Introduction to Software Licensing
Under
What is Software Licensing?
Benefits of using Licensed Software
Current Situation
What is Software Licensing?
Software Licensing – a legal instrument that governs the use and distribution
of the software
Software Licensing is the legal right to run or the privilege given to you by a
company to access their application (or program)
A license agreement governs the use of licensed software. License
agreements typically allow the software to run on a limited number of
computers and allow copies to be made, though solely for backup purposes.
Benefits of using Licensed Software
By using Licensed Software, you are able to contribute to the further
development of the program you are using. It also helps the economy
generate not just computer related jobs, but opportunities for other people /
businesses who’s work is much dependent on “written” technology.
Apart from the legal obligation to use Licensed Software, Licensed Software
outright comes with support not found in “pirated” software.
Things to ponder about… How would you feel if your hospital test results
were taken using pirated syringes? Or you didn’t know you purchased fake
Vitamin C’s?
Things to ponder about… If you’re a driver – are you sure you’re not using
fake license? How about your birth or marriage certificate? What benefit can
it help you if you discovered one day that they’re all fake? Or somebody
owns these licenses or certificates other than you?
Current Situation Are you familiar with any of these symbols, logos, boxes,
etc?
Current Situation Clearly visible, Microsoft programs that are sold in
sidewalks seems to always be a good buy. Likewise you can expect,
McDonalds products to support you if you buy BigMuck and Apol Pie – just in
case you got into trouble.
Current Situation You might think that everything mentioned here is just
about software (or Microsoft). The tendency is that if you extract MP3 from
CD’s (or download them from the Internet), or use Torrent to be able to
download the latest movies and other “rights-own” media – you are simply
contributing to the rate of piracy worldwide.
Software License and Copyright Law In the United States, Section 117 of the
Copyright Act gives the owner of a particular copy of software the explicit
right to use the software with a computer, even if use of the software with a
computer requires the making of incidental copies or adaptations (acts which
could otherwise potentially constitute copyright infringement). Therefore,
the owner of a copy of computer software is legally entitled to use that copy
of software. Hence, if the end-user of software is the owner of the respective
copy, then the end-user may legally use the software without a license from
the software publisher. Accordingly, proprietary software licenses attempt to
give software publishers more control over the way their software is used by
keeping ownership of each copy of software with the software publisher. By
doing so, Section 117 does not apply to the end-user and the software
publisher may then compel the end-user to accept all of the terms of the
license agreement, many of which may be more restrictive than copyright
law alone.
Proprietary Software Proprietary software is computer software which is the
legal property of one party. The terms of use for other parties is defined by
contracts or licensing agreements. These terms may include various
privileges to share, alter, dissemble, and use the software and its code. Well
known examples of proprietary software include Microsoft Windows, Adobe
Photoshop, Corel Draw, Quickbooks, SAP, etc.
Proprietary Software For example, the rights to develop Windows XP or
Microsoft Office 2003 and their release protocols are held by Microsoft. They
have the proprietary rights to sell the license to use their products. The code
on how Windows XP was developed from step zero to step one hundred is
theirs exclusively.
Proprietary Software In the Philippines, all the software (and hardware)
development members of the Business Software Alliance (BSA) are
encouraging the legal use and licensing of their softwares. Its members
represent one of the fastest growing industries in the world. BSA programs
foster technology innovation through education and policy initiatives that
promote copyright protection, cyber security, trade and e-commerce.
US copyright laws, software piracy can result in fines of up to $150,000 for
each software title copied. In addition, the government can criminally
prosecute for copyright infringement. If convicted, violators can be fined up
to $250,000 or given a jail term of up to five years, or both.
In the Philippines In the Philippines, the Business Software Alliance (BSA)
together with The Pilipinas Anti-Piracy Team (PAPT) leads the government-
initiated campaign which aims to significantly reduce software piracy in the
country and promote respect for Intellectual Property Rights (IPR). PAPT
combines BSA, NBI, PNP and Optical Media Board (OMB) in ensuring
compliance to software licensing and no to piracy.
