Discussion:
[Federal decision, so I believe it applies to all states...]
In a recent decision, Krause vs. Titleserv, a federal circuit court ruled, on appeal, that the repair of bugs in software are not to be looked upon as copyright infringement (not a crazy idea). But then they additionally ruled that adding functionality to copyrighted software done by an entity that does not hold the copyright to software is permissible if facilities to develop the software were provided by that entity and if no explicit written agreement is entered into by the two parties.
Scenario I can easily see happening in the music business: an unscrupulous media outlet provides recording facilities to an artist, with perhaps merely an oral understanding that they would receive certain specific distribution rights in return for that (e.g., "you can use it on ... concert tour"). The artist copyrights his/her music, thinking, quite reasonably, that s/he ultimately holds control of the work of art. After the copyrighted work is recorded (the recording division having paid well for it to be done...), the media company subsequently takes that work, adds something to it, then uses it in a movie made by another division of that label. Artist sues; label says, "Krause/Titleserv"??!!
This might not only affect works yet to be created after the date of this decision, but perhaps also works that were already made under similar circumstances in years gone by! The alleged infringement in Titleserv dates back to 1996...
I'm not an IP lawyer, but it seems to me that, while the circuit court was reasonable to decide that the bug fixing by the software user was permissible, the court probably opened a Pandora's box when they signed off on permitting the company that used the software to add functionality simply because they needed it (!); and it would seem that, in absence of any written agreement between the two parties, a federal copyright registration should prevail...
Answer:
In a recent decision, Krause vs. Titleserv, a federal circuit court ruled, on appeal, that the repair of bugs in software are not to be looked upon as copyright infringement (not a crazy idea). But then they additionally ruled that adding functionality to copyrighted software done by an entity that does not hold the copyright to software is permissible if facilities to develop the software were provided by that entity and if no explicit written agreement is entered into by the two parties. But adding functionality does not give the person adding the functionality the right to then go out and sell this "new" version of the software to anyone else -- it's strictly for in-house. This ruling just says that software companies can't go after companies who fix bigs or make in-house changes to lawfully-acquired software. It's sort of like buying a CD, then ripping it to your harddrive and creating a new CD with the songs in a different order that works better for you -- that is perfectly acceptable, but you can't then go out and sell the new CD without violating copyright protections.
Scenario I can easily see happening in the music business: an unscrupulous media outlet provides recording facilities to an artist, with perhaps merely an oral understanding that they would receive certain specific distribution rights in return for that (e.g., "you can use it on ... concert tour"). This doesn't make any sense. Unless there is a written agreement between the artist and the "unscrupulous media outlet," the copyright is owned by the artist alone -- the "unscrupulous media outlet" has no rights to the work.
And furthermore, a good argument could be made that anyone that relies on oral contracts for anything important probably deserves whatever happens to them...
The artist copyrights his/her music, thinking, quite reasonably, that s/he ultimately holds control of the work of art. And they would, absent a contractual agreement to the contrary.
After the copyrighted work is recorded (the recording division having paid well for it to be done...), the media company subsequently takes that work, adds something to it, then uses it in a movie made by another division of that label. Artist sues; label says, "Krause/Titleserv"??!! This doesn't make much sense as written, but I think I see where you are going with this. And the fact is, they could use that re-done song in a movie without paying the artist -- as long as they kept the movie in house, and never sold it, distributed it, or allowed the public to see it. As soon as anything like that happen, they would be outside of Titleserv territory, and into copyright infringement land.
I'm not an IP lawyer, but it seems to me that, while the circuit court was reasonable to decide that the bug fixing by the software user was permissible, the court probably opened a Pandora's box when they signed off on permitting the company that used the software to add functionality simply because they needed it (!); and it would seem that, in absence of any written agreement between the two parties, a federal copyright registration should prevail... I think you are overreacting. The Titleserv decision is a very reasonable decision -- it basically says that once you buy a piece of software, you have some ownership rights in it, and you can do pretty much whatever you want to do with THAT copy of the software. There's no conflict with copyright laws here -- you still can't reproduce the coftware to sell to someone else without violating the copyright -- it just gets purchasers of software out from under draconian EULAs that prohibit just about everything under the sun.
This is a pretty narrow holding that hopefully will be extended, but it is certainly nothing to be frightened of.
Answer:
I can see that the Sell versus Use is a helpful way to distinguish; but is it always so easy to distinguish when you're selling a product?
If you sell a service to other parties that uses information that is uniquely produced by that software, isn't it really just a transitive minor sale of that software? And doesn't this invite one to, in effect, rent out modified software, thus diluting the value of copyright ownership?? If a person makes a product, then figures out an improvement on it whose use derives unique benefit, instead of going to buy the original artist's product, might not some (now thanks to Kraus/TitleServ) go and buy the services of somebody who modded it and will use it for me! ("I didn't sell it, your honor; I just rented it out!"; or how about: "I didn't rent out the software; I just rented out my use of the copyright holder's software..."). If the company is not using the modified software in such a way that garners additonal revenue from other parties, I could agree with your argument. But I think you can see that allowing modification by people who are in the stream of commerce with the original copyright holder is a slippery slope to embark upon...
And I can see the same slippery slope being encountered with music player sales; already some companies are renting music. What happens when it starts being modified and charged for? In the end, isn't that a simply degradation of copyright holder rights??
Answer:
If you sell a service that uses information that is uniquely produced by that software, isn't it really just a transitive minor sale of the software? I'm not really sure what you mean here.
Couldn't you in effect rent out modified software?? ("I didn't sell it, your honor; I just rented it out!"; or how about: "I didn't rent out the software; I just rented out my use of the copyright holders software..."). No. "Sale" in this context means any change in ownership -- so that would cover sales, giving it away, lending it out, renting it, or simply allowing others to use it.
