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Supreme Court Lets Utilization Rights Stand 341

Posted by Zonk
from the no-discussion dept.
Moof writes "The United States Supreme Court refused to hear a case between a programmer and his former employer. What makes this news is the fact that the court is letting stand the rulings of the lower courts: Essentially if someone owns a physical copy of software, then they are allowed to modify the code as part of their regular use, no matter what other agreements are in place."
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Supreme Court Lets Utilization Rights Stand

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  • by XorNand (517466) * on Tuesday November 08, 2005 @05:12PM (#13982293)
    The U.S. Supreme Court declined to hear an appeal by a programmer who sued his former employer for changing his programs' source code.
    I RTFA, but don't understand how the programmer could claim copyright on something he wrote while being employed by this company. All work produced by a person during the course of his/her employment is owned by the employer, not the employee. Unless this guy had a special employment contract, or coded in his free time?
    • by Xentor (600436) on Tuesday November 08, 2005 @05:13PM (#13982320) Homepage
      Maybe it was more of a consultant gig, where he sold them a black-box custom solution. They'd own the program, but he'd keep the code. They'd get it a little cheaper, but they'd have to hire him again whenever changes were needed...

      I've seen this tactic before... I wouldn't work that way.
      • by bwt (68845) on Tuesday November 08, 2005 @07:34PM (#13983721) Homepage
        I read the opinion. He was an independent contractor. By default, independent contractors own the copyrights to stuff they create. The idea is that the terms of their contract should spell out explicitly the full extent of the transfer of ownership, and that which is not given up is retained. If you are a regular employee stuff you create for work is owned by your employer because you are a part of them legally. This is the same idea that protects true employees from being sued by third parties, but does not protect contractors. These principles define what happens in the absense of explicit contract agreements.
    • by aitikin (909209) on Tuesday November 08, 2005 @05:18PM (#13982377)
      I understand that's the way the laws and contracts are written. Thing is, a photographer is hired to take a picture for someone. The photographer takes said picture, gives the person the picture and is paid for it. Who owns the copyright? The photographer. Because of my understanding on that, I understand where the coder is coming from (to an extent. Lesson here, read you contract before signing!).
      • Well, there's a difference between putting a photographer on the payroll and hiring him just for your wedding. If the photographer worked for a studio, the studio owner would actually own the images, not the guy who snapped them. The term "employee" (which was used in the article) has a very specific legal definition. Google "employee contractor IRS" to see exactly how well-defined it is.
        • If the photographer worked for a studio, the studio owner would actually own the images,
          followed your advice(google), to find who owns the copyright, all the first 5 links I clicked on say the opposite of what you claim.

          http://copylaw.com/new_articles/wfh.html [copylaw.com]
          the fact that under copyright law, authors are presumed to own the copyright in the works they create. The best way to avoid these problems is by having a written agreement in place before any work begins.
          • What the grandparent is getting at is that the corporate entity is the author of software, or any other "work for hire" built by an employee during his or her term of employment. That would be a better phrase to Google for, actually. Anything you come up with during your normal course of business (and in some cases, I believe it's been interpreted to including anything at all you create while employeed by the company) belongs to them.
            • You said it correctly: "work for hire" applies to material created by an employee during his or her term of employment. An independent contractor is NOT an "employee". There are a few very narrow cases where an independent contractor's work may be a "work for hire". All involve an explicit agreement to this effect, but even this is not sufficient to guarantee it legally. See this article [copylaw.com] for more info.

              Normally, stuff you creates when not on the job is yours even if you are an "employee". The only time this
      • Yup, but thankfully it isn't universally true that all photographers keep the copyright -- our wedding photographer provided the option to buy the copyright to the photos she took, so when all was said and done we had the prints, the negatives, and the right to make copies however we wish. However, she retained the right to use the photos in her promotional materials.

        Most photographers wanted to retain copyright and provided no options, which is why we didn't give them our business. :-)
    • Probably he had some rights in the program, if he didn't, the justification would be "you do not have copyright get lost", not about usage rights.

