Chapter 3:

Intellectual Property

Ethics for the Information Age

Fifth Edition

by
Michael J. Quinn
 Chapter Overview

• Introduction
• Intellectual property rights
• Protecting intellectual property
• Fair use
• Protections for software
• Open-source software
• Legitimacy of intellectual property
protection for software
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 3.1 Introduction

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 Information Technology Changing
Intellectual Property Landscape
• Value of intellectual properties much greater than
value of media
– Creating first copy is costly
– Duplicates cost almost nothing
• Illegal copying pervasive
– Internet allows copies to spread quickly and widely
• In light of advances in information technology,
how should we treat intellectual property?

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 3.2 Intellectual Property Rights

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 What Is Intellectual Property?

• Intellectual property: any unique product of the

human intellect that has commercial value
– Books, songs, movies
– Paintings, drawings
– Inventions, chemical formulas, computer programs
• Intellectual property ≠ physical manifestation

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 Analogy Is Imperfect

• If Ben Jonson and William Shakespeare

simultaneously write down Hamlet, who owns it?
• If Ben “steals” the play from Will, both have it

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 Limits to Intellectual Property Protection

• Giving creators rights to their inventions

stimulates creativity
• Society benefits most when inventions in
public domain
• Congress has struck compromise by giving
authors and inventors rights for a limited
time

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 3.3 Protecting Intellectual Property

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 Protecting Intellectual Property

• Trade Secret
• Trademark, Service Mark
• Patent
• Copyright

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 Trade Secret

• Confidential piece of intellectual property that

gives company a competitive advantage
– Never expires
– Not appropriate for all intellectual properties
– Reverse engineering allowed
– May be compromised when employees leave firm

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 brand names

Trademark Service mark

• Identifies goods or • Identifies services
products

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 Trademark, Service Mark

• A trademark is a word, symbol, picture, sound,

or color used by a business to identify goods.
• A service mark is a mark identifying a service
• By granting a trademark or service mark, a
government gives a company the right to use it
and the right to prevent other companies from
using it.
• Society benefits from branding because branding
allows consumers to have more confidence in
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 Trademark, Service Mark

• Company can establish a “brand name”

– Does not expire
– If brand name becomes common noun, trademark
may be lost
– Companies advertise to protect their trademarks
– Companies also protect trademarks by contacting
those who misuse them

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 Patent

• A public document that provides detailed

description of invention
• Provides owner with exclusive right to the
invention
• Owner can prevent others from making,
using, or selling invention for 20 years

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 Funny patents!!

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 Copyright
• Provides owner of an original work five rights
– Reproduction
– Distribution
– Public display
– Public performance
– Production of derivative works
• Copyright-related industries represent 5% of
U.S. gross domestic product (> $500 billion/yr)
• Copyright protection has expanded greatly since
1790
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 Copyright Creep

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 Copyright Creep

• Since 1790, protection for books extended from

28 years to 95 years or more
• Some suggested latest extension done to
prevent Disney characters from becoming public
domain
• Group of petitioners challenged the Copyright
Term Extension Act of 1998, arguing Congress
exceeded Constitutional power

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 3.4 Fair Use

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 Fair Use Concept

• Sometimes legal to reproduce a

copyrighted work without permission
• Courts consider four factors
– Purpose and character of use
– Nature of work
– Amount of work being copied
– Affect on market for work

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 Time Shifting

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 Space Shifting

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 Google Books

• Google announced plan to scan millions of books held by

several huge libraries, creating searchable database of
all words
– If public domain book, system returns PDF
– If under copyright, user can see a few sentences; system
provides links to libraries and online booksellers
• Authors Guild and publishers sued Google for copyright
infringement
– Out-of-court settlement under review by U.S. District Court for
Southern District of New York

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 Benefits of Proposed Settlement