In the Philippines DON'T FORGET that even though The Pilipinas Anti-Piracy
Team (PAPT) is mandated to resume their search after the Cebu 2009
countdown, require them to present a search warrant, authorization or
mission order. Organizations must present the end-user licensing
agreements, certificates of authenticity, invoices and receipts.
Intellectual Property of the Philippines
REPUBLIC ACT NO. 8293 AN ACT PRESCRIBING THE INTELLECTUAL PROPERTY
CODE AND ESTABLISHING THE INTELLECTUAL PROPERTY OFFICE, PROVIDING
FOR ITS POWERS AND FUNCTIONS, AND FOR OTHER PURPOSES PART I The
Intellectual Property Office SECTION 1. Title. — This Act shall be known as
the "Intellectual Property Code of the Philippines."
What Is Intellectual Property?
– Have you ever given a CD to a friend that contained a copy of a computer
game or a program? – Have you ever recorded a televised movie to watch
later in the week? – Have you downloaded music or a movie from the Web
without paying for it? – Have you e-mailed a copy of an online newspaper or
magazine article to a dozen friends? – Have you set up a Web site about your
favorite band or actor, with short videos from performances?
What Is Intellectual Property?
– The value of a painting is higher than the cost of the canvas and paint used
to create it! – The value of intellectual and artistic works comes from the
creativity, ideas, skills, labor, and other nonmaterial efforts and attributes
provided by their creators. – Our property rights to the physical property we
create or buy include the rights to use it, to prevent others from using it, and
to set the (asking) price for selling it. – Would you produce something if
anyone else can just take it away? Q: How is it important for the
individual/society to protect intellectual property?
Intellectual Property Is: – Term used to describe works of the mind Distinct
and “owned” or created by a person or group
– Intangible creative work—not the particular physical form on which it is
stored or delivered.
– Given legal protection in the form of copyright, patent, trademark, and
trade secret laws.
– The owner of a physical book may give away, lend, or resell the one
physical book he or she bought, but not make copies.
Intellectual Property Laws:
– Copyright law  Protects authored works
– Patent laws  Protect inventions
-Trademark laws  Protect logo, business name or brand name
Trade secret laws  Help safeguard information critical to an organization’s
success
Copyrights
Copyrights are granted for a limited, but long, time [Life + 50 yrs in 1976;
1998: Life + 70 years, 95 years for corporate work].
What is a Copyright? A copyright is a form of protection grounded in the U.S.
Constitution and granted by law for original works of authorship fixed in a
tangible medium of expression. Copyrights last for the life of the creator +70
years if created after 1978 If created between 1922 and 1978, then the
copyright lasts for 95 years from publication If created before 1922, its in the
public domain
What does that mean? The work must be original, or created by you The
work must be fixed in a tangible medium of expression This means the work
is permanent/stable enough to be perceived, reproduced or communicated
for more than a transitory duration Some examples of fixation Book Painting
Drawing recording Additional requirements A copyrightable work must
contain a “modicum of creativity”
With some exceptions, copyright owners have the exclusive right to:
– Make copies of the work,
– Produce derivative works,
– Distribute copies,
– Perform the work in public, and
– Display the work in public.
