Intellectual Property PDF

Chapter 4: Intellectual Property 1-1 Chapter Overview (1/2) Introduction Intellectual property rights Protecting intellectual property Fair use New restrictions on use 1-2...

Chapter 4: Intellectual Property 1-1 Chapter Overview (1/2) Introduction Intellectual property rights Protecting intellectual property Fair use New restrictions on use 1-2 1-2 Chapter Overview (2/2) Peer-to-peer networks and cyberlockers Protections for software Open-source software Legitimacy of intellectual property protection for software Creative Commons 1-3 1-3 4.1 Introduction 1-4 1-4 Information Technology Changing Intellectual Property Landscape Value of intellectual properties much greater than value of media – Creating first copy is costly – Duplicates cost almost nothing Illegal copying pervasive – Internet allows copies to spread quickly and widely In light of advances in information technology, how should we treat intellectual property? 1-5 1-5 Reproduced by permission of Electronic Frontier Foundation via Creative Commons Attribution License 3.0. Go to www.eff.org/copyright for redistribution information. To access the original work, go to w2.eff.org/IP/P2P/?f=music-to-our- ears.html 1-6 1-6 4.2 Intellectual Property Rights 1-7 1-7 What Is Intellectual Property? Intellectual property: any unique product of the human intellect that has commercial value – Books, songs, movies – Paintings, drawings – Inventions, chemical formulas, computer programs Intellectual property ≠ physical manifestation Does right to own property extend to intellectual property? 1-8 1-8 Property Rights Locke: The Second Treatise of Government People have a right… – to property in their own person – to their own labor – to things which they remove from Nature through their labor As long as… – nobody claims more property than they can use – after someone removes something from common state, there is plenty left over 1-9 1-9 Locke’s Notion of Property Rights 1-10 1-10 Expanding the Argument to Intellectual Property Writing a play akin to making a belt buckle Belt buckle – Mine ore – Smelt it down – Cast it Writing a play – “Mine” words from English language – “Smelt” them into prose – “Cast” them into a complete play 1-11 1-11 Analogy Is Imperfect Ben Jonson, walker Art Library/Alamy; Shakespeare, Classic Image/Alamy If Ben Jonson and William Shakespeare simultaneously write down Hamlet, who owns it? If Ben “steals” the play from Will, both have it These paradoxes weaken the argument for a natural right to intellectual property 1-12 1-12 Benefits of Intellectual Property Protection Some people are altruistic; some are not Allure of wealth can be an incentive for speculative work Authors of U.S. Constitution recognized benefits to limited intellectual property protection 1-13 1-13 Limits to Intellectual Property Protection Giving creators rights to their inventions stimulates creativity Society benefits most when inventions in public domain Congress has struck compromise by giving authors and inventors rights for a limited time 1-14 1-14 Prices Fall When Works Become Public Domain Table from “Letter to The Honorable Senator Spencer Abraham,” by Randolph P. Luck from LUCK’S MUSIC LIBRARY. Copyright © 1996 by Randolph P. Luck. Reprinted with permission. 1-15 1-15 4.3 Protecting Intellectual Property 1-16 1-16 Trade Secret Confidential piece of intellectual property that gives company a competitive advantage Never expires Not appropriate for all intellectual properties Reverse engineering allowed May be compromised when employees leave firm 1-17 1-17 Trademark, Service Mark Trademark: Identifies goods Service mark: Identifies services Company can establish a “brand name” Does not expire If brand name becomes common noun, trademark may be lost Companies advertise to protect their trademarks Companies also protect trademarks by contacting those who misuse them 1-18 1-18 Screenshot by Xerox. Copyright © 2012 by Xerox Corporation. All rights reserved. Reprinted with permission. 1-19 1-19 Patent A public document that provides detailed description of invention Provides owner with exclusive right to the invention Owner can prevent others from making, using, or selling invention for 20 years 1-20 1-20 Copyright Provides owner of an original work five rights – Reproduction – Distribution – Public display – Public performance – Production of derivative works Copyright-related industries represent 6% of U.S. gross domestic product (> $900 billion/yr) Copyright protection has expanded greatly since 1790 1-21 1-21 By permission of John Deering and Creators Syndicate, Inc. 1-22 1-22 Key Court Cases and Legislation Gershwin Publishing v. Columbia Artists Basic Books v. Kinko’s Graphics Davey Jones Locker No Electronic Theft Act 1-23 1-23 Copyright Creep 1-24 1-24 Copyright Creep Since 1790, protection for books extended from 28 years to 95 years or more Some say latest extension done to prevent Disney characters from becoming public domain Group of petitioners challenged the Copyright Term Extension Act of 1998, arguing Congress exceeded Constitutional power U.S. Supreme Court ruling – CTEA does not create perpetual copyrights – CTEA is constitutional 1-25 1-25 4.4 Fair Use 1-26 1-26 Fair Use Concept Sometimes legal to reproduce a copyrighted work without permission Courts consider four factors – Purpose and character of use – Nature of work – Amount of work being copied – Affect on market for work 1-27 1-27 Sony v. Universal City Studios Sony introduced Betamax VCR (1975) People started time shifting TV shows Movie studios sued Sony for copyright