MODULE

Social and
Professional Issues
Prepared by:
Engr. FREDERICK VON A. IBASCO, MSIT

[Type text]
Chapter 6: Intellectual Property
Learning Objectives
At the end of the chapter, students will be able to:
• Define intellectual property
• Determine some copyright law and discuss significant cases
• Discuss copying and sharing, search engines and online libraries
• Discuss the different free-speech issues
• Evaluate the ethical issues on the different case scenario presented
• Analyze IP right issues such as Sharing Music: the Napster Case and Reverse Engineering: game machines
• Evaluate the ethical issues on the different case scenario presented

As you read this chapter, consider the following questions:

1. What does the term intellectual property encompass, and why are organizations so concerned about
protecting intellectual property?
2. What are the strengths and limitations of using copyrights, patents, and trade secret laws to protect
intellectual property?
3. What is plagiarism, and what can be done to combat it?
4. What is reverse engineering, and what issues are associated with applying it to create a lookalike of a
competitor’s software program?
5. What is open source code, and what is the fundamental premise behind its use?
6. What is the essential difference between competitive intelligence and industrial espionage, and how is
competitive intelligence gathered?
7. What is cybersquatting, and what strategy should be used to protect an organization from it?

Overview of the Intellectual Property System

The intellectual property (IP) system relates to rights and obligations, as well as privileges and incentives–all rooted from
the creation and protection of IP, which “refers to creations of the mind: inventions; literary and artistic works; and
symbols, names, and images used in commerce.”

IP rights as basic human rights involve “the right to benefit from the protection of moral and material interests resulting
from authorship of scientific, literary, or artistic productions.” (Art. 27, Universal Declaration of Human Rights).
Meanwhile, the 1987 Philippine Constitution mandates their protection “particularly when beneficial to the people”. (Art.
XIV, Sec. 13) In the midst of these seemingly conflicting interests of the creators and innovators and the public, the
system seeks to strike a balance between them through legal safeguards.

Otherwise put, the system seeks to provide an environment in which everyone benefits from one’s creativity ad
innovation, especially since IP is a tool for economic and socio-cultural development.

Intellectual Property and Changing Technology

What is Intellectual Property?

• The intangible creative work, not its particular physical form
• Value of intelligence and artistic work comes from creativity, ideas, research, skills, labor, non-material efforts
and attributes the creator provides
• is a term used to describe works of the mind—such as art, books, films, formulas, inventions, music, and
processes—that are distinct and owned or created by a single person or group.
• Protected by copyright law, patent law and trade secret laws.
• Copyright holders have exclusive rights:
• To make copies
• To produce derivative works, such as translations into other languages or movies based on books
• To distribute copies
• To perform the work in public (e.g. music, plays)

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 • To display the work in public (e.g. artwork, movies, computer games, video on a Web site)
• REPUBLIC ACT NO. 8293
• AN ACT PRESCRIBING THE INTELLECTUAL PROPERTY CODE AND ESTABLISHING THE INTELLECTUAL
PROPERTY OFFICE, PROVIDING FOR ITS POWERS AND FUNCTIONS, AND FOR OTHER PURPOSES
• SECTION 1. Title. - This Act shall be known as the “Intellectual Property Code of the Philippines.”

In the Philippines

R.A. 165 – Patent Law 1947

R.A. 166 - Trademarks

Intellectual Property Office (IPO)

 Republic Act No. 8293 (Signed on June 6, 1997)

An Act Prescribing the Intellectual Property Code and Establishing the Intellectual Property Office, Providing for its
Powers and Functions

IPO WEBSITE:
www.ipophil.gov.ph

Establishment of IP Satellite Offices

Chapter 6 – Intellectual Property 3

Challenges of New Technology:
• Digital technology and the internet has made copyright infringement easier and cheaper
• New compression technologies have made copying large files (e.g. graphics, video and audio files) feasible
• New tools allow us to modify graphics, video and audio files to make derivative works
• Scanners allow us to change the media of a copyrighted work, converting printed text, photos, and artwork to
electronic form

Cybersquatting
Companies that want to establish an online presence know that the best way to capitalize on the strengths of their brand
names and trademarks is to make the names part of the domain names for their Web sites. When Web sites were first
established, there was no procedure for validating the legitimacy of requests for Web site names, which were given out
on a first-come, first-served basis. And in the early days of the Web, many cybersquatters registered domain names for
famous trademarks or company names to which they had no connection, with the hope that the trademark’s owner
would eventually buy the domain name for a large sum of money.

Copyright Law and Significant Cases

A COPYRIGHT is the exclusive right to distribute, display, perform, or reproduce an original work in copies or to prepare
derivative works based on the work. Copyright protection is granted to the creators of “original works of authorship in
any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or
otherwise communicated, either directly or with the aid of a machine or device.”

