Chapter 6

Intellectual Property
Overview
• Dapat memahami jenis kekayaan intelektual, pentingnya
perlindungan kekayaan intelektual, serta masalah utama hak
kekayaan intelektual dan teknologi informasi
Objectives
• Setelah menyelesaikan unit ini, mahasiswa diharapkan:
• Mampu menjelaskan definisi intellectual property dengan
benar
• Mampu membedakan jenis-jenis intellectual property dan
penggunaannya dengan tepat
• Mampu menjabarkan kegiatan yang termasuk plagiarism
dengan benar
• Mampu menguraikan penerapan reverse engineering, open
source code, dan competitive intelligence dengan tepat
• Mampu menjabarkan strategi untuk melindungi organisasi
dari cybersquatting dengan benar
Contents
• What Is Intellectual Property?
• Key Intellectual Property Issues
What Is Intellectual Property?
• Term used to describe works of the mind
• Distinct and “owned” or created by a person or group
• Protected through copyright, patent, and trade secret laws
• Intellectual property represents valuable asset to companies
• If not protected, others can copy or steal them, resulting in
significant loss of revenue and competitive advantage
• Copyright law: protects authored works
• Such as: art, books, film, and music
• Patent law: protects inventions
• Trade secret law: helps safeguard information that is critical to an
organization’s success
What Is Intellectual Property?
(cont’d.)
• Such laws can also present potential ethical problems for IT
companies and users
• Some innovators believe that copyrights, patents, and trade
secrets stifle creativity by making it harder to build on ideas of
others
• Meanwhile, the owners of intellectual property want to control
and receive compensation for the use of their intellectual
property
• Defining and controlling the appropriate level of access to
intellectual property are complex tasks
• Example: computer software that is treated as:
• The expression of an idea → protected under copyright law
• A process for changing computer’s internal structure →
protected under patent law
• A series of mental steps → ineligible for protection
Copyrights ©
• Established in the U.S. Constitution
• Article I, Section 8, Clause 8
• Grants creators of original works the exclusive right to:
• Distribute
• Display
• Perform
• Reproduce work
• Prepare derivative works based upon the work
• Author may grant exclusive right to others
• As new forms of expression develop, they can be awarded
copyright protection
Copyrights (cont’d.)
• Copyright Term
• Copyright law guarantees developers the rights to their works
for a certain amount of time
• Sonny Bono Copyright Term Extension Act (1998)
• Created after 1/1/78: life of the author plus 70 years
• Created but not published or registered before 1/1/78: life of
the author plus 70 years; no expiration before 31/12/2004
• Created before 1978 still in original or renewable term of
copyright: 95 years from the date the copyright was originally
secured
• Championed by movie studios concerned about retaining rights to
their early films
• Opponents argued that it stifles creativity and innovation
Copyrights (cont’d.)
• Eligible Works
• Must fall within one of these categories
• Types of work that can be copyrighted: Architecture, Art,
Audiovisual works, Choreography, Drama, Graphics,
Literature, Motion pictures, Music, Pantomimes, Pictures,
Sculptures, Sound recordings, Other intellectual works (As
described in Title 17 of U.S. Code)
• Must be original
• Evaluating originality can cause problems
• Copyright law is flexible in covering new technologies
• Software, video games, multimedia works, web pages
Copyrights (cont’d.)
• Not Eligible Works
• Works that have not been fixed in a tangible form of expression
• Example: improvisational speech
• Works that consist entirely of common information that
contains no original authorship
• Example: chart showing conversion between European and
American units of measure
Copyrights (cont’d.)
• Fair use doctrine
• Maintains balance between protecting an author’s rights and
enabling public access to copyrighted works
• Allows portions of copyrighted materials to be used without
permission under certain circumstances
• Factors to consider when evaluating the use of copyrighted
material (Title 17, section 107, of U.S. Code)
• Purpose and character of the use (commercial or
nonprofit/educational)
• Nature of the copyrighted work
• Portion of the copyrighted work used
• Effect of the use on the value of the copyrighted work
• Key concept: an idea cannot be copyrighted, but the expression
of an idea can be
Copyrights (cont’d.)
