Legislation and ethics for data

and businesses*

Chapter 4: Intellectual Property Rights

*Sources: Ethics for the Information Age 8th edition Michael J. Quinn, 2020 -
Pearson
Some key questions

 Is it fair for some people to watch shows for free when others are paying to view
them?

 Do entertainers have the right to control who sees and hears a performance of their
music?

 Is there a natural right to intellectual property?

Introduction

 As a society we benefit from access to high-quality television shows, music, movies,

computer programs, and other products of the human intellect.

 The value of these intellectual properties is much higher than the cost of the media
on which they are distributed, tempting people to make unauthorized copies

 When this happens, producers of intellectual property do not receive all the
payments the law says they are entitled to

 The legal system has responded by giving more rights to the creators of intellectual
property.
What is “Intellectual Property”?

 According to the World Intellectual Property Organization, intellectual property

“refers to creations of the mind: inventions; literary and artistic works; and symbols,
names and images used in commerce”

 Examples of intellectual property include:

 essays, poems, novels, plays, movies, songs, drawings, paintings, photographs,

architectural designs, industrial designs, inventions, chemical formulas, and
computer programs.
What is “Intellectual Property”?

 Intellectual property refers to any new idea or invention created by an individual or a business. It is
essentially an invention that has both commercial and moral value.

 Such inventions that are new, innovative and life-changing can be protected by the individual who came
up with the concept or product under intellectual property rights and laws that govern the country.

 Under Intellectual Property Rights (IPRS), the inventor can get copyrights, patents, design and,
trademarks and trade secret protection to shield an invention/creation from being duplicated or copied
by another individual or business.
 Benefits of Intellectual Property Protection

 Protecting your IP gives you an exclusive property right and can help your business to do better than it
otherwise would, or it can kick-start a new business.

 Developing effective IP protection strategies will depend on your particular business. An effective
strategy may involve a range of IP protection options. As an example, you may seek patent protection
for your product, register its design and develop a branding strategy based on a registered trademark.

 IP protection can allow you to turn your knowledge/idea into a tangible asset capable of assignment,
transfer and licensing.

 Your protected IP can be used as a leverage for attracting investors, as collateral for obtaining finance.

 Protecting your IP can reduce the risks associated with commercialisation by deterring competitors from
using the protected IP.
Protecting Intellectual Property

there are four different ways in which individuals and organizations

protect their intellectual property:
 trade secrets,
 trademarks/service marks,
 patents,
 copyrights.
Trade Secrets

 A trade secret is a confidential piece of intellectual property that provides a company

with a competitive advantage.

 Examples of trade secrets include formulas, processes, proprietary designs, strategic

plans, customer lists, and other collections of information.

 The right of a company to protect its trade secrets is widely recognized by

governments around the world.

 In order to maintain its rights to a trade secret, a company must take active measures
to keep it from being discovered.

 For example, companies typically require employees with access to a trade secret to
execute a confidentiality agreement.
Trade Secrets

 A famous trade secret is the formula for Coca-Cola syrup. The formula, known inside
the company as “Merchandise 7X,” is locked in a bank vault in Atlanta, Georgia

 An advantage of trade secrets is that they do not expire. A company never has to
disclose a trade secret. Coca-Cola has kept its formula secret for more than 100
years.

 The value of trade secrets is in their confidentiality. Hence trade secrets are
not an appropriate way to protect many forms of intellectual property.

 While it is illegal to steal a trade secret, there are other ways in which
confidentiality may be broken:
 Reverse engineering
 hiring a firm’s employees
Trademarks and Service Marks

 A trademark is a word, symbol, picture, sound, or color used by a business to

identify goods.

 A service mark is a mark identifying a service.

 the term “trademark” is commonly used to describe both forms of intellectual

property

 By granting a trademark, a government gives a company the right to use it

and the right to prevent other companies from using it. Through the use of a
trademark, a company can establish a “brand name.”