• Google would pay $125 million to resolve legal claims of

authors and publishers and establish Book Rights
Registry
• Readers would have much easier access to out-of-print
books at U.S. public libraries and university libraries
• University libraries could purchase subscriptions giving
their students access to collections of some of world’s
greatest libraries
• Authors and publishers would receive payments earned
from online access of their books, plus share of
advertising revenues
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 Court Rejects Proposed Settlement

• March 2011: U.S. District Court for

Southern District of New York rejected
proposed settlement
• Judge ruled agreement would have:
– Given Google significant advantage over competitors
– Rewarded Google for “wholesale copying of
copyrighted words without permission”
– Given Google liberal rights over orphaned works

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 Digital Rights Management

• Actions owners of intellectual property take

to protect their rights
• Approaches
– Encrypt digital content
– Digital marking so devices can recognize
content as copy-protected
• Digital watermarking encryption cracked

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 3.5 Protections for Software

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 Software Copyrights

• Copyright protection began 1964

• What gets copyrighted?
– Expression of idea, not idea itself
– Object program, not source program
• Companies treat source code as a trade
secret

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 Violations of Software Copyrights

• Copying a program to give or sell to

someone else
• Preloading a program onto the hard disk of
a computer being sold
• Distributing a program over the Internet

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 Software Patents

• Until 1981, Patent Office refused to

grant software patents
– Saw programs as mathematical algorithms,
not processes or machines
• U.S. Supreme Court decision led to first
software patent in 1981
– Microsoft files ~3,000 applications annually
– Licensing patents a source of revenue
– Reverse engineering okay

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 3.6 Open-Source Software

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 Open-Source Definition

• No restrictions preventing others from selling or

giving away software
• Source code included in distribution
• No restrictions preventing others from modifying
source code
• No restrictions regarding how people can use
software
• Same rights apply to everyone receiving
redistributions of the software (copyleft)

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 Beneficial Consequences of Open-
Source Software
• Gives everyone opportunity to improve program
• New versions of programs appear more
frequently
• Programs belong to entire community
• Shifts focus from manufacturing to service

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 Examples of Open-Source Software

• BIND
• Apache
• Sendmail
• Android operating system for smartphones
• Firefox
• OpenOffice.org
• Perl, Python, Ruby, TCL/TK, PHP, Zope
• GNU compilers for C, C++, Objective-C, Fortran, Java,
and Ada

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 Examples

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 GNU Project and Linux

Goal: Develop open-source, Unix-like operating system

→ 1991

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 Crititique of the Open-Source
Software Movement
• Without critical mass of developers, quality can
be poor
• Without an “owner,” incompatible versions may
arise
• Relatively weak graphical user interface
• Poor documentation

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 3.7 Legitimacy of Intellectual
Property Protection for Software

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 Do We Have the Right System in Place?

• Software licenses typically prevent you

from making copies of software to sell or
give away
• Software licenses are legal agreements
• Not discussing morality of breaking the law
• Discussing whether society should give
intellectual property protection to software

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 Rights-based Analysis

• “Just deserts” argument

– Programming is hard work that only a few can do
– Programmers should be rewarded for their labor
– They ought to be able to own their programs
• Criticism of “just deserts” argument
– Why does labor imply ownership?
– Can imagine a just society in which all labor went
to common good

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 A Consequentialist Argument Why
Software Copying Is Bad

Beth Anderson

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 Utilitarian Analysis
• Argument against copying
– Copying software reduces software purchases…
– Leading to less income for software makers…
– Leading to lower production of new software…
– Leading to fewer benefits to society
• Each of these claims can be debated
– Not all who get free copies can afford to buy software
– Open-source movement demonstrates many people
are willing to donate their software-writing skills
– Hardware industry wants to stimulate software industry
– Difficult to quantify how much society would be harmed
if certain software packages not released
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 Conclusion

• Natural rights argument weak

• Utilitarian argument not strong, either
• Nevertheless, society has granted
copyright protection to owners of computer
programs
• Breaking the law is wrong unless there is a
strong overriding moral obligation or
consequence
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