Brief introduction to IPR issues related to computer programs. Sample cases include software projects, products, embedded programs, and smart phone applications.

1. Legal Protection of
Computer Software
Olli Pitkänen
D.Sc, LL.M.

2. Intellectual Property Rights (IPR)
• Copyright
– Automatic international protection for expressions
of creative works
• Patents
– Protects new, useful, nonobvious inventions
– Not abstract ideas, but an application needed
• Trademarks
– Business brands (logo, phrase, graphic symbol, …)
that distinguish products or services can be
registered or established.
• Database protection, trade secrets, design right, …
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Olli Pitkänen

3. IPR in software
• Special problems in applying old regimes to novel areas
– Copyright was developed to protect arts and
literature, patent was to protect inventions in
physical machines, and so on
– In 1970’s and early 1980’s, World Intellectual
Property Organisation (WIPO) was driving at
special kind of (sui generis) protection for computer
programs, but failed to get international support
– Since then, especially copyright and patent systems
have been stretched to cover also software
– In the EU especially Directive 91/250/EEC on the
legal protection of computer programs
• In Finland, implemented in the Copyright Act 3
Olli Pitkänen

4. Sample Cases
• Software Project
– Software developed for one customer
• PC Software Product
– Standard product to be sold to numerous
customers
• Embedded software
• Smart Phone Application
– Application to be sold through the ecosystem’s
market place – complying with standards, rules
• Facebook Application
– Software as a service to be used within other
software 4
Olli Pitkänen

5. Copyright in programs: coverage
• Copyright protects original expression of creative works
– NOT protecting ideas, algorithms
– Threshold to protect computer program is not high,
but there must have been significant choices in
developing the program
• If e.g. due to technical constraints only one
solution is possible, not copyrightable
• No-one else would have implemented the
program in the same way
• Copyright protects the whole program and its parts as
long as they represent creativity
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Olli Pitkänen

6. Copyright in programs:
exclusive rights
• Copyright gives the right holder an exclusive right to
copy the work and to make it available to the public
• Usually, copyright does not cover the usage of the work
– E.g. one may read a book without permission
• Installing and running a computer program involves
making copies  using a program usually requires
permission, a license
• Exhaustion: the exclusive rights usually apply only to
the first sell, reselling a legal copy does not infringe
copyright. However, reselling software requires new
copies. Mixed court cases (see e.g. KKO 2003:88)
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Olli Pitkänen

7. Copyright in programs: limitations
• Right to make copies and modifications
– Permission not required, if necessary for the
intended purpose (including error correction) by the
lawful acquirer.
– Can be overridden by the license agreement
• Right to make back-up copies
– Mandatory, cannot be overridden
• Right to observe the functioning of the program to
determine the underlying ideas and principles which
underlie any element of the program
– Ideas and principles are not copyrightable
– Mandatory, cannot be overridden
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Olli Pitkänen

8. Copyright in programs: limitations
• Decompilation
– Ok, if indispensable to obtain the information
necessary to achieve the interoperability of an
independently created computer program
– Requires
• a right to use the program,
• the information is not readily available
– The information may not be used for other goals
• Copyright in computer programs and databases is
automatically assigned to the employer, if the work is
created in an employment relationship
– Excl. university researchers and teachers
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Olli Pitkänen

9. Is Software Patentable?
• In Europe, mere computer programs do not qualify for
patents – in theory
– program as a part of another invention may qualify,
e.g embedded software may be patentable
– in practice, almost any program can be patentable
• In the USA, programs are widely patentable –
nowadays also business methods and many other
subject matters patentable
• Worldwide active ongoing discussion
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Olli Pitkänen

10. Software patents
• Patent protects new, useful, nonobvious inventions
• Only rarely a program is an invention as a whole, but a
program may include many inventions
• A patentable invention is the concrete embodiment of
an idea: a device, a product, a process or a method for
making something
• Computer programs are often patented as an
implementation of a method or as a part of a system
consisting of devices and software
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Olli Pitkänen

11. Sample Software Patent
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12. How to read software patents?
• Patent abstracts are often misleadingly broad
• Claims are the important part
• For example, the previous sample patent application
(US2008276313) includes 7 claims that define precisely
the scope of the patent
– “1. A method for installing an applianced domain name server, the
method comprising:
forming a software installation package for the domain name server,
the software installation package comprising:
• a hardened operating system;
• a securely pre-configured domain name server software; …”
• Description may help to understand the claims 12
Olli Pitkänen

