Historically, computer programs were not effectively protected by copyrights because transfixing a computer program into the memory of an electronic information system is not permanent without a storage device, and because programs were regarded as a simple list of instructions for the computer to process and hence not copyrightable. Computer companies, therefore, used software license agreements (also known as "end-user license agreements" or EULAs) to prevent unauthorized copying.
When the federal courts interpreted the Copyright Act to give computer programs the same copyright status as literary works, companies continued to license their products to avoid transfer of their copyright to the end user via the doctrine of first sale (see Step-Saver Data Systems, Inc. v. Wyse Technology). They also wanted to retain search and seizure powers to uncover unauthorized copying.
Most software consumers 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 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 become 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 most software is licensed and not sold, the 117 exemptions do not apply. MAI Systems Corp. v. Peak Computer, Inc. and Triad Systems Corp. v. Southeastern Express Co. are two excellent cases demonstrating how licenses can be used. 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 the software vendors copyright 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."
Only copyrighted software is subject to restrictions on its use, but since a copyright symbol or statement of copyright ownership is no longer required by law as a condition of protection, one cannot safely assume from the absence of such notice that it is permissible to copy the software. There are, nevertheless, probably tens of thousands of software programs that are in the public domain (called freeware).
Shareware is software that can be permissibly downloaded electronically from bulletin boards, such as www.downloads.com, and for which one pays a small fee upon deciding to use the software. Software not labeled as freeware or shareware is software that falls under a third category – licensed software. Determining whether software is in the public domain or copyright protected may seem at first a daunting task. The following advice should help Centre community members categorize the software they may have and be safe in its use:
Copyright infringement of software may refer to the following kinds of practices when done without the permission of the copyright holder:
Can I backup my computer software?
Yes, under certain conditions as provided by section 117 of the Copyright Act. Although the precise term used under section 117 is “archival” copy, not “backup” copy, these terms today are used interchangeably. This privilege extends only to computer programs and not to other types of works.
Under section 117, you or someone you authorize may make a copy of an original computer program if:
You are not permitted under section 117 to make a backup copy of other material on a computer's hard drive, such as other copyrighted works that have been downloaded (e.g., music, films).
It is also important to check the terms of sale or license agreement of the original copy of software in case any special conditions have been put in place by the copyright owner that might affect your ability or right under section 117 to make a backup copy. There is no other provision in the Copyright Act that specifically authorizes the making of backup copies of works other than computer programs even if those works are distributed as digital copies.
Is it legal to sell backup copies of computer software (in online auctions or on website)? Is it legal to buy and use a backup copy of software I already own?
No. The Copyright Act does not permit anyone to sell backup copies to third parties separately from the original copy of the software. If you lawfully own a computer program, you may sell or transfer that lawful copy together with a lawfully made backup copy of the software, but you may not sell the backup copy alone.
There are websites offering to sell “backup” copies of software via download over the Internet or in a custom-burned CD-R format, under the guise that section 117 permits this. Section 117 does NOT permit the sale of backup copies. Again, section 117 does not allow you to sell backup copies to someone else except when such backup copies are sold together with the original lawfully owned copy. It does not allow anyone to solely distribute “backup” copies to the public. In addition to being a violation of the exclusive right of distribution, such activity is also likely to be a violation of the terms of the license to the software. In many cases these sites appear to be a front for distribution of illegal copies, which is copyright infringement. You should be wary of sites that offer to sell you a backup copy.
And if you do buy an illegal backup copy, you will be engaging in copyright infringement if you load that illegal copy onto your computer, i.e., the unauthorized reproduction of the infringing computer program into memory. Lesson: if you want a backup copy of a lawfully owned computer program, back it up yourself.