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    Perl Archive : TLC : Webmaster : Protecting Against Internet Piracy
    Guide Search entire directory 
     

    Date Published: 1999-10-01

    by Michael J. Persson, Esq.
    © 1999, Law Offices of William B. Ritchie

    The Internet has created huge opportunities for programmers and other electronic content providers. Unlike the traditional product manufacturing and distribution model, it is relatively easy to set up a Web Site and begin selling your product or service. This ease of entry, however, can also work to your disadvantage. Electronic products and services are easily copied and reused by others on their own sites. Programs like Bandwidth Protector‘ Software by CGI Software may protect against others linking to images on your site. However, how do you protect yourself from others downloading your images or products and posting them on their web sites?

    The two principal forms or protecting electronic products are copyrights and patents. Each offers a different type of protection and each have different requirements for obtaining and enforcing rights.

    Copyrights protect artistic expression, such as photographs, graphics, and stories, but also can be used to protect the arrangement of code in a script or other program. In this manner, copyright may be used to protect against direct copying of your product.

    A copyright automatically arises from the creation of the work and not from registration or publication of the work. However, a copyright must be registered as a prerequisite to instituting any infringement suit and for collecting damages for infringement. Copyright registration is a relatively simple procedure involving the completion and submission of a registration form, the deposit of two copies of the work with the U.S. Copyright Office, and the payment of a $30.00 registration fee. Typically, no examination is made by the Office and the copyright registration issues as a matter of course.

    Copyrights may be enforced in a number of ways to prevent Internet Piracy. First, if the pirates does not own their own server, you may notify their host of the existence of your copyright and demand the removal of the material from the host's server. Such a notification is particularly powerful if the host is registered with the copyright office and has appointed an agent for the receipt of such notices. Under the Digital Millenium Copyright Act a host is shielded from liability if it follows a specific procedure upon receipt of an infringement notification. Part of this procedure requires the removal of the offending material pending a showing of non-infringement by the pirate. As most pirates will not respond, this will generally be effective at removing the material from the Internet.

    If a pirate owns their own server, or responds to the host with a counter notification of non-infringement, then the copyright must be enforced through legal action. The copyright laws are the purview of federal law and, accordingly, suits for copyright infringement are typically filed in Federal District Court. A copyright owner who files suit has a number of remedies available.

    The first, and often most powerful, remedy is the injunction. An injunction is an order from the court that requires the pirate to cease and desist from their action. At the outset of a suit, a copyright owner will usually seek a preliminary injunction to require the pirate to cease their action pending outcome of the suit.

    The copyright owner may also seek actual monetary damages or statutory damages for the infringement. Actual damages are typically calculated based upon lost profits of the copyright owner or upon the ill gotten gains of the infringer. The lost profits are equivalent to the money lost by the copyright owner that is directly attributable to the infringement; i.e. lost profit from sales. These damages are often appropriate when the pirate has distributed large numbers of the owner's materials for free, causing the owner to lose large numbers of sales. The ill-gotten gains are equivalent to the profits made by the infringer through the infringement. These damages are appropriate in cases where the pirate is selling large numbers of the materials to different markets than the copyright owner; i.e. the owner has no proof of lost sales. Statutory damages are damages awarded by the court and require no evidence of actual damage. These damages may be appropriate, for example, where a pirate distributes a piece of shareware in violation of a license agreement that they entered into upon download from the owner. In such a case, where there is no tangible lost profits or ill-gotten gains, the owner would still be entitled to an award of money by the court.

    A typical copyright infringement action may be brought for as little as $5,000, although more complex actions can cost in upwards of $150,000.

    Patents protect useful articles and can be used to protect specific useful features of a script or other program. Accordingly, patents may be used to protect a program regardless of the way that the code is written.

    A patent is the grant of the right to exclude others from making, using or selling a new and useful invention for a limited period of time; now 20 years from the date of filing. Patents are not effective until granted by the government and the invention must first pass a rigorous examination prior to grant. Given the current PTO backlog of over 18 months in the software field, such a grant may not occur for 2 - 4 years from the date of initial filing. Further, the cost of obtaining a patent will generally be between $4,000 and $8,000.

    Issued patents may appear, from their descriptions and drawings, to cover broad program concepts. However, the scope of a patent is limited by its claims, which constitute the legal definition of the invention. In order for another program to infringe the patent, each and every element and limitation of the claim must be found in the program, either directly or equivalently.

    In addition to the question of infringement, patent infringement suits usually will also involve counter claims, by the infringer, that the patent is invalid and/or is unenforceable because of some inequitable conduct on the part of the patent holder.

    Once a infringement, validity and enforceability are proven, the patent owner is entitled to a remedy for the infringement. As was the case with copyrights, an injunction may be sought to prevent future infringement. Actual damages, computed in a similar manner as copyright damages, may also be sought. Unlike copyrights, however, no statutory damages are available and an owner must prove actual damage in order to obtain a monetary recovery.

    Patent infringement suits are generally very expensive. The minimum legal costs in a case going to trial are in the range of $50,000. However, it is not uncommon for legal costs to be as high as $2.5 million in some cases. These costs will cause many to forego patent protection. However, an owner of a valid and enforceable patent may have a number of options for paying for an infringement suit.

    First, the owner may seek to partner with another company to bring suit. It is not uncommon for small companies to license their patent rights to larger concerns who, in turn, agree to assist in patent enforcement. Second, the owner may find a law firm to take the case on a contingent fee. If a patent is a good one, many firms are willing to take such a risk for a percentage of the damages, typically between 33% and 50%. Finally, the owner may purchase infringement insurance that will cover them in the event of infringement by others. Although such insurance is just begin to gain acceptability, it is offered by a few companies.

    The two principal forms or protecting electronic products are copyrights and patents. Each offers a different type of protection. Copyrights protect artistic expression, such as photographs, graphics, and stories, but also can be used to protect the arrangement of code in a script or other program. In this manner, copyright may be used to protect against direct copying of your product. Patents protect useful articles and can be used to protect specific useful features of a script or other program, regardless of the way in which the code is written.

    by Michael J. Persson, Esq.
    ©, 1999; Law Offices of William B. Ritchie
    Michael J. Persson, Esq.
    Law Offices of William B. Ritchie
    72 N. Main Street
    Concord, New Hampshire 03301
    (603) 225-5212
    fax: (603) 225-5146

     
     


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