This article sets out the general intellectual property issues with which software producers should be concerned for the purpose of developing and selling their products. We have set out these issues under the main intellectual property rights headings and we have also dealt under separate headings with the types of agreements and contracts which software producers may need to enter into to ensure the protection of their intellectual property rights.
Copyright - Computer Programs/Literary Works
Most of the ‘products’ developed by software producers take the form of computer programs and often there are numerous types of computer programs to carry out different aspects of an overall software application.
The European Communities (Legal Protection of Computer Programs) Regulations, 1993, provide that copyright subsists in computer programs and applies to every original computer program as if it were a literary work. These Regulations state that the legal protection afforded to computer programs shall apply to the expression in any form of a computer program. Accordingly a computer program in its source code and object code and any other form is protected by copyright provided the computer program is original. The standard of "originality" required is very low and essentially entails that the program must not be a reproduction of another work.
It should be noted that the Regulations expressly state that "ideas and principles which underlie any element of a computer program, including those which underlie its interfaces, are not protected by copyright under these Regulations". Accordingly if an original computer program is created or developed, this will be protected. However the ideas behind the program will not be protected and for this reason it is not possible to prevent a third party from independantly developing a new program based on the ideas of another by means of copyright law.
Under these Regulations the exclusive rights of a copyright owner in a computer program are stated to include the right to do or authorise:
- the permanent or temporary reproduction of a computer program by any means and in any form in whole or in part. Insofar as loading, displaying, running, transmission or storage of the computer program necessitates its reproduction, such acts shall be subject to authorisation by the rightholder;
- the translation, adaptation, arrangement and any other alteration of a computer program and the reproduction of the results thereof, without prejudice to the rights of the person who alters the program;
- any form of distribution to the public including the rental of the original computer program or copies thereof.
Regarding the right of distribution to the public, the first sale within the European Union of a copy of a program by the rightholder or with its consent shall exhaust this distribution right within the European Union of that particular copy, with the exception of the right to control further rental of the program or a copy thereof. In effect this exhaustion principle means that once the copy of the original computer program is placed on the market in the European Union by the copyright owner or with their consent, it is not possible to further control the distribution of that copy within the European Union. This however does not affect the copyright owners rights in relation to the reproduction of the program. Many software producers license the use of their software rather than selling it and accordingly the principle outlined above may be of limited relevance.
These exclusive rights of a rightholder in relation to the copyright in a computer program are subject to exceptions set out in Articles 6 and 7 of these Regulations. In general terms Article 6 states that unless there are contractual provisions to the contrary, the acts set out at points (i) and (ii) above do not require the authorisation of the rightholder if they are necessary for the use of the computer program by the lawful acquirer in the course of the intended purpose, including for error correction. The exceptions also allow a legitimate user of the program to make a back-up copy and to use a copy of the program to study, observe or test the functioning of the program to determine the ideas and principles which underlie any element of the program.
The exceptions set out in Article 7 of the Regulations relate to the reproduction of the code and translation of its form where it is indispensable to obtain information necessary to achieve the interoperability of an independently created computer program with other programs.
There is no requirement in Irish law to register copyright and accordingly once a work qualifies for copyright protection under the terms of the legislation, copyright subsists therein. For the purpose of putting other parties on notice of the ownership of copyright it is advisable that computer programs contain a notice to this effect. This will assist in any actions for infringement as users will find it more difficult to claim they were not aware that the program was protected by copyright.
It is often the case the software developers/producers also print manuals or guides containing explanatory details regarding the use of their software. If this is the case such "literary works" will qualify for copyright protection under Part II of the Copyright Act, 1963 if the work is original.
Under the European Communities (Term of Protection of Copyright) Regulations, 1995, the term of copyright protection under Irish copyright law was increased to the lifetime of the author and 70 years after the author’s death, irrespective of the date when the work was published or otherwise lawfully made available to the public.
Finally, the Copyright Act 1963 is due to be substantially amended upon the enactment of the draft Copyright and Related Rights Bill 1998. This Bill is still only in working draft form and has not yet been formally published. It is not expected that the present provisions in relation to copyright protection of computer programs will be amended significantly as our present legislation fully implements the terms of the EU Directive in this area.
Trade marks
In order to help protect any goodwill and reputation which a company/individual builds up, the registration of the company name or trading name, together with any logo used, as a trade mark, would be prudent. Any such applications for registration would be made under the Trade Marks Act, 1996. Trade marks are registrable in respect of goods and services. Any trade mark application must refer to specific goods and/or services of interest. The registration of a trademark consists of a property right which gives the proprietor exclusive rights in respect of the registered mark for the goods/services for which it has been registered.