      I think the more important issue is that the court affirmed basic rights of a copy owner. These are under attack from EULAs and other directions. Good to see them recognized.
    • by Anonymous Coward
      Actually, that's not always the case. Copywrite law says that the author is the owner, unless they expressly give up those rights. Most of the time employment contracts have clauses that do just that; make the programmer give up rights to the code to the employer. Sometimes, though, it gets overlooked (especially with small companies that don't know any better). It's happened to me before, actually.
      • From the wiki on work for hire [wikipedia.org]:

        A "work for hire" (sometimes expressed as "work made for hire") is an exception to the general rule that the person who actually creates a work is the legally-recognized author of that work. According to copyright law in most countries, if a work is "made for hire", the employer - not the employee - is considered the legal author. The employer may be a corporation or an individual.

        The employee doesn't own this; the corporation does.

    • by emag (4640) <slashdot@@@gurski...org> on Tuesday November 08, 2005 @05:21PM (#13982426) Homepage
      I don't understand it either. It sounds from TFA as though he wrote these programs in the normal course of his employment, clearly making the software the property of the company. That he "placed locks on the code and stipulated that Titleserv could run--but not alter--the programs" sounds as though he was attempting to hold the company hostage. Even with some additional information in one of the comments [com.com] on TFA, it sounds like it was a co-ownership situation, where the company had every right in the world to make modifications as it needed them.
    • "All work produced by a person during the course of his/her employment is owned by the employer, not the employee. Unless this guy had a special employment contract, or coded in his free time?"

      IANAL, but I don't think that happens by default. That's why companies have you sign something that makes it explicit.

      I interpret this as good news. It means you should be free to modify stuff you bought to make it do your bidding regardless of what the copyright owner may want you to do with it. This would seem t

      • by billstewart (78916) on Tuesday November 08, 2005 @05:39PM (#13982646) Journal
        First of all, this wasn't a Supreme Court decision - it was a Supreme Court refusal-to-decide, which leaves the appeals court for whatever district the case was filed in governing the case in that district only. If the appeals court or the district court below it wrote a really good opinion, it can be influential in other cases in other districts, but it doesn't have to be.

        Second, there were obviously contractual issues going on here. The news article doesn't say when or where the programmer wrote the programs, or whether he was a consultant or regular employee, or whether they were "work for hire", or what other contracts they had. It doesn't sound like typical work for hire by an employee, because that would normally be owned by the employer and the case would have been a slam-dunk way earlier. So the results of this case are likely to only be useful if you've got a similar contractual agreement, and we don't know what that agreement is because the article doesn't go into that kind of detail.

        • In practice when the SCOTUS refuses to hear a case the highest appellate court ruling is treated as controlling law by other federal courts. If the SCOTUS lets a ruling stand then other federal courts, even in other districts will look long and hard before handing down a decision that goes against the ruling that the SCOTUS let stand. Federal judges do not like to be reversed by higher courts - its professionally humiliating. Essentially what's going on when a decision is overturned is that the SCOTUS or
      • Actually, wouldn't the company in this case be guilty of circumventing the "locks" the programmer put in place? That'd be a DMCA violation wouldn't it?

        From TFA, this was filed in 1996, pre-DMCA. Now it would be a DMCA violation, but back then it wouldn't have been.
      • Re:Wrong? (Score:5, Interesting)

        by Proteus (1926) on Tuesday November 08, 2005 @05:59PM (#13982869) Homepage Journal
        IANAL, but I don't think that [assignment of copyright to an employer] happens by default. That's why companies have you sign something that makes it explicit.

        I'm not an attorney, either, but I have been an employer. The error of the statement above, and a similar line of thought in this comment below [slashdot.org], is that everything in a contract is stuff that isn't already in the law. That's simply not true.

        When you create a contract, you do it for a few reasons. One is to address things that aren't already covered adequately elsewhere. Another is to have a single document where all terms are agreed upon, to establish that all parties knew their rights and responsibilities -- even if they are already coded in law. Another is that terms in contracts are often easier to enforce than the same terms coded as law (in terms of suing someone for violation).