Copyright infringement is a violation of the rights secured by the owner of a copyright. Infringement occurs when
someone copies a substantial and material part of another’s copyrighted work without permission.

Eligible Works
The types of work that can be copyrighted include architecture, art, audiovisual works, choreography, drama, graphics,
literature, motion pictures, music, pantomimes, pictures, sculptures, sound recordings, and other intellectual works, as
described in REPUBLIC ACT NO. 8293 also known as the “Intellectual Property Code of the Philippines.” To be eligible for a
copyright, a work must fall within one of the preceding categories, and it must be original. Copyright law has proven to be
extremely flexible in covering new technologies; thus, software, video games, multimedia works, and Web pages can all
be protected.

A bit of history:
• 1790 first copyright law passed
• 1909 Copyright Act of 1909 defined an unauthorized copy as a form that could be seen and read visually
• 1976 and 1980 copyright law revised to include software and databases that exhibit "authorship" (original
expression of ideas), included the "Fair Use Doctrine"
• 1982 high-volume copying became a felony
• 1992 making multiple copies for commercial advantage and private gain became a felony
• 1997 No Electronic Theft Act made it a felony to willfully infringe copyright by reproducing or distributing one or
more copies of copyrighted work with a total value of more than $1,000 within a six-month period
• 1998 Digital Millennium Copyright Act (DMCA) prohibits making, distributing or using tools to circumvent
technological copyright protection systems and included protection from some copyright lawsuits for Web sites
where users post material
• 2005 Congress made it a felony to record a movie in a movie theater

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Fair Use Doctrine:
• Four factors considered
- Purpose and nature of use – commercial (less likely) or non-profit purposes
- Nature of the copyrighted work
- Amount of significance or portion used
- Effect of use on potential market or value of the copyright work (will it reduce sales of work?)
• No single factor alone determines
• Not all factors given equal weight, varies by circumstance

Significant Cases:
• Sony vs. Universal City Studios (1984)
– Supreme Court decided that the makers of a device with legitimate uses should not be penalized
because some people may use it to infringe on copyright
– Supreme Court decided copying movies for later viewing was fair use
– Arguments against fair use
• People copied the entire work
• Movies are creative, not factual
– Arguments for fair use
• The copy was for private, noncommercial use and generally was not kept after viewing
• The movie studios could not demonstrate that they suffered any harm
• The studios had received a substantial fee for broadcasting movies on TV, and the fee depends
on having a large audience who view for free
• Reverse engineering: game machines
• Sega Enterprises Ltd. v. Accolade Inc. (1992)
• Atari Games v. Nintendo (1992)
• Sony Computer Entertainment, Inc. v. Connectix Corporation (2000)
• Courts ruled that reverse engineering does not violate copyright if the intention is to make new creative works
(video games), not copy the original work (the game systems)
• Sharing music: the Napster case
• Was the sharing of music via Napster fair use?
• Napster's arguments for fair use
• The Sony decision allowed for entertainment use to be considered fair use
• Did not hurt industry sales because users sampled the music on Napster and bought the CD if they liked
it RIAA's (Recording Industry Association of America) arguments against fair use
• "Personal" meant very limited use, not trading with thousands of strangers
• Songs and music are creative works and users were copying whole songs
• Claimed Napster severely hurt sales
• Court ruled sharing music via copied MP3 files violated copyright
• Was Napster responsible for the actions of its users?
• Napster's arguments
• It was the same as a search engine, which is protected under the DMCA
• They did not store any of the MP3 files
• Their technology had substantial legitimate uses RIAA's arguments
• Companies are required to make an effort to prevent copyright violations and Napster did not take
sufficient steps
• Napster was not a device or new technology and the RIAA was not seeking to ban the technology
• Court ruled Napster liable because they had the right and ability to supervise the system, including
copyright infringing activities
• File sharing: MGM v. Grokster
• Grokster, Gnutella, Morpheus, Kazaa, and others provided peer-to-peer (P2P) file sharing services
• The companies did not provide a central service or lists of songs
• P2P file transfer programs have legitimate uses
• Lower Courts ruled that P2P does have legitimate uses
• Supreme Court ruled that intellectual property owners could sue the companies for encouraging copyright
infringement

Chapter 6 – Intellectual Property 5

 Copying and Sharing

Responses from the Content Industries:

• Ideas from the software industries
– Expiration dates within the software
– Dongles (a device that must be plugged into a computer port)
– Copy protection that prevents copying
– Activation or registration codes
– Obtained court orders to shut down Internet bulletin boards and Web sites
• Banning, suing and taxing
– Ban or delay technology via lawsuits
• CD-recording devices
• Digital Audio Tapes (DAT)
• DVD players
• Portable MP3 players
– Require that new technology include copyright protections
– Tax digital media to compensate the industry for expected losses