• Copyright infringement
• Violation of the rights secured by the owner of a copyright
• Copy substantial and material part of another’s copyrighted
work without permission
• Have a wide range of discretion in awarding damages
• From $200 for innocent infringement to $100,000 for willful
infringement
• Software copyright protection
• Raises many complicated issues of interpretation
• Software that produces same result in a slightly different way
may not infringe a copyright if no copying occurred
• Copyright law should not be used to inhibit interoperability
between the products of rival vendors
Copyrights (cont’d.)
• The Prioritizing Resources and Organization for Intellectual
Property (PRO-IP) Act of 2008
• Increased enforcement and substantially increased penalties
for infringement
• General Agreement on Tariffs and Trade (GATT)
• Trade agreement among 117 countries
• Created World Trade Organization (WTO) in Geneva,
Switzerland, to enforce compliance with the agreement
• Despite GATT, copyright protection varies greatly from country
to country
• Expert should be consulted when considering international
usage of any intellectual property
Copyrights (cont’d.)
• The WTO and the WTO TRIPS (Trade-Related Aspects of
Intellectual Property Rights) Agreement (1994)
• Many nations recognize that intellectual property has become
increasingly important in world trade
• Established minimum levels of protection that each
government must provide to the intellectual property of
members
• Covers copyright, patents, and trade secrets
• World Intellectual Property Organization (WIPO)
• Agency of the United Nations
• Advocates for the interests of intellectual property owners
• Goal: ensure that IP laws are uniformly administered
• WIPO Copyright Treaty (1996) provides additional copyright
protections for electronic media
Copyrights (cont’d.)
Copyrights (cont’d.)
• Digital Millennium Copyright Act (DMCA)(1998)
• Implement WIPO Copyright Treaty and WIPO Performances
and Phonograms Treaty
• Divided into five sections:
• Title I (WIPO Copyright and Performances and Phonograms
Treaties Implementation Act of 1998)
• Title II (Online Copyright Infringement Liability Limitation
Act)
• Title III (Computer Maintenance Competition Assurance
Act)
• Title IV (Miscellaneous provisions)
• Title V (Vessel Hull Design Protection Act)
Copyrights (cont’d.)
• Digital Millennium Copyright Act (DMCA)(1998)(cont’d)
• Title I
• Civil and criminal penalties included
• Governs distribution of tools and software that can be used
to circumvent technological measures used to protect
copyrighted works
• Title II
• Provides safe harbors for ISPs whose
customers/subscribers may be breaking copyright laws by
downloading, posting, storing, or sending copyrighted
material via its services
• ISP must comply with “notice and takedown procedures”
that grant copyright holders a process to halt access to
alleged infringing content
Patents
• Grant of property right to inventors
• Issued by the U.S. Patent and Trademark Office (USPTO)
• Permits an owner to exclude the public from making, using, or
selling the protected invention
• Allows legal action against violators
• Prevents independent creation as well as copying
• Extends only to the United States and its territories and
possessions
• Applicant must file with the USPTO
• USPTO searches prior art: existing body of knowledge available
to a person of ordinary skill in the art
• Takes an average of 25 months from filing an application until
application is issued as a patent, rejected, or abandoned
Patents (cont’d.)
• An invention must pass four tests
• Must be in one of the four categories: processes, machines,
articles of manufacture, compositions of matter
• Must be useful
• Must be novel
• Must not be obvious to a person having ordinary skill in the
same field
• Items cannot be patented if they are:
• Abstract ideas
• Laws of nature
• Natural phenomena
Patents (cont’d.)
• Patent infringement
• Making unauthorized use of another’s patent
• No specified limit to the monetary penalty
• Leahy-Smith America Invents Act (2011)
• Changes from “first-to-invent” to “first-inventor-to-file”
• Expanded the definition of prior art
• Something resembling invention were on sale anywhere in
the world (not only US) before a patent was filed
• Software patent
• Protects feature, function, or process embodied in instructions
executed on a computer
• Some experts think the number of software patents being
granted inhibits new software development
Patents (cont’d.)
• Software patent (cont’d)
• Before obtaining a software patent, do a patent search
• Software Patent Institute is building a database of information
• Software Cross-Licensing Agreements
• Large software companies agree not to sue each other over
patent infringements
• Small businesses have no choice but to license patents if they
use them
• Average patent lawsuit costs $3 - $10 million
Trade Secrets
• Trade secret
• Business information
• Represents something of economic value
• Requires an effort or cost to develop
• Some degree of uniqueness or novelty
• Generally unknown to the public
• Kept confidential
• Trade secret protection begins by:
• Identifying all information that must be protected, from
undisclosed patent applications to market research and
business plans
• Developing a comprehensive strategy for keeping it secure
Trade Secrets (cont’d.)