infringements U.S. Supreme Court ruled (5-4) that time shifting is fair use 1-28 1-28 Time Shifting 1-29 1-29 Digital Recording Technology Copying from vinyl records to cassette tapes introduced hiss and distortions Introduction of compact disc a boon for music industry – Cheaper to produce than vinyl records – Higher quality – Higher price  higher profits BUT it’s possible to make a perfect copy of a CD 1-30 1-30 Audio Home Recording Act of 1992 Protects rights of consumers to make copies of analog or digital recordings for personal, noncommercial use – Backup copy – Give to family member Digital audio recorders must incorporate Serial Copyright Management System (SCMS), so consumers can’t make a copy of a copy 1-31 1-31 RIAA v. Diamond Multimedia MP3 compression allowed songs to be stored in 10% of the space, with little degradation Diamond introduced Rio MP3 player (1998) People started space shifting their music RIAA started legal action against Diamond for violation of the Audio Home Recording Act U.S. Court of Appeals, 9th Circuit, affirmed that space shifting is consistent with copyright law 1-32 1-32 Space Shifting 1-33 1-33 Kelly v. Arriba Soft Kelly: Photographer maintained Web site with copyrighted photos Arriba Soft: Created search engine that returned thumbnail images Kelly sued Arriba Soft for copyright infringement U.S. Court of Appeals, 9th Circuit, affirmed that it was fair use 1-34 1-34 Google Books Google announced plan to scan millions of books held by several huge libraries, creating searchable database of all words If public domain book, system returns PDF If under copyright, user can see a few sentences; system provides links to libraries and online booksellers Authors Guild and publishers sued Google for copyright infringement (copying books for commercial reasons) Out-of-court settlement reached 1-35 1-35 Benefits of Proposed Settlement Google would pay $125 million to resolve legal claims of authors and publishers and establish Book Rights Registry Readers would have much easier access to out-of-print books at U.S. public libraries and university libraries University libraries could purchase subscriptions giving their students access to collections of some of world’s greatest libraries Authors and publishers would receive payments earned from online access of their books, plus share of advertising revenues 1-36 1-36 Criticisms of Proposed Settlement Google should have gone to court – Google had a good case that its use was a fair use, based on precedent of Kelly v. Arriba Soft – If Google had been found not guilty of copyright infringement, it could have given public access to books at lower rates Agreement gives Google a virtual monopoly over orphaned works Potential chilling effect of Google tracking the pages that people are viewing 1-37 1-37 Court Rejects Proposed Settlement March 2011: U.S. District Court for Southern District of New York rejected proposed settlement Judge ruled agreement would have: – Given Google significant advantage over competitors – Rewarded Google for “wholesale copying of copyrighted words without permission” – Given Google liberal rights over orphaned works 1-38 1-38 4.5 New Restrictions on Use 1-39 1-39 Counterfeit CDs = Lost Profits © Reuters/CORBIS 1-40 1-40 Digital Millennium Copyright Act First big revision of copyright law since 1976 Brought U.S. into compliance with Europe Extended length of copyright Extended copyright protection to music broadcast over Internet Made it illegal for anyone to – Circumvent encryption schemes placed on digital media – Circumvent copy controls, even for fair use purposes 1-41 1-41 Digital Rights Management Actions owners of intellectual property in digital form take to protect their rights Approaches – Encrypt digital content – Mark digital content so devices can recognize content as copy-protected 1-42 1-42 Secure Digital Music Initiative Goals – Create copy-protected CDs – Secure digital music downloads Consortium of 200 companies developed “digital watermarking” scheme Failed – Internet copying became huge before SDMI ready – Some SDMI sponsors were electronics companies – Digital watermarking encryption cracked 1-43 1-43 Sony BMG Music Entertainment Rootkit Millions of audio CDs shipped with Extended Copy Protection, a DRM system Prevented users from – Ripping audio tracks into MP3 format – Making more than 3 backup copies Relied upon Windows “rootkit” that hid files and processes; usually only hackers use rootkits Huge public outcry once secret uncovered Sony BMG stopped production and compensated consumers 1-44 1-44 Encrypting DVDs Contents of DVDs encrypted using Content Scramble System (CSS) Need decryption keys to view a DVD Jon Johansen wrote a decryption program for Linux 2600 Magazine published the code Motion picture studios sued 2600 Magazine and won Johansen tried in Norway and found not guilty 1-45 1-45 Foiling HD-DVD Encryption Hardware, software, and entertainment companies created Advanced Access Content System to encrypt HD-DVDs Encryption key posted on Digg.com AACS leaned on Digg.com to censor postings containing key Digg users fought back AACS “expired” the key and issued a new one A month later, a Digg user posted the new key 1-46 1-46 Criticisms of Digital Rights Management Any technological “fix” is bound to fail DRM undermines fair use DRM could reduce competition Some schemes make anonymous access impossible 1-47 1-47 Online Music Stores Employed Digital Rights Management When iTunes Music Store opened, all music was protected with a DRM scheme called FairPlay FairPlay blocked users from freely