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The Courts Government Programming News IT Technology

Supreme Court Lets Utilization Rights Stand 341

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 the_skywise ( 189793 ) on Tuesday November 08, 2005 @05:12PM (#13982301)
    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.
  • err... (Score:2, Interesting)

    by soapdog ( 773638 ) on Tuesday November 08, 2005 @05:13PM (#13982319) Homepage
    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?
  • 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?
  • by KiloByte ( 825081 ) on Tuesday November 08, 2005 @05:17PM (#13982364)
    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.
  • 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!).
  • by MSZ ( 26307 ) on Tuesday November 08, 2005 @05:18PM (#13982379)
    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 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 Xentor ( 600436 ) on Tuesday November 08, 2005 @05:21PM (#13982433) Homepage
    Hey, if I write a piece of software for hire, they get the code too. They buy it, they own it.

    Obviously this wouldn't apply to a shrink-wrapped commercial product, but then, that's not what this is about.
  • 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.

  • Tests Two and Three (Score:3, Interesting)

    by IanDanforth ( 753892 ) on Tuesday November 08, 2005 @05:23PM (#13982454)
    "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 program I want if I need to get it running on a *nix box? Isn't that essential for most programs before I can use it?

    -Ian
  • Re:Contradiction (Score:3, Interesting)

    by AviLazar ( 741826 ) on Tuesday November 08, 2005 @05:24PM (#13982472) Journal
    Read the statement again..it lists THREE criteria and fills it with the word "and" which means you have to meet all three criteria. Ripping a game, or music or movie, is not an essential step in utilization. Also, it could be argued the third step. Not to mention, copy protection is covered under different laws. So even if you were correct about your statement and it was legal to do so, it is not legal to do so if a program has a copyright protection system (even a poorly designed one).
  • 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
  • Re:Contradiction (Score:3, Interesting)

    by Macadamizer ( 194404 ) on Tuesday November 08, 2005 @05:27PM (#13982495)
    I fail to see a basic difference between this and using DeCSS to view a DVD on a unsupported platform.

    The big difference between using DeCSS and this case is that in this case, the owner of the materials figured out for themselves how to break the protections in the code. The DMCA prohibits the distribution of methods for breaking copy protections, but it doesn't prohibit you, an individual, from figuring out how to do it yourself. If you could figure out DeCSS on your own, you are free to use it on your own system -- but you can't distribute the information without running afoul of the DMCA provisions in the copyright code, and you are not allowed to purchase or otherwise obtain tools or methods for cracking copy protection from others.

    Basically, if you've got the skills to do it yourself, you can crack copy protection without running afoul of the copyright code. If you need help, or give help to anyone else, that's where you get into trouble.
  • by MotownAvi ( 204916 ) <`moc.namssird' `ta' `iva'> 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 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?
  • by Agilus ( 471376 ) on Tuesday November 08, 2005 @05:39PM (#13982647) Homepage
    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. :)
  • 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.
  • by panda ( 10044 ) on Tuesday November 08, 2005 @05:55PM (#13982810) Homepage Journal
    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 take it that means that they agree that I bought the copy of the software and that I own it.

  • Re:Contradiction (Score:3, Interesting)

    by john82 ( 68332 ) on Tuesday November 08, 2005 @05:55PM (#13982813)
    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 said they needed.

    The developer locked the code and left specific instructions (EULA anyone?) that it was not to be edited. The company defeated the copy protection and violated the EULA.

    IANAL but it would seem to me that this case might open the door for a defeat of DMCA. The case itself was not about the merits of DMCA so there was no impact on the law.

