Intellectual Property Protec for Computer Software and Business
Intellectual Property Protec for Computer Software and Business Methods 1/5/2022 1
Main Topics n Copyright Protection u u u n Patent Protection u u u 1/5/2022 Subject Matter and Exclusive Rights Types of Copyrightable Software Derivative Works Registration Authorship, Ownership, and Inventorship u u Patent Rights and Ownership U. S. vs. European Novelty Requirements Business Method Patents Amazon. com v. Barnesand. Noble. com International Patent Protection for Software Hot Areas for Software Patents Conclusions 2
Subject Matter and Exclusive Rights Subject Matter of Copyright: original works of authorship fixed in any tangible medium of expression Exclusive Rights: n n n 1/5/2022 Reproduction – copying a work Adaptation – preparing derivative works Distribution – distributing work publicly Performance – performing work publicly Display – displaying work publicly – e. g. , posting on website Sound Recording Digital Audio. Transmission – includes Internet broadcasting 3
Forms of Copyrightable Software n n All types of computer programs are copyrightable regardless of purpose or output. Copyright protection extends to works fixed in any tangible means of expression from which they can be perceived with the aid of machine or device. u u u 1/5/2022 Includes source code and object code Includes code embodied in a ROM or other memory storage device Does not extend to ideas or program functions 4
Derivative Works n n 1/5/2022 Definition – a work based on one or more pre-existing works Includes translation, dramatization, motion picture version, etc. For software, derivative works include original modifications to someone else’s code Cases: Nintendo v. Galoob Toys (1994), Sony v. Gamemasters (1999) 5
Registration n Advantages: u n Requirements u u 1/5/2022 Required to bring federal lawsuit and to obtain statutory damages and attorney fees, prima facie proof of ownership Deposit of first and last 25 pages of code Trade secrets can be redacted. Source code or object code can be registered. Completed form TX plus fee 6
Authorship, Ownership, and Inventorship n Definitions u u u 1/5/2022 u Author – one who originates a work Joint works – works created by multiple authors with intent to be merged into inseparable or interdependent parts of a whole Work made for hire – « 1. « 2. work of authorship created pursuant to employment – agency law applies specially commissioned and within one of the statutory categories, if express agreement in writing signed by both parties Inventor – originator of claimed idea 7
Copyright Ownership n n n Ownership initially vests in author Exception – work made for hire Joint works – u u n n n 1/5/2022 Co-authors deemed tenants in common (each has undivided ownership but must account to other owners) Originator of an idea not a co-author but may be an inventor Collective/derivative works – individuals only own their respective contributions Transfer of copyright requires writing signed by the copyright owner Transfers can be recorded and recordation provides advantages against subsequent transferees 8
Authorship vs. Inventorship Example n n 1/5/2022 Engineer at Company A sketches on paper a new method for controlling an industrial process. Company A hires Company B to write software to implement the method. Who is the author? Who is the inventor? Who is the owner? 9
Transfer Example n n n 1/5/2022 A transfers copyright in software to B. 1 -15 -2000 A transfers copyright in same software to C. 1 -15 -2000 C records transfer. 1 -16 -2000 B records transfer. Who owns copyright? 1 -1 -2000 10
Copyright Summary n n 1/5/2022 Protection and federal registration are easy and inexpensive to obtain. Provides right to control exclusive rights, such as reproduction and distribution No protection against independent development Does not protect program functions 11
Patent Rights and Ownership n n n 1/5/2022 Rights of patent holder: prevent others from making, using, selling, or offering to sell the claimed invention Patents treated as personal property for ownership purposes Ownership of patent rights governed by common law, state statutes, and Bayh. Dole for federally-funded inventions Recording an assignment prevents voiding of first conveyance by subsequent purchasers. Joint owners of patents can make, use, sell, offer to sell invention without accounting to other owners. 12
