Intellectual Property Rights in Software Applications

 1. Copyrights:

One of the most common forms of IP protection for software is copyright. Without the owner's permission, it is illegal for anyone to copy, share, perform, display, or produce derivative works from a protected work.

Copyrights in the context of software safeguard the program's structure, flow, and organization as well as its source and object codes. Once the software is fixed in a tangible medium of expression, like when it is saved on a computer hard drive, copyright protection automatically arises.

The Copyright Act of 1976 is the main act governing copyrights in the US. The Act states that original works of authorship fixed in physical forms of expression, such as computer programs, are protected by copyright. (Reference: Title 17 of the United States Code – Copyrights)

In the US, copyright will be granted at the time a work is created, so registration is not necessary. However, registering with the U.S. Copyright Office has a number of important benefits, including:

- The copyright claim's public record.

- requisite for bringing legal action for infringement in the U.S.

- Statutory damages and legal fees may be recovered in court if registered prior to - a violation or within three months of publication. If not, only real damages may be demanded.

The process to register a software copyright involves:

Completing an application form from the U.S. Copyright Office.

1. Paying a non-refundable filing fee.

2. Submitting a non-returnable copy or copies of the work to be registered.

Benefits of Copyrighting Software:

Protection Against Infringement: A registered copyright provides the owner with the legal right to sue

for copyright infringement.

Public Record: A copyright registration establishes a public record of the copyright claim, which can deter potential infringement.

Damages and Attorney’s Fees: If registration is made within three months after the release of the work or prior to an infringement of the work, statutory damages, and attorney’s fees will be available to the copyright owner in court actions.

Potential Downsides of Copyrighting Software:

Limited Protection: Copyright only protects the specific expression of an idea, not the idea itself. This means that competitors can create similar software as long as they don't copy the actual code.

Disclosure of Source Code: Registering a software copyright requires submitting portions of the source code, which can be problematic if the code contains trade secrets. However, the U.S. Copyright Office allows you to redact or omit portions of the code in some cases to protect such secrets.

Cost and Time: Copyright registration involves paying a fee and may take time to process. However, the fee is relatively low compared to other IP protections such as patents, and the processing time is usually less than eight months.

2. Patents:

Patents protect the underlying ideas while copyrights protect how an idea is expressed. Patents in the software industry can cover developments like algorithms, processes, or practical features of the software.

However, obtaining and upholding software patents can be difficult. The software must be novel, creative, and useful in order to be patentable. Notably, the ruling in Alice Corp. v. CLS Bank International by the

U.S. Supreme Court significantly increased the difficulty of obtaining a software patent in the United States.

The Patent Act (Title 35 of the United States Code) regulates software patents. However, a number of court rulings, most notably Alice Corp. v. CLS Bank International, which held that abstract ideas implemented using a computer are not eligible for patent protection, have limited the ability to patent software. (Reference: Title 35 of the United States Code – Patents)

How to Apply Patents on Software Applications:

1. Document your invention

2. Search for prior art

3. Prepare a patent application

4. File your patent application with the United States Patent and Trademark Office (USPTO)

5. Respond to USPTO office actions

6. Pay maintenance fees

Benefits of Patenting Software:

1.             Protection from Competition: A patent gives you a 20-year monopoly to prevent others from making, using, selling, or importing your invention without your permission.

2.            Increased Marketability: Patents can make your software more attractive to investors, partners, and customers.

3.            Licensing Revenue: You can license your patent to others for a fee.

Potential Downsides of Patenting Software:

1.             Cost and Time: Applying for a patent can be costly and time-consuming. It often takes years for a patent to be granted.

2.            Public Disclosure: To get a patent, you must fully disclose how your software works. This can be a problem if you prefer to keep your code secret.

3.            Enforcement: Enforcing a patent (i.e., suing for infringement) can be extremely expensive.

4.           Patent Eligibility: As mentioned, not all software is patentable, especially if it can be considered an abstract idea.

3. Trade Secrets:

Any confidential business information that gives an advantage can be protected by trade secrets. This might apply to software's source code, formulas, procedures, or other confidential data. To be considered a trade secret, the information must be actively kept secret by the owner.

Both state and federal law protect trade secrets in the United States. The Defend Trade Secrets Act of 2016 established a federal civil cause of action for trade secret misappropriation, and the Economic Espionage Act of 1996 made some trade secret misappropriations illegal. (Reference: 18 U.S.C § 1831-1839 - Economic Espionage Act of 1996)

Trade secrets are not "applied" for in the way that patents, copyrights, or trademarks are. Instead, they are inherently protected as long as the information remains confidential and meets the following

criteria, according to the Uniform Trade Secrets Act (UTSA) in the U.S:

1.             It is not generally known to the public.

2.            It confers some sort of economic benefit on its holder (where this benefit must derive specifically from its not being publicly known, not just from the value of the information itself).