Digital Rights Management:

• Collection of techniques that control uses of intellectual property in digital formats
• Includes hardware and software schemes using encryption
• The producer of a file has flexibility to specify what a user may do with it
• Apple, Microsoft and Sony all use different schemes of DRM
• RA 9239 or the "Optical Media Act of 2003”

The DMCA vs. Fair Use, Freedom of Speech, and Innovation:

• Lawsuits have been filed to ban new technologies
• U.S. courts have banned technologies such as DeCSS even though it has legitimate uses, while courts in other
countries have not.
• Protesters published the code as part of creative works (in haiku, songs, short movies, a computer game and art)
• U.S. courts eventually allowed publishing of DeCSS, but prohibited manufacturers of DVD players from including
it in their products

Video Sharing: Conflict and Solutions:

• Industry issues "take down" notices per the DMCA
• As long as sites like YouTube and MySpace comply with take down notices they are not in violation
• Take down notices may violate fair use, some have been issued against small portions of video being used for
educational purposes

New Business Models and Constructive Solutions:

• Organizations set up to collect and distribute royalty fees (e.g. the Copyright Clearance Center), users don't have
to search out individual copyright holders
• Sites such as iTunes and the new Napster provide legal means for obtaining inexpensive music and generate
revenue for the industry and artists
• Revenue sharing allows content-sharing sites to allow the posting of content and share their ad revenues with
content owners in compensation
• The industry imbeds advertising in files that it then posts to the P2P sites, the advertiser gets its message out and
the industry gets its fees
• Fan fiction is generally not seen as a threat, the writers are also the customers for the original works

Ethical Arguments about Copying:

• Unlike physical property, copying or distributing a song, video, or computer program does not decrease the use
or enjoyment by another person
• Copying can decrease the economic value of creative work produced for sale
• The fair use guidelines are useful ethical guidelines
• There are many arguments for and against unauthorized copying

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International Piracy:
• Some countries do not recognize or protect intellectual property
• Countries that have high piracy rates often do not have a significant software industry
• Many countries that have a high amount of piracy are exporting the pirated copies to countries with strict
copyright laws
• Economic sanctions often penalize legitimate businesses, not those they seek to target

Search Engines and Online Libraries

• Search Engines
– Caching and displaying small excerpts is fair use
– Creating and displaying thumbnail images is fair use
– Court ordered Google to remove links to pages that infringe copyright; Google is appealing
• Books Online
– Project Guttenberg digitizes books in the public domain
– Microsoft scanned millions of public domain books in University of California's library
– Google has scanned millions of books that are in the public domain and that are not; they display only
excerpts from those still copyrighted
• Some court rulings favor search engines and information access; some favor content producers

Free-Speech Issues

Domain Names:
• Domain names may be used to criticize or protest (e.g. XYZIsJunk.org)
• Companies sue under trademark violation, but most cases dismissed
• Some companies buy numerous domain names containing their name so others cannot use them

Posting Documents for Criticism:

• Documents that are copyrighted and trade secrets have been posted as a form of criticism
• Organizations have sued to have the documents removed from the Web
• In some cases courts have ruled that it is a copyright violation and the documents must be removed
• In one judgment against the Church of Scientology, the court ruled that the church’s primary motivation was "to
stifle criticism of Scientology in general and to harass its critics"

Free Software

• Free software - idea, an ethic, advocated and supported by large, loose-knit group of computer programmers
who allow people to copy, use, and modify their software
• Free means freedom of use, not necessarily lack of cost
• Open source - software distributed or made public in source code (readable and modifiable)
• Proprietary software - (commercial) sold in object code (obscure, not modifiable) (E.g.: Microsoft Office)
• Plagiarism is the act of stealing someone’s ideas or words and passing them off as one’s own. The explosion of
electronic content and the growth of the Web have made it easy to cut and paste paragraphs into term papers
and other documents without proper citation or quotation marks.
• Reverse engineering is the process of taking something apart in order to understand it, build a copy of it, or
improve it. Reverse engineering was originally applied to computer hardware but is now commonly applied to
software as well.

Should All Software Be Free?