Patent Assignment Recordation Example n n n 1/5/2022 1 -1 -2000 A assigns patent to B. B does not record assignment. 2 -1 -2000 A assigns patent to C. Who owns patent? Suppose same facts except B records on 3 -1 -2000. Who owns patent? 13
U. S. vs. European Novelty Requirements n n 1/5/2022 U. S. – Public disclosure, sale, or offer to sell an invention starts the one-year clock after which patent rights are barred. Europe – absolute novelty – Any public disclosure of the invention bars patent rights but offer to sell does not (unless details of invention are disclosed). 14
On Sale Bar in U. S. n n Test is 1) commercial offer for sale and 2) invention ready for patenting prior to critical date Hypo: Company A contracts to sell software to Company B, contract signed 1 -1 -2000. Company A develops software during 2000, completes and delivers to Company B on 6 -1 -2000. Company A files for patent on 5 -1 -2001. Is patent valid? Robotic Systems v. View Engineering: Completion 1/5/2022 of software not required to meet ready for patenting test. 15
Business Method Patents n n 1/5/2022 What is a business method patent? Patents on financial and businessrelated ideas not new. E-commerce patents floodgates opened with State Street Bank v. Guarantee Trust (1998). New “first inventor” defense applies to prior users of “business methods. ” 16
Examples of Business Method Patents n n n 1/5/2022 The Art of Compiling Statistics (1889) Method for Managing Mutual Funds (1998) One-click on-line ordering system (1999) 17
Amazon. com v. Barnesandnoble. co m Dec. 1, 1999, Amazon. com wins preliminary injunction. u Feb. 1, 2001, CAFC vacates preliminary injunction because of substantial question of patent invalidity. u Lawsuit settled in 2001. u 1/5/2022 18
Amazon. com v. Barnesandnoble. co m n n 1/5/2022 Validity issue at trial hinges on whether Compu. Serv Trend stock chart ordering system anticipates or renders obvious “single action” claims. Another validity issue is whether it would have been obvious to modify prior art “web basket” system. 19
Fate of Business Method Patents n n n 1/5/2022 Subject matter issue not discussed in Amazon. com CAFC opinion Heightened scrutiny in USPTO for patent applications assigned to class 705: Data Processing: Financial, Business Practice, Management, or Cost/Price Determination Explicitly recognized by U. S. Congress in first inventor defense legislation 20
International Patent Protection for Computer Software n n 1/5/2022 Article 52(2) of European Patent Convention specifically excludes “programs for computers” as inventions. However, patents for programmed computers have been recognized in various countries. – 1965 Linear Programming U. K. Decision 1960 s and 1970 s – Patent offices in European countries grappled with the concept of software patents. Vicom Decision (1979) opened floodgates for software patents in the EPO. 21
International Patent Protection for Computer Software n n 1/5/2022 Patent in Vicom decision related to image processing. Both method and apparatus claims allowed by the EPO Board of Appeals Subsequent EPO Board of Appeal decisions have upheld patentability of software (IBM Data Processor Network patent (1990)). E-commerce patents only excluded to the extent that they are directed to methods for doing business AS SUCH 22
Hot Areas for Software Patents n n 1/5/2022 Computer networking Computer Security Biostatistics E-Commerce 23
Patent Summary n n n 1/5/2022 Patents protect ideas, not just expressions of ideas. Independent development is not a defense to patent infringement except for limited business method exception. Software is protectable as process or programmed device under patent law. 24
Conclusions n n n 1/5/2022 Software should be considered for both copyright and patent protection. Software is patentable in U. S. and internationally. E-commerce and methods for doing business can be patented in U. S. and internationally. Patents for e-commerce inventions more likely to be successful if described and claimed in technical terms. Searching and disclosing non-patent prior art, including material available on web pages, increases likelihood of patent’s success before the PTO and in court. File early in development process to avoid onsale bar. 25
Contact Information Gregory A. Hunt ghunt@jenkinswilsontaylor. com JENKINS, WILSON & TAYLOR, P. A. Suite 1400, University Tower 3100 Tower Blvd Durham, North Carolina 27707 Telephone: (919) 493 -8000 Website: www. jenkinswilsontaylor. com 1/5/2022 26
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