Software rights - to share or to keep control?

Acts such as storing a computer program or running a computer program will usually be considered as involving ‘copying’ the copyrighted work that is the program and, as such, require permission of the rights holder. The rights holder can therefore control who can use the program and how, for example with a licence. Such a licence can include a variety of terms and conditions, such as the payment of a fee when the computer program is obtained and/or used, a restriction to use the program on specific computer(s) or for specific user(s) only, and an expiry date for the licence. Additionally, if a third party has access to the source code for a computer program, the third party cannot modify the source code without the right holder’s permission, as this is generally considered an ‘adaptation’ under copyright law.

Additionally, some of the functionalities of a computer program may be protected by patents. Whereas copyright will protect the actual program’s source and object code, patents can protect certain technical functionalities or workings of the computer program (eg, a novel and inventive functionality). If the operation of a computer program would infringe a patent, a user of that computer program should obtain permission from the patent rights holder to use the computer program, eg, via a licence. For example, in cases where an end user obtains the computer program from a distributor, the end user may expect the distributor to arrange for such permission to be already in place (ie, that the distributor has obtained a licence not only for the distributor to distribute the program, but also for end users to use the program). As for a copyright licence, the patent licence terms will dictate what a particular user can and cannot do.

Two camps have emerged over time, each having their own ‘philosophy’ as to how computer programs should be licenced. The first camp believes that the investments made in innovation should be rewarded by controlling the computer program using protection provided by copyright or patents. In other words, this camp generally argues that the right holders should keep control of their computer programs so as to protect their revenues. The rationale behind this position is that a lack of or low return-on-investment for research and development (R&D) spending would simply result in sharp reductions in R&D investment and thus a decline of innovation and software development.

The second camp believes that giving users the freedom to use and modify a computer program will stimulate innovation and will ultimately result in better computer programs. This camp includes, for example, supporters of ‘open source software’ and ‘free software’, sometimes referred to as ‘Free and Open Source Software’ (FOSS).

FOSS licences are generally more permissive than conventional licences and give a user more rights with respect to using and redistributing a computer program. Such licences also permit the user to modify the computer program and to redistribute the modified version. FOSS licences generally also include restrictions. For example, some FOSS licences include an obligation to distribute the computer program or any modified version of it under the same licence terms. FOSS licence supporters therefore do not reject copyright as such, but use the copyright law to control the distribution of a computer program under terms which they believe are fair and in line with their views on computer programs. More generally, the rationale behind FOSS licences is that restrictive rights or licences arguably do not facilitate innovation but instead slow innovation down by prohibiting distribution and modification of computer programs and the use of certain functionalities.

From a commercial point of view, it is important to understand the advantages and drawbacks of each approach to understand whether one, the other, or a combination of both approaches would provide the best protection and opportunities for a specific project. For example, some FOSS licences include implicit or explicit licences for patents and, in some cases, patent rights holders may want to be careful that they are not unintentionally and unwillingly granting a patent licence when using such FOSS licences. In other cases, FOSS licences may be more suitable for a specific business model.

We will look at these issues in more detail during our 13 March 2013 webinar with a view to explaining the effects of some FOSS and non-FOSS licence terms and the types of issues to take into consideration when starting a project involving computer programs.

In the meantime, if you have any questions or concerns regarding the interaction of copyright, patent rights and FOSS, do not hesitate to contact us with your questions and we will endeavour to address these during our webinar.