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CS 305Social, Ethical, and Legal

Implications of Computing

Chapter 4Intellectual Property

Herbert G. Mayer, PSU CSHerbert G. Mayer, PSU CSstatus 7/24/2011status 7/24/2011

Slides derived from prof. Wu-Chang Feng Slides derived from prof. Wu-Chang Feng

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Syllabus What is IP? Paradox Dealing with IP Trade Secret Trade MarkTM

Patents Copyright © or ( c ) Fair Use Four Factors of Fair © Use Cases Digital Millennium Copyright Act (DMCA) Bit Torrent Pirate Bay SW Patents

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What is IP?1.) Intangible property that is the result of creativity 1.) Intangible property that is the result of creativity

(such as patents, trademarks, or copyrights) (such as patents, trademarks, or copyrights)

wordnetweb.princeton.edu/perl/webwnwordnetweb.princeton.edu/perl/webwn

2.) Intellectual property refers to creations of the mind: 2.) Intellectual property refers to creations of the mind: inventions, literary and artistic works and symbols, inventions, literary and artistic works and symbols, names, images, and designs used in commercenames, images, and designs used in commerce

3.) Unique product of the human intellect that has 3.) Unique product of the human intellect that has commercial valuecommercial value Books, songs, movies, paintings, inventions, formulas,

shapes, computer programs

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Derived Physical Property RightsJohn Locke - 2John Locke - 2ndnd Treatise of Government (1632-1704) Treatise of Government (1632-1704)

People have the right to property of their own person No one has the right to own another person People have the right to their own labor, and that labor should be to their own

benefit –nobody can hold slaves & labor for others is to be paid Right to anything removed from nature through their own labor –nobody

can snatch the gold you mined, except the state Note: from nature! Not from the neighbor’s back yard or employer’s office

Physical propertyPhysical property A person labors to cut down a tree in nature and chops it into pieces

Person also owns the chopped wood, if the person had right to tree possession Does not mean: OK to steal a tree; i.e. cut down a city or your neighbor’s tree

That person has exclusive rights to the chopped wood Unless she didn’t own the tree

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Paradox Dealing with IPSimultaneous inventionsSimultaneous inventions

Intellectual property can be invented simultaneously! Can only give exclusive rights (e.g. patent) to one of them E.g. first production of aluminum in France and the US 1886: Two unknown young scientists, Paul Louis Toussaint Heroult (France)

and Charles Martin Hall (USA), working separately and unaware of each other's work, simultaneously invented a new electrolytic process, the Hall-Heroult process, which is the basis for all aluminium production today. They discovered that if they dissolved aluminium oxide (alumina) in a bath of molten cryolite and passed a powerful electric current through it, then molten aluminium would be deposited at the bottom of the bath

Differing notions of “stealing”Differing notions of “stealing” Intellectual property can be “stolen” without taking property away Some ideas can be copied against wish of the person having the initial ideas Only true way to prevent such copying is to keep the original idea

confidential

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US Constitution“… promote the Progress of Science and useful Arts by securing

for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries”

Allows persons to control distribution and use of their IPEncourages hard work and creativity by allowing inventor to reap

benefits from workRights are limited to a fixed period of time before entering public

domain

» Inventor must be rewarded so that innovation is encouraged

» Society must eventually benefit from the innovation

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Four Ways of Protecting IP

Trade SecretTrade Secret

TrademarkTrademark

PatentPatent

CopyrightCopyright

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Trade SecretWell-kept secretWell-kept secret

Formulae, processes, proprietary designs, customer lists, strategic plans

Must take active steps to keep confidential Does not expire as long as kept confidential

Example: Coca Cola formula Example: Coca Cola formula Locked in a bank vault in Atlanta Merchandise 7X a secret for 100 years

Problems with trade secret:Problems with trade secret: Someone needs to work with the “secret” Reverse engineering is possible Employees leaving the company leave with the secret Can’t use it for things like movies (or even software) where public

display is necessary in order to obtain any benefit

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TrademarkTM

Word, symbol, picture, sound, or color used by a business to identify Word, symbol, picture, sound, or color used by a business to identify goodsgoods Government grants the right to use it and the right to prevent other

companies from using it Allows a company to establish a “brand name” A Brand Name constitutes a real, tangible value, e.g. IBM™

Examples:Examples: Band-aid™, Xerox™, Intel™

Can become “commonized” resulting in loss of trademark rightCan become “commonized” resulting in loss of trademark right Aspirin, yo-yo, escalator, thermos Must always be used as an adjective to describe the brand rather than a

noun or a verb Adobe cracking down on the use of “Photoshopping” “I am stuck on Band-Aid brand” Kleenex brand facial tissue As adjective, cannot form plural, like a noun: e.g. Oreo Cookies, NOT Oreos!