Author may grant exclusive right to others
Types of work that can be Copyrighted:
– Architecture – Art – Audiovisual works – Choreography – Drama – Graphics
– Literature – Motion pictures– Music – Pantomimes – Pictures – Sculptures
– Sound recordings – Other intellectual works
To get Copyright: – Work must fall within one of the preceding categories –
Must be original • Evaluating originality can cause problems
Derivative Works A derivative work is something initially created by another
which you alter in a creative and original fashion The totality of changes must
be substantial so as to clearly identify the work as being a separate entity
(The work must be transformative) Your alterations are copyrightable
What does copyright not protect? Copyright does not protect facts or ideas
However, copyright can protect an original, creative expression of facts and
ideas if fixed in a tangible medium Phonebook- Not copyrightable Content is
a listing of facts (peoples’ phone numbers) Organized alphabetically Not
sufficiently creative
Fair-Use Doctrine – Permission to use the work is not required. – Allows uses
of copyrighted material that contribute to the creation of new work and do
not significantly affect sales of the material, thus depriving copyright holders
of their income. – Allows some research and educational uses as well as
news reporting and critiquing. – Guidelines for determining Fair Use are
found in law.
Four Factors in “Fair Use”(1976)
– Purpose and nature of use, including whether it is for commercial $$
purposes or nonprofit educational purposes.
– The nature of the copyrighted work. Creative work such as a novel, music,
art, have more protection than factual work – after all the facts are the facts.
– The amount and the significance of the portion used.
– The effect of the use on the potential market or value of the copyrighted
work. Uses that reduce sales of the original work are less likely to be
considered fair use.
Copyright infringement – Copy substantial and material part of another’s
copyrighted work – Without permission • Area of copyright infringement –
Worldwide sale of counterfeit consumer supplies • Copyrights to protect
computer software exist – To prove infringement, copyright holders must
show a striking resemblance between the original software and the new
software that could be explained only by copying
World Intellectual Property Organization (WIPO) – Agency of the United
Nations – Advocates for the interests of intellectual property owners
Digital Millennium Copyright Act (DMCA) – Added new provisions to WIPO –
Civil and criminal penalties included – Governs distribution of tools and
software that can be used for copyright infringement – Opponents say it
restricts the free flow of information
Patents • Grant of property rights to inventors • Patents are granted for a
limited time. – Patents protect new ideas by giving the inventor a monopoly
on the invention for a specified period of time (e.g. 20 years). • Issued by the
U.S. Patent and Trademark Office (USPTO) • Permits an owner to exclude the
public from making, using, or selling the protected invention • Allows legal
action against violators • Prevents independent creation • Extends only to
the United States and its territories and possessions
Applicant must file with the USPTO – USPTO searches prior art – Takes an
average of 25 months • Prior art – Existing body of knowledge – Available to
a person of ordinary skill in the art • Patent infringement – Someone makes
unauthorized use of a patent – No specified limit to the monetary penalty
An invention must pass four tests 1. Must be in one of the five statutory
classes of items • Processes • Machines • Manufactures (Such as objects
made by human and machines) • Composition of matter (such as chemical
compounds) • New uses of any of the previous classes 1. Must be useful 2.
Must be novel 3. Must not be obvious to a person having ordinary skill in the
same field • Items cannot be patented if they are – Abstract ideas – Laws of
nature – Natural phenomena
Software patent – Feature, function, or process embodied in instructions
executed on a computer • 20,000 software-related patents per year have
been issued since the early 1980s
Copyright or Patent Software? – There is disagreement about whether
copyright is the appropriate protection mechanism for software. – Some
argue for patents, some for completely new rules designed specifically for
software. – There are two aspects to the debate. – First, what is the nature of
a new program? Is it an invention, a new idea? Or is it a “writing,” an
expression of ideas, algorithms, techniques? – Second, what are the practical
consequences of each choice in terms of encouraging innovation and
production of new products?
Practical considerations • Should You Copyright or Patent Software? –
Copyrights: • Protect the expression of an idea in a fixed and tangible form. •
Are cheap, easy to obtain, and last a long time. • Allow fair-use of the
intellectual property. – Patents: • Protect new, non-obvious, and useful
processes. • Are expensive, difficult to obtain, and last for short periods of
time. • Allow licensing to other developers.