        When someone hires you to create a work, they own the copyright under the doctrine of "work for hire". The contracts do a couple of things: they spell this out explicitly, and often extend the provision to works you were not directly asked to create.
        • Work Made for Hire (Score:3, Informative)

          by PCM2 (4486)

          When someone hires you to create a work, they own the copyright under the doctrine of "work for hire". The contracts do a couple of things: they spell this out explicitly, and often extend the provision to works you were not directly asked to create.

          IAANAL, but while that certainly may be true and such a doctrine does exist, it is more specific than you seem to believe it is.

          In order for a work that is created by a freelance contractor to qualify as a "work made for hire" [copyright.gov] (specific wording of copyright

    • The employer would own the copyright if the object in questions is a work for hire... but it's sometimes hard to judge whether the business relationship is employer-employee or not [copyright.gov].

      Also, without knowing the details of the case, it is possible that his agreement contract included a clause that he would retain copyright over his work. It's complicated as well by the fact that the company he worked for was not in the business of producing the product in question.
    • Not so. Without some contract stipulating "work for hire," the programmer owns the software.
  • Ergo... If I have a physical copy of a CD, I'm allowed to alter it and/or its encryption, as I wish, to still hear my music so long as I'm not using it for any other purpose.
    • Especially, this means you are allowed to edit away the part that displays the EULA. Copyright can't affect use, just copying (as its name says), so you don't have to agree to have your rights restricted if you haven't agreed to it before (written contract, etc). That's good, as click-wrap EULAs have always been dubious.
      • IANAL.

        I wish this ruling did mean that you can edit out EULAs, but IMHO it doesn't. Had Kraus (the developer) coded an EULA screen into the product, or even verbally stated that he was licensing the product to the TitleServ, then the case would have been completely different. The way SCOTUS said that the only changes that can be made to a copyrighted piece of software are changes that are made "as an essential step in the utilization of the computer program in conjunction with a 18 machine," and used "in
    • by no_opinion (148098) on Tuesday November 08, 2005 @05:20PM (#13982400)
      Wrong, that cannot be concluded from the ruling. If you read the opinion you'll see it is limited to software programs, not music or movies.
      • If you read the opinion you'll see it is limited to software programs, not music or movies.

        Maybe movies on VHS, but DVDs aren't just the storage of a movie for linear playback. Many commercial DVDs contain some programmed scripts that control how the content is played back. It has the capability to set and read variables and perform conditional branching.
      • If you read the opinion you'll see it is limited to software programs, not music or movies.

        So I can legally break the software protection schemes that the movie and software distributers have put into place on my media?
      • Easy solution: Someone make an interpreter that reads music files or encrypted files, or even better, ANY DATA FILE, as code. Just read sequences of bytes, and map each to a particular instruction, making sure to limit your language to be tolerant of bad memory accesses, or just disallow any bad accesses.

        Such an interpreter could be used to make digital art. Then, any data file run through it -is- code. :) If no one has coined this idea yet, I claim first patent rights to it. :)
        • This is what Adobe did with PostScript fonts. IIRC, there was something about fonts were just shapes, and couldn't be copyrighted, or some such, so Adobe made the font into a program that drew the shapes, and then it was covered by copyright.

          Maybe somebody else remembers the details better...
    • Am I allowed then to also reverse engineer any software I buy on a CD?
      An executable is also a "binary" source code (series of 1s and 0s), then I can transform it into assembly using a disassember.
      So if I buy Windows XP, then I can run some of its parts through a disassembler, so I would have a more readable "source code", then I can change it any way I want, bypass any security mechanism, customize it to my liking and so on.
    • Ergo not really. According to the article the changes constitute "an essential step in the utilization" of the program

      You do not need to rip music to your computer hard drive as an essential step to utilize the music. You can play it from the CD player.

      The article mentioned three criteria, and between the second and third there was the word and which means all three criteria must be met. The third criteria could also be argued against you.
      • I cannot play it from CD on my iPod.
        My Lexus's CD player will not play some DRM encrypted CDs.
        My Linux system (and I own nothing but Linux & OS X systems) will not run the proprietary DRM rootkits that enable access to various disks.

