in software piracy has been facilitated by the rapid proliferation of programming available, the number of authors creating it and the difficulty often involved in detecting whether a program has in fact been copied.
By its prevalence, such piracy has thrown into bold relief a number of economic effects which can only adversely affect the marketplace in the long run. One preeminent effect is the relatively brief economic life expectancy of any particular piece of useful software because pirated copies may quickly become so pervasive that the incentive for prospective customers to pay retail prices for such programming greatly decreases.(fn5) As a result, vendors of original software are motivated initially to price their products higher than they otherwise might to factor the likelihood of diminished revenues due to piracy into their return on investment equations. However, even this tactic does not fully compensate the originating vendor due to the ever-present possibility that programs pirated incompletely may be of such poor quality that their use may serve to generate a bad reputation for the original work.(fn6) This, in turn, can only work to harm the market potential for the originating vendor's present and future software products.
The legal profession and the courts clearly have an obligation in what has become a pitched struggle with the pirates to provide maximum legal protection for the creators and proprietors of databases and software products. Given the extreme volatility of the marketplace in these industries, the necessity for ensuring swift and decisive action to stanch the unauthorized copying and dissemination of software and computer-stored data cannot be over-emphasized. Unfortunately, many lawyers, and indeed many courts, have a basic lack of understanding not only of the technology, but also of the law in these areas.
At present, the temporary restraining order and preliminary injunction offer the most effective legal weapons to limit the losses that a vendor may incur once an instance of piracy has been discovered. Except for these legal means of temporary relief, the delays inherent in the process of "going to trial" more often than not will be longer than the market life of the product in question. The result is that "legal relief" will be rendered both costly and impractical. Realizing this, hardware and software designers are constantly attempting to devise a viable technique to protect against piracy before it occurs, and thereby avoid having to resort to legal action to enforce their rights. Nonetheless, temporary relief measures, when used in conjunction with federal copyright and state trade secret laws, currently present the best protection for software products and databases available.
This article explores the scope of protection that has been afforded software products and computer-stored data to date and prescriptively details how and why temporary restraining orders and preliminary injunctions should be used to enforce respect for the rights of proprietors of these types of property. Initially presented is a brief discussion of legally significant technical distinctions between the various forms of modern programming, upon which some modern judicial decisions granting or denying relief to plaintiff's have apparently turned. This is followed by a review of the nature and extent of protection given by copyright law, both historically
and more recently. A comparison is then made between federal copyright and state trade secret means of protecting software and computer databases. The advantages of temporary restraining orders and preliminary injunctions, and the standards for their use, are described. Finally, several tactical suggestions are made for the plaintiff and defendant involved in a temporary injunction contest.
In discussing the legal protection of computer software and databases, a basic acquaintance with various technical terms is essential to an understanding of the issues with which recent court decisions in this area have dealt. This is even more important when it is realized that several decisions have turned on distinctions between the different types of computer programs. While these distinctions are purely technical in nature, the developing case law has nonetheless imbued them with legal significance, of which attorneys should be aware.
Software is a generic term encompassing all types of programs executed by a computer. The purpose of these programs may be to solve a specific problem, schedule and initiate the execution of other programs or constantly check the computer's circuitry for malfunctions, to name only a few. The term "computer software," as used in the Copyright Act of 1976, includes not only programs but program descriptions and other supporting documentation. All such materials, as well as the programs themselves, constitute a designated type of "literary work" and are thus copyrightable.(fn7)
A computer program is a set of serial instructions that directs the computer to perform certain tasks.(fn8) The user typically writes programs in "high level" programming languages which use words and symbols to command the computer to perform various simple and complex functions. For example, these range from basic addition and subtraction to complex differentiation and vector integration.(fn9) Since a computer cannot actually understand words, phrases and symbols, other special machine programs known as "compilers" and "translators" act in turn to translate the user-written instructions into a form of "machine instruction" that can be executed in the computer's circuitry.
The computer circuitry is basically composed of a large number of switches, each one of which is only capable of being on or off at any given point in time. Every program is eventually reduced to a lowest level "object code." This is expressed in binary numbers, a series of ones and zeroes that instructs the various switches to open or close, respectively, in pattern, thus executing the program.(fn10) Hence, computer programs may be written in high level or low level languages, such as assembly language and object code.
"Source code" generally refers to any mnemonic system of representing large numbers of machine instructions, such as BASIC, COBOL and FORTRAN, which are high level languages using commands resembling English words and symbols. Programs written in source code are entered into a computer via a variety of such input devices as a terminal keyboard, hard disk, floppy disk, magnetic tape or punched cards. The programs are then translated by a compiler into an intermediate assembly language. (Although much less sophisticated than the high level languages noted above, assembly language is also considered a form of source code.) Finally, the original program is translated from assembly language into machine readable language, composed solely of binary ones and zeroes. Instructions existing in machine language are referred to as written in "object code." While it is possible for programmers to write assembly language or even object code directly, the usual and more efficient practice is to write programming in high level source code due to the greater ease with which it may be read, checked and corrected.(fn11)
Application programs are normally written in high level programming languages and are designed to perform specific user-oriented tasks, such as to maintain and update records, perform a series of calculations or create word processing capability. Operating programs, in contrast, perform functions internal to the computer such as scheduling the execution sequence of application programs, initiating their actual execution and directing the output to the proper output terminal device.(fn12)
A ROM is a silicon chip on which a computer program in the form of object code is photochemically imprinted as a pattern of binary on/off switches. When activated in a given sequence, these switches serve to give machine instructions to the computer, to which the chip itself is permanently wired, and this results in the execution of the program. Often the activation sequence of the switches can be varied, allowing the computer to function in several different modes. Given that the computer program is imprinted photochemically, it is permanently stored on the chip and is not lost even when the power is turned off. Since the information stored in the ROM...
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