Software Patents (continued) • Before obtaining a software patent, do a
patent search • Software Patent Institute is building a database of
information • Cross-licensing agreements – Large software companies agree
not to sue others over patent infringements – Small businesses have no
choice but to license patents
Patents (continued) • Defensive publishing – Alternative to filing for patents
– Company publishes a description of the innovation – Establishes the idea’s
legal existence as prior art – Costs mere hundreds of dollars – No lawyers –
Fast
Patents (continued) • Standard – is a definition or format – Approved by
recognized standards organization (ISO,ANSI) – Or accepted as a de facto
standard by the industry – Enables hardware and software from different
manufacturers to work together • Submarine patent – Hidden within a
standard – Does not surface until the standard is broadly adopted
Patent farming involves – Influencing a standards organization to make use
of a patented item – Demanding royalties from all parties that use the
standard
Trade Secret Laws • Uniform Trade Secrets Act (UTSA) established uniformity
in trade secret law • Trade secret – Business information – Represents
something of economic value – Requires an effort or cost to develop – Some
degree of uniqueness or novelty – Generally unknown to the public – Kept
confidential • Computer hardware and software can qualify for trade secret
protection
Trade Secret Laws (continued) • Information is only considered a trade secret
if the company takes steps to protect it • Greatest threat to loss of company
trade secrets is employees • Nondisclosure clauses in employee’s contract –
Enforcement can be difficult – Confidentiality issues are reviewed at the exit
interview
Noncompete agreements – Protect intellectual property from being used by
competitors when key employees leave – Require employees not to work for
competitors for a period of time • Safeguards – Limit outside access to
corporate computers – Guard use of remote computers by employees
Trade secret law has a few key advantages over patents and copyrights – No
time limitations – No need to file an application – Patents can be ruled
invalid by courts – No filing or application fees • Law doesn’t prevent
someone from using the same idea if it is developed independently • World
Trade Organization (WTO) – TRIPs Agreement provides for a minimum level
of protection for intellectual property
Summary of the WTO TRIPs Agreement
Legal Overview: The Battle Over Customer Lists • Employees make
unauthorized use of an employer’s customer list – Customer list not
automatically considered a trade secret – Educate workers about the
confidentiality of such lists
Key Intellectual Property Issues • Issues that apply to intellectual property
and information technology – Plagiarism – Reverse engineering – Open
source code – Competitive intelligence – Cybersquatting
1. Plagiarism • Theft and passing off of someone’s ideas or words as one’s
own • Many students – Do not understand what constitutes plagiarism –
Believe that all electronic content is in the public domain • Plagiarism
 Item TM or SM? Why?
McDonald's Service The name is a Service Mark
Mark when referencing the business
of serving food
Golden Trademark Logos are registered as
Arches Logo Trademarks
McNugget Trademark McNugget is a product, not a
service - so it's a Trademark
McCafe Service A Service Mark when
Mark referencing the business of
serving coffee and other
drinks
McCafe Trademark The stylized text logo for
McCafe is a Trademark
detection systems – Check submitted material against databases of
electronic content
Steps to combat student plagiarism – Help students understand what
constitutes plagiarism – Show students how to document Web pages –
Schedule major writing assignments in portions – Tell students that you know
about Internet paper mills – Educate students about plagiarism detection
services
Partial List of Plagiarism Detection Services and Software
2. Reverse Engineering • Process of taking something apart in order to –
Understand it – Build a copy of it – Improve it • Applied to computer –
Hardware – Software • Convert a program code to a higher level design •
Convert an application that ran on one vendor’s database to run on another’s
Compiler – Language translator – Converts computer program statements
expressed in a source language to machine language • Software
manufacturer – Provides software in machine language form • Decompiler –
Reads machine language – Produces source code
37. Ethics in Information Technology, Second Edition 37 Reverse Engineering
(continued) • Courts have ruled in favor of using reverse engineering – To
enable interoperability • Software license agreements forbid reverse