        For me, in several situations, I cannot use these CD players. I do not own a standalone CD player, except for the changer and 1-shot in my Lexus.
        • OS-X can't play CD's? Linux has problems playing CD's? I think a lawyer will argue "We make our CD's very easy to play on the majority of systems out there. While there are systems out there that will not work, it is impossible to cater to every single person and protect our intellectual property. Good sir, we will offer you a refund on your most recent CD purchases, but continue to rip our content and circumvent our legally allowable copyright protection and we will p0wn your @$$. Thank you"
          • And that's why its important that this case law is being slowly built up.

            The case in question pertains _exactly_ to this situation. It doesn't matter about the majority of users; I _own_ one copy of the CD. Ripping of this CD to a non-protected format is _needed_ for me to be able to use it.

            Otherwise, the programmer in question could simply have said, "But, your honor, I designed the software for their requirements at the time, and they could have simplyed employeed me, or purchased a different program, at
    • I think that the problem with cracking copy protection or reverse engineering software is not in you doing it for yourself - after all, if you did it only for yourself, no one would ever find out about it and sue you.

      It's the fact that almost 100% of the copy protection cracking/etc is done so the product can be freely distributed that has software/music/movie companies up in arms.
    • Unfortunately, legislation trumps precedent. My understanding is that unless the Supreme Court rules the DMCA itself unconstitutional, its specific restrictions apply regardless of what the general precedent would otherwise be.
  • err... (Score:2, Interesting)

    by soapdog (773638)
    didn't read TFA but won't thing rulling be used against DMCA in the future, like enabling you to patch DRM software you own and stuff like that?
  • I was under the impression that without some sort of other agreement (which the article does not mention) that a company owns the code generated by its employees. Why wouldn't that apply in this case and making the modification of programs in your possesion moot?
  • Contradiction (Score:5, Interesting)

    by Apreche (239272) on Tuesday November 08, 2005 @05:14PM (#13982326) Homepage Journal
    Isn't this a direct contradiction of the DMCA? What if I buy a physical copy of a game that has copy protection and modify that copy protection? Did the lower court make a bad ruling? Or is it only ok if you are not circumventing a copy protection measure?
    • I am not intimately familiar with the wording DMCA, but this code was written in 1995, so it probably isn't covered by the DMCA.
    • Tests Two and Three (Score:3, Interesting)

      by IanDanforth (753892)
      "Provided that they own a physical copy of the program"

      This test alone would directly contradict the DMCA, however the modification must also:

      "constitute 'an essential step in the utilization' of the program"

      and somewhat confusingly

      "the software [must be] used 'in no other manner.'"

      So what we're looking at here is a case where essential software can be modified, or if the program must be modified before it can be used. Then that's legal.

      So my question is, doesn't this mean I can alter/crack/reverse any prog
      • It's an interesting ruling.

        From the first part(physically owning), it seems to refer to owning the media on which the source is on(the server at titlserv)

        The second, I am assuming from the article, is implying that they changed the program to do maintance and fix some bugs so it would continue to work.

        Here's my take on the third. 'In no other manner'. The program, from the article, was not altered to do something other than the original intent. It was altered to fix bugs. I dont think ripping/cracking/etc t
    • Isn't this a direct contradiction of the DMCA?

      From TFA, this suit was filed in 1996, pre-DMCA. Now it would be a DMCA violation, but back then it wouldn't have been.
    • Re:Contradiction (Score:3, Interesting)

      by john82 (68332)
      On the face, it does indeed sound like a violation of DMCA:

      Krause left the programs, which were designed to manage client information, on Titleserv's servers when he quit working for the company. He placed locks on the code and stipulated that Titleserv could run--but not alter--the programs, prompting a lawsuit from the company, which claimed it needed to make code tweaks in order to fix bugs and to perform other "routine" functions. Company employees ultimately picked the locks and made the changes they
  • by Fred_A (10934) <(fred) (at) (fredshome.org)> on Tuesday November 08, 2005 @05:16PM (#13982355) Homepage
    Great, now the supreme court starts to utilize "utilize". What's the point of utilizing fancy new words when thare are some fine regular words we could be utilizing instead that do just as well ?

