A software license is both the contract and the key. As a contract, it constitutes a software intellectual property agreement between the vendor and the user as to how the software will be used. As a key, it gives the user access to the software and allows them to use it according to the terms of the software intellectual property agreement. Licensing management systems help protect intellectual property of software by issuing licenses to users that allow them to use the software only in an authorized manner.
Each license helps control the use of the software so every use complies with the contract. A comprehensive licensing management system also allows the vendor to track how the licenses that have been purchased by each client are being used. There are multiple models of licensing management that may be used for different types of software. The right strategy for how to protect software IP varies from company to company and from software to software, and may even involve multiple models for the same program.
In essence, license keys are a kind of code that enables the program to work according to the software intellectual property agreement. That code can be accessed using a physical electronic device — a dongle or USB key — or via software installed or downloaded to the device.
This type of license application requires the user to plug a physical electronic device into the computer on which they intend to use the software. The code for the license is programmed into the hardware key and enables the device to access the software. This type of license is similar to the former, except that the code to activate the software is delivered via software that is installed or downloaded to a specific device.
This type of license is also a code that is installed or downloaded to the device, but it can be shared among users on a network, or otherwise accessed on multiple devices. This model is an excellent solution if your company is trying to figure out how to protect intellectual property online. It can be especially cost-effective if a customer needs multiple users or devices to access the software, but not all at once.
If for example a company with devices purchases a floating license that gives access for up to 10 users at once, the user who needs to access it sends a request for access to a central license server, and the server provides the license based on availability.
Another way of providing access to users from multiple devices is the named user or per-seat license: a license that can only be activated by a particular user who signs in with specific credentials. This is useful if a company knows that only specific employees will need to access this software. For example, if the company has a team of designers that work with Adobe Photoshop, you can purchase a per-seat license for that team.
Hybrid models. Many software vendors choose to offer a range or combination of different types of software licenses to best suit the needs of their clients. Many of the license models listed above can be mixed and matched. For example, a company may prefer per-seat licenses for a team of employees who need to access the software regularly, and a concurrent license for a different team that needs to access it only occasionally. Copyright law also protects against indirect copying, such as unauthorized translation of the code into a different programming language.
Copyright protection arises automatically upon the creation of an original work of authorship. In contrast with patents, independent development of a copyrighted work is a defense to an allegation of copyright infringement. Imagine, though, how unlikely it would be for the same thousands of lines of code to be created independently by one not engaged in unauthorized copying.
Unlike patents, copyright law affords no protection to the ideas underlying the program. Ideas and concepts are fair game for competitors to the extent they are not protected by patents or trade secrets. A trade secret is any formula, pattern, compound, device, process, tool, or mechanism that is not generally known or discoverable by others, is maintained in secrecy by its owner, and gives its owner a competitive advantage because it is kept secret. The classic example of a trade secret is the formula to Coca-Cola.
Many features of software, such as code and the ideas and concepts reflected in it, can be protected as trade secrets. This protection lasts as long as the protected element retains its trade secret status. Unlike patents, trade secret protection will not extend to elements of software that are readily ascertainable by lawful means, such as reverse engineering or independent development.
Their legal status as a protectable intellectual property right will be upheld if the owner can prove the trade secret was not generally known and reasonable steps were taken to preserve its secrecy.
Maximizing the economic value of a software asset critically depends on understanding the nature of the intellectual property rights involved and how best to use the available forms of legal protection to protect those rights.
Unless someone discovers your secret by what the law calls "fair means," your trade secret will last forever. If someone else discovers, on their own, a trade secret similar to yours, you can't take legal action. Sometimes companies and individuals don't see trade secrets as secure enough protection for valuable software inventions. One difficulty with copyright and software comes from companies who hire software developers. Usually, copyright law says that whoever creates the work owns the copyright.
However, the law also contains language to cover work-for-hire. If you are an employee of a company, and you create software for that company, the company owns the copyright.
That gives the company copyright ownership of the code, not the individual who created it. Some other work you might hire independent contractors to do automatically falls under "work-for-hire":. If you work as an independent contractor, you own the copyright to your work even if you create it for a company. You and the company have to sign a contract stating they own the copyright to change that, or you can license your software to the company instead of handing over the copyright.
Whether you're a business or an independent contractor, it's best to get these details out of the way before work starts. Who owns the copyright of software matters because of what copyright allows you to do with the code:. A license allows another party, like a business, to use the software you developed. Handing over the copyright, or assigning the copyright, gives them legal ownership of the copyright. No matter which side you're on, your contract needs to be specific.
Copyright and patents both have limits as far as how they protect software IP. To fill the holes, many people use contracts and license agreements. One problem with licenses is getting people to agree to them. If someone uses your software who did not agree to the license like by using software someone else purchased then they aren't bound by it.
You can go after the person who violated the license by letting a third-party use the software. Using the license to protect your software against someone who didn't agree to it, however, is very difficult. Software as IP has a stormy history, with most problems coming from software developers seeking patents for their software. The question of whether or not the software can receive a patent is a complicated one, which Supreme Court cases can't even completely answer.
In fact, lots of people still believe that you can't get a patent for software. Un patentable things include the following:.
If computer programs can't get patents, then how can software? The words "as such" appear with this list of unpatentable things. The "as such" means that if you create something that qualifies as a "technical invention," but it still appears on this list, you can patent it. British patent law stayed basically the same from until In , a patentable invention had to be a "new method of manufacture" according to the Statute of Monopolies.
When the U. During the 60s and 70s, ideas about patents were changing, but computers weren't the driving force they are today. People didn't think about software very much or at all when putting together new patent literature. They excluded computer programs from patentable inventions because computer programs were too complicated for patent officers to review. But banning all computer programs might mean that some of the best computer inventions couldn't get patents, so they added "as such" to the language.
The Boards of Appeal for the European Patent Office had to answer questions about the "as such" language not long after. They dealt with a Vicom patent application to do with image software. Guidelines about software patents came from their decision. That's why not all software qualifies for a patent. The most important include:. You can't patent an algorithm on its own because that's an abstract idea.
But if the algorithm has a specific purpose and application in the software, then the software may qualify for a patent. If your software solves a specific technology problem in a way you can discuss in detail, then you could qualify for a patent.
An abstract idea like math or an algorithm that creates a specific or tangible result can qualify for a patent. Abstract ideas are where most software patent applications run into trouble. Proving that software is not an abstract idea, but qualifies as an invention, is difficult.
That's why so much recent legislation has focused on the subject. CLS Bank "Alice" case, which covered software patents and abstract ideas.
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