 Society benefits from branding because branding allows consumers to have

more confidence in the quality of the products and services they purchase
Patents

 A patent is intellectual property protection for a limited period of time to

creators of machines, systems, and other inventions

 A patent is quite different from a trade secret because a patent is a public

document that provides a detailed description of the invention.

 The owner of the patent can prevent others from making, using, or selling the
invention for the lifetime of the patent, which is currently 20 years. After the
patent expires, anyone has the right to make use of its ideas.

 Obtaining a patent is a lengthy, complicated, and expensive process

Copyrights

 A copyright is how authors are provided with certain rights to original works
that they have written.

 The owner of a copyright has five principal rights:

1. The right to reproduce the copyrighted work

2. The right to distribute copies of the work to the public
3. The right to display copies of the work in public
4. The right to perform the work in public
5. The right to produce new works derived from the copyrighted work
Fair Use
 The right given to a copyright owner to reproduce a work is a limited right.

 Under some circumstances, called fair use, it is legal to reproduce a

copyrighted work without the permission of the copyright holder.

 Examples of fair use include citing short excerpts from copyrighted works for
the purpose of teaching, scholarship, research, criticism, commentary, and
news reporting.
Digital technologies

 The introduction of digital technology and the Internet have brought

intellectual property issues to the forefront.

 Representing audio and video content digitally means anyone with the right
equipment can make perfect copies.

 Broadband Internet technology enables these copies to be quickly and widely

disseminated.

 We will discuss issues related to digital media and software development as

examples
Digital Media

 When information is stored digitally, anyone with the right equipment can make
perfect copies, making copyright infringement easier.

 The increase in the number of people with broadband Internet connections has
stimulated digital copying.

 The number of illegal downloads soared when more people gained broadband
access to the Internet.

 As a result, the music industry has lost sales

Digital rights management (DRM)

 Digital rights management (DRM) refers to any of a variety of actions owners of

intellectual property may take to protect their rights.

 All DRM technologies are aimed at tracking and controlling the use of content once
it has entered the market

 DRM technologies may be incorporated into a computer’s operating system, a

program, or a piece of hardware

 One approach to DRM is to encrypt the digital content so that only authorized users
can access it. Another approach is to place a digital mark on the content so that a
device accessing the content can identify the content as copy protected.
Problems with DRM

 Many experts suggest that any technological “fix” to the problem of copyright abuse
is bound to fail.

 Others argue that DRM undermines the well established principle of fair use. Under
DRM, a consumer may not be able to make a private copy of a DRM-protected work
without making an extra payment, even if he has the right to do so under traditional
fair-use standards.

 Sony’s example

 Online Music Stores Drop Digital Rights Management (e.g. Apple, Amazon)
The solution

 Companies trying to sell access to movies, television shows, and songs now
understand that they need to make “doing the right thing”—obtaining a legal
copy—as easy as “doing the wrong thing.”

 It is now more convenient to get paid content through Netflix, or the Apple
iTunes store than it is to get illegal copies.
Copyright Protection for Software

 In the early days of the computer industry, there was no strong demand for
intellectual property protection for software.

 Most commercial software was produced by the same companies manufacturing

computer hardware.

 They sold complete systems to customers, and the licensing agreements covered use
of the software as well as the hardware.

 Interest in copyrighting software grew with the emergence of an independent

software industry in the 1960s.
Copyright Protection for Software

 When a piece of software gets copyright protection, what exactly is copyrighted?

 First, copyright protects the original expression of an idea, not the idea itself.

For example, suppose you develop a program for a relational database management
system. You may be able to copyright your implementation of a relational database
management system, but you cannot copyright the concept of using relational
databases to store information.
 Second, copyright usually protects the executable program, not the source program.

Typically, the source code to a program is confidential, in other words, a trade secret
of the enterprise that developed it. The company only distributes the executable
program to its customers. The copyright also protects the screen displays produced
by the program as it executes. This is particularly valuable for the developers of video
games.
Violations of Software Copyrights

 The holder of a copyright has a right to control the reproduction of the copyrighted material.