    Ok so people can modify code as part of their regular utilizage, and we can uglify the language as part of our reguly utilization of it as well, blah.
    • by Have Blue (616) on Tuesday November 08, 2005 @05:59PM (#13982861) Homepage
      Remember that this is a legal document we're reading. Each word has an extremely specific meaning that may or may not be the same as the colloquial meaning, and using a different one would have changed the legal meaning of the text.
      • legal terms (Score:3, Interesting)

        by rodentia (102779)

        Lawyers have no monopoly on precision in language, despite their claims to the contrary. In fact, a fair amount of legal effort is expended in cleaning up imprecision because Law continues to rely on natural language. That is as it should be, as Law is a humane discipline.

        The difficulty of legal jargon stems not from some greater degree of specificity, but rather from too great a reliance upon conventional (legal, precedential) usage. A good 85% of legal usage persists for its hoary connotative value (p
    • The word "utilize" came from the statute, not the court decision (and certainly not from the SC).

      "Utilize" is not the same thing as "use", which is why you see so many grammarians getting their collective panties in a wad over seeing it in print. To "use" something denotes action in conformance with the thing's designed purpose. To "utilize" something means to use in a way that differs from the as-designed purpose. I can't "utilize" a hammer to drive a nail, I can only "use" it. However, I can "utilize" a s
  • Whatever the legal issues (I wonder if, had Titleserv not been able to get through his security measures and make the changes, they could have gotten a court to compel Krause to do it?)...

    What an idiot! Who would ever hire Krause again, after this stunt? This is the kind of thing people here yap about doing in Ask Slashdot replies, but what fool actually does it?

    • His contract might have allowed for this. At my company we utilize Dell Servers, and some Dell software - we are not allowed to modify this software. He might have had a contract that prevented other people from modifying the software - in essence making it so the company had to hire him for any and all edits. This is mere speculation on my part - but it would seem to fit this argument.
  • by Hobbes897 (782722) on Tuesday November 08, 2005 @05:18PM (#13982383)
    He placed locks on the code and stipulated that Titleserv could run--but not alter--the programs.
    So much progress from one man's prickishness.
  • "He placed locks on the code and stipulated that Titleserv could run--but not alter--the programs, prompting a lawsuit from the company, which claimed it needed to make code tweaks in order to fix bugs and to perform other "routine" functions."

    Translation: What a dick.

    If this code was work-for-hire, then this would be completely illegal (and laughable). TFA doesn't go into detail about the agreement, so perhaps this was nothing more than someone trying to force something they knew they couldn't have.

    I wou
  • by MyNameIsFred (543994) on Tuesday November 08, 2005 @05:19PM (#13982396)
    See this [wistechnology.com] for more details. This issue appears to have been whether the company actually owned the source. The courts said yes.
  • by bherman (531936) on Tuesday November 08, 2005 @05:21PM (#13982428) Homepage
    The difference between this software and say MS Office is that you don't "own" MS office, you have a license to use it but you do not have property rights on it.

    AFAIK.

    IANAL.
    • by panda (10044)
      The difference between this software and say MS Office is that you don't "own" MS office, you have a license to use it but you do not have property rights on it.

      If I don't "own" it, and I'm "licensing" it, then I didn't buy it; I'm only renting it. If I'm renting it, then why do I pay sales tax on the (non)purchase? Why does a business pay property tax on its software when it is counted as a capital asset? If Microsoft still owns the software, then Microsoft should pay the property tax. Since they don't, I
  • The only way that the court might have ruled for him was if they paid him also to rent the software from him rather than transfer the rights to them. From the sounds of this ruling, it would seem to me like he needs to really start covering his ass from a countersuit by his former employer. Can you imagine someone with the gall to write a custom app for a client and then disable it when they feel that it is time to end their relationship with the client, without a rental agreement in place?
  • DMCA Violation! (Score:5, Interesting)

    by Jtheletter (686279) on Tuesday November 08, 2005 @05:22PM (#13982438)
    So is there any reason why this programmer can't turn around and start another suit claiming that the company violated the DMCA when they "picked the lock" and circumvented his digital security measure without his permission?

