Software Copyright Case 1

[CajunCenturion]

High court won't hear programmer's appeal

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[Stella740pl]

In the judgment, one phrase caught my eye (p.9):

“ … It seems anomalous for a user whose degree of ownership of a copy is so complete that he may lawfully use it and keep it forever, or, if so disposed, throw it in the trash, to be nonetheless unauthorized to fix it when it develops a bug, or to make an archival copy as backup security.”

Other than that, and legalities aside, Titleserv “paid Krause a substantial sum to develop” the programs, but “many routine functions such as addition of a new customer or a change of a customer address could be performed only by changing the source code” (bold font is mine)???
And that’s in a database system written in Clipper?

 

[svanels]

Another Dinosour who thaught he was indispensable...

Steven

 

[sleipnir214]

Stella740pl:

And that’s in a database system written in Clipper?

Is that a facetious comment, or do you know the application was written in Clipper?


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[CajunCenturion]

Yes, the written judgment of the court (it's a PDF link in the article) identifies Clipper as the source language.

I find the legal distinction between the "owner of a copy" and the "owner of a copyright", to be interesting. A lack of understanding between those, and the privileges associated with each, has often come up in this forum.

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[sleipnir214]

Thanks. The PDF is most enlightening.


The PDF mentions that Krause didn't get the difference between "owning a copy" and "owning a copyright" right, either. The judgement in this case is very explicit on the subject of how Krause's copyright is involved: "The changes made by Titleserv were made only to its copies of Krause’s programs. Krause enjoyed no less opportunity after Titleserv’s changes, than before, to use, market, or otherwise reap the fruits of the copyrighted programs he created."

The PDF reads, "In 1996, Krause and Titleserv began negotiating Krause’s assignment of the copyright in 12
his programs to Titleserv in exchange for a five-year consulting agreement." I take it, then that the two parties had some kind of agreement that Krause would own the coprights to the code. Normally, if Krause developed the code on Titleserv's dime, Titleserv owns the copyright.

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[jsteph]

Krause enjoyed no less opportunity after Titleserv’s changes, than before, to use, market, or otherwise reap the fruits of the copyrighted programs he created

Not so fast...I'm not sure how 'crippled' the software was, but crippleware is very common, we see it all the time in demo versions--you can't legally change/thwart that to get the 'full' version.

Now, certianly Titleserve wouldn't 'knowingly' pay for crippled software, but if they signed off on the versions they had when Krause left and it worked reasonably well at that time, but *subsequent* changes within the Titleserve necessitate changes in the software to add a customer (a new field, for instance) then the developer has every right to be paid to make those changes--even if, in the eyes of Titleserve, those changes are necessary to the utilization of the program.

If the program was 'useable' at the time of Krauses departure, then he has a right to be paid for upgrades.
--Jim

 

[sleipnir214]

Why should he be paid for upgrading the software? He didn't to the work.

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[jsteph]

sleipnir,
I don't think you understood my post or it wasn't clear enough, I'll put it another way: Titleserve is obligated to either use the software as is, or pay Krause to upgrade it.

The point is that the software was locked down and "as-is" as per a standard contract. Just because it 'needs an upgrade', doesn't negate copyright laws. I agree that if it were buggy from the get-go, and wasn't useable at all the day Mr. Krause left, then they have a right to get useable software in whatever way they can.

But we don't really know if this is the case--it wasn't clear in the article, and true, maybe Mr. Krause's lawyer should have worked harder to prove that the programs were indeed useable at the point of Krause's departure.

Let's say you bought a Frank Sinatra CD years ago. You now feel that his use of the word 'Dame' in some of his songs is sexist, so you set up a studio, dub in your vocals over the entire verse, but replacing 'dame' with the word 'woman', and re-burn the cd. Don't you think that would affect sales of Sinatra CD's as more people hear this strange voice? Should that be legal to break this copyright because *you* decided a change should be made?

And that's the crux of my whole point--it hinges on whether the 'upgrades' were really needed at the time of Krauses departure and not normal 'wish-list' things or sudden necessities as a result of changes on Titleserve's side.
--Jim

 

[CajunCenturion]

==>Titleserve is obligated to either use the software as is, or pay Krause to upgrade it.
What Titleserve is obligated to do, is to conform to all pertinent copyright laws, and to all applicable licenses.

... it is not an infringement for the owner of a copy of a computer program to make or authorize the making of another copy or adaptation of that computer program provided:
(1) that such a new copy or adaptation is created as an essential step in the utilization of the computer program in conjuction with a machine and that it is used in no other mannter, or ...

Your Sinatra example doesn't apply because it isn't a computer program. Further, it doesn't whether or not the adaptation are 'wish-list' items or not. The owner of the copy of a computer program, even though they may not own the copyright, has the legal right to adapt their own copy of that program to fit their needs, but nothing else.

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[CajunCenturion]

I meant to add that is many cases, the customer does not own a copy of the program, but they own a license to use the program.

