Return to BTJ Online

Box Score
BY Joel I. Rosenblatt

Appearing on Turner Classic Movie® Channel was a World War II Hollywood “win the war” propaganda film about the partisan combatants in the Soviet Union (that’s Russia, enemy to the German fascist, know as Nazi’s, who were the featured villains in the Harrison Ford thriller “Raiders of the Lost Ark”. The film featured a band of well know (at that time), Hollywood bit actors, costumed for action like a Bolshoi Ballet Chorus line attacking a German encampment whose specialty was torturing a large contingent of unwilling resident Russian peasants.

It was the uniformity of the “peasant’s costume” that dated the movie, not so much the costume itself. A more up to date costuming for the Russian peasants was in the movie “Fiddler on the Roof” where the style was the same but the colors varied. Considering the Turner Classic was in black/white, I may be giving too much credit to any apparent progress shown in the “Fiddler” movie. However, the important lesson is each society progresses at its own pace, and as my publisher requires I write something about intellectual property law, even though less entertaining, I’ll use Turner as an example of adaptations made to stay current with consumer expectations in an open market system.

As way of introduction, originally a government granted restricted right, as in copyright or patent or trademark, was viewed suspiciously as an exception to the basic and fundamental right of free competition. That was the view of Thomas Jefferson, among others, and for that reason, the first patent statues made a bargain, granting a limited and restricted right of 14 years for inventions that contributed useful knowledge to the arts and sciences. The common law legal doctrines evolving from that “bargain” limited the patent right by the “first sale doctrine.” That meant that sale of product covered by a valid enforce able patent, would be covered by that patent for the first sale only. The patent right could not be used to restrict the resale to, or use by, any other party of that respective product already sold once by the patentee.

The idea was the “bargain” made for the patent was completed for each patented product with its “first sale.” The proceeds of the first sale was the compensation to the patentee for the donation to the public of the invention’s useful knowledge. That’s the rational used to construct the legal rule, not unlike the elemental logically connected steps in constructing a geometric or any other mathematical rule.

However, as progress is controlled by the evolving market, now a patent right may be restricted after first sale by any valid agreement made with the purchaser/licensee at the time of the transaction. So much for the first sale doctrine, Thomas Jefferson, and the rights of man.

The operative word is a “valid agreement,” which itself may not be an easy task. Even so, this turn in the patent law should not have come as a surprise. It uses a tried and true method already used to restrict the more difficult to control software transactions. At one time, software was fair game for everyone (not unlike hunting companions). Now, the courts, more inclined to favoring legal rights protecting private property have fashioned legal remedies that permit software transactions, more restrictive than outright sales. An example would be the change in the copyright law (1978) making computer programs protectable, even though the protection is limited by the courts to the elements that are created by the author of the program and which are shown as demonstrating a minimum of creativity.

Under U.S. law, as practiced in our fifty states and the District of Columbia, software transactions have become a regular commercial occurrence, with over the counter and Internet, transactions, common usage. In some cases, the product has been provided at reduced price and with fewer restrictions. For example, the Apple offer of single CD cuts at $0.99, without the restrictive burden of buying the whole album with 2nd rate, tunes, was successful because the market viewed it as a “fair bargain” and “fair bargains” discourage the kind of anger and resentment that can lead to outrage and intellectual property rebellion. It’s not unconceivable, considering we did it for tea.

Early on, in the software infancy days, programs were written for restricted uses on proprietary data processors using proprietary operating systems. Microsoft and the IBM compatible computer changed that model (how ever not completely as Apple remains a standout), and the Open Source or Linux, under a general public license, may permanently terminate practical use of license restrictions (at least by tying applications to any one data processor or operating system). At one time the software industry was obsessed with restricting one copy to use on one processor and for one operation systems. While that may continue to be the case for some products, the accommodations made in our legal system now allow over the counter and download transactions with a sufficient amount of legal security to satisfy intellectual property concerns.

This brings me to a case in point. Recently, I was the recipient of an inquiry from Russia (for those who skipped my introduction, that is the old Soviet Union with a new system of government), about selling a) a new software application b) over the counter c) for use on a commercially available server d) using open source or a Microsoft operating system. What surprised me was the inquiry was less concerned with protecting the proprietary rights in the programming and more interested in compliance with individual state commercial transactions laws (that would be the Uniform Commercial Code).

Speculating on the reasons for the apparent lesser concern for intellectual property, it may be the program may not have any protectable elements. For example, none of the program’s algorithms or processes may be original, or creative, or novel, and are in the public domain. The company may be marketing on price, support, the variety of features or performance. However, while the provision of a wide variety of features may not be protectable able, the software elements contributing to improve performance, might be protectable by patent or copyright.

The inquiry included a request for an attorney to certify the software product technology is as represented in the product’s advertising and sales promotional literature. While this is not an attorney at law service that would be under the Rules of the Florida Bar, an attorney in good standing, does have legal means to protect the software seller by means of a licensing and warranty agreement which comes under the protections provided in the Uniform Commercial Code.

The way it’s done is to include within the software transaction, an act demonstrating acceptance of the license and all of its term, including limited rights in the software and the standard and customary restricted warranties and remedies. To prevent excesses by the software provider, the law does protect the innocent consumer, at least a little, by the legal rules of procedural and substantial unconscionability. That means a contract entered without a meaningful choice and with undue burdens that the law views as making no bargain at all for the consumer. Anyone not clear on this point may call or email.
However, within the limits of conscious, the consumer buying a CD literally in a box or figuratively in a box by downloading, is still liable to be made legally helpless, for example by attached license agreements with by restrictive warranties, by useless remedies, by restrictions against reasonable use, by burdensome arbitration clauses, or by shell corporations difficult to find or sue, so the consumer is left “holding the box.”

Mr. Rosenblatt, a Registered Patent Attorney with the U.S. Patent and Trademark Office, practices in the e commercial law of technology and the Internet and the law of patents, trademarks, and copyrights. He is a Florida Supreme Court Certified Mediator, a Florida Bar Certified Approved Mediator for Computer Law Disputes, and is admitted to the Northern, Middle, and Southern, U.S. District Courts for Florida. Any questions or comments may be directed to Mr. Rosenblatt at (321) 727-7626; FAX: (321) 821-1922 or by email to jirosenblatt@earthlink.net Past articles may be viewed at http://www.joelirosenblatt.com