Creative Protection

Single software licence shared 774,651 times

By Nicole Kobie

Posted on 6 Dec 2010 at 12:21

A single licence for Avast security software has been used by 774,651 people after it went viral on a file-sharing site, according to the company.

Avast noticed that a license for its paid-for security software, sold to a 14-user firm in Arizona, was being distributed online. Rather than shut down the piracy, the company decided to see how far the software would spread.

The Avast Pro licence showed up on file-sharing sites, and a year and a half later it had topped three-quarters of a million active users.

Full story.

Narendra on being a Wildcat, The Social Network and his suit against Facebook

By Katherine Zhu

In The Social Network, Divya Narendra is that other guy — in cahoots with the “Winklevi twins” and Harvard Connection. At Northwestern, though, Narendra is a Kellogg JD-MBA student.

Seven years ago, Narendra conceived the idea for social network ConnectU with his roommates at Harvard. In 2004, the ConnectU trio — Narendra, Cameron Winklevoss and Tyler Winklevoss — sued Facebook founder Mark Zuckerberg, claiming he stole their idea and their source code. They settled in 2008 for a reported $65 million. The dispute flared up again in May 2010, as Narendra and the Winklevosses leveled allegations of securities fraud against Facebook. And the feud goes on.

We reached Narendra by email last week and chatted with him about his portrayal in The Social Network, his time at Northwestern so far and his dreams of becoming a rock star.

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Vernor v. Autodesk, Inc.

Timothy Vernor purchased several used copies of Autodesk, Inc.’s AutoCAD Release 14 software (“Release 14”) from one of Autodesk’s direct customers, and he resold the Release 14 copies on eBay. Vernor brought this declaratory judgment action against Autodesk to establish that these resales did not infringe Autodesk’s copyright. The district court issued the requested declaratory judgment, holding that Vernor’s sales were lawful because of two of the Copyright Act’s affirmative defenses that apply to owners of copies of copyrighted works, the first sale doctrine and the essential step defense.

Autodesk distributes Release 14 pursuant to a limited license agreement in which it reserves title to the software copies and imposes significant use and transfer restrictions on its customers. We determine that Autodesk’s direct customers are licensees of their copies of the software rather than owners, which has two ramifications. Because Vernor did not purchase the Release 14 copies from an owner, he may not invoke the first sale doctrine, and he also may not assert an essential step defense on behalf of his customers. For these reasons, we vacate the district court’s grant of summary judgment to Vernor and remand for further proceedings.

Download Vernor v. Autodesk, Inc.

FM Industries, Incor v. Citicorp Cr

The decision awarding sanctions against McGrath is reversed. All of the district court’s other decisions are affirmed.

Download FM Industries, Incor v. Citicorp Cr

R.C. Olmstead, Inc. v. CU Interface, LLC

R.C. Olmstead appeals the district court’s grant of summary judgment to defendants in this copyright and trade secret infringement case brought by one provider of credit union software against the developer of a competing credit union software. Olmstead challenges several of the district court’s discovery rulings, which Olmstead argues unfairly inhibited its ability to prove its claims. Among other things, the district court rejected plaintiff’s inadequate expert report under F.R.C.P. 26, and refused to draw adverse inferences based on a third party’s destruction of evidence. The district court granted summary judgment for defendant CUI after determining that Olmstead had failed to raise a genuine issue of material fact as to whether CUI created its software by copying Olmstead’s software, and that Olmstead’s end use product was not a trade secret. Because the district court did not abuse its discretion with respect to its subsidiary rulings, and because Olmstead did not create a genuine issue of material fact with respect to either the copyright claim or the trade secret claim, the district court properly granted summary judgment.

Download R.C. Olmstead, Inc. v. CU Interface, LLC

JustMed, Inc. v. Byce

At the heart of this case is a dispute over whether a small technology start-up company owns the source code developed for its product. Its informal employment practices raise questions as to whether defendant-appellant Michael Byce was an employee when he developed the source code. After a bench trial, the district court entered judgment and ordered a permanent injunction against Byce, in favor of plaintiff appellee JustMed, Inc., Byce’s former employer. Among other things, the district court found that JustMed owns the software program used on its digital audio larynx device under the work-for-hire doctrine of the Federal Copyright Act, because Byce wrote the source code for the company as an employee, not as an independent contractor. The district court also found that Byce misappropriated the software under the Idaho Trade Secrets Act. Byce appeals both rulings. We have jurisdiction under 28 U.S.C. § 1291, and we affirm in part and reverse in part.

Download JustMed, Inc. v. Byce

Riviera Distribs., Inc. v. Jones

Riviera came to the wrong forum. Agreements such as the one between Riviera and Midwest are designed to reduce the price tag of decision-making. By filing another suit, Riviera forced Midwest to bear the very expenses that the parties had agreed to avoid. The party responsible for creating excessive legal costs must bear them itself in the end.