This case is not a licensing issue, but an ownership issue. It also makes clear the distinction between the owner of a copy, and the owner of a copyright. The hearing court, and the appeals court, both ruled that Titleserve was within its right to adapt the copy of the computer program that they owned. They couldn't do anything else because they didn't have a copyright, but they did have adaptation rights over their copy.

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[sleipnir214]

According to the courts, Titleserv was well within their rights.

By default, if Titleserv paid for Mr. Krause to develop the software, Titleserv owns the software in its entirety. In this particular case, there is some contention. The decision states

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.

Mr. Krause's mention of an oral contract tells me that there was no '"as-is" as per a standard contract'.

And there was no violation of copyright laws. The court's decision reads

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 discard or destroy it at will, gave it sufficient incidents of ownership to make it the owner of the copy for purposes of applying § 117(a).

Titleserv owned the software on its servers.

Under fair use, you are perfectly within your rights to modify your CD for your own use. Heck, I do it all the time. Whenever I rip a CD to my MP3 player, I am modifying the audio content. The flaw in your analogy is when you start assuming redistribution. At no time did Titleserv attempt to redistributed the software, a right which it may or may not have, as redistribution was not part of the case and thus not part of the court's decision. Likewise, I am mindful that I do not have the right to redistribute my MP3 files, so I do not share them.


I do agree that there is some subtext here, and that we do not know the details of that subtext. Important in my mind is the nature of the termination of the relationship between Krause and Titleserv. I have absolutely no proof of this, but I suspect that Krause terminated the relationship unilaterally, thinking that sooner or later Titleserv would have to come crawling to him and grovel at this feet to get him to modify the software. He could then extort whatever favorable deal out of them he wanted.

It probably never occurred to Krause that Titleserv would break into software and upgrade it themselves.

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[MDXer]

If a company is entitled to make changes to a purchased application so that it fits their business needs then why should I pay extra for an SDK giving me the right to modify the software.

In the past I dealt with an very wellknown vendor in my area of expertise. Since the package did not do 100% of what we needed it to we were required to pay for an SDK license that allowed us to modify the base functionality of the software to meet our needs.

From the opinions I'm reading here is that companies that need to modify software need not purchase the SDK since they own the software.

Shoot Me! Shoot Me NOW!!!
- Daffy Duck

 

[sleipnir214]

that need to modify software need not purchase the SDK since they own the software

No.

Again, the scope of this case is very small. Titleserv didn't buy this software off-the-shelf. They paid Krause a "substantial sum" for his services writing the software.

Under normal circumstances, the software would be owned, copy and copyright, by Titleserv. But Krause claims an oral agreement gave him copyright to the software. The court, by keeping the scope of its decision carefully focused, bypassed the entire copyright question and any question as to whether the oral agreement actually exists or can be enforced. The court stated that since Titleserv had the right to do whatever they wanted to with their copy of the software, and with no legalese stating otherwise, they owned that copy of the software. And as such they could legally modify it.

What the court has set up here is a set of default rules of software ownership in a very restricted situation. If you pay for someone to write a program, and that program resides on your server, and you and the programmer do not have a verifiable agreement in place as to who owns what, then the default condition is that you own that copy of the software.

If you and the programmer have signed contracts or you have agreed to what exactly is owned, and if any of that states otherwise, the explicit condition stated in your agreement still holds sway.


Now, are you assuming you have purchased the software, or have you verified this? I'll bet that you actually purchased a only license to use the software -- that is, after all, the standard way of the world now. If all you own is a license, then no, you don't own the copy that resides on your hardware.




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[CajunCenturion]

When was the last time you read the End User License Agreement that covered the terms and conditions of your purchase?

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[sleipnir214]

I keep trying. But after about three paragraphs my eyes, in order to prevent further damage to my brain, deliberately refuse to scan any more of the text.

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[jaymaechtlen]

EULAS vary, but regardless of legality, you might have a tough time modifying the software without getting the SDK for it.
It costs some non-trivial amount of time and effort to package up an SDK for sale. It also costs something to support it.
It is just another way to market a base package and extended package. Presumeably the base package does some useful stuff, and the SDK lets you do some fancy stuff.
Re: the decision- sounds like the court got it right.

cheers
Jay

 

[jsteph]

Yes, after reading the decision, the court was right as far as the law is written. Whether we agree with the law as written is another matter for another discussion.

But I think an appropriate question might be--what if there had been no source code? Suppose it wasn't written in a language where (as it sounds like was the case) the executable was reverse-engineer-able? Suppose Titleserve couldn't have fixed the code? Could the court have forced Kraus to come up with the source? What if he'd "lost" it?

Just a few thoughts...
--Jim

 

[CajunCenturion]

jsteph - It all boils down to the contract. What did the developer agree to provide in return for what compensation? The bottom line is that if the developer could not provide what he was contractually obligated to provide, then the developer is in breach of contract, and he or she would be liable for damages.

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As a circle of light increases so does the circumference of darkness around it. - Albert Einstein