Copyright 1992 by S. Kitterman Jr. and the Las Vegas PC Users Group, 316 Bridger Avenue, Suite 240; Las Vegas, NV 89101. All rights reserved. This file was originally printed in the March 1992 issue of The Bytes of Las Vegas, a publication of the Las Vegas PC Users Group, and may be reprinted only by nonprofit organizations. Please give proper credit to the author and The Bytes of Las Vegas. ------------------------------------------------------------------------------- Copyrights and Computer Software: Part V by Sam Kitterman, Jr., LVPCUG [The purpose of these articles is to give general information regarding copyrights and how they pertain to protection of software. It is not intended to constitute legal advice nor should it be relief upon to address a particular situation since the tone of these articles is general in nature.] When you buy software, what rights do you have? Generally speaking, a determination of those rights involve not only the Copyright Act but also contract and licensing law. When one purchases software, be it commercial "shrinkwrap" or shareware, one usually finds a "License Agreement" enclosed with the software. Indeed, many commercial manufacturers of software enclose the software in a sealed pouch upon which the Licensing Agreement is printed, i.e., preventing the purchaser from claiming lack of knowledge of the agreement since he or she should have read the license before opening the pouch. That licensing agreement determine a number of your rights to use of the software. What rights you may have under the licensing agreement will be dependent upon the language of that agreement. However, most licensing agreements follow certain "boilerplate" provisions such as: most agreements follow the general trend of allowing you, the "licensee" of that software, to install that software on one PC, and to allow you to make an archived copy/back-up of the software; and, most agreements also follow the general trend of denying you any right to install/use that software on more than one machine or to allow others use of that software, including making a copy of that software for their own use, e.g., the crime of pirating software. Again, the Copyright Act itself has put further limitations upon these rights. Under the doctrine of "first sale", a buyer of software previously had the right to rent, lease, or resell that software to others so long as he had first acquired possession of the software by purchasing it him/herself. Embodied in Section 109(a) of the Copyright Act, the "first sale" doctrine is as follows: Notwithstanding [other provisions of the Copyright Act], the owner of a particular copy...lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell, or otherwise dispose of the possession of that copy.... Indeed, this doctrine was the basis for allowing software stores, such as Omni Video here in Las Vegas, to purchase software and rent it to the public for a fee. Needless to say, copyright owners of commercial software became quite concerned at this apparent loophole in the law. Not only were they unable to collect any revenue from those rentals but furthermore, they became concerned that members of the public renting software would make unauthorized copies thereof and in doing so, would "rob" the owners of revenues they should have received when commercial software was purchased. Those concerns became so great that the commercial software industry lobbied Congress for an amendment to the Copyright Act, an amendment limiting the effect of this doctrine of "first sale". Needless to say, they succeeded. As of December 1, 1990, a new law went into effect. Known as the Computer Software Rental Amendments Act of 1990, that amendment changed section 109 of the Copyright Act to prohibit any person in possession of a particular copy of a computer program (including any tape, disk, or other medium embodying such program [from disposing of or authorizing the disposing of that computer program] by rental, lease, or lending, or by any other act or practice in the nature of rental, lease or lending. Please note: this law only applies to software purchased on or after December 1, 1990. Software purchased prior to that date is still governed by the "first sale" doctrine. Although this is a new law effecting the use of computer programs, it is actually tailored upon an earlier law, one known as the Record Rental Amendment of 1984. Enacted in 1984, that law applied similar controls to the renting, leasing or lending of authorized phonorecords. There are several exceptions to this Act. First, a purchaser of software may continue to dispose of such software by renting, leasing, or lending it where he has the authorization of the copyright owner for that program. Needless to say, whether obtaining such authorization is possible is highly questionable. Second, disposing of such software may be done where it is NOT for a commercial advantage, direct or indirect. For example, nonprofit educational institutions may continue to rent, lend or lease software to "faculty, staff or students". Nonprofit libraries may also continue to lend computer programs where such is done for a nonprofit purpose and where the library ensures that "each copy of a computer program...lent by such library has" the copyright notice affixed to the program's packaging. Third, computer programs embodied in certain "machines" may still be rented, leased or lent without violating this new law. More specifically, the law will be inapplicable to two types of computer programs: (1) computer programs embodied in machines or products "which cannot be copied during the ordinary operation or use of the machine", e.g., calculators, automobile electronic systems, etc.; and, (2) computer programs embodied or used "in conjunction with a limited purpose computer that is designed for playing video games"[e.g., Nintendo, Sega], including limited purpose computers that "may be designed for other purposes". However, if that limited purpose computer can be used for copying of computer programs, then such a system will not fall under this exemption. However, there is an interesting endnote to this particular law. It has what is called a "Sunset" provision, i.e., this law will self-terminate on October 1, 1997. Any rentals, leasings, or lendings of software after that date will not be in violation of this Act. It would seem that this provision was added so that this Act would coincide with the Record Rental Amendment Act of 1984's Sunset provision. In summary, if you purchase computer software since December 1, 1990 and you rent, lease, or lend it to others for commercial gain, you will be in violation of the law. Needless to say, this is a law that is being vigorously enforced by the industry, usually by the Software Protection Association. Needless to say, the moral of this lesson is: If you want to use commercial software, be legal or face the risks. Copyright infringement not only is prosecutable by civil lawsuit but also by criminal action brought against the infringer by the U.S. Attorney's Office. ---------------------------------- Copyright 1992--S. Kitterman Jr. [Sam Kitterman, a member of the Las Vegas PC Users Group is an attorney with the firm of Quirk, Tratos & Rothel; he specializes in issues related to computer software. This is the fifth of a series of articles Sam is writing for The Bytes of Las Vegas. It was originally published in the March 1992 issue of The Bytes of Las Vegas, the official newsletter of the Las Vegas PC Users Group.]  Downloaded From P-80 International Information Systems 304-744-2253