engineering • Semiconductor Chip Protection Act (SCPA) – Established a new
type of intellectual property protection for mask works
38. Ethics in Information Technology, Second Edition 38 3. Open Source Code
• Program source code made available for use or modification – As users or
other developers see fit • Basic premise – Software improves – Can be
adapted to meet new needs – Bugs rapidly identified and fixed • High
reliability • GNU General Public License (GPL) was a precursor to the Open
Source Initiative (OSI)
39. Ethics in Information Technology, Second Edition 39 4. Competitive
Intelligence • Gathering of legally obtainable information – To help a
company gain an advantage over rivals • Often integrated into a company’s
strategic plans and decision making • Not industrial espionage • Nearly 25
colleges and universities offer courses or programs • Without proper
management safeguards it can cross over to industrial espionage
40. Ethics in Information Technology, Second Edition 40 A Manager’s
Checklist for Running an Ethical Competitive Intelligence Operation
41. Ethics in Information Technology, Second Edition 41 5. Cybersquatting •
Trademark is anything that enables a consumer to differentiate one
company’s products from another’s – May be • Logo • Package design •
Phrase • Sound • Word
42. Ethics in Information Technology, Second Edition 42 Cybersquatting
(continued) • Trademark law – Trademark’s owner has the right to prevent
others from using the same mark • Or confusingly similar mark •
Cybersquatters – Registered domain names for famous trademarks or
company names – Hope the trademark’s owner would buy the domain name
• For a large sum of money
43. Ethics in Information Technology, Second Edition 43 Cybersquatting
(continued) • To curb cybersquatting – Register all possible domain names •
.org • .com • .info • Internet Corporation for Assigned Names and Numbers
(ICANN) – Current trademark holders are given time to assert their rights in
the new top-level domains before registrations are opened to the general
public
44. Ethics in Information Technology, Second Edition 44 Summary •
Intellectual property is protected by – Copyrights – Patents – Trade secrets •
Plagiarism is stealing and passing off the ideas and words of another as one’s
own • Reverse engineering – Process of breaking something down – In order
to understand, build copy, or improve it
45. Ethics in Information Technology, Second Edition 45 Summary
(continued) • Open source code – Made available for use or modification as
users or other developers see fit • Competitive intelligence – Not industrial
espionage – Uses legal means and public information • Cybersquatting –
Registration of a domain name by an unaffiliated party
What is a trademark? A trademark is a word, phrase, symbol or design, or a
combination thereof, that identifies and distinguishes the source of the
goods of one party from those of others. A servicemark is the same thing,
except it identifies and distinguishes the source of a service rather than
goods. Oftentimes, the term “trademark” is used to mean both
What can’t you trademark? Generic terms Descriptive terms (“Sweet” for ice
cream) Your name (unless secondary meaning- Kraft for Cheese) Misleading
terms (Can’t say “sugar sweet” for something artificially sweetened) Location
terms (“New York fashion” for clothes) Name of the goods in another
language (“Gelato”) Commonly used words in an industry (“hamburger,”
“software”) Scandolous, offensive or immoral language
A restaurant or retail store might deal in physical items, but they actually
require service marks. McDonald’s is a registered service mark for restaurant
services. Similarly, Walmart is a registered service mark for retail store
services.
In contrast, if you sold a line of jewelry products or clothing products, then
you would want to get a trademark for your product line. Tiffany & Co is a
registered trademark for a line of jewelry products, and Nike is a registered
trademark for a line of footwear and clothing products.
The Service Mark Symbol
Whenever a trademark or service mark is federally registered with the
United States Patent and Trademark Office (USPTO), the owner of the
trademark may use the registered trademark symbol, often referred to as the
registration symbol, ®. It is unlawful for unregistered companies to use this
symbol.
If the trademark or service mark is not federally registered, then the
appropriate symbol for a trademark would be ™, whereas the appropriate
symbol for a service mark would be ℠. In other words, if you are providing a
product under a particular name or logo, then you may use the ™ symbol to
signify that you are claiming trademark rights. If you provide a service
instead of a product, then you may use the ℠ symbol for the same purposes.