13. Software Patents: Pros
• Object of the patent more suitable than the object of
copyright
– Programs more like machines than literature?
• More reasonable expiration time (max 20 years)
– yet too long?
• Publicity is useful for the industry
– Patent system spreads knowledge
• More established practice e.g as securities
– A start-up company with patents (applications?)
gets funding easier than just with copyright
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Olli Pitkänen

14. Software Patents: Cons
• Unnecessary if copyright protects software
– Does it?
• Laborious, expensive application procedure favors large
corporations although small enterprises are often more
innovative
• Patent system in general questionable
– On the societal level, do benefits outweigh the
drawbacks?
• Favors American companies
• Practical problems
– the incompetence of patent offices 
lots of poor patents esp. in the USA 14
Olli Pitkänen

15. Trademark
• It is often a good idea to use brands when marketing
computer programs
• Trademark protects brands, like the name of the
program, a logo, or a graphic symbol
– Distinguish a program from competing programs
• Trademark does NOT protect the program itself
– Trademark does not prevent e.g. unauthorized
copying of the program code
• Trademark can be established, but because that is
uncertain and slow, it is usually advisable to register at
least the name of a commercial program
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Olli Pitkänen

16. IPR Strategy
• IPR allows one actor to affect how the others allocate
their resources
• IPR Strategy: how to get and utilize intellectual property
rights and how to monitor and control them
– An IPR strategy also includes the organization of costs and
responsibilities
• IPR Strategy is based on business needs.
– Should be a part of business strategy, but in many cases the
link is weak
– Sometimes written, often just an established policy
• Obviously, the meaning of the IPR Strategy can vary a
lot in different businesses
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Olli Pitkänen

17. Copyright Strategy
• Because copyright is achieved automatically, a
company doesn’t need a strategy to decide when to
seek copyright
• Instead, a strategy is needed to decide
– how the copyright is licensed or assigned, and
– how to monitor and enforce the copyright
• e.g. how to react if a business partner infringes
the copyright
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Olli Pitkänen

18. Patent Strategy
• In principle, a patent protects a certain technological
invention
• In practice, it is more like a business tool
• Patents need to be applied for
– It is a significant investment to build a patent
portfolio
– Have to decide how many and what kind of
applications are made, in which countries, …
• Also a strategy is needed to decide how to license
patents and how to monitor and enforce them
• A patent strategy can be active or passive; offensive or
defensive
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Olli Pitkänen

19. Why to patent?
• To prevent others from using
the invention is just one reason
to get a patent
• Even an application can be
very valuable to ensure the
investors to fund a company
• Patents may promote
marketing
• A patent portfolio can be a
very valuable tool in
negotiations (e.g. Nokia v.
Qualcomm)
• License fees esp. from Cohen et al, 2002 Olli Pitkänen
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20. Example
• A Finnish SME in software industry
• Decides to file about 5 patent applications annually
• 1st file in the USA (cost ca $5000-$20000 / application)
• Within 12 months PCT application
• Within 30 months EPO and some national applications
– EPO covers even 30 countries
– Costs about 5000 € per country
• Patent portfolio is extended actively
• Ready to defend and negotiate actively
• Will not attack actively
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Olli Pitkänen

21. Defending IPR
• The right-holder must observe possible violations itself
– There is no such thing as “IPR Police” that would
seek for infringements
– However, the right-holders can get help from
officials, like the police, customs, courts, etc, when
they find violations
• IPR violation can be a crime
– Usually the punishments (jail, fine) are mild
• Compensations can be significant
• Costs of litigation as well as coercive measures, like an
injunction order during the trial can become truly
expensive
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Olli Pitkänen

22. Defending trademarks
• The right-holder must defend trademarks
– Give a notice, if others are using the trademark in a
confusing way
– If you don’t defend your trademark, you may loose it
– E.g. Aspirin is no longer a trademark in the USA, but
can refer to any painkiller, while in many countries
(e.g. in Finland) it is still a registered trademark
– In contrast, patents and copyright don’t need to be
defended
• A patent holder may remain hidden and start to
claim royalties after being unnoticed for years
(“submarine patents”)
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Olli Pitkänen

23. Software project
• In a software project, one participant (e.g. a consultant
company) may develop the concept for a program,
another (e.g. a software company) implements the
program, and the customer is actively involved in each
phase
• Expertise, labour, and time is needed from everybody,
but they are usually not protected by intellectual
property rights
– Copyright is gained by originality and creativity, and patent
requires inventiveness, it does not matter how much effort
and skills somebody has put to produce the program
– Database protection being an exception: requires investment
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Olli Pitkänen

