Software copyright
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Software copyright, the relatively recent extension of copyright law to software, allowed a market for proprietary software to flourish for some time. Some proponents of free software use software copyrights in order to ensure that the software they write will remain free, using licenses such as the GNU General Public License.
Basis and history
When installing a program, a copy is made to the hard drive, when launching a copy is made into memory, when visiting a web page a copy is sent over the network. All these activities are allowed in the US under section 117 Limitations on exclusive rights: Computer programs of the US Copyright Act and do not violate US copyright law, provided that the sale of software is considered a sale under the Uniform Commercial Code, which has substantial case law to support this argument, and not a license.
The crux of the current debate on copyrights is actually due to the nature of electronic information systems themselves. The problem stems because transfixing a computer program into the memory of an electronic information system is not permanent without a storage device. Thus it was questionable at one time on whether or not computer programs were subject to copyright protection. To protect their assets commercial computer companies used "licenses”, contract terms to augment trade secret protection, in order to protect against unauthorized copying. When the federal courts interpreted the Copyright Act to provide substantial protection for computer programs as literary works companies continued the practice of "licensing" their products for end use in order to get around the doctrine of first sale (Step-Saver Data Systems, Inc. v. Wyse Technology).
Even after 1990, even though it was unnecessary to protect their products with licenses, software companies continued to "License" their products to preempt federal copyright statutes, the US Constitution, and other federal laws so that they could impose terms very favorably for them, such as ignoring all exemptions to copyright and give themselves search and seizure powers prohibited to US Law enforcement agencies by the US Constitution, and quite unfavorable to the consumer. They were able to engage in the practice due to monopolization of the software industry. With regards to the software industry most users, and professionals, are unaware that the grants made in most EULAs are already granted by section 117 of the US copyright act while at the same time take away all the rights granted to the consumer by the "Limitations on exclusive rights of the copyright holder" codified in sections 107-122 of the US Copyright Act. The EULA has became so predominate that most take the EULA contract for granted, and typically do not read them, and clicking it as a necessary evil to use any commercially available software.
Since software makers claim that their product is not sold but rather licensed, they argue that the 117 exemptions do not apply thus requiring a license in order to use software. MAI Systems Corp. v. Peak Computer, Inc. and Triad Systems Corp. v. Southeastern Express Co. are two excellent cases demonstrating the abuses that copyright holders have leveraged through this practice. In both cases the defendant was repairing or maintaining machines for another company. Section 117 of the Copyright Act states that "it is not an infringement for the owner of a copy of a computer program to make or authorize the making of another copy or adaptation of that computer program provided...that such a new copy or adaptation is created as an essential step in the utilization of the computer program." Although the service and maintenance that was done in both MAI and Triad was an "essential step in the utilization of the computer program," and thus immune to an allegation of infringement, the defendants in these two cases were found to have infringed because the software that their customers were using had been "licensed" to the customers, not "sold." In both of these cases, the court noted that the duplication rights provided under Section 117 only applied to an "owner" of a copy. The court concluded that a "licensee" was not an "owner." It is important to note that section 117 has since been modified by the DMCA to allow repairs of computers.
Copyright holders in other media decided they wanted to give themselves the same powers as computer software makers by forcing users into similar contract agreements. However there has traditionally been no precedent to agree to a contract in order to use legally acquired copyright-protected materials. In fact case law supports the position that there is "no difference between a license and sale of protected materials.." and that "to call a sale a license is mere play on words" (Bauer & Cie. v. O'Donnell and Bobbs-Merrill Co v. Straus) thus bringing the enforceability of the EULA and the practice of licensing copyrighted materials for end-use into question.