• Trade Secret Laws
• Protect only against the misappropriation of trade secrets
• Doesn’t prevent someone from using the same idea if it was
developed independently
• Have a few key advantages over patents and copyrights
• No time limitations
• No need to file an application or disclose trade secret to
outsiders
• Hence, no filing or application fees
• No risk to be ruled invalid in courts
• Unlike patents
• Vary greatly from country to country
Trade Secrets (cont’d.)
• Trade Secret Laws (cont’d)
• Uniform Trade Secrets Act (UTSA)
• Established uniformity across the states in area of trade
secret law
• Computer hardware and software can qualify for trade
secret protection
• The Economic Espionage Act (EEA) of 1996
• Penalties of up to $10 million and 15 years in prison for the
theft of trade secrets
• Information is considered a trade secret only if companies
take steps to protect it
Trade Secrets (cont’d.)
• Employees and Trade Secrets
• Employees are the greatest threat to trade secrets
• Accidentally disclose trade secrets, or
• Steal them for monetary gain
• Educate employees about the importance of maintaining the
secrecy of corporate information
• Trade secret information should be labeled clearly as
confidential
• Should only be accessible by a limited number of people
• Nondisclosure clauses in employee’s contract
• Departing employees cannot take copies of computer
programs or reveal the details of software owned by the
firm
• Confidentiality issues are reviewed at the exit interview
Trade Secrets (cont’d.)
• Employee and Trade Secrets (cont’d)
• Noncompete agreements
• Protect intellectual property from being used by
competitors when key employees leave
• Require employees not to work for competitors for a period
of time
• Several factors to consider when settling disputes:
• The reasonableness of the restriction
• The employee’s right to work and seek employment
• Geographic area and the length of time of the restriction
• Wide range of treatment on noncompete agreements among
the various states
Key Intellectual Property Issues
• Issues that apply to intellectual property and information
technology
• Plagiarism
• Reverse engineering
• Open source code
• Competitive intelligence
• Trademark infringement
• Cybersquatting
Plagiarism
• Stealing someone’s ideas or words and passing them off as one’s
own
• Many students:
• Do not understand what constitutes plagiarism
• Believe that all electronic content is in the public domain
• Others feel pressured to achieve high GPA or too lazy to do
original work
• Plagiarism is also common outside academia
• Plagiarism detection systems
• Check submitted material against databases of electronic
content
Plagiarism (cont’d.)
Plagiarism (cont’d.)
• Steps to combat student plagiarism
• Help students understand what constitutes plagiarism and
why they need to cite sources properly
• Show students how to document Web pages and materials
from online databases
• Schedule major writing assignments in portions due over the
course of the term
• Tell students that instructors are aware of Internet paper mills
and plagiarism detection services
• Incorporate detection into an antiplagiarism program
Reverse Engineering
• Process of taking something apart in order to:
• Understand it
• Build a copy of it
• Improve it
• Applied to computer hardware and software
• Begins by extracting design-stage details from program code
• Design-stage details are more conceptual and less defined
• Frequent use: to modify an application that ran on one vendor’s
database to run on another’s
• Database management systems use their own programming
language for application development
• Organizations that want to change database vendors also need
to redevelop existing applications → costly and lengthy
• Code-generation tools can be used to take the design and
produce code (forward engineer) → reduces time and cost
Reverse Engineering (cont’d.)
• Other issues involve tools called compilers and decompilers
• Compiler: language translator that converts computer program
statements expressed in a source language to machine
language
• Software manufacturer usually provides software in machine
language form
• Decompiler: reads machine language and produces source
code
• Provides way to gain access to information that another
organization may have copyrighted or classified as trade secret
Reverse Engineering (cont’d.)