exchanging purchased music – Songs couldn’t be played on more than 5 different computers – Songs couldn’t be copied onto CDs more than 7 times Songs purchased from iTunes Store wouldn’t play on non-Apple devices DRM-protected music purchased from other online retailers couldn’t be played on iPod 1-48 1-48 Online Music Stores Drop Digital Rights Management Consumers complained about restrictions associated with DRM European governments put pressure on Apple to license FairPlay or stop using DRM Amazon reached an agreement with all four major music labels to sell DRM-free music Apple followed suit in 2009 1-49 1-49 Microsoft Xbox One Microsoft announced cloud-based gaming experience for Xbox One (June 2013) – User could play any game without disc in tray – Automatic software updates of every Xbox One Controversial features of licensing arrangement – Disc could be shared only once – Second-hand market restricted – Xbox consoles would have to check in every 24 hours Microsoft backtracked – No need to connect to Internet – Freedom to lend, rent, buy, sell discs – Disc must be in tray to play game 1-50 1-50 4.7 Protections for Software 1-67 1-67 Software Copyrights Copyright protection began 1964 What gets copyrighted? – Expression of idea, not idea itself – Object program, not source program Companies treat source code as a trade secret 1-68 1-68 Violations of Software Copyrights Copying a program to give or sell to someone else Preloading a program onto the hard disk of a computer being sold Distributing a program over the Internet 1-69 1-69 Important Court Cases Apple Computer v. Franklin Computer – Established that object programs are copyrightable Sega v. Accolate – Established that disassembling object code to determine technical specifications is fair use 1-70 1-70 Safe Software Development Reverse engineering okay Companies must protect against unconscious copying Solution: “clean room” software development strategy – Team 1 analyzes competitor’s program and writes specification – Team 2 uses specification to develop software 1-71 1-71 Software Patents (1/3) Until 1981, Patent Office refused to grant software patents – Saw programs as mathematical algorithms, not processes or machines U.S. Supreme Court decision led to first software patent in 1981 Further court rulings led to patents being granted for wider range of software 1-72 1-72 Software Patents (2/3) Thousands of software patents now exist – Microsoft files ~3,000 applications annually – Licensing patents a source of revenue Secondary market for software patents – Patent trolls: Companies that specialize in buying patents and enforcing patent rights – Companies would rather settle out of court than spend time and money going to trial – RIM didn’t settle quickly; ended up paying $612 million 1-73 1-73 Software Patents (3/3) Critics say too many patents have been issued – Patent Office doesn’t know about prior art, so it issues bad software patents – Obvious inventions get patents Companies with new products fear getting sued for patent infringement – Build stockpiles of patents as defense mechanism – Software patents used as legal weapons Bezos: software patents should expire in 3-5 years 1-74 1-74 Key Differences between Software Copyrights and Software Patents Software Copyright Software Patent What is protected? Object Program, Software process screen displays with practical utility Is getting protection expensive? No Yes Is getting protection time consuming? No Yes Is reverse engineering allowed? Yes No 1-75 1-75 4.8 Open-Source Software 1-76 1-76 Criticisms of Proprietary Software Increasingly harsh measures being taken to enforce copyrights Copyrights are not serving their purpose of promoting progress It is wrong to allow someone to “own” a piece of intellectual property 1-77 1-77 Open-Source Definition No restrictions preventing others from selling or giving away software Source code included in distribution No restrictions preventing others from modifying source code No restrictions regarding how people can use software Same rights apply to everyone receiving redistributions of the software (copyleft) 1-78 1-78 Beneficial Consequences of Open- Source Software Gives everyone opportunity to improve program New versions of programs appear more frequently Eliminates tension between obeying law and helping others Programs belong to entire community Shifts focus from manufacturing to service 1-79 1-79 Examples of Open-Source Software BIND Apache Sendmail Android operating system for smartphones Firefox and Chrome OpenOffice.org Perl, Python, Ruby, TCL/TK, PHP, Zope GNU compilers for C, C++, Objective-C, Fortran, Java, and Ada 1-80 1-80 Screenshot from OpenOffice.org, a registered trademark of Apache Software Foundation. Copyright © 2012 by Apache Software Foundation. Reprinted with permission. 1-81 1-81 GNU Project and Linux GNU Project – Begun by Richard Stallman in 1984 – Goal: Develop open-source, Unix-like operating system – Most components developed in late 1980s Linux – Linus Torvalds wrote Unix-like kernel in 1991 – Combined with GNU components to make an O.S. – Commonly called Linux 1-82 1-82 Impact of Open-Source Software Linux an alternative to proprietary versions of Unix Linux operating system on 95% of the world’s 500 fastest supercomputers 1-83 1-83 Crititique of the Open-Source Software Movement Without critical mass of developers, quality can be poor Without an “owner,” incompatible versions may arise Relatively weak graphical user interface Poor mechanism for stimulating innovation (no companies will spend billions on new programs) 1-84 1-84