If the company is not using the modified software in such a way that it garners additonal revenue, I could agree with your logic. Well, the company could use the modified software to garner additional revenue over what it could gain by using the unmodified software, and long as the gains are from actually using the software, and not merely reselling the software.
And I can see the same slippery slope being encountered with music player sales; already some companies are renting music. What happens when it starts being modified and charged for? If the music is being modified and then redistributed, then it is violating the copyright holder's right to control the creation and sale of "derivative works" -- in other words, it's already illegal to do that, and this ruling does not change anything. It's already legal for you to go home, rip a CD, and then modify the music -- remix it, sample from it, etc. -- and then make a new CD to listen to, as long as you don't then redistribute the modified music, but keep it for yourself. As soon as you distribute it in any way, then you are infringing someone's copyright.
This ruling doesn't even really concern itself with copyright anyway -- it's really concerned with the end-user licensing agreements (EULA's) that ship with software. Most EULA's state that you are not purchasing software, but rather you are obtaining a limited license to use the software. The software company argued that the modifications were outside the scope of the license, while the other company argued that the EULA didn't specifiy that a license had been purchased. This is a contract law problem -- it has nothing to do with copyright law. The case turned on the fact that the EULA didn't state that the purchaser had only purchased a license, and therefore the purchaser "owned" their particular copy of the software, and could therefore modify it in-house. But again, this is simply a contract issue, not really an IP issue, and would have gone the other way had the EULA been written like most EULAs out there.
This case was very dependent on a particular set of facts -- this really doesn't foretell a slippery-slope towards reduced protections for copyright owners. Hell, the pendulum has been swinging in favor of increased protections for nearly 30 years now, with no signs of shifting the other way...
Answer:
I agree with most of what you say.
A simple example:
Let's say you add a feature to somebody's else's software that you implicitly own rights to under Krause/TitleServ; then that (desirable) added functionality results in increased sales of services that were a result of that modification. Have you not just implicitly sold, or more specifically rented, the original copyright holder's modified work??
What works for software, works for music players too...
Answer:
Let's say you add a feature to somebody's else's software that you implicitly own rights to under Krause/TitleServ; then that (desirable) added functionality results in increased sales of services that were a result of that modification. Have you not just implicitly sold, or more specifically rented, the original copyright holder's modified work?? Forget the added feature. If I create a graph using, say, Excel, and then I use that graph as part of something I sell or as part of my service, have I "implicitly sold, or more specifically rented" my copy of Excel? Of course not. Unless you are a software company, or otherwise in the business of selling software, the software you use is simply a tool. If you can modify the tool to make you more efficient, so much the better.
If you drive clients around in your car, have you "implicitly sold, or more specifically rented" time in your car?
What works for software, works for music players too... Only if you agreed to a EULA that was poorly written, like the one in Titleserv, when you bought your music player.
Answer:
Well, it looks like this argument will end up where most ones do; semantics.
A graph is not part of the programming environment that somebody might use in Excel. There are XLAs, XLLs, and (lightweight) password protected modules that are specifically designed by Microsoft for that; the programming environments laid out by Microsoft serve as a "good fences make good neighbors" boundary, so there is no quibbling about what belongs to Microsoft and what is yours to program and claim as intellectual property. Theoretically, if Microsoft did not want you to resell their software with a modification to its chartingl, they could come after you for that (and when its a modifaction that is friendly to OpenSource, to date they have! That was the case with Bloomberg Trading Systems years ago; shops that were tricking them out would end up getting sued by Bloomberg). For any programmer to lay claim to Microsoft's interface functions would be an overreach, as it would be for a musician to claim somebody humming a deformation of tune in a non-fee revenue generating situation.
Driving clients in the car is simply a use of the (possibly) copyrighted (patented?) product; it's not a functional improvment of the product.
So please answer my specific example above: If I add a function to a piece of software such that the services I deliver using it are more significantly valuable as a result of that modification, and people beat a path to my door to pay you to use the software for them (really a use by proxy, a rental), are you not ultimately indirectly competing with that copyright holder? Is that not a dimunition of that copyright holder's rights??
Answer:
Well, it looks like this argument will end up where most ones do; semantics. It doesn't have to.
A graph is not part of the programming environment that somebody might use in Excel. There are XLAs, XLLs, and (lightweight) password protected modules that are specifically designed by Microsoft for that; the programming environments laid out by Microsoft serve as a "good fences make good neighbors" boundary, so there is no quibbling about what belongs to Microsoft and what is yours to program and claim as intellectual property. Theoretically, if Microsoft did not want you to resell their software with a modification to its chartingl, they could come after you for that (and when its a modifaction that is friendly to OpenSource, to date they have! That was the case with Bloomberg Trading Systems years ago; shops that were tricking them out would end up getting sued by Bloomberg). For any programmer to lay claim to Microsoft's interface functions would be an overreach, as it would be for a musician to claim somebody humming a deformation of tune in a non-fee revenue generating situation. This is completely irrelevant and tangential to the point I was making.
So please answer my specific example above: If I add a function to a piece of software such that the services I deliver using it are more significantly valuable as a result of that modification, and people beat a path to my door to pay you to use the software for them (really a use by proxy, a rental), are you not ultimately indirectly competing with that copyright holder? How are you competing with the copyright holder in this example? Presumably you are using the software to provide a service -- in other words, you are using the software as a tool to perform your services. Also presumably, the software company is in the business of selling software, not running the software for people. How are the two companies competing in this case?
If you are really simply running your modified software for people -- not providing any services, just essentially hosting the software -- then that is already copyright infringement, whether or not you made any modifications to the software. As I noted above, rentals and the like are already infringing uses.