Legal Issues in Software Engineering Juha Laine, Software Business and Engineering Institute, HUT 3/23/06
This Lecture Law and Technology at HUT Software and copyright Software and patents Software Contracts
Law and Technology at HUT SoberIT A3 Module Legal Issues in Computing (3 cr) Legal Aspects in Electronic Commerce (3 cr) Law on Network Society (4 cr) (E) Seminars on topical subjects (3 cr) Book exams Individual Studies Special Writings
Institute of Law at HUT Introduction to Finnish Law (E) Introduction to European Union Law (E) Electricity and Communications Law (E) Principles on Law on Contracts and Obligations Legislation on Patents Competition Law Internet Law
Computing and Law What it is all about? Intellectual Property Rights Copyright Patents Data Base Protection Trade Marks Trade Secrets and so forth Software Contracts Off-the-Shelf Software Contracts Software Projects Maintenance and Support Hardware purchases including software Application Services Provisioning (ASP) Contracts
Balancing Principle Copyrights and patents should 1) give incentives to innovators and authors to create more; 2) guarantee access to the public including future authors and innovators
IPR s - transnational coverage Software can be sold globally but laws are basically national or regional IPR s are mainly based on international conventions (e.g. WTO, WIPO) The principles of software laws are quite similar in all over the world U.S patents are not valid in Europe But European copyrights are valid in U.S.A and vice versa
Software Copyright Basically every piece of original software is under copyright law Software is regarded as literary work What is protected? - the source code and the binary code The author or sometimes the employer owns the copyright Copyright need not to be registered. -symbol is not needed
Software copyright The duration of the copyright is generous - 70 years from the death of the author Ideas are not protected System ideas, logical structure, algorithms and principles are not protected Software architecture and user interface may be protected if original work
Software Copyright You must have the permission of the author to copy, modify or distribute any piece of copyrighted software You must always give credit to the author (moral right) User can make necessary copies, including backups, from legally obtained software User can decompile the binary to study how the program works and to ensure interoperability
Patents and software What can be patented? Invention Technical contribution Industrial application Novelty Inventive step/non-obviousness Computer programs cannot be patented as such But computer implemented innovation can be patented if they fulfill above conditions
Patents and Software EPO Guidelines (2003): In the practice of examining computer-implemented inventions... it may be more appropriate for the examiner to proceed directly to the questions of novelty and inventive step, without considering beforehand the question of technical character what is claimed in the accepted application is under patent law Patent must be normally applied to patent office (may cost 5-10.000 euros)
Patents and software Patent is granted for 20 years Patent includes exclusive right to commercial use of the invention Manufacturing Sales and marketing You must have a permission from patent holder to commercially use anything that is patented You can always continue prior use of invention You can use the invention for non-commercial purposes
Patents and software You can also challenge the patent if you feel there is prior art and the claims are overbroad
Software Contracts Special feature - Licensing of IPR Otherwise like many other commercial contracts (e.g sales of goods contract) General principles of contract law Freedom of contract principle Freedom to decide the contents of the contract No form requirements Fairness principle Unfair contract terms can be left aside or adjusted by the court
Software Contracts Hierarcy of norms 1) Mandatory law 2) Contract provisions 3) Dispositive law Contract provision against mandatory law has no legal effects Contract terms replace the provisions of dispositive law Examples of mandatory provisions In copyright moral rights, back-up copy, decompilation for ensuring interoperability, in patents prior use, in many cases consumer law and competition law