    How is this any different than when I remove the DRM from an iTunes song as "an essential step in the utilization" of that song in my other digital music player(s)? Afterall, I own a physical copy of the software - the encoded song.

    Maybe that's not the best example but there are lots of others that I'm sure slashdotters can some up with.

    How is it that copyright law allows a holder's utilization to trump the agreement they had in place to run but not alter the software, yet pretty much any shrinkwrap/click-thru EULA isn't overruled by this same copyright utilization clause? Article was very light on details. Stinks of corporate favoritism at first glance.

    • Re:DMCA Violation! (Score:3, Informative)

      by ArsenneLupin (766289)
      So is there any reason why this programmer can't turn around and start another suit claiming that the company violated the DMCA when they "picked the lock" and circumvented his digital security measure without his permission?

      As other people have pointed out, the alleged violations happened before the DMCA existed. And no law is retroactive (or rather: no law should be retroactive)

  • Own or license? (Score:5, Interesting)

    by metoc (224422) on Tuesday November 08, 2005 @05:25PM (#13982473)
    From the ruling:

    Section 117(a)(1) provides an affirmative defense against copyright
    infringement for anyone who
    (i) owns a physical copy of a computer program,
    (ii) makes an adaptation "as an essential step in the utilization of the computer program in conjunction with a machine," and
    (iii) uses it "in no other manner."

    So if you 'owned' a physical copy of a Windows word processing app, and you adapted it so that it would run under Linux (machine), and made no other changes, you would not be infringing on someones copyright. But does the law distingish between 'own' and 'license'?
  • by RingDev (879105) on Tuesday November 08, 2005 @05:25PM (#13982477) Homepage Journal
    He most likely ran the binaries through an obfuscator to make sure that any hard coded strings were appropriatly mangled and the code was not easily recoverable. That way, the code is "protected" but not encrypted and this would not fall under the DCMA's jurisdiction.

    -Rick
  • by MotownAvi (204916) <avi&drissman,com> on Tuesday November 08, 2005 @05:27PM (#13982500) Homepage

    This is pretty huge. From the PDF:

    It is undisputed that Titleserv possessed executable copies of all the programs. The parties disagree whether Titleserv owned those copies within the meaning of 117(a). Krause claims that Titleserv never owned the program copies saved on its file server, but rather possessed the copies as a licensee pursuant to an oral agreement. Titleserv asserts that it owns copies of the programs because it paid Krause a substantial sum to develop them and has an undisputed right to possess and use them permanently.
    (emphasis mine)

    So suppose I go to CompUSA and buy Photoshop off the shelf. I paid a subtantial sum to Adobe, and I have an undisputed right to possess and use Photoshop permanently. Can I finally legally say that I own a copy of Photoshop?

  • by acherrington (465776) <`acherrington' `at' `gmail.com'> on Tuesday November 08, 2005 @05:31PM (#13982549) Homepage
    I think that a lot of people are jumping on the "I can get rid of the copyright protection on my CD/DVD/GAME/Etc...." band wagon. This isn't exactly correct.

    The company involved owned the software... outright owned it. You must remember that when you purchase a copy of 99.99999999% of all works, you do not own it, rather you purchased a license for it. Bascially, they are saying you may mod your car or house, because you own it, but they haven't said anything about licensed software.
    • Actually that would be wrong. California never adopted the UCITA, so absent any other agreement the transaction's governed by the Uniform Commercial Code. I never signed any agreement to only license the software before the sale, so an over-the-counter sale occurred per the UCC. I own the copy I bought under those rules. I'd also note that the appeals court considered the same logic you're using and explicitly rejected it in their ruling when they discussed whether formal title was needed or not.

  • So the chances of a DMCA violation are minimal. HTML Version of the ruling here [72.14.207.104]
  • by Stanistani (808333) on Tuesday November 08, 2005 @05:34PM (#13982583) Homepage Journal
    Krause argued that Titleserv never owned the program copies at issue, but rather possessed them as a licensee pursuant to an oral agreement. Titleserv countered that it owned the copies because it paid Krause a substantial sum to develop them and had an undisputed right to possess and use them permanently.

