Software Licensing Agreements Essays - Computer Law,

Software licensing Agreements Software license agreements emerged as the most popular means of protection of proprietary rights in computer software. They coexist with other forms of intellectual property rights as patent and copyright. Software license agreements serve several functions in transactions involving the transfer of computer technology. One of the most important legal functions is the protection of the proprietary rights of the licenser in the transferred software.(SPA) Other functions include controlling the revenue generated by licensed software and determining the rights and responsibilities of the parties regarding the performance of the licensed technology. Issue related to these functions include the applicability of Article 2 of the Uniform Commercial Code, including offer and disclaimer of warranties, determining the appropriate types of licenses to utilize, such as single users C.P.U. licenses, site enterprise licenses and network concurrent licenses.(SPA) In 1993 worldwide illegal copying of domestic and international software cost $12.5 billion to the software industry, with a loss of $2.2 billion in the United States alone. Estimates show that over 40 percent of U.S. software company revenues are generated overseas, yet nearly 85 percent of the software industry's piracy losses occurred outside of the United States borders.(Bueger, 1994) The Software Publishers Association indicated that approximately 35 percent of the business software in the United States was obtained illegally, which 30 percent of the piracy occurs in corporate settings. In a corporate setting or business, every computer must have its own set of original software and the appropriate number of manuals.(BSA) It is illegal for a corporation or businesses to purchase a single set of original software and then load that software onto more than one computer, or lend, copy or distribute software for any reason without the prior written consent of the software manufactur er. Many software managers are concerned with the legal compliance, along with asset management and costs at their organizations. Many firms involve their legal departments and human resources in regards to software distribution and licensing. Information can qualify to be property in two ways; patent law and copyright laws that are creations of federal statutes, pursuant to Constitutional grant of legislative authority.(SPA) In order for the government to prosecute the unauthorized copying of computerized information as theft, it must first rely on other theories of information-as-property. State law creates trade secret laws, and most jurisdictions have laws that criminalize the violations of trade-secret holders rights in the secret. The definition of a trade secret varies somewhat from state to state, but commonly have the same elements. For example, the information must be secret, and not of public knowledge or of general knowledge in the trade or business, a court will allow a trade secret to be used by someone who discovered or developed the trade secret independently or if the holder does not take adequate precautions to protect the secret. In 1964 the United States Copyright Office began to register software as a form of literary expression.(SPA) The office based its decision on White-Smith Music Co. v. Apollo, where the Supreme Court determined that a piano roll used in a player piano did not infringe upon copyrighted music because the roll was part of a mechanical device. Since a computer program is textual, like a book, yet also mechanical, like the piano roll in White-Smith, the Copyright Office granted copyright protection under the rule of doubt.(SPA) In 1974, Congress created the Natural Commission on New Technological Uses (C.O.N.T.U.) to investigate whether the evolving computer technology field outpaced the existing copyright laws and also to determine the extent of copyright protection for computer programs.(Gibbs, 1993) C.O.N.T.U. concluded that while copyright protection should extend beyond the literal source code of a computer program, evolving case law should determine the extent of protection. The commission also felt copyright was the best alternative among existing intellectual property protective mechanisms, and C.O.N.T.U. rejected trade secret and patents as viable protective mechanisms. The C.O.N.T.U. report resulted in the 1980 Computer Software Act, and the report acts as informal legislative history to aid the courts in interpreting the Act.(Gibbs, 1993) In 1980, the Copyright Act was amended to explicitly include computer programs. Title 17 to the United States Code states, it is illegal to make or to distribute copies of