Software And Intellectual Property Law: 4 Questions Every Software Business Should Ask Themselves
By Laura L. Hupp, Patent Attorney, Merchant & Gould P.C.
As software creeps its way into every facet of our lives, many industries that were previously untouched by computers are now using the power of computing to innovate and stay competitive in the marketplace. While computer software may bring efficiency and computational power to such industries, it also brings complexity. The creation and use of software is closely tied to many intellectual property law concerns that go beyond that “End User License Agreement” everyone claims to have read when they check the box. Following are four key questions you should ask yourself, if software plays an integral role in your business (or your client’s business).
1. Did I create new software?
The first thing you should determine is whether your business developed a new software application. It could be that your business is using existing software. If all of the code you are relying on came from a third party, you did not create new software and can move on to the next question!
However, if you, an employee, or a contractor created new code to solve problems in your business using software, you should take a closer look to see if there is something there that you should protect. Protectable software can be created from entirely new code or could be pieced together using existing software packages in new ways.
Regardless of whether your business’ software can be considered a new invention, if you have new code, you should consider copyright protection. Luckily, you have a copyright in anything new you create as soon as it is fixed in some tangible form. However, if you want to be able to enforce your copyright, you need to register it with the U.S. copyright office.
If you want your business’ software to be usable by others instead of patenting it, you could consider different options for open source licenses. You can make your business’ software freely available to others to modify and use, but in order to do so the user must agree to your license terms. There are many different options to consider for what kind of open source license format you want to use such as attribution, restrictions on use, etc.
2. Did I use software to solve a problem in a new way?
First, does your new software provide new and improved solutions to problems? This could come in the form of making it faster -- or easier -- to perform certain computing tasks, providing a more effective user interface, or finding a new way to crunch a bunch of data to produce a useful output. If your business’ software solves a technical problem, then you might want to consider patent protection.
Patents for software have pros and cons. One downside of pursuing patent protection is the time and cost involved with obtaining a patent. Software inventions have faced many challenges in the United States Patent and Trademark office due to laws restricting which types of software are eligible for patent protection. This hurdle (which you might hear referred to as 101 rejections or Alice rejections) can cause further delay and cost in obtaining patent protection for your invention that might not exist with other types of inventions. Another drawback is that it can sometimes be difficult to determine whether a competitor is using or making software that uses your patented features, so enforcing your patents rights takes some effort even after you obtain a patent. Finally, if you get as far as litigating your issued patent in court, it could face challenges of invalidation. Because of how quickly software technology moves, it may not always be worth the time and expense to pursue patent protection because the term of protection (20 years) often goes beyond the useful life of a software product.
On the plus side, patents can provide various benefits to their holders. Patents provide protection for the general concepts and processes that your business’ software employs. If you are developing a software product as a part of a startup company, having a provisional patent application on file provides you with freedom to discuss your ideas while knowing that they are protected from theft. Having a patent application pending also provides assurance to investors that their investment will be protected from infringement by competitors. If others develop software that performs the same task as your business’ patented software, you will have the right to use legal action to prevent them from using and selling that software. Even though technology moves fast, your business’ software invention could benefit in many ways from having patent protection.
Two key alternatives to patent protection are copyrights and trade secrets. Copyrights, as mentioned above, go into effect automatically as soon as something new has been created. Copyright protects your business’ code from exact copying and use without permission. Thus, it is the exact code that is protected—not the general processes that are implemented by the code. The term for copyright protection is quite lengthy—in the United States it lasts for the lifetime of the author plus 70 years.
Trade secrets are defined as anything that gives a business a competitive advantage and is something that a business has taken reasonable measures to keep secret. In the case of software, you could protect source code as a trade secret by placing restrictions against reverse engineering in a license to users of your business’ software. As long as the business keeps its secret protected, trade secrets can have an indefinite term of protection.
3. Where did I get my code?
Before you get ahead of yourself by applying for patents or copyrights, you should consider where you got your code if your business did not write all of it from scratch. Most software is built using some existing pieces of code. So where did your business get its code? You want to make sure that your business’ use of that code is permitted under any license agreements associated with the software. Those license agreements may come with purchased software or could apply to open-source software. Either way, there may be limitations on how your business can use the software and whether your business can obtain meaningful patent protection on inventions that use the software. It is worth taking the time to fully understand any licenses that apply to existing software that your business is using.
Perhaps some or all of your code was written by a contractor. In that case, you should check the agreements that your business has with the contractor. If your business does not have agreements in place—get them! Such agreements should indicate who owns the intellectual property from any code that is generated. Generally, the contractor should assign all rights in intellectual property to your business for any work they are doing for hire.
Another risk you should consider is whether your business’ software infringes any existing software patents. Even if you have totally new code, you could be infringing an existing patent. Free internet databases such as Google Patents make it easy for anyone to do some initial investigating to determine if their business’ new software employs concepts that are already protected by a patent. A more thorough search can be performed by a patent agent or patent attorney. While it might incur some expense up front, ensuring that your business is free to use its software without fear of being sued for infringement can be worth the peace of mind! Potential investors find this information to be reassuring as well.
4. Where am I getting my data?
Another concern that you might have relates to data. Many companies rely on external data sources to produce results. For example, you might use patient data or tissue sample data to generate information about diseases. If you do not control the source data, you should determine if you have permission to use the data. First, if the data is obtained from another entity, did you get the proper permissions to use their database? Second, if the data is obtained from individual people, even if it is anonymized, did they grant permission to use their personal data?
People will often agree to terms and conditions for use of their data in exchange for use of a software program or when signing paperwork as part of a medical procedure. In such cases, the permissions they grant are often transferable to other entities. Check with your data source to determine if you have permission to use the data in producing your software.
Conclusion
With the myriad of intellectual property concerns involved with software, it helps to be informed about the legal issues. It is worth taking the time to look into these concerns to ensure that you are not shouldering any undue risk by being unaware of laws that you need to comply with or take advantage of.
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About The Author
Laura L. Hupp is a patent attorney who focuses on life science and software patent law, using her background in biochemistry, molecular biology, and intellectual property to assist her clients in understanding the patent process and how it relates to science. She can be reached at lhupp@merchantgould.com, or 612-766-6011. www.merchantgould.com