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Xerox… er, Copy anyone?

Google it?

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PatentPublic document providing a detailed description of a piece of Public document providing a detailed description of a piece of

intellectual propertyintellectual property U.S. government provides inventor with exclusive right to IP for

limited time Prevents making, using or selling the invention for patent life 20

years

Companies sue other companies for infringementCompanies sue other companies for infringement Instant photography Polaroid vs. Kodak (1970s) Careful about Patent Trolls, and Patent Pirates

May be beneficial for patent-owner to license its IPMay be beneficial for patent-owner to license its IP Sun’s SPARC architecture transferred to SPARC International

which then licensed it to many HW manufacturers

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Copyright © or ( c )U.S. government provides authors with certain rights to U.S. government provides authors with certain rights to

original works they have writtenoriginal works they have written Major revisions in 1976 and 1998

5 principal rights5 principal rights right to reproduce work right to distribute copies of work to public right to display copies of the work in public right to perform work in public right to produce new works derived from copyrighted work

Owner can authorize others to exercise these rightsOwner can authorize others to exercise these rights e.g. radio stations to play songs without originator losing

ownership rights

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Copyright Duration

Sonny Bono Copyright Term Extension Act (1998)Sonny Bono Copyright Term Extension Act (1998) Works created before 1/1/1978 protected for 95 years After 1/1/1978, protected for authors’ lifetimes plus 70 years

after their deaths 11th extension in 40 years Timed to save Mickey Mouse from becoming public domain

Copyright creepCopyright creep Protection applied to musical scores and their embodiment

(piano rolls, records) Protection continually being extended

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Fair Use

Fair use – legal to reproduce copyrighted work without Fair use – legal to reproduce copyrighted work without permission of holder under certain conditionspermission of holder under certain conditions

US Copyright Act (CA)US Copyright Act (CA) does not specify what types of does not specify what types of copying constitute “fair use”copying constitute “fair use” courts rely on precedent, based on section 107 of CA

ExamplesExamples Citing short excerpts for teaching, scholarship, research,

criticism, commentary, and news reporting

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Four Factors of Fair © UseSection 107 of the Copyright ActSection 107 of the Copyright Act

1. What is the purpose and character of the use? Educational versus commercial Educational uses are more permissible

2. What is the nature of the work being copied? Fiction versus non-fiction Published versus non-published Non-fiction is more likely permissible to be copied

3. How much of the copyrighted work is being used? Amount copied relative to total size of the work Easiest to determine!

4. How will this use affect the market for the copyrighted work? This point is THE heart of fair use, but hardest to measure

definitively

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Copyright CasesKinkos (1991)Kinkos (1991)

“Professor publishing” practice Photocopying copyrighted materials for students Not fair-use even though purpose is educational

Full copy that impacts market of original significantly

MIT student making commercial software available freeMIT student making commercial software available free Charges dropped because the student did not profit,

rendering current law inapplicable Note inconsistency: “Professor publishing” did not benefit

professor No Electronic Theft Act (1997)

Closed this loopholeCriminal offense to reproduce or distribute more the $1000 worth

of copyrighted material in a 6 month period.

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Copyright Cases

Sony vs. Universal StudiosSony vs. Universal Studios Time shifting via VCR (betamax)

1. Purpose

2. Nature

3. Amount

4. Market impact

Supreme court decision 1984 decided in favor of Sony, since copying and “time-shifting” actually increased the audience of viewed films, thus increasing the studio’s profit through ads!

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New Fair Use Restrictions

Exact copies are a bad thing… particularly digital!Exact copies are a bad thing… particularly digital! Technology radically increased the impact of copying A single copy *could* be easily distributed and affect the

commercial market of work

Audio Home Recording act of 1992Audio Home Recording act of 1992 Copies for personal and non-commercial use OK Royalty paid on the sale of recording devices and divided

among players Limited copying through smart card management systems

(SCMS) --prevents someone from copying a copy of a piece of work

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RIAA vs. Diamond Multimedia Systems (1998)

Mid-90s saw advent of Mid-90s saw advent of mp3mp3 encoders and decoders encoders and decoders Rio mp3 player developed RIAA asked for injunction, preventing Rio sales, since it did

not include SCMS Rio was not a recording device, so it did not fall under Audio

Home Recording act of 1992 Software encoder on computer! Judgment also approved “space-shifting”