Trademark or Service Mark – More Examples
Let’s take a look at several well known marks registered by the McDonald’s
corporation, and if they are a trademark or service mark.
Differences between Trademark and Copyright Copyright is geared toward
protecting literary, artistic, and creative works Trademark protects items that
help define a company, such as a logo and brand Ex: A publishing company
can trademark its name, logo and sometimes the names of the books it
publishes. However, it can copyright the content of the books.
The Bottom Line
The line between a trademark and a service mark is often so thin that many
companies simply end up having both. For example, Google lists its brand as
both a trademark and a service mark. (We also created additional resources
so you can read more about patents and copyrights.) Trademark or
Item
Ultimately, your concern should not be whether your company has a service Copyright?
mark or a trademark, but whether your mark is registered. That’s the best
way to ensure that others don’t infringe on your mark. Working with an
Movies Copyright
experienced attorney will increase your chances of success in you
trademark/service mark registration process

copyright Paintings Copyright

copyright provides intellectual property protection to an original creative
work, such as a book, a film, or a painting (often referred to as original works
of authorship.)
By having a copyright, the author of the creative work can stop others from Photographs Copyright
copying or reproducing the work without permission. In other words, a
copyright provides you with the right to control how your creative work is
used.
Poems Copyright
For example, the Harry Potter books are protected by copyright. This means
that if you published a book that copied the text of the Harry Potter books
without the copyright owner’s permission, then you would be in violation of Song Lyrics Copyright
the owner’s copyright. The owner could then sue you in federal court for
copyright infringement.
Copyright law exists to provide creators with the exclusive rights to their
artistic works. If anyone could copy and resell creative works without Music Copyright
restriction, creators would have much less incentive to produce anything.
Copyright law allows them to profit from their creative endeavors.
It should be noted that copyright protects only the content of the creative
work. It does not protect the ideas found therein. Someone could write and Derivative Works[edit]
publish a book about wizards and magic, very similar to the Harry Potter
According to Section 173.2 of the Intellectual Property Code,[4] derivative
books, without violating copyright law. As long as the content is original, the
works are defined as new work provided that they do not violate any
work would not only be free from copyright violation, but it would be
subsisting copyright upon the original work employed or any part thereof, or
copyrightable itself.
to imply any right to such use of the original works, or to secure or extend
For example, the lyrics and music to the song “I Will Always Love You” are
copyright in such original works.
protected through copyright. The movie Jaws is also protected through
copyright. Essentially, any creative and original work outside of business The list of derivative works includes the following:
names or slogans can be protected through copyright.
 Dramatizations, translations, adaptations, abridgments, arrangements,
The only exception to the general rules listed above is that logos can be and other alterations of literary or artistic works
protected by both trademarks and copyrights. A logo is both a creative work
(which is required for copyright protection), and a device used to distinguish  Collections of literary, scholarly or artistic works, and compilations of
or differentiate a product or service from another competing product or data and other materials which are original by reason of the selection
service (which is required for trademark protection). or coordination or arrangement of their contents.
The general public might often confuse the terms copyright and trademark, According to Section 174[4] which refers to the case of a published edition of
but it’s important to understand that they protect different assets. work, the publisher has the copyright consisting merely of the right of
reproduction of the typographical arrangement of the published edition of
the work
Trademark or
Item
Copyright? Fair use
A fair use, in its most general sense, is a doctrine in the law that act of
Business Name Trademark copying of copyrighted materials done for purposes such as commenting,
criticizing, or parodying a copyrighted work without the permission from the
copyright owner. It is used as a defense under copyright infringement

Business Slogan Trademark That is when someone directly practices each element of your claim by
“making, using, selling, or importing” the apparatus you’ve patented or by
directly performing each step in your method claim.
Business Logo Can be both

Books Copyright

Manuscripts Copyright

Screenplays Copyright