    I also wonder about the impact of this case on EULAs. Apparently the code would require a recompile to add users or business functions. Hrmm... I want the functionality in WinXP Pro (strictly hypothetical) but I have XP Home. Guess I can ignore the EULA now?
  • by Anita Coney ( 648748 ) on Tuesday November 08, 2005 @05:55PM (#13982819) Homepage
    But by refusing to hear the case, the United States Supreme Court is saying that the 2nd circuit is correct.
  • 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.
  • by DCheesi ( 150068 ) on Tuesday November 08, 2005 @06:02PM (#13982891) Homepage
    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.
  • by Dare nMc ( 468959 ) on Tuesday November 08, 2005 @06:16PM (#13983012)
    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.
  • legal terms (Score:3, Interesting)

    by rodentia ( 102779 ) on Tuesday November 08, 2005 @06:33PM (#13983165)

    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 (pointing to roots in Common or Roman law) and its ability to deter the uninitiated.
  • by Pofy ( 471469 ) on Tuesday November 08, 2005 @06:40PM (#13983229)
    > The Software is licensed, not sold. This EULA does not grant you any rights to trademarks or service
    >marks of Microsoft.

    Yet they DO sell it. Writing something else does not change the fact that many times such software are sold, for example in a shop. Doesn't matter if you like to call it something else or write something else. Even more, a third part can't change and revoke a purchase deal between me and the shop.

    It is intresting to note also that "licensing" is bassically something non existant in laws regulating sales, leases, and such. Licensing is basically giving a permission to something that is forbidden. In this case, there is no such forbiden thing either. You may also try figuring out what happens if what you say is true if you do NOT agree to the EULA, or prior to even getting a chance to do so, perhaps on the way home from the shop. What is the "status" of the purchase you made then? Non existant? regulated by something you have not yet agreed to? Something else? The thing is, Microsoft DO sell it, they handle it like a sale and it is done like a sale, hence it is a sale. There are a whole bunch of laws regulating sales by the way.
  • by richardtallent ( 309050 ) on Tuesday November 08, 2005 @07:02PM (#13983421) Homepage
    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 screwdriver handle to drive a nail.

    The fact that the word "utilize" was, er, used, actually played an important part in the district court's ruling. Use of that word specifically means that the owner can "stretch" a computer program to other purposes without violating copyright, as long as the principle use is the same (e.g., same sort of transactions being processed).
  • 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

  • by bwt ( 68845 ) on Tuesday November 08, 2005 @07:34PM (#13983721)
    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 bwt ( 68845 ) on Tuesday November 08, 2005 @08:12PM (#13984054)
    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 isn't the case is if your employment contract specifically contains terms stating otherwise. It's never the case that you lose rights to work you create "off the clock" involunatarily. You must agree explicitly. Courts almost always resolve contract ambiguity in favor of the author.

    For those that care, the case to read is CCNV v Reid, where the Supreme Court ruled in favor of a sculptor who created a statue for a non-profit organization when determining who owned the copyright. This opinion spells out everything and is the definitive precedent for all of this.

  • by nolife ( 233813 ) on Wednesday November 09, 2005 @12:38PM (#13989682) Homepage Journal
    I am not discounting the complexity of taking the right photograph or trying to discount the art in any way but.. I could write an equally long and detailed description on how to replace a wheel bearing and brake pads, how to mix and master a sound board recording, how to diagnose and repair a vertical deflection circuit on a 27 in television, how to assemble a model airplane, how to do a good job hanging and finishing drywall, or how to detail and wax a car. Each requires a technical skill, practice, attention to detail, and patience to get it right. Getting the "right" photograph is not an absolute and is an opinion. ANYONE that can push a button and hold a camera can take a picture with decent equipment and a majority of the people looking at that actual picture would be decently satisfied with the results, it may not be the best, the lighting might be a little off but for the most part, it would be very acceptable to a majority of the general population. Throw in a little practice and maybe a basic understanding of photography and the results would be even better. How many times have you seen some random person get handed a camera and asked to take a shot for them? People are generally not picky or care about most of the things you described above. Maybe for the "hype" of a wedding where emotions and stress are involved everything must be right but that is the only time. Do you think you could ask anyone on the street to replace your wheel bearing, hang drywall for you, or hey quick, write me a software application that calculates the deflection of a piece of aluminum under load.

    My points have nothing to do with copyright either. IMHO, if I want photos taken by someone, I want to pay them to do a job for me, the material they take and the chance to take those photos was at my request. I am paying for the expertise and their experience, just as a I would pay someone to do a professional job to pave my driveway.

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