 The definition of what it means to make a copy of a program is broad. Suppose you purchase a
program stored on a CD. If you transfer a copy of the program from the CD to a hard disk, you are
making a copy of it. If you execute the program, it is copied from the hard disk of the computer
into its random-access memory (RAM). This, too, is considered making a copy of the program. The
standard licensing agreement that comes with a piece of commercial software allows the
purchaser of the product to do both of the above-mentioned copying operations.

 However, doing any of the following actions without the authorization of the copyright holder is a
violation of copyright law:

1. Copying a program onto a CD to give or sell to someone else

2. Preloading a program onto the hard disk of a computer being sold

3. Distributing a program over the Internet

Benefits of software copyrights

 Governments have given ownership rights to those who produce computer software
because of the perceived beneficial consequences.

 A key benefit is the ability to profit from the licensing of the software.

 The assumption is that people will work harder and be more creative if they must
compete with others to produce the best product.

 Those who produce the best products will have the opportunity to make money
from them.
Arguments against software copyrights

 Digital technology has made copying trivial. In order to enforce copyrights in the
digital age, increasingly harsh measures are being taken.

 These measures infringe on our liberties. The purpose of the copyright system is to
promote progress, not to make authors wealthy.

 Copyrights are not promoting progress in the computer software field. It is wrong to
allow someone to “own” a piece of intellectual property.

 Granting someone this ownership forces the users of a piece of intellectual property
to choose between respecting ownership rights and helping their friends. When this
happens, the correct action is clear. If a friend asks you for a copy of a proprietary
program, you would be wrong to refuse your friend. “Cooperation is more important
than copyright.”
Open Source Software

Open source is an alternative way of distributing software. Numerous definitions of open

source exist. According to the Open Source Initiative, licenses for open-source programs
have the following key characteristics

1. There are no restrictions preventing others from selling or giving away the software

2. The source code to the program must be included in the distribution or easily
available by other means (such as downloadable from the Internet).

3. There are no restrictions preventing people from modifying the source code, and
derived works can be distributed according to the same license terms as the original
program.

4. There are no restrictions regarding how people can use the software.

5. These rights apply to everyone receiving redistributions of the software without the
need for additional licensing agreements
Beneficial Consequences of Open-Source Software

 advocates of open-source software describe five beneficial consequences of open-

source licensing:
 The first benefit of open source is that it gives everyone using a program the
opportunity to improve it. People can fix bugs, add enhancements, or adapt the
program for entirely new uses. Software evolves more quickly when more people
are working on it.
 The second benefit: the rapid evolution of open-source software leads to the new
versions of opensource programs to appear much more frequently than new
versions of commercial programs. Users of open-source programs do not have to
wait as long for bug fixes and patches
 A third benefit of open source is that it eliminates the tension between obeying
copyright law and helping others.
Beneficial Consequences of Open-Source Software

 The fourth benefit is that open-source programs are the property of the entire
user community, not just a single vendor. If a vendor selling a proprietary
program decides not to invest in further improvements to it, the user community
is stuck. In contrast, a user community with access to the source code of a
program may continue its development indefinitely
 The fifth benefit is that it shifts the focus from manufacturing to service, which
can result in customers getting better support for their software. If source code
were distributed freely, companies would make money by providing support, and
the companies that provided the best support would be rewarded in the
marketplace
In conclusion

 To a large extent, copyrights and patents for technological innovations have

proven to be problematic.

 Companies trying to sell access to movies, television shows, and songs now
understand that they need to make “doing the right thing”—obtaining a legal
copy—as easy as “doing the wrong thing.” It is now more convenient to get
paid content through Netflix, or the Apple iTunes store than it is to get illegal
copies.

 There are a large number of bad software patents, and many software patents
have been issued for obvious inventions. Large corporations are stockpiling
software patents, so that if they are sued for infringing another company’s
patent, they can retaliate with their own patent-infringement countersuit.