"Lawsuits
primarily benefit the attorneys and nobody else."
- Bryce's Law
INTRODUCTION The protection of intellectual property should
be a significant concern to all Information Technology organizations. Without
protection, commercial hardware/software vendors would quickly evaporate as
others would inevitably steal their designs and programs. Corporate developers
would also suffer if their ideas, inventions, and programs were misappropriated
thereby causing them to lose their competitive advantage. In fact, our
corporate landscape and standard of living would be radically different if we
had no such protection. Fortunately, the framers of the U.S. Constitution were
wise enough to implement legislation safeguarding the authorship and ownership
of literature, art, and inventions, thus causing the United States to flourish
in the arts and sciences. But the advent of the computer caused us to
reconsider how we safeguard such property. For example, the concept of a
computer program has been a bit nebulous to some people; should the source code
be protected by copyright? What about the object code (executable)? Attorneys
have been debating this subject over the last thirty years and there is still
general confusion in the field.
In 1974, MBA embarked on our own
lawsuit to protect the "PRIDE" methodology. This was a lengthy legal battle
which took the courts into unchartered waters. At the time, "PRIDE" was nothing
more than a methodology implemented with printed manuals and forms (no software
support at the time). To safeguard our product, our lawyers drafted a standard
nondisclosure agreement which all prospective buyers would sign prior to our
sales presentation. Further, our contracts included similar verbiage
instructing the customer to safeguard the physical embodiment of the product
and not to divulge it to unauthorized third parties.
We were contacted
by Arthur Young & Company in 1974 to conduct a "PRIDE" sales presentation
for one of their consulting clients in Milwaukee, Wisconsin; the Harley
Davidson Motorcycle Company (then a division of AMF). The attendees signed the
nondisclosure agreement and the presentation was conducted as usual. Following
the presentation, MBA was informed that Harley wouldn't be purchasing our
product, and that Arthur Young would be developing a similar methodology for
Harley instead. This made MBA suspicious, particularly since one of Young's
consultants was a former "PRIDE" user. Consequently, MBA initiated a lawsuit
over misappropriation of trade secrets.
This turned into a long and
ugly legal battle which lasted eight years. Basically, the lawyers for the
opposition contended that since the "PRIDE" materials had copyright notation
printed on them, they were in the public domain. In contrast, it was our
contention that "PRIDE" was a trade secret, In the end, we won the lawsuit and
"PRIDE" was proven to be a trade secret in a court of law. This litigation
established many precedents and is often referenced in similar cases; for
additional information, see:
Chicago-Kent College of Law http://www.kentlaw.edu/perritt/honorsseminar/honorssemts2.htm
Library Law http://www.librarylaw.com/ip-kirschner3.html Many
years have gone by since the verdict was passed. In 1989, Arthur Young &
Company merged with Ernst and Ernst (now called Ernst & Young), the
principals of the case have moved on and we no longer bear any ill-will towards
the company. Further, "PRIDE" was placed on the Internet in 2004 (with
copyright notation). As a result of the lawsuit, MBA learned a lot about the
protection of intellectual property. I may not be an attorney, but you may look
upon this as a convenient primer to protect yourself.
COPYRIGHTS Copyright is primarily concerned with the
authorized reproduction of such things as text, graphics, music, and
audio/video recordings. As such, it protects publishers, authors, artists, and
designers from unauthorized republication or redistribution of their work. Not
too long ago, in order for a copyright to be enforceable, it had to be
registered with the copyright office. However, the laws were somewhat loosened
in 1976 whereby copyright protection is now effective from the moment the work
is first created in fixed form. Although the use of copyright notation is no
longer mandatory, it is highly beneficial to include it whenever possible to
indicate your work is protected by copyright. Notation typically appears as:
"Copyright © 2002 ABC Company" Since computer
program source code is written as text, it is a wise idea to add such notation
in the source code. But understand this, copyright only protects the work from
unauthorized reproduction, it does not protect the author's ideas (which are
how the lawyers of Arthur Young argued against us). Although the exact source
code cannot be reused, it does not protect the logic of the program. To
illustrate, suppose a new employee brings with him some source code from his
last place of employment. Copyright protection would prohibit him from reusing
the source code, but it wouldn't stop him from using the ideas contained in the
program. Unfortunately, most programmers do not like to reinvent the wheel and,
as such, frequently reuse source code over and over again. From this
perspective, probably every company with an I.T. department is guilty of some
form of copyright infringement.