Copying in order to make portableFair use and consistent with copyright law

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Kelly vs. Arriba Soft Corporation

KellyKelly Photographer with a web site full of copyrighted works

Arriba SoftArriba Soft Image search engine that created thumbnails of Kelly’s

photos upon crawling the site

Fair use?Fair use?1. Purpose

2. Nature

3. Amount

4. Market impact

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Google Books (2004)

Google scanning and digitizing entire librariesGoogle scanning and digitizing entire libraries Michigan, Harvard (initially), New York Public Library, etc. If book is in public domain, then entire book can be

accessed via PDF If book is still copyrighted, then only excerpts are made

available

Fair use?Fair use?1. Purpose

2. Nature

3. Amount

4. Market impact

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Google Books (2004)

Sued in 2005 by Authors GuildSued in 2005 by Authors Guild Objected to Google scanning copyrighted books Massive infringement Google eventually settled (e.g. paid off) the suit

Some believe this was the intended strategy à priori $125 million settlement Registry to allow authors to “opt-out” of agreement

Still controversial Did Authors Guild own all books, present and future?

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Other Cases

Professor posting a journal article on a password-Professor posting a journal article on a password-protected web site for his class to accessprotected web site for his class to access

1. Purpose

2. Nature

3. Amount

4. Market impact

Professor takes photographs of paintings shown in a Professor takes photographs of paintings shown in a book. Uses it for lecturesbook. Uses it for lectures

1. Purpose

2. Nature

3. Amount

4. Market impact

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Other Cases

YouTubeYouTube HD-captures of copyrighted material Low fidelity copies Derivative works

Guitar Hero performances

What is fair use?

Deeplinking of contentDeeplinking of content Bypasses advertising of content provider

Google News excerpting and fast flip?Google News excerpting and fast flip? Especially for paid sites such as WSJ and NYT?

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Digital Millennium Copyright Act (DMCA) of 1998Illegal for consumers to circumvent encryption schemes placed on Illegal for consumers to circumvent encryption schemes placed on

digital mediadigital media Effectively makes copies of any digitally recorded work for any

purpose illegal Covers music broadcast over Internet

Illegal to sell or discuss software that circumvents copy controlsIllegal to sell or discuss software that circumvents copy controls

Brought US in compliance with international copyright statutesBrought US in compliance with international copyright statutes

Strategy was for everyone to adopt Secure Digital Music InitiativeStrategy was for everyone to adopt Secure Digital Music Initiative Copy-protected CDs and secure digital downloads Failed!

mp3 vendors began to exert pressure against it Scheme was cracked by researchers in Princeton

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DMCA CasesDeCSSDeCSS

DVDs encrypted with Content Scrambling System (CSS) DVD players/computers built with hardware to unscramble DVDs DeCSS allowed DVDs to be played on a Linux box Written by 16 year old Norwegian

MP studios sued MP studios sued 2600 Magazine2600 Magazine for publishing DeCSS for publishing DeCSS Successfully sued under DMCA Appeals court ruled that computer code is “speech” but limited

because it’s functional rather than expressive Right to free speech outweighed by potential harm of increasing

illegal copying What ethical framework?

DeCSS is illegal in the U.S. todayDeCSS is illegal in the U.S. today Author was acquitted in Norway eventually DeCSS has both legal and illegal purposes

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DMCA Cases

HD-DVDs encrypted with AACSHD-DVDs encrypted with AACS Rather than post code, the encryption key was posted in

January 2007 on digg.com09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0AACS threatened to sue…digg took post downVirally spread anyway

Key revoked eventually which forced HD-DVD and Blu-Ray player owners to update to work with new key

Lesson: Technological fixes have a history of failureLesson: Technological fixes have a history of failure Eventually on-line music stores dropped DRM (even iTunes) Amazon mp3

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Peer-to-Peer NetworksNetworks for exchanging files and resources between computers Networks for exchanging files and resources between computers

Napster (1999)Napster (1999) Facilitated the exchange of music files (mp3s)

Hosted a central directory of peers and the files they had Peers connected directly to each other to download

Sued in 1999 by RIAA Injunction granted in February 2001 Napster forced in June 2001 to block 100 percent of all copyrighted

material transfers or disable all transfers Went offline in July 2001 and shut down in Sept. 2002