• Courts have ruled in favor of reverse engineering:
• To enable interoperability
• Reason: to refuse someone the opportunity to create an
interoperable product would allow existing manufacturers to
monopolize the market, making it impossible for others to
compete
• Software license agreements forbid reverse engineering
• Some software developers are moving offshore to avoid U.S.
rules
• Ethics of using reverse engineering are debated
• Fair use if it provides useful function/interoperability
• Can uncover designs that someone else has developed at great
cost and taken care to protect
Open Source Code
• Program source code made available for use or modification, as
users or other developers see fit
• Basic premise
• Many programmers can help to improve software
• Can be adapted to meet new needs
• Bugs rapidly identified and fixed
• Reasons for using open source software:
• Provides a better solution to a specific business problem
• Costs less
• GNU General Public License (GPL) was a precursor to the Open
Source Initiative (OSI)
• A software developer could make a program open source simply
by putting it into the public domain with no copyright
Open Source Code (cont’d.)
Open Source Code (cont’d.)
• Why would firms or individual developers create open source
code if they do not receive money for it?
• To earn respect for solving a common problem
• Some have used open source code and feel the need to pay
back by helping other developers
• If the firm is paid to develop the software rather than for the
software itself, it may license the code as open source and use
it to promote the firm’s expertise or as an incentive to attract
other potential clients
• To earn potential software maintenance fees if the end user’s
needs change in the future
• A firm may develop useful code but reluctant to license and
market it, so it donate the code to the general public
Competitive Intelligence
• Gathering of legally obtainable information
• To help a company gain an advantage over rivals
• Often integrated into a company’s strategic plans and decision
making
• An effective competitive intelligence program requires the
continual gathering, analysis, and evaluation of data with
controlled dissemination of useful information to decision
makers
• Not the same as industrial espionage, which uses illegal means to
obtain business information not available to the general public
• Without proper management safeguards, it can cross over to
industrial espionage
Competitive Intelligence (cont’d.)
• Almost all the data needed for competitive intelligence can be
collected from examining published information or interviews
Trademark Infringement
• Trademark is logo, package design, phrase, sound, or word that
enables consumer to differentiate one company’s product from
another’s
• Trademark owner can prevent others from using the same mark
or a confusingly similar mark on a product’s label
• Trademark can be renewed forever as long as it is in use
• Organizations frequently sue one another over the use of a
trademark in a Web site or domain name
Trademark Infringement (cont’d.)
• Nominative fair use is defense often employed by defendant in
trademark infringement cases where a defendant uses a plaintiff’s
mark to identify the plaintiff’s products/services in conjunction
with its own products/services
• To successfully employ this defense, the defendant must show:
• The plaintiff’s product/service cannot be readily identifiable
without using the plaintiff’s mark
• It uses only as much of the plaintiff’s mark as necessary to
identify the defendant’s product/service
• The defendant does nothing with the plaintiff’s mark that
suggests endorsement or sponsorship by the plaintiff
Cybersquatting
• When web sites were first established, there was no procedure for
validating the legitimacy of requests for web sites names
• Given out on a first-come, first-served basis
• Cybersquatters
• Register domain names for famous trademarks or company
names
• Hope the trademark’s owner will buy the domain name for a
large sum of money
• To curb cybersquatting
• Register numerous domain names and variations (.org, .com,
.info)
• For owners who rely on non-English-speaking customers can
register their names in multilingual form
Cybersquatting (cont’d.)
• Internet Corporation for Assigned Names and Numbers (ICANN)
• Several top-level domains (.com, .edu, edu., .gov, .int, .mil, .net,
.org, aero, .biz, .coop, .info, .museum, .name, .pro, .asis, .cat,
.mobi, .tel, and .travel)
• Current trademark holders are given time to assert their rights
in the new top-level domains before registrations are opened
to the general public
• Has a Uniform Domain Name Dispute Resolution Policy to
provide for the fast, relatively inexpensive arbitration of
disputes
• Anticybersquatting Consumer Protection Act (ACPA) (1999)
• Allows trademark owners to challenge foreign cybersquatters
• Helps trademark owners challenge the registration of their
trademark as a domain name even if the owner has not created
an actual web site
Unit Summary
• Sekarang, mahasiswa:
• Mampu menjelaskan definisi intellectual property dengan
benar
• Mampu membedakan jenis-jenis intellectual property dan
penggunaannya dengan tepat
• Mampu menjabarkan kegiatan yang termasuk plagiarism
dengan benar
• Mampu menguraikan penerapan reverse engineering, open
source code, dan competitive intelligence dengan tepat
• Mampu menjabarkan strategi untuk melindungi organisasi
dari cybersquatting dengan benar
Question & Answers