Software Intellectual Property: What It Is & How to Protect It
Software intellectual property, also known as Software IP, is a computer code or program that is protected by law against copying, theft, or other use that is not permitted by the owner. Software IP belongs to the company that either created or purchased the rights to that code or software. Any unauthorized use of it by someone else is illegal.
Is Software an Intellectual Property?
Intellectual property is a type of intangible property created by the mind, such as inventions, works of art and literature, designs, names, or images. Software also fits into this category.
Intellectual property law recognizes 4 types of intellectual property that can be protected. Let’s take a look at these types and how they apply to software IP.
The 4 Types of Intellectual Property
1) Patents
A patent is the exclusive right to produce, use, and sell an invention. To qualify for a patent in the United States, you need to apply to the Patent Office and demonstrate that your invention is:
- Novel: No technology like it has yet been produced
- Useful: Your invention provides a clear and reasonably accessible benefit to the user
- Non-obvious: Your invention must have a component of innovation and can’t be the obvious next step in the development of an existing technology
- Patentable subject matter: Different countries have different criteria for what can and cannot be patented
Patents generally expire after a given period — usually 20 years. This gives the inventor a sufficient amount of time to fully benefit from the exclusive production and sale of their invention.
Software patents are extremely valuable for vendors because they can protect aspects of their product that other intellectual property laws cannot. However, patents can be difficult to obtain and the application process can drag out considerably. Furthermore, different countries have different approaches to the patentability of software.
You can read more about how to apply for and maintain patents on the United States Patent and Trademark Office website.
2) Copyright
In contrast to a patent, which protects the idea or concept of an invention, copyright protects the specific expression of that idea. It gives the owner the exclusive right to copy, modify, and distribute or sell those copies or modifications of the property to the public.
Software copyright could cover the specific code used in the program or elements in the user interface. Copyright is automatically obtained by the creation of the original work — unlike with patents, there’s no need to go through an application process. Copyright is usually applicable for the duration of the copyright owner’s life plus 50 years, or for 75 years from publication in the case where the software was created by the employee of a company. So practically speaking, if someone in your company comes up with a unique code for software that functions a certain way, that code is automatically protected under copyright law.
3) Trade secrets
A trade secret is a process, tool, mechanism, or formula that is not publicly available and is kept secret by its owner to maintain an edge over their competitors. In the shoemaker example above, the unique design of the shoe would fall under copyright, while the special way the shoemaker produces those shoes would be considered a trade secret because the competitor can’t discover it just by studying or taking apart the finished product.
Trade secrets can be protected by law as long as the owner makes reasonable effort to keep it a secret and no one else has discovered it independently. It’s illegal for someone to spy on your company and steal a trade secret, but if they figure it out by reverse engineering or by developing it themselves, it’s fair game.
4) Trademarks
A trademark is a symbol, phrase, name, or other type of expression used to distinguish a particular product or brand. Names of brands or products are often marked as trademarks using a trademark symbol: ™ for unregistered trademarks, and ® for registered ones.
What Kind of Intellectual Property is Software?
The software itself — the actual code — is copyrighted intellectual property, and it might also be considered a trade secret. The person or company who created it doesn’t need to register for a patent or trademark for its unauthorized use to be considered illegal. The concept of the software might also be protected by patent law if the creator has registered for a patent.
How to Protect Software Intellectual Property
It’s pretty easy for a shoemaker to protect his property: he locks up his store at the end of the day so no one can enter. But how does a software vendor protect the code they developed and ensure that no one steals their product or uses it in an unauthorized manner?
Your first layer of software intellectual property protection is doing your homework long before your product is released to the public:
- Hire a good lawyer or legal team to clarify exactly which rights you have and how best to protect them.
- File for patents and register trademarks where possible.
- Carefully screen employees and independent contractors and have them sign non-disclosure agreements before working with you. Intellectual property litigation experts R. Mark Halligan and Doug Haas wrote in 2010 that “employees are the foundation of an effective trade secret protection program.” (The Secret of Trade Secret Success, Forbes Magazine, Feb 19 2010)
- Store and work with your data on secure devices and follow all best practices for data security.
Once your technology is ready for distribution on the market, what you need to protect your software is a robust licensing management system.
How to Protect Software IP with Licensing Management
A license is what authorizes a customer to use your product legally.
When someone pays for the right to use an apartment, first they must sign a contract or agreement with the owner. Once that has been signed, the owner hands the renter or buyer a key they can use to access the property.
A software license is both the contract and the key. As a contract, it constitutes a software intellectual property agreement between the vendor and the user as to how the software will be used. As a key, it gives the user access to the software and allows them to use it according to the terms of the software intellectual property agreement.
You can’t steal an apartment very easily, but when it comes to software, copying the code or transferring the program to unauthorized devices or users can be very easy if it’s not well protected with a good licensing management system.