Software Contracts Standard documents (general conditions) In advance drafted documents (general conditions) which are intended to be used in unlimited number of future contract relations One-side drafted documents Documents drafted by one party alone Documents drafted by an organization representing one party alone Agreed documents Drafted by organizations representing both (all) parties
Software Contracts Copyright is exclusive right to the work Copyright can be licensed except moral rights License may be exclusive or non-exclusive Only the copyright owner can license the copyright By an exclusive license the licensor cannot grant the same license to other parties including the owner of the right By an non-exclusive license the licensor may grant the same rights to unlimited number of third parties
Software Contracts Agreed documents are typically more balanced than one-side drafted documents e.g IT-2000 general conditions Sponsored by Central Chamber of Commerce in Finland What is a license? License is a permission to perform some act that otherwise would be unlawful What is subject matter of license? -IPR Copyright Patent Trademark Know-how
Software Contracts A license can be limited to Number of copies Number of users (desks) Certain computers (processors) Certain time limit Instances of use Certain purpose of use (e.g. educational) Certain result of use (project)
Software Contracts IT-2000 ehdot (Valmisohjelmistot) Asiakas saa valmisohjelmistoon omaa sisäistä toimintaansa koskevan laitekohtaisen käyttöoikeuden, jota asiakas ei saa siirtää tai muuten luovuttaa kolmannelle ilman toimittajan etukäteen antamaa kirjallista suostumusta. Asiakkaalla ei ole oikeutta käyttää valmisohjelmistoa tarjotakseen ko. ohjelmiston käyttämistä koskevia palvelukeskus tai - käyttöpalveluita kolmansille ilman toimittajan etukäteen antamaa kirjallista lupaa.
Software Contracts Defects liability (general contract law) What is defect? Inconsistency with the description of the contract Fitness for the the normal use Fitness for buyers particular use if the seller was aware of the particular use at the time of concluding of the contract In accordance with general contract law no limitations all costs and damages must be compensated liability will last for years (hidden defects)
Software Contracts Limitations of liability: Microsoft: Microsoft warrants that the Product will perform substantially in accordance with the accompanying materials for a period of ninety days from the date of receipt. IT2000-ehdot: Toimittaja sitoutuu korjaamaan veloituksetta asiakkaan toimittajalle takuuaikana kirjallisesti ilmoittamat valmisohjelmiston virheet ilman aiheetonta viivytystä. Valmisohjelmiston virheeksi katsotaan se, että valmisohjelmisto ei toimi oleellisilta osin kuten määrityksissä, kuvauksessa tai käsikirjassa on esitetty. Takuuaika on yhdeksänkymmentä (90) päivää.
Software Contracts Third party claims Software may infringe intellectual property rights of third parties Usually (hidden) copyright or patent infringement Several options, e.g Exclusion of any responsibility Indemnification (possible insurance coverage)
Software Contracts Apache license: Disclaimer of Warranty. Unless required by applicable law or agreed to in writing, Licensor provides the Work (and each Contributor provides its Contributions) on an "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied, including, without limitation, any warranties or conditions of TITLE, NON-INFRINGEMENT, MERCHANTABILITY, or FITNESS FOR A PARTICULAR PURPOSE. You are solely responsible for determining the appropriateness of using or redistributing the Work and assume any risks associated with Your exercise of permissions under this License.
Software Contracts IT2000-general terms: Toimittaja vastaa siitä, etteivät toimittajan toimittamat tuotteet loukkaa sovitussa toimitus- tai käyttömaassa voimassaolevia immateriaalioikeuksia. 7.2 Toimittaja on velvollinen puolustamaan kustannuksellaan asiakasta tätä vastaan nostetuissa kanteissa, joissa väitetään, että tuote loukkaa kolmannen osapuolen edellä tarkoitettuja oikeuksia edellyttäen, että asiakas välittömästi ilmoittaa kirjallisesti toimittajalle vaateista ja antaa toimittajan käyttää vastaajan puhevaltaa sekä antaa toimittajalle kaikki saatavissa olevat tarpeelliset tiedot, avun ja valtuutukset. Toimittaja vastaa oikeudenkäynnissä kolmannelle osapuolelle maksettavaksi tuomittujen korvausten maksamisesta, mikäli asiakas on menetellyt edellä kerrotun mukaisesti.