This conclusion makes it unnecessary to discuss the parties’ other disputes, such as whether by filing a second suit Riviera entitled Midwest to an award under 28 U.S.C. §1927.

The judgment is reversed, and the case is remanded for an award of reasonable attorneys’ fees to Midwest under 17 U.S.C. §505. The award should include the legal fees that Midwest has incurred to vindicate its rights on appeal.

Download the decision.

Piracy Is Big Business

ESA estimates that the video game industry loses $3 billion from piracy annually—not including piracy over the Internet. Todd Hollenshead of id Software assesses the situation

by David Radd

Hollenshead laid out that, in no uncertain terms, piracy is a serious problem for the PC industry. Why should we care? ESA estimates that the video game industry loses three billion dollars from piracy annually and that doesn't even reflect piracy over the Internet. Scott Miller of 3D Realms estimates that as much of 50% of PC game sales are lost to piracy. It affects the development cycle too. For example, when the Half Life code was leaked at Valve, and many people were playing the game and passing judgment without paying for it, those sorts of things can really affect team morale.

Current methods of combating piracy outlined by Hollenshead included physical protection, online "guerrilla" warfare (against nefarious groups that run warez sites), the legal system that comes into play with the DMC, infringement lawsuits, the FBI and customs. Education through the ESA and other organizations is key in getting the word out about the problems piracy causes for the industry as well. It's important, because some of the gains from game piracy are even used to fund criminals and terrorist groups, said Hollenshead.

Full story.

In the line of duty?

State trooper lays claim to software he developed

By PATRICK MARLEY
pmarley@journalsentinel.com

Posted: Jan. 14, 2007

Madison - Eighteen months ago, the State Patrol praised trooper David Meredith for going beyond the call of duty by developing time-saving software that helps officers write traffic tickets electronically.

"Meredith is credited for accomplishing more in one year than software companies have in five years," the State Patrol said in a press release in May 2005, when Meredith received a special honor for his work on the software.

Now, he is suing the head of the patrol, saying the state is trying to illegally seize the source code to software he developed on his own time and had hoped to market.

But the State Patrol argues that Meredith never owned the program because his bosses directed him to write it while he was on the clock. Plus, the state says it is barred by contract from developing it commercially.

The dispute erupted after Meredith told his bosses last year that he wanted to sell the product to other law enforcement agencies.

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Where Real Money Meets Virtual Reality, The Jury Is Still Out

By Alan Sipress
Washington Post Staff Writer
Tuesday, December 26, 2006; A01

Veronica Brown is a hot fashion designer, making a living off the virtual lingerie and formalwear she sells inside the online fantasy world Second Life. She expects to have earned about $60,000 this year from people who buy her digital garments to outfit their animated self-images in this fast-growing virtual community.

But Brown got an unnerving reminder last month of how tenuous her livelihood is when a rogue software program that copies animated objects appeared in Second Life. Scared that their handiwork could be cloned and sold by others, Brown and her fellow shopkeepers launched a general strike and briefly closed the electronic storefronts where they peddle digital furniture, automobiles, hairdos and other virtual wares.

"It was fear, fear of your effort being stolen,'' said Brown, 44, whose online alter ego, Simone Stern, trades under the name Simone! Design.

Brown has reopened her boutique but remains uncomfortably aware that the issue of whether she owns what she makes -- a fundamental right underpinning nearly all businesses -- is unresolved.

As virtual worlds proliferate across the Web, software designers and lawyers are straining to define property rights in this emerging digital realm. The debate over these rights extends far beyond the early computer games that pioneered virtual reality into the new frontiers of commerce.

"Courts are trying to figure out how to apply laws from real life, which we've grown accustomed to, to the new world," said Greg Lastowka, a professor at Rutgers School of Law at Camden in New Jersey. "The law is struggling to keep up."

U.S. courts have heard several cases involving virtual-world property rights but have yet to set a clear precedent clarifying whether people own the electronic goods they make, buy or accumulate in Second Life and other online landscapes. Also unclear is whether people have any claim when their real-life property is depicted online, for instance in Microsoft's new three-dimensional renderings of actual real estate.

The debate is assuming greater urgency as commerce gains pace in virtual reality. In Second Life, where nearly 2 million people have signed up to create their own characters and socialize with other digital beings, the virtual economy is booming, with total transactions in November reaching the equivalent of $20 million. Second Life's creator, Linden Lab, allows members to exchange the electronic currency they accumulate online with real U.S. dollars. Last month, people converted about $3 million at the Lindex currency market.

Second Life's economy has been surging since Linden Lab made the unusual decision three years ago to grant users intellectual property rights for what they create with the Web site's free software tools. Thousands of people have created homes and businesses on virtual land leased from the site and are peddling virtual items as varied as yachts and ice cream.

Full story.