LEGAL
Computer IP Laws
The are few statutes or other sources of law dealing specifically with computers, but this does not mean that there is no law governing this ever-more important area of commerce. All of the areas of Intellectual Property law outlined in the other intellectual property section affect computers, and thus are included in ``Computer Law," but there are some unique features of Copyright, Patent and Trademark law that are applicable to computers.
Patent Protection: Computer programs are treated like electronic machines or tools. As such, a patent can protect the ideas, systems, methods, algorithms, functions, or other properties of computer programs that are otherwise unprotectible under copyright or trade secret laws. A patent can also protect the program at multiple levels. Detailed coding sequences as well as the ``look and feel" of the program can be protected under patent law. So patents can protect a software program all the way from specific application to equivalent or similar implementations, or even a series of software products (an important factor given the short life span of software). But remember that it takes eighteen to thirty months to obtain a patent, so plan ahead, and consult your intellectual property attorney early.
When applying for a patent there are a number of things you should know. First, the US Patent and Trademark Office has been criticized in the past for not being as sophisticated and knowledgeable about computer software as they are in other areas. To put another way, you cannot expect your typical software patent examiner to have the same level of expertise as your typical computer programmer.
This fact will affect your software patent application. The application may need to be accompanied by a person-to-person interview between the patent examiner and the software developers. It would also help to include with the application some materials describing the invention in simpler terms and a description of the prior art in the area (i.e., what has been done in this particular software market before). The United States Patent and Trademark Office also encourages inventors to disclose the program flow chart form, block diagrams, and pseudo-code. These materials must enable a ordinary computer programmer to make and use the program without much difficulty. Your patent counsel should be able to lead you through all of this (if he cannot, find new counsel!).
Cost of Patent: Three major costs are involved when obtaining a patent on software.
- The patent attorney's time to prepare the software application: the cost of preparing the application can run from $7,000 to $100,000. Average cost is between $10,000 to $30,000.
- The prosecution costs: Average cost for prosecuting the patent before the Patent Office is between $10,000 to $20,000.
- The costs involved in searching for software which represents the ``prior art": Estimates are hard to give since a lot of it depends on how diligently you search and how difficult it is to uncover the ``prior art." One estimate we saw put it between $2,000 to $20,000.
As noted above, it can take eighteen to thirty months to obtain a patent on software. And as you know, in that many months, software is already middle-aged if not near the end of its lifespan. The patent's main benefit, therefore, may be in those situations where the company is creating software that is ground-breaking. That way, all software coming after which is built upon the groundbreaking software will have to pay for the right to sell the later-developed software.
Another benefit to obtaining a patent, especially for small startup companies, is that it gives the patent-holder a bargaining chip if the company finds itself enmeshed in an intellectual property dispute. Rather than getting bogged down in financially ruinous intellectual property litigation, small companies challenged by another company sometimes cut a deal and say, ``Don't sue us on your copyrights, patents, etc., and we won't sue you." The two companies then go back to focusing on their products and making them better rather than fighting each other over intellectual property rights that have a very short half-life in any event. Of course, the fewer intellectual property rights a company owns, the less attractive bargain it can offer to the other side, so a patent may be a nice blue chip when it comes time to deal.
Another aspect of intellectual property laws arguing in favor of patents is the fact that patents protect the novelty of the software, as opposed to Copyright's protection of the originality. You see, with Copyright, the creator of a software program is protected against anyone who may copy his program. But if someone else develops a similar or identical program on their own without any copying of the prior program, then Copyright offers no protection or power against the second creator. Copyright protects the original work from unauthorized copying, but it offers no protection against original and independent development of similar or identical products. Patents, on the other hand, would protect the patent-holder from anyone who would offer an infringing product regardless of whether the infringing product was developed independently and originally without any copying of the earlier program.
This is not to say that patents do not have some drawbacks. One rather large drawback to a patent is that once (if!) the patent passes all the hurdles of the US Patent Office, the application and all materials submitted with it become public documents, and anyone caring to examine the documents has access to them. And you better believe that your competitors will be examining them! All trade secrets found in the application material are lost at that point. But while the patent application is pending, the contents of the application are kept secret. But if the code is disclosed in the application, it can still be copyrighted.
Copyright Protection:
In 1980, amendments to the Copyright Act extended statutory copyright protection to computer programs. Now the owner of copyrighted software has exclusive control over:
- duplication of the software;
- preparation of derivative works or versions of the software; and
- distribution of the software to the public.
Like all copyrightable works, you need to deposit a copy of computer programs along with the application for a copyright. If the work is an unpublished or a published computer program, the deposit requirement is one visually perceptible copy in source code of the first and last 25 pages of the program. For programs of less than 50 pages, the whole program must be submitted.
If the work is a CD-ROM format, the deposit requirement is one complete copy of the CD-ROM, the operating software, and any manuals accompanying it. If the identical work is also available in print or hard copy form, send one complete copy of the print version and one complete copy of the CD-ROM version.
Go to Copyright page for general discussion of Copyright
Back to United States Intellectual Property Table of Contents
NON-DISCLOSURE AGREEMENTS
Two different confidentiality agreements / non-disclosure agreements are offered, sold as a package.
1) External Contacts: This agreement is the one to use with contractors, vendors, consultants, potential employees, licensees and anyone else that will have access to your business. You can even have full-time employees sign this non-disclosure agreement, in addition to the employment contract.
2) Mutual Contacts: This is a "mutual" non-disclosure agreement, which stipulates that both parties (both you, and your contact) will not disclose proprietary information. This is used when talking to an "equal," like a potential partner, investor or even a competitor.
- protect your trade secrets, financial results and intellectual property from being revealed.
$29.99