3.            It is the subject of reasonable efforts to maintain its secrecy.

To protect your software as a trade secret, you should take the following steps:

1.             Identify the aspects of your software that give you a competitive advantage.

2.            Develop a plan for maintaining the secrecy of this information. This could include:

•              Using non-disclosure agreements (NDAs) for anyone who has access to the secret.

•              Implementing security measures, such as password protections or encrypted files.

•              Training employees about the importance of maintaining the secrecy of the information.

Benefits of Trade Secrets:

1.             No Registration Required: Unlike patents, copyrights, or trademarks, trade secrets require no formal registration and have no time limit. They remain valid as long as the secret is kept confidential.

2.            Less Expensive: Because there's no registration process, protecting a trade secret can be less expensive than obtaining a patent or copyright.

3.            Protection of Broad Range of Information: Trade secrets can protect a wider range of information than other types of intellectual property rights, including marketing strategies, customer lists, and manufacturing processes.

Potential Downsides of Trade Secrets:

1.             Vulnerability to Reverse Engineering: If a competitor can legally reverse engineer your product and discover your secret, you have no legal recourse.

2.            No Protection Against Independent Discovery: If someone else independently creates the same software, you cannot prevent them from using, selling, or patenting it.

3.            Risk of Accidental Disclosure: Maintaining the secrecy of information can be difficult, especially as more people within an organization need to access it.

4.           Cost of Secrecy Measures: While you don’t have to pay registration costs, the cost of implementing and maintaining secrecy measures can be significant.

4. Trademarks:

Names, logos, slogans, and other symbols used to identify the goods and services of a company are protected by trademarks. Software names, the names of services related to software, and logos can all be protected by trademarks in the software industry.

The Lanham Act (Title 15 of the United States Code) provides trademark protection. Brand names and logos that are associated with goods and services are protected by trademarks. (Reference: Title 15 of the United States Code - Lanham Act)

Trademark registration in the U.S. is governed by the U.S. Patent and Trademark Office (USPTO). Here are the basic steps to register a trademark for your software application:

1.             Conduct a Trademark Search: Before you file an application, conduct a thorough search to ensure your proposed trademark isn't already in use.

2.            Prepare and File an Application: Prepare an application, which includes your name and address, the trademark, the goods/services the mark will be used on, and a specimen showing use of the mark in commerce.

3.            USPTO Review: After filing, an examining attorney at the USPTO reviews your application to determine whether it complies with federal law and regulations.

4.           Post-Registration: If approved, the USPTO publishes your trademark in the Official Gazette, and anyone who believes they will be harmed by registration of the mark has 30 days to file an opposition. If there is no opposition, or the opposition is unsuccessful, the USPTO will register the mark.

Benefits of Trademarks:

1.             Exclusive Rights: Registered trademarks offer the owner exclusive rights to use the trademark nationwide in connection with the goods/services listed in the registration.

2.            Legal Protection: They provide legal protection against unauthorized use, allowing you to bring a lawsuit in federal court.

3.            Public Awareness: They build brand recognition and enhance your company's reputation.

Potential Downsides of Trademarks:

1.             Cost: Trademark registration comes with costs, including application fees and potential attorney fees.

2.            Time-Consuming: The registration process can take several months to a year, or longer if legal issues arise.

3.            Maintenance: You have to actively use your trademark in commerce and defend it against infringement. Also, to keep your trademark alive, you must file specific maintenance documents.

5. Licenses:

Software licenses are contracts that allow the copyright holder to grant another party permission to use their software in a specific way. These terms might cover price agreements, limitations on reselling, or time frames for use.

Contract law primarily governs software licenses. The Uniform Commercial Code, copyright, and patents are a few examples of areas of law that may cross over with certain aspects of the law. Depending on the jurisdiction and the particulars of the agreement, the legal principles that govern software licensing can change considerably. (Reference: Restatement (Second) of Contracts)

To apply a license to software applications, you typically need to create a Software License Agreement, which is a document outlining the permissions, protections, and terms for using the software. This process usually involves:

1:Decide on License Type:

2:Draft License Agreement:

3:Incorporate License into Software:

Benefits of Licensing:

1.             Control Over Software Usage: A software license allows you to retain control over your software. You can specify what users can and can't do with the software.

2.            Monetization: Licensing your software can provide a steady stream of income. Users pay to get access to the software, often through a one-time purchase or a subscription model.

3.            Protection: A well-drafted software license can help protect your intellectual property rights and limit your liability for software malfunctions or other issues.

Potential Downsides of Licensing:

1.             Cost and Time: Drafting a comprehensive software license agreement can be costly and time-consuming, often requiring legal assistance.

2.            Enforcement Challenges: While a license agreement gives you legal recourse against users who violate the terms, enforcing these terms can be difficult and costly.

3.            Restricts User Freedoms: Particularly with proprietary licenses, users are limited in their ability to modify, share, and sometimes even use the software. This can potentially limit the software's popularity or usability.