Re-emerged as a subscription music service later

Ethical analysisEthical analysis Kant Act utilitarianism Rule utilitarianism Social contract theory

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Second Generation P2P

FastTrack (Kazaa, Grokster)FastTrack (Kazaa, Grokster) Hosting central directory killed Napster Decentralize directory across peers Only distribute software to create P2P file sharing network

RIAA responseRIAA response Use fake accounts to poison downloads and track activity Targeted ISPs and universities to get user information

Sued Verizon to get real user information (success in June 2003) Started suing users who downloaded > 1000 files But, appeals court later ruled in Dec. 2003 that RIAA has no right to user

information from Verizon Sued individual universities to get student information Universities either started to ban P2P (PSU) or subscribe to legitimate

services (Napster)

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MGM vs. GroksterInjunction against distribution of Grokster softwareInjunction against distribution of Grokster software

Initial ruling compared P2P software to legal home recording devices and denied injunction

Overturned by US Supreme Court unanimously in June 2005Distributor who promotes a product’s use to infringe copyright

is liable for acts of infringement by parties using the software Software company profits via advertisingGains when there are more usersMore users come when high-value copyrighted material availableUnlawful objective is unmistakableFair use rules on the side of the copyright holder

Grokster shut down in November 2005

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BitTorrentTechnology to transfer large files quicklyTechnology to transfer large files quickly

Peer to Peer file sharing protocol Developed 2001 to distribute large amounts of data quickly By Bram Cohen, born 1975 Who owns BitTorrent company in San Francisco, CA Used for ~½ of all internet traffic http://www.bittorrent.com/btusers/download Extends P2P to allow multiple peers to serve one file Still requires a way for a user to “search” for content Used for many legitimate purposes (i.e. free software

distribution) Achilles heel

Must be able to find torrents

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Pirate BaySearch index for torrentsSearch index for torrents

#1 Torrent tracker in the world Bowing to international pressure, Swedish police attempted

to shut it down in 2006 All servers confiscated After 3 days, site brought back up

Site hosted in Netherlands with backups in Belgium and Russia

“Just some stats… here are some reasons why TPB is down sometimes – and how long it usually takes to fix:

Tiamo [Neij] gets *very* drunk and then something crashes: 4 days

Anakata [Svartholm] gets a really bad cold and noone [sic] is around: 7 days

The US and Swedish gov. forces the police to steal our servers: 3 days

…yawn” (06-05-2006)

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Pirate Bay

Founders sued in 2008 by International Federation of the Founders sued in 2008 by International Federation of the Phonographic IndustryPhonographic Industry Found guilty in 4/2009 and sentenced to one year in prison Appeal still pending

Blocked in many countriesBlocked in many countries Denmark Italy Ireland China

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Copyright Protection for Software

Software copyrightsSoftware copyrights Copyright act of 1976 explicitly recognized software Protects

Expression of idea – copyright implementation, not the idea Protects object code, not source code (typically the source code is

considered “confidential”. Exception: open-source software

Violations of software copyrightsViolations of software copyrights Not a violation:

Copying a program from CD-ROM to hard disk to run Copying a program from hard disk to RAM upon execution

Generally in violation if: Copying a program onto a CD to give/sell to someone else Preloading a program onto a computer being sold Distributing program over the Internet

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Copyright Protection, EULAs

Newer Newer EEnd nd UUser ser LLicense icense AAgreements stipulate greements stipulate copyright and other things:copyright and other things:

Can install on only one computer May phone home May collect “aggregated data” and other things Automated work

1. OVERVIEW. At the time the tool is running, the software checks your device for certain malicious software listed at http://go.microsoft.com/fwlink/?LinkId=39249 (“Malware”) and if detected, the software removes Malware from your device. The tool must be run again on the specific device to detect and remove subsequent

Malware updates…. Anything

“It is further agreed and understood that such conditions are not exhaustive and that Virtual Reach may from time to time **impose further conditions outside of this EULA**.” Virtual Reach

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Software Copyright Cases

Apple vs. Franklin computerApple vs. Franklin computer Franklin ACE was Apple II compatible Franklin copied OS functions from Apple ROM to ensure this Ruled in favor of Apple Franklin held liable – establishing copyright for object

programs

Sega vs. AccoladeSega vs. Accolade Accolade disassembled object code of a Sega game to

determine how to interface their own game with a Sega console (Sega didn’t publish it)

Ruled in favor of Accolade Reverse engineering considered fair-use Public benefit from more video games on a Sega!

