Software copyright, the relatively recent extension of copyright law to machine-readable software. It is used by proprietary software companies to prevent the unauthorized copying of their software. It is also used by proponents of open source software to encourage the disclosure of improvements to source code. (See copyleft)
When installing a program a copy is often made to the hard drive of a computer. When launching a program, a copy is made into memory. When visiting a web page a copy is sent over a network. All these activities are allowed in the United States under of the US Copyright Act.
Historically, computer programs were not effectively protected by copyrights because transfixing a computer program into the memory of an electronic information system is not permanent without a storage device, and because programs were regarded as a simple list of instructions for the computer to process and hence not copyrightable. Computer companies, therefore, used software license agreements (also known as "end-user license agreements" or EULAs) to prevent unauthorized copying.
When the federal courts interpreted the Copyright Act to give computer programs the same copyright status as literary works, companies continued to license their products to avoid transfer of their copyright to the end user via the doctrine of first sale (see Step-Saver Data Systems, Inc. v. Wyse Technology). They also wanted to retain search and seizure powers to uncover unauthorized copying.
Most software consumers are unaware that the grants made in most EULAs are already granted by section 117 of the US copyright act while at the same time take away the rights granted to the consumer by the "Limitations on exclusive rights of the copyright holder" codified in sections 107-122 of the US Copyright Act. The EULA has become so predominate that most take the EULA contract for granted, and typically do not read them, and clicking it as a necessary evil to use any commercially available software.
Since most software is licensed and not sold, the 117 exemptions do not apply. MAI Systems Corp. v. Peak Computer, Inc. and Triad Systems Corp. v. Southeastern Express Co. are two excellent cases demonstrating how licenses can be used. In both cases the defendant was repairing or maintaining machines for another company. Section 117 of the Copyright Act states that "it is not an infringement for the owner of a copy of a computer program to make or authorize the making of another copy or adaptation of that computer program provided...that such a new copy or adaptation is created as an essential step in the utilization of the computer program." Although the service and maintenance that was done in both MAI and Triad was an "essential step in the utilization of the computer program," and thus immune to an allegation of infringement, the defendants in these two cases were found to have infringed the software vendors copyright because the software that their customers were using had been "licensed" to the customers, not "sold." In both of these cases, the court noted that the duplication rights provided under Section 117 only applied to an "owner" of a copy. The court concluded that a "licensee" was not an "owner."
Section 117 has since been modified by the Digital Millennium Copyright Act to allow repairs of computers.
Other case law supports the position that there is "no difference between a license and sale of protected materials.." and that "to call a sale a license is mere play on words" (Bauer & Cie. v. O'Donnell and Bobbs-Merrill Co v. Straus) thus bringing the enforceability of the EULA and the practice of licensing copyrighted materials for end-use into question.
In Apple v. Microsoft, the courts established that a look and feel copyright claim must demonstrate that specific elements of a user interface infringe on another work. A program's particular combination of user interface elements is not copyrightable.
Fair use is a defense to an allegation of copyright infringement under section 107 of the Copyright Act. Courts use a four factor test to determine the validity of the fair use defense. The court will weigh each factor, and no factor is dispositive. The factors are: (1) the purpose and character of the use, (e.g., is the use commercial? Educational?); (2) the nature of the copyrighted work; (3) the amount and substantiality of the copied material in relation to the copyrighted work as a whole; and (4) the effect on the market.
The fair use defense is applicable to claims of software copyright infringement. In Sega v. Accolade, 203 F.3d 596 (9th Cir. 1993), the defendant, Accolade, successfully employed the fair use defense. Accolade had reverse engineered several of Sega’s video games so that Accolade could create its own games that would be compatible with Sega’s Genesis console. In doing so, it was undisputed that Accolade actually did copy Sega’s copyright protected object code. To determine whether Accolade engaged in fair use, the court analyzed the four factors mentioned above.
On the first factor, the court concluded that the purpose and character of Accolade’s use was commercial, but only minimally so. The court stated that Accolade’s use was “intermediate,” and only intended to discover the functional and thus unprotected elements of Sega’s games. Accolade took this functional information and then produced its own games, and according to the court, added to the promotion of creative expression, which is a core principle of the Copyright Act. Therefore, the court found that the first factor weighed in Accolade’s favor.
The court’s discussion of the second factor highlighted the unique challenges of applying copyright law to software. Ideas embedded in, or functional elements of software are not protected by copyright, but expression of those ideas – the code – is protectable; but how can someone access the functional idea without copying the protected code? Essentially, the court concluded that the only way to get to the unprotected functional elements in the software was for Accolade to copy the entire protected expression of those functional elements, and therefore, this factor, the nature of the copyrighted work, also weighed in Accolade’s favor.
Regarding the third factor, the amount copied, the court reiterated that Accolade had copied entire Sega programs. However, Accolade extracted the functional aspects and then wrote their own expressive code, thus ultimately using only minimal amounts of protected material in the final Accolade game. The court afforded this factor little weight.
The court determined that the fourth factor, effect on the market, also weighed in Accolade’s favor. A court may not find fair use if an infringing work would take the place of the original work in the market. But the court notes that the Copyright Act was not intended to create monopolies, it was intended to foster creativity. Thus, the court finds that Accolade’s largely original work is merely an acceptable market competitor of Sega’s work. While natural market competition might have a negative financial effect on Sega, the court found that the benefit to consumers compelled a finding that the fourth factor weighed in Accolade’s favor. Therefore, the court found that Accolade had engaged in fair use.
The Fair Use defense is applicable to other forms of electronic media on the internet. For example, a search engine may, without permission, copy copyrighted images into its database and display thumbnails of those images in response to user searches. The copy is considered fair use and intended to direct the searcher to the full-size image. Kelly v. Arriba Soft Corp., 336 F.3d 811 (9th Cir. 2003).
Software is copyrightable in India, but enforcement is difficult.
A copyleft is a type of EULA that requires an end user to make the source code of software derived from an original copyrighted piece of source code available under similar terms.