    This quote is from:
    HERE [bna.com]

    Hoy! An oral agreement.
    Legal, binding, but not provable in this case.
  • Modchips now legal? (Score:3, Interesting)

    by _KiTA_ (241027) on Tuesday November 08, 2005 @05:35PM (#13982600) Homepage
    Does this count for modifying the bios (software) protection on systems such as the Playstation 2 and whatnot? Where does the limit stand between modifying software and modifying hardware that has software inside of it?

    I would also point out that the PS2 comes with driver CDs. So presumably... you could modify it there, legally.

    Right?
    • I think the legal source code ownership played a key role here. There is a big difference (relative big-ness is up for debate of course, or should be) between buying the source code and buying a product that utilizes the software. Same with people who earlier posted about trying to undo copy protection on CD's. In this case the company was supposed to legally own the source (or so I surmise) and therefore was trying to circumvent their own software. Now, whether they knew this was the case or believed they
  • What does this mean for all the people who own computers with MS Windows installed on them, and have a real need to change the code to fix bugs that constantly reduce productivity?

    Since the company in question broke the "locks" the copyright owner put in place, doesn't that violate the DCMA? Wouldn't the DCMA make their actions criminal (as apposed to just a civil case)?

  • GPL implication (Score:3, Interesting)

    by GigsVT (208848) on Tuesday November 08, 2005 @05:54PM (#13982799) Journal
    Surprised no one has picked up on the implication for the GPL.

    Right now you don't need to agree to the GPL to compile/use/run GPL software, since those things don't trigger copyright protections.

    But previous to this, if you modified it at all, copyright law kicks in and you must abide by the GPL, by modifying it, you stepped outside allowed use under "all rights reserved" and are thus you can only operate under the terms of the GPL.

    Under this precedent, you can modify it even if it were released under "All Rights Reserved" and thus do not need to comply with the GPL.

    This may have serious implications regarding possible GPL V3 clauses on internally modified GPLed software that is used as a network service. If you can modify the software within your rights under "All Rights Reserved" then you may not have to comply with any GPL V3 provision that says you must distribute source for internally modified GPL programs running as network services.
    • Re:GPL implication (Score:3, Informative)

      by arkhan_jg (618674)
      Just a slight correction; the GPL v2 does not kick in when you modify the code - you already have that right, as copyright law has little to nothing to say about modification (the DMCA does, but that only applies to copy prevention mechanisms) - the GPL is not a EULA. You may or may not have the right to make local copies for personal use only without needing the GPL, but that depends upon your particular fair use rights in your area.

      The GPL v2 only definitely kicks in when you want to distribute copies of
  • This is HUGE (Score:5, Insightful)

    by John Murdoch (102085) on Tuesday November 08, 2005 @06:07PM (#13982935) Homepage Journal

    Don't just RTFA--read the decision. In particular, note this conclusion on page 11:

    We conclude in the absence of other evidence that Titleserv's right, for which it paid substantial sums, to possess and use a copy indefinitely without material restriction, as well as to 5 discard or destroy it at will, gave it sufficient incidents of ownership to make it the owner of the 6 copy for purposes of applying 117(a).4 7

    This is the conclusion the court reached after some extensive discussion of what it means to "own" a copy of a piece of software. Key point: the court is ruling on a specific law referring to ownership of a copy of a program, NOT ownership of (or even access to) the source code. The court discusses at length what ownership means--and concludes with the paragraph above. In other words, if you...

    • paid substantial sums of money
    • have the right to possess and use it indefinitely without material restriction
    • may discard or destroy it at all

    ...then you--as a matter of law--own a copy of the software.

    How huge is this?
    The immediate impact of this is to legalize reverse-engineering projects of custom software where the original coder can't or won't produce the source. The more interesting question is whether this legalizes the reverse-engineering of commercially-"licensed" software. On the one hand, this ruling makes it clear that--Microsoft's EULA to the contrary--I own several copies of Microsoft Office. On the other hand, the letter of the law, and the text of this decision, would seem to only permit me to use a disassembler to examine the code and fix bugs. Nothing--repeat--nothing in this decision would permit me to re-distribute that code. That's still very much an issue of copyright infringement.

