Software

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."

Section 117 has since been modified by the Digital Millennium Copyright Act to allow repairs of computers.
Other 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.
Original graphics, designs, and text appearing in a software user interface may qualify as copyrightable look and feel. They can also be protected with a design patent.
The set of operations available through the interface is not copyrightable in the United States under Lotus v. Borland, but it can be protected with a utility patent.
In Apple v. Microsoft, the courts established that a look and feel copyright claim must demonstrate that specific elements of a user interface infringe on another work. A program's particular combination of user interface elements is not copyrightable.

Using Copyrighted Software

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:

Assume all software is copyright protected. The only source for permission to copy the software is either a specific grant of that right in a license agreement or the express or implied permission of the copyright owner.
Maintain in a secure place any packaging materials that may contain the provisions of the license agreement.
Check with ITS or CTL to determine which software is site or group licensed to Centre College.
Look at the program’s initial screens, disk outer surfaces, and program documentation for information about the copyright status of the software.

Copyright infringement of software may refer to the following kinds of practices when done without the permission of the copyright holder:

Creating a copy and/or selling it, otherwise known as "software piracy". This is copyright infringement in most countries and is unlikely to be fair use or fair dealing if the work remains commercially available. In some countries the laws may allow the selling of a version modified for use by blind people, students (for educational product) or similar. Differences in legislation may also make the copyright void in some jurisdictions, but not the others.
Creating a copy and giving it to someone else. This constitutes copyright infringement in most jurisdictions. It is not infringing under specific circumstances such as fair use and fair dealing.
Creating a copy to serve as a backup. This is seen as a fundamental right of the software-buyer in some countries, e.g., Germany, Spain, Brazil and Philippines. It can be infringement, depending on the laws and the case law interpretations of those laws, currently undergoing changes in many countries. In the US, legal action was taken against companies which made backup copies while repairing computers (see MAI Systems Corp. v. Peak Computer, Inc. (1993)) and as a result, US law was changed so that making temporary backup copies of software while repairing computers is not copyright infringement.
Renting the original software. Software licenses often never restrict the usual right of a purchaser of a copyrighted work to let others borrow the work. In some jurisdictions the validity of such restrictions are disputed, but some require permission from the copyright holder to allow renting the software.
Buying the original software. Licenses never say that the buyer does not buy the software but instead pays for the right to use the software. In the US, the first-sale doctrine, Softman v. Adobe and Novell, Inc. v. CPU Distrib., Inc. ruled that software sales are purchases, not licenses, and resale, including unbundling, is lawful regardless of a contractual prohibition. The reasoning in Softman v. Adobe suggests that resale of student licensed versions, provided they are accurately described as such, is also not infringing.
Bulletin Board Sharing/Internet Piracy- Albacea et al (2005) states that this infringement occurs when System Operators share (by electronic transfer) copyrighted materials on bulletin boards or the internet for users to download.

FAQ: Software

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:

the new copy is being made for archival (i.e., backup) purposes only;
you are the legal owner of the copy; and
any copy made for archival purposes is either destroyed, or transferred with the original copy, once the original copy is sold, given away, or otherwise transferred.

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.