Global software leaders, Including Oracle, Sony, Adobe, Microsoft, SAP, Apple, and Amazon recognize the importance of US software copyrights and have registered thousands. Every Israeli software company should also protect their software with registered US copyrights.
While Israeli companies are leaders in encryption, network protection, and cyber security, many companies do not realize that their most valuable software assets are dangerously exposed to theft and misuse. Due to a confluence of very recent events, the US legal landscape for software protection has been completely reshuffled - placing US copyrights as the vanguard for software protection.
Protection against competitors, employee theft, and customer misuse
US software copyright registration offers an incredibly powerful layer of protection for software. Importantly, a single software copyright registration protects the registered source code, as well as the object code and the user interface generated by such source code - in a true triple play. Software copyrights provide protection from competitors, outside developers, and former employees who may try to steal code or copy the UI. Software copyrights also add a layer of protection to enforce license and distribution agreements with customers, OEM's, and resellers - since a breach of such agreements may also constitute copyright infringement. Software copyrights provide a compelling collections and enforcement tool against customers who owe license, maintenance, or other related software usage fees.
Oracle versus Google and SAP highlight importance of software copyrights
Two recent cases have placed software copyrights front and center - and show the power of software copyrights. In November 2014, SAP agreed to pay Oracle $479 million in damages and attorneys fees, for illegally copying and reselling Oracle’s copyrighted software. In May 2014, a federal appeals court ruled that Google infringed Oracle’s registered copyrights in JAVA API’s by literally copying API source code to develop tools for Android. Google also infringed Oracle’s software copyrights by copying the structure, sequence, and organization of the JAVA API’s.
While literal copying is one way of showing copyright infringement, "substantial similarity" is all that is required to prove infringement. Even if changes are made to code to try to hide copying, if the end result is substantially similar to the original copyrighted code, then software infringement has occurred.
Recent US Patent Law changes reduce patents availability for software
As the critical role of US software copyrights has emerged, recent developments in US patent law raise significant questions on the patentability of software applications. In June 2014, the US Supreme Court issued a landmark decision in Alice Corporation v. CLS Bank International, which has created significant obstacles in patent protection for software. Numerous US patents covering software applications have been invalidated by the courts in recent months relying on the Alice decision. Similarly, numerous patent applications for software have been rejected by the US Patent and Trademark Office in reliance upon Alice. In view of Alice, it is likely that software patents will continue to face challenges. Therefore, an integrated, multi-tiered, intellectual property strategy, considering software copyrights and software patents is crucial.
Software copyrights have long life and registration is fast
The process for US software copyright registration is streamlined and the legal and filing fees are nominal. For example, software copyrights can be registered in as little two weeks or less using expedited registration for appropriate applications. Where expedited registration is unavailable, standard registration is completed within 3-5 months. Software copyrights for commercial software are valid for 95 years.
Strong penalties for software copyright infringement
Strong penalties against infringers are available, as demonstrated in the Oracle case against SAP. A copyright owner can choose between statutory damages of up to $150,000 per infringed copyright, or actual damages based upon lost sales due to the infringement. In addition to damages, injunctions, seizure of products, and attorneys' fees are available.
US software copyrights: Unmatched protection and value for software companies
US software copyrights provide unmatched protection for software. Companies that have not registered US copyrights for their key software assets are leaving the company open to material losses and are disregarding a powerful tool that could immediately turn the tables on any potential infringer. Copyrights provide far greater protection than non-disclosure agreements, end-user license agreements, employment agreements, and independent developer agreements. Finally, registered copyrights also increase company valuations, reduce revenue losses, increase collections and can increase royalty streams.
Mitchell C. Shelowitz is the Leader of The US Software Copyright Protection Group at Pearl Cohen Zedek Latzer Baratz. His group is focused on registering and enforcing US software copyrights, and defending claims of software copyright infringement. Mitch is a seasoned business and technology lawyer admitted to practice law in New York and Israel, is former General Counsel of Ceragon Networks, and is the founder of the Association of Corporate Counsel Israel.
Published by Globes [online], Israel business news - www.globes-online.com - on April 21, 2015
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