Section 8 of the 1996 Act sets out various reasons for which registration shall be refused. In general a trade mark can be refused registration if it is identical or similar to an earlier trade mark and the goods or services to which the trade mark is applied are identical or similar to the goods and services for which the earlier trademark is protected. A trade mark is registered for a period of 10 years from the date of registration which period may be renewed for further successive periods of 10 years.
In the event that a trade mark remains unregistered there is no action to prevent or recover damages for the infringement of an unregistered trademark, however the reputation and goodwill of the company may still be protected by means of an action for passing off in the event that another company is passing off its goods or services as being those of another party’s. We would recommend however, proceeding with an application to register a trade mark as this would provide a statutory basis for an infringement action.
Database Right
At present, there is no provision in Irish law for a database right as such, however databases/compilations may qualify for copyright protection as literary works if they constitute the author’s original intellectual creation. The difficulty with qualifying for copyright protection in relation to databases is that while many of these compilations or databases require much time, expertise and money to be invested in their creation, they very often involve little or no originality or intellectual input.
As a result of the EC Council Directive 96/9 on the Legal Protection of Databases the Irish Government were obliged to implement a new right into Irish law before January 1st 1998 in respect of databases. This has not been done however the draft Copyright and Reated Rights Bill 1998 contains provisions for this new right in respect of databases. This Bill is not expected to be enacted until 1999 at the earliest. Accordingly the details contained in this article in respect of database rights are expressed as being subject to what this Act may provide for when enacted.
The draft legislation provides that copyright shall subsist in a database in certain limited circumstances. However it also provides for a new right (called "sui generis") which shall subsist in a database where there has been susbstantial investment in obtaining, verifying or presenting the contents of the database. The new sui generis right provides for two restricted acts in respect of databases which may only be undertaken or authorised by the owner of the database right are:-
- The extraction of information from the database which includes permanent or temporary transfer of all or substantial part of the contents to any other medium by any means or any form.
- Re-utilisation, which constitutes making the contents of a database available to the public by any means.
This new database right lasts for fifteen years from the end of the year in which making the database was completed. This fifteen year period begins again once there has been substantial change to the database.
If it is envisaged that data may be extracted or re-utilised from third party protected databases (upon the introduction of this legislation), by software production compaies, their servants or agents during the course of any research or development or during any testing or application of software, this issue should be borne in mind.
Patents
The relevant legislation in Ireland in respect of patents is the Patents Act 1992. A patent agent should be consulted regarding whether any products could qualify for the granting of a patent. A patent will be granted in respect of an invention if an invention is susceptible of industrial application, it is new and it involves an inventive step. Section 9, Sub-Section 2 (b) of the Patents Act 1992 specifically states that a program for a computer shall not be regarded as an invention. This is then qualified by a proviso and a patent agent should be consulted regarding whether particular products come within thet terms of the proviso.
Employment Contracts
Employment contracts entered into should contain clauses providing for the following:-
- Any and all intellectual property rights which may subsist in any work carried out/created/invented by any employee shall be owned by the production Company and the employee shall acknowledge this fact and enter into an employment contract on this basis.
- Confidentiality - A detailed confidentiality clause should be inserted into employment contracts to ensure that any intellectual property rights and in particular any trade secrets and know how which may be disclosed to employees in the course of their employment and in particular in any research and development work must remain confidential.
Consultancy Contracts
Consultancy contracts should contain similar provisions as those outlined above in respect of employment contracts. The Copyright Act, 1963 contains provisions in respect of employers owning copyright of works created by its employees, however no such provisions exist in respect of independant contractors and accordingly it is important that such clauses are expressly provided for in any agreements with contractors.
Customers Contracts
It is essential to structure the exploitation of your software by customers in such a way that none of the intellectual property rights in the computer programs and any other works are transferred to the customer. Accordingly licence agreements may be entered into or, alternatively customer contracts could contain an authorisation to use your protected works.
For the purpose of retaining ownership of intellectual property rights it should be brought to the attention of the customers that any authority or licence granted to them in respect of the use of your software or other works is not granted or given on an exclusive basis and that the producers are free to provide the same software to other companies or individuals. Customer contracts should also contain a confidentiality clause in respect of confidential information and in particular information relating to intellectual property rights, trade secrets and know how of the company.
Liability for on-line copyright infringement
At present there is no legislation in Ireland at National level or at European Level which clarifies the issue of liability of Internet Service Providers (ISPs) and other intermediate parties, for on-line copyright infringement. In the US the recent Digital Millennium Copyright Act deals specifically with this point and creates a more certain legal environment for ISPs. The Act contains a series of limitations for service providers in the context of system caching, transmission, routing and connections provision.
This article was intended to provide general guidelines. Specialist advice should be sought about specific facts.