TRADE SECRETS A trade
secret is much different than a copyright. Basically, it represents some unique
formula, design or idea. Perhaps the best known example of a trade secret is
the Coca-Cola syrup formula which is strictly protected in a vault. There are
essentially two elements for establishing a trade secret; first, that it is a
"unique" idea or formula, that it has distinguishable characteristics or
properties to differentiate it from others, and; second, that you can
demonstrate you are taking effective safeguards to protect it from unauthorized
use (hence, making it a "secret"). In the lawsuit over "PRIDE", we were able to
successfully demonstrate that "PRIDE" was unique and that we had taken adequate
steps to safeguard unauthorized use (our nondisclosure agreement).
PATENTS A patent is similar to a trade secret in that the
inventor has a unique idea or device he wishes to prevent others from
producing. To implement a patent, the idea or device must be registered with
the U.S. Patent and Trademark Office. A registration process is required which
includes a fee. For an invention to be patented, it must be proven to be
unique, useful, and not of an obvious nature. If a patent is granted, the
inventor is protected from others producing a similar invention for a limited
period of time (20 years). The patent is renewable at the end of this period.
The computer field makes active use of patents to establish unique
inventions and protect them from others For example, IBM typically registers
the most patents each year, both hardware and software.
TRADE
MARKS/SERVICE MARKS A trademark is an arbitrary word, name,
symbol, or device used to distinguish a particular product. A service mark is
similar except it is used to distinguish a particular service. For example,
"PRIDE" is the registered trademark of M. Bryce & Associates.
Like
a patent, the trade/service mark has to be registered with the U.S. Patent and
Trademark Office. And, yes, a registration fee is required. Notation normally
accompanies the trademark to indicate it is registered ®. Use of such
notation should be encouraged so that others know your product or service is a
trademark.
A trade/service mark means no other company can use it to
offer a competing product or service unless authorized by the company holding
its title. As such, it is closely related to the integrity of the title
company. If a competitor uses it, the public will assume they are somehow
aligned with your business and, as customers of your competitor, are entitled
to the same level of service or quality your business offers. If the competitor
fails in this regards, it is a reflection of both your product/service and your
company which could damage your business.
CONCLUSION
When MBA was founded, we were very lucky to get good, sound legal advice
for protecting our intellectual property. Because of this, I encourage anyone
concerned in this regard to seek such advice from a qualified attorney.
Another way to assist in the protection of your intellectual property is to
enact some form of employee agreement, whereby the employee agrees not to
misappropriate your products (such as designs and software), or use other
intellectual property without expressed authorization. This puts your employees
on notice.
Devices such as copyrights, trade secrets, patents,
trade/service marks are very helpful for preventing the unauthorized use or
distribution of your products. However, if someone really wants to pirate your
products, they will. When you catch someone in the act though, try to give them
a way out. I always recommend that you try to avoid litigation whenever
possible. I find such lawsuits primarily benefit the attorneys and nobody else.
But if your livelihood is genuinely threatened, as ours was, then you have no
alternative but to use the full force of the law.
ABOUT THE AUTHOR
Tim Bryce is the Managing Director of M. Bryce & Associates (MBA)
of Palm Harbor, Florida and has 30 years of experience in the field. He is
available for training and consulting on an international basis. He can be
contacted at:
timb001@phmainstreet.com
Copyright © 2006 MBA. All rights reserved.