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Software PatentsUntil early 1980s, no software patentsUntil early 1980s, no software patents

Programs are mathematical algorithms, not processes or machines

Diamand vs. Diehr (1981)Diamand vs. Diehr (1981) Invention curing rubber using computer controlled heating Distinction based on data

Manipulates values only (e.g. sorting numbers) – not patentable Manipulates data representing measurements made in the real world –

patentable Software that takes EKG signals to drive pacemaker is patentable

Opens the floodgatesOpens the floodgates Prior art is huge issue given the many decades of software before

1981 Prior art searches typically review prior patents! Many “bad” patents due to lack of knowledge of prior art

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Safe Software Development

General strategyGeneral strategy Clean-room development environment Two teams work on project

First team develops specifications of functionality based on working with the competitors products

Second team creates code based upon specifications

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Open-Source vs. Proprietary SW

Proprietary softwareProprietary software Government gives rights to those who produce software

Benefit of profiting from licensing gives incentives for people to work hard, be creative, and eventually benefit society

Copyright protects the initial, tangible benefit Digital technology makes it trivial to copy and results in

harsh steps being taken

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Open-SourceAlternative software development and distribution modelAlternative software development and distribution model

No restrictions on selling or even giving away the software For some licenses, source code must be published if modified and

distributed No restrictions on what to use for Rights apply to all who receive redistributions

BenefitsBenefits Anyone can improve the software Eliminates tension between obeying copyright law and helping

others --since code is given away Code is property of the community and lives indefinitely --no EOL Turns software into service industry rather than a manufacturing

one

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Different Flavors

GPL v2GPL v2 Linux Vendor that distributes any code that uses GPL’d code must

publish all of their source code modifications as well

BSDBSD You may modify and redistribute without publishing the

source code

Other variantsOther variants Combination licenses

Free/GPL for non-commercial use, but commercial use requires a different license agreement

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Open-Source Issues

Critical mass of developers on a projectCritical mass of developers on a project

Forking of projects and fragmenting of the development Forking of projects and fragmenting of the development communitycommunity

Removing financial reward reduces innovation and Removing financial reward reduces innovation and investment from commercial software developersinvestment from commercial software developers

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IP and SW

Should software get copyright and patent-protected to Should software get copyright and patent-protected to begin with?begin with?

Rights-based analysisRights-based analysis Locke: mixing your labor with something gives you an

ownership rightFarmers having rights to crops they labor to produceProgrammers having rights to software they labor to produce

But….Pouring a can of tomato juice into the ocean will not make yuou

owner of same ocean!Copying intellectual property is different than stealing

something physical

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IP and SW

Utilitarian analysisUtilitarian analysis Copied software reduces purchases Less software sold for profit means producers will make less

software Software benefits society so allowing copying is wrong Caveats

Would those who copied the software have bought it or done without it? --e.g. Windows in China

Stallman: freely exchanged/copied code stimulates innovation allowing developers to see each other’s code –gnu and Linux live well!

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Discussion

Is it ethical to record a live concert and post it on the Is it ethical to record a live concert and post it on the Internet?Internet?

Is it ethical to use pirated software?Is it ethical to use pirated software?

Is it ethical to download music files for songs that have Is it ethical to download music files for songs that have not been purchased?not been purchased?

Was it ethical to post the 32-character encryption key for Was it ethical to post the 32-character encryption key for HD-DVDs?HD-DVDs?

What does MGM vs. Grokster mean for aspiring What does MGM vs. Grokster mean for aspiring developers of P2P filesharing software?developers of P2P filesharing software?

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References

1.1. John Locke: John Locke: http://en.wikipedia.org/wiki/Two_Treatises_of_Goverhttp://en.wikipedia.org/wiki/Two_Treatises_of_Government nment

2.2. Aluminum: http://www.alunet.net/shownews.asp?Aluminum: http://www.alunet.net/shownews.asp?ID=490&type=3ID=490&type=3

3.3. Trademark grammar: Trademark grammar: http://itre.cis.upenn.edu/~myl/languagelog/archives/0http://itre.cis.upenn.edu/~myl/languagelog/archives/000943.html 00943.html

4.4. Patent trolls: http://en.wikipedia.org/wiki/Patent_troll Patent trolls: http://en.wikipedia.org/wiki/Patent_troll

5.5. Defense of Patent Trolls: Defense of Patent Trolls: http://www.businessweek.com/technology/content/fehttp://www.businessweek.com/technology/content/feb2010/tc2010021_330487.htmb2010/tc2010021_330487.htm