24. Who is the creator, inventor in a
software project?
• Remember, purely abstract ideas are not protected
• New, nonobvious inventions can be patentable if they
are well described and concrete enough
• Original expressions can be copyrightable
• In a project many people are often brainstorming and
bouncing off ideas – later it can be difficult to find out
whose idea was the valuable one
– Not a big problem within one company: the employer can
usually get the inventions and copyrightable works anyway
– Problem, if people are from different organizations
– Solution: always make a written contract in
advance
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Olli Pitkänen

25. IPR in Project Outcome
• A computer program developed in a project by a vendor
for a customer is usually copyrightable
• Project agreement should define whether the customer
gets the copyright or only a license to use the program
• The program may include inventions, but they are
seldom patented, because both the vendor and the
customer lack interest
• Trade secrets can be important to protect especially the
customer’s confidential information
• Trademarks are less important in relation to customer
specific programs that are not for mass markets
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Olli Pitkänen

26. Software Components
• Software that is developed in a project
includes three kinds of components,
which may involve different IPR:
– Customer-specific components
• Esp. copyright and trade secrets
– Vendor’s library components
• Esp. copyright and patents
– Third parties’ standard components
• Any IPR
– Important to take notice of license
terms
Olli Pitkänen

27. PC Software Products
• Software that is not customized, but replicated and
sold in large quantities
• The program itself does not include customer-
specific information, customer’s trade secrets, etc
• Copyright is the main protection
• Patented inventions may exist
• Trademarks are very important to support
marketing
• End-user license agreements present standard
terms and conditions on licensing IPR
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Olli Pitkänen

28. Embedded software
• Program to control devices other than normal
computers
– Specialized for the particular hardware
– Time and memory constraints
• Copyrightable like any software
– Hardware constraints may reduce choices in
developing the program, thus not necessarily
creative enough
• Program as a part of the embedded system can be
easier to patent than inventions in stand-alone software
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Olli Pitkänen

29. Smart Phone Application
• Ecosystems (Apple, Google Android, Microsoft
Windows) have their own rules, guidelines and
technical constraints, which may limit copyrightability
• Standards in mobile industry may also set constraints
– Certain functionality needs to be implemented in a
standard way to make it interoperable with other
systems, which leaves little room for creativity
• In general smart phone applications, however, are
copyrightable and patentable like any programs
• Ecosystems may have their own licensing policies
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Olli Pitkänen

30. Standards and IPR
• Mobile industry relies heavily on standards
• To get one’s own patented invention included in a
standard, may force others to pay royalties
• Standardization bodies have their own IPR rules
– Sometimes it is required that all the participants
disclose their IPR in advance
– Sometimes they are required to license for free
– Nowadays, it is typical that taking part in a
standard-setting process requires that everyone
undertakes to license its IPR (especially essential
patents) in fair, reasonable, and non-discriminatory
terms (FRAND)
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Olli Pitkänen

31. Facebook Application
• Software as a service (SaaS) on
top of the Facebook Platform,
which provides the application with
Facebook data including users’
social networks
• Complying with the environment
– The Platform constraints functionality and implementation
• Apps are usually copyrightable as any programs
• Patents are also possible
– E.g. Zynga has applied for patents related to game based
incentives for commerce
• Trademarks are very important 31
Olli Pitkänen

32. Conclusions: Copyright
• Copyright gives a good basic protection for computer
programs
– Automatic, no need to file applications
– Covers the whole program
– Limited to a certain implementation, does not
protect ideas or inventions
• Copyright-holder can object modifications, but if
the program is completely rewritten, it doesn’t
infringe copyright
– Copyright is the basis of end-user licensing and
open source licensing
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Olli Pitkänen

33. Conclusions: Patent
• In Europe, it is still somewhat challenging to get a
patent for a software related invention since the law
forbids patenting computer programs as such
• If granted, software patent may provide stronger
protection than copyright since patent is not that
implementation specific
• Patent does not usually cover the whole program like
copyright, but merely an invention within the program
– One program may include many patentable
inventions
• For a software business, patents may have significant
other benefits, like appreciation among investors
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Olli Pitkänen

34. Conclusions: Trademarks
• Especially in mass markets, brands can be very
valuable
• It is unwise not to protect brands by trademarks
– It is easy and relatively inexpensive to register a
trademark
– Trademarks need to be defended, however
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Olli Pitkänen