    So can I reverse-engineer my Sony rootkit CD?
    Frankly, you shouldn't bother. You should take that rootkit CD back to Wal-Mart and tell them (in as loud a voice as you can muster) that you read "on the Internet that Sony's new CDs install a virus on your computer." But I digress....

    Where this is interesting is that it appears to overrule the software industry's assertion that you and I are licenseholders, not owners. This may force a wholesale change in EULAs--where it may become extremely interesting is in the question of the U.S. legal doctrine of First Sale. This says that if you buy something, you own it. And if you own it, you can do anything you want with it--including sell it to somebody else. The licensee/owner distinction that software companies have asserted is intended to prevent the creation of a used software market. EULAs typically include language that prohibits you from selling the software "license" to anyone else without getting permission from the vendor first, or otherwise jumping through hoops. Various vendor "authentication" programs that tie serialized CDs to the MAC addresses of your computer essentially do the same thing--you have to get permission from Microsoft to subsequently "unlock" that software and install it on a different PC. Under the doctrine of First Sale, that's blatantly illegal--IF you own the software.

    The bottom line:
    You may reasonably conclude that software industry lawyers are going to be working overtime on this.

  • by Anonymous Coward on Tuesday November 08, 2005 @07:19PM (#13983579)
    The article is misleading, and the comments appear to be based on many wrong impressions on what this case decided.

    Firstly, they did not decide the the company had any copyright. The case does not explicitly say, however based on the decision it seems that Krause was a contractor, not an employee, otherwise the company would own the copyright. Either that, or the company had an incompetent lawyer who failed to plead that point, which would have seen the case summarily dismissed much more easily so that the more interesting stuff here would not have needed any discussion.

    Based on the description of things from the court, William Krause is not just an arsehole without the slightest bit of integrity in his body, but is a seriously incompetent programmer who should never be allowed to work in the industry again. He wrote the software in such a way that the only way to add customers to it was to modify the software - no input form for this guy, just hard code customer details into the source code. There were other problems of this nature, but that one alone should tell you enough to know he is incompetent and you should avoid him. Then when he and the company parted ways, he told them they could continue to use the software but could not make any modifications to it. Since they could not add customers to it, this effectively meant they could not get any use out of it. That should be enough to make it clear this guy is a complete arsehole.

    Now, under 17 USC 117(a)(2), the owner of a copy of the program (that is, not the owner of the copyright, but the owner of the physical copy) legitimately obtained, does not infringe by doing anything necessary as an essential step in using the software. The company made the modifications predominantly for the purpose of adding customers and related things that ought to be ordinary functionality of the program, but could only be done by modifying the code because of the way this incompetent had implemented the thing. They also fixed bugs, which the court found was an "essential" step in using the program.

    The company also reformatted the code and gave variables meaningful names. Now that would appear to go beyond essential steps, but it could be argued that this was necessary in order to be able to make the other essential modifications. It does not strike me as going quite as far as "essential", but put yourself in the position of the judge who has before him (or her) such a lowlife plaintiff. You can't change the law, but whether the step is essential or not is a question of fact that the judge can decide - if it's close enough to the fuzzy areas, whose side are you going to go with? As it turned out it seems the plaintiff did not argue that directly, but if he had he would most likely have lost on that point too.

    The company also made enhancements - to add stuff like cheque printing. The court found this essential by finding (as a matter of law) that making the program more useful to its owner is a part of utilisation, and modification is an essential step in doing that. This part does create some tension with DMCA provisions - is a game more useful if it does not require you to have its CD in the drive? There is certainly an argument to be made that "No-CD" modifications are legal under this rule. In Australia the tension of such an interpretation with its equivalent of the DMCA is resolved by Stevens v Sony, which would state that the CD checking code does not qualify as a technological protection measure since it does not prevent the copying, only makes the software useless if copied (in the wrong way).

    The final point is the most interesting one from a geek point of view. TitleServ also made modifications to make the software work with their new computer system, and more importantly, their new Windows operating system. The court found that copying the software onto the new Windows operating system and modifying it to work with that is protected. How does that help geeks? Think of Wine! Using Microsoft components on Li

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