• Would there be sufficient incentives to produce the huge quantity of consumer software available now?
• Would the current funding methods for free software be sufficient to support all software development?
• Should software be covered under copyright law?
• Concepts such as copy left and the GNU Public License provide alternatives to proprietary software within
today's current legal framework

Chapter 6 – Intellectual Property 7

 Issues for Software Developers

Patents for Software

• Patents protect inventions of new things or processes
• A patent is a grant of a property right issued by the United States Patent and Trademark Office (USPTO) to an
inventor. A patent permits its owner to exclude the public from making, using, or selling a protected invention,
and it allows for legal action against violators.
• The Supreme Court said that software could not be patented; however a machine that included software could
• Patents are not supposed to be given for things that are obvious or are already in common use
• The Patent Office has made mistakes Patents on Web Technologies:
• Amazon agreed to pay IBM who holds patents for online catalogs and targeted advertising
• Microsoft was fined $1.5 billion for violating MP3 patents. The decision was voided; the case continues.
• Friendster applied for a patent on its social-networking Web techniques. While the patent was pending, sites
such as MySpace sprang up. Friendster's patent was granted and it may now charge licensing fees to businesses
using the technology.

Discussion Question
1. Explain the concept that an idea cannot be copyrighted, but the expression of an idea can be, and why this
distinction is a key to understanding copyright protection.
2. Identify and briefly discuss three key advantages that trade secret law has over the use of patents and copyrights
in protecting intellectual property. Are there any drawbacks with the use of trade secrets to protect intellectual
property?
3. What problems can arise in using nondisclosure and noncompete agreements to protect intellectual property?
4. Outline a multistep approach that a university might take to successfully combat plagiarism among its students.
5. Under what conditions do you think the use of reverse engineering is an acceptable business practice?
6. How might a corporation use reverse engineering to convert to a new database management system? How
might it use reverse engineering to uncover the trade secrets behind a competitor’s software?
7. Why might an organization elect to use open source code instead of proprietary software?
8. What is the nominative use defense? What are the three key elements of this defense?
9. What measures can companies take to combat cybersquatting?

What Would You Do?

1. You have procrastinated too long and now your final paper for your Programming course is due in just five days
—right in the middle of final exam week. The paper counts for half your grade for the term and would probably
take you at least 20 hours to research and write. Your roommate, and Programming major, has suggested two
options: He will code an original paper for you for P1,000, or he will show you two or three “paper mill” Web
sites, from which you can download a programming code for less than P300. You want to do the right thing, but
writing the paper will take away from the time you have available to study for your final exam in three other
courses. What would you do?

Recommended Learning Materials and Resources

To supplement the lesson in this module, you may download e-books used as reference in this lesson with the following
links:
• http://en.wikibooks.org/wiki/Ethics_for_IT_Professionals/What_Is_Ethics
• http://www.ethicsinpractice.net/Teaching_material/~/media/EthicsinPractice/PDF/
The_Good_The_Right_%20_The_Fair_jan_13.ashx

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 Flexible Teaching Learning Modality (FTLM) adapted

In this chapter, teaching and learning is through the use of technology like print, audio, video and the internet. Students
interact with their Professor and each other through virtual classrooms, email, and web conferencing. For the online
modality, the Virtual Classroom shall be used for the purpose of delivering a lecture and allowing a synchronous
discussion with the students. For the remote modality, Self-directed (SeDI) a learning management system shall be used
to upload the module and to allow asynchronous discussion with the students. This will also be used as platform for the
submission of the requirements.

References:

 www.papt.org.ph/
 www.gov.ph/2012/09/12/republic-act-no-10175/
 https://www.facebook.com/PilipinasAntiPiracyTeam/
 https://www.ipophil.gov.ph/overview-of-the-intellectual-property-system/
 REPUBLIC ACT NO. 8293 or the “Intellectual Property Code of the Philippines”
 REPUBLIC ACT NO. 9239 or the "Optical Media Act of 2003”
 Reynolds, George W., Ethics in Information Technology, 5th Edition, 2015 Cengage Learning
 Ethics for IT Professionals/What Is Ethics Retrieved from
http://en.wikibooks.org/wiki/Ethics_for_IT_Professionals/What_Is_Ethics on October 22, 2013
 Mickey Gjerri, Morten Ebbe Juul Nielsen and PeterSandoe, The Good, the Right & the Fair – An Introduction to
Ethics. (e-book). Retrieved from http://www.ethicsinpractice.net/Teaching_material/~/media/EthicsinPractice/
PDF/ The_Good_The_Right_%20_The_Fair_jan_13.ashx on October 22, 2013.
 Lavina, Charlemagne et al., Ethics for IT Professionals with Legal Aspects in Computing. 2012
 Reynolds, George W. Principles of Ethics in Information Technology. Australia: Cencage Learning, 2010
 Calvan, Nestor, Computer Ethics, Cybercrimes and Laws, 1st Edition, 2009
 Baase, Sara, A Gift of Fire, Social Legal and Ethical Issues for Computing and the Internet. 3rd Edition. Prentice
Hall, 2008

Chapter 6 – Intellectual Property 9