Intellectual Property | Real Estate | Technology | Software

Is fair use as a defense to software copyright infringement claims?

Mar 29th, 2016 | By | Category: Copyright Litigation

Copyright Law – Computer Software Programs

Copyright lawyer

Introduction

When the Copyright Act was initially passed in 1976, Congress surely anticipated that the “fair-use” defense should and would evolve over time to take on the new challenges of the times.  In our age, to adapt to new digital technologies, computing in the cloud and other challenges created by novel technologies. But can the fair use defense save a company from being sued for federal copyright infringement?  Keep in mind that fair use has never been popular with authors and publishers of copyrighted works.  This blog poses a few ideas to ponder in this context.

What is the Fair Use test?

Under the Copyright Law there is NO INFRINGEMENT if there is a FAIR USE of the copyrighted work.  But just what this means has been broken down into a world famous four part test.  You can look to the statute for the wording of the law which says:

“Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include:
(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (this is addressed in the preamble highlighted above, meaning, if the use of the software is for teaching purposes (i.e. student version software that sometimes gets installed, and then when the student leaves there is a failure to uninstall), then this could be perceived as a fair use under the copyright laws).  This argument, of course, gets reduced if the use is essentially commercial in nature, but is an important factor to look at.  Another example is a company disassembling or decompiling a program in order to create a compatible computer program.  One federal court case from the Northern District of California that discussed this is the Sega v. Accolade test if you think this applies to your usage of a copyrighted program.
(2) the nature of the copyrighted work; (some have argued that this prong of the test would be more willing to find a fair use where the work used relates to factual or function uses as opposed to fanciful or artistic uses).  One great piece of scholarship on this topic is from the Berkeley Law Journal which discusses fair use software).  One example to consider is downloading a trial version or promotional version to evaluate the functionality of a piece of software, for example a CAD program.  Sometimes this may be triggered by an online ad that prompts curiosity, or a co-worker or consultant bringing in a copy they bought at a garage sale, or on Ebay, Amazon, Craigslist or some other website.  In fact, it could be argued that this is exactly what the large software companies want you to do – INSTALL THEIR PROGRAMS ON AS MANY COMPUTERS IN YOUR ORGANIZATION AS POSSIBLE, like a “shareware”.  Of course they want you to pay for it, but testing out the functionality is certainly the first step toward making the purchase.
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; (the more you take, the more you risk)
and
(4) the effect of the use upon the potential market for or value of the copyrighted work. (this is the harm to the commercial market of the copyright holder.  If you are cutting into their market share in copying their software without paying for it, the more likely this defense will not apply and your company will be seen as a infringer or worse yet, the dreaded label of being a “software pirate.”  One argument that comes to mind is what if a company like Minitab, Parametric, Bentley or Ansys made it illegal per their licensing agreement to make a back up copy on your home computer or laptop?  Would this be a fair use or someone trying to willfully infringe a company’s copyrights?  The point is, there are situations where failure to buy all the licenses the software company wants you to buy may not necessarily be illegal in nature.  On the other hand, the main publishers and their trade associations are claiming BILLIONS in losses due to software piracy.  How much of this is what might be considered FAIR copying and usage even though not technically in compliance with a shrinkwrap or clickwrap lceinse?  Something to ponder.
The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.”
See 17 U.S.C. 107.  These factors will be examined in any case of alleged software piracy or infringement.

Are there any other defenses to copyright infringement?

There are not always pure defenses to claims of software theft, and many times the approach in taking on  the publishing companies such as Microsoft, Adobe or Autodesk comes down to the battle between their argument of “willful infringement” versus a companies insistence that any unauthorized licensing is due to “innocent infringement.”  We have talked about this on many blogs and on our highly popular Youtube channel (now with other 200,000 visitors).   That being said, if your company received an audit demand letter from either the software alliance (BSA) or the Software Information Industry Association (SIIA) you owe it to yourself to review our list of potential defenses to software infringement.  No other software compliance law firm that I know of has even attempted to publish a list like ours, which should make you wonder what their actual strategy is other than to roll over and have you pull out your checkbook.  Don’t fall for that while at the same time paying retainer fees as high as $10,000 or more.

Do I need a software lawyer to handle the case?

No.  It is not easy, but I do believe if handled correctly (and if the infringement factor is fairly low), it may be possible for a small business to handle these types of claims on their own, whether you are an architect, designer, or engineer accused of Autocad shortages, or virtually any other type of business facing a Microsoft audit due to windows shortages, office products (Word, Excel, Powerpoint), CAL shortages or other issues with other companies (such as Adobe photoshop).

As a leader in this field, and unlike other law firms you will come across telling you the opposite, our firm is a champion of the small business and we have written probably the most comprehensive guide on the internet addressing how a company can handle their own compliance audit.  Take the time to read the guide if you are considering going this direction.  If not, we offer low flat rate fees designed to make this a “no brainer” and to help you navigate this serious legal issue that could affect officers and directors and in some cases your corporate existence.

Contact an intellectual property law firm

We can help your company with software compliance issues, licensing, and defending or asserting copyright infringement claims in computer programs, code, and in regard to other copyrighted content (such as eBooks, music, songs, lyrics, comics, film, video, photographs, art work, and other creative works).  We offer low flat rate fees in many cases and tenacious legal representation.  Contact us to discuss your case, we offer free initial consultations at (877) 276-5084.

 

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We are a business and civil litigation firm with a focus on copyright infringement cases involving illegal movie downloads (torrent cases such as London Has Fallen, ME2 Productions and Malibu Media defense), software audits (ex. Microsoft audits, SPLA, Autodesk audit notification letter, Siemens PLM defense, SIIA, Adobe and Business Software Alliance defense) and other software vendors threatening piracy and infringement. We also handle cases involving internet law, anti-SLAPP, media law, right of publicity, trademarks & domain name infringement, and we have a niche practice area handling California BRE licensing disputes, accusations, subpoena response, statement of issues and investigations. We have offices in San Francisco, Beverly Hills, Newport Beach, San Diego & Phoenix, Arizona and accept federal copyright and trademark cases nationwide. All content on our website is general legal information only and not a substitute for legal advice, and should not be relied upon. Decisions to hire counsel should not be based on advertising alone. Blogs, videos and podcasts are authored by Steve Vondran, Esq. unless otherwise noted. We can be reached at (877) 276-5084.

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