issue
#312
8 October 2002
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a l k i n g a b o u t c a d
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issue
#312
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Reverse
Engineering Halted by Shrinkwrap License: Below
the Radar, - -
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Reaction & Update: Reverse Engineering Halted by Shrinkwrap License Reaction From CADKEY In a telephone interview with upFront.eZine, CADKEY ceo Bob Bean told me: To succeed as a software company and continuously deliver the value that our customers demand, we have to evaluate features and capabilities of competitive software. It is a chilling thought that the laws in this country might support an anti-progressive, anti-innovative, anti-competitive, pro-monopoly stance on shrink-wrap licenses. The impact of this decision has the potential to stifle progress and innovation of the American software industry. More importantly however, if this decision is allowed to stand, it will hurt consumers since advancing the state of the art by looking at competitive products to improve your own products will be against the law.
Reaction From HLB Technology In an email interview with upFront.eZine, HLB president Harold Bowers wrote me: This was a case about copyright infringement and contract law. The evidence in this case was overwhelming. In the Court of Appeals for the Federal Circuit, the court found that, "The record indicates, for example, that Baystate scheduled two weeks in Draft-Pak's development schedule to analyze the Designer's Toolkit. Indeed, Robert Bean, Baystate's president and CEO, testified that Baystate generally analyzed competitor's products to duplicate their functionality". According to the Court: "The record also contains evidence of extensive and unusual similarities between Geodraft and the accused Draft-Pak-further evidence of reverse engineering." The court further stated that "those similarities extended beyond structure and design to include many idiosyncratic design choices and inadvertent design flaws". As stated by the Federal Circuit found "Mr. Bowers' copyright and contract claims both rest on Baystate's copying of Mr. Bowers' software. Following the district court's instructions, the jury considered and awarded damages on each separately. This was entirely appropriate." The court went on to say "Because substantial evidence supports the jury's verdict that Baystate breached its contract with Mr. Bowers, this court affirms that verdict." Software companies, like most companies, protect their trade secrets with contracts. The protection of trade secret information is critical to most companies. A software company does not somehow forfeit its rights to protect its trade secrets simply because its products are software products. The Court of Appeals for the Federal Circuit correctly applied standard contract law to the overwhelming evidence in this case. I've seen firsthand several very talented programmers quit creating software after their products were repeatedly reverse engineered. A company must be able to protect its trade secrets if it is to stay competitive. The law, as articulated in this case, is a pro software decision that will again begin to pull the true creators back into the market. The decision allows the true innovators to be able to create again while being compensated for their work. Why work endlessly, staying up all night, and working 7 days a week creating when you can so easily be reverse engineered out of existence? Yes, it may be a lot easier to imitate vis a vis reverse engineering, but the buck has to stop somewhere. The independent developer has been driven out of the market by a pervasive culture of simply appropriating another's work. If this continues, U.S. competitiveness is at risk. We will eventually only be a country of imitators. The Federal Circuit decision is a major step in the right direction in protecting the U.S. software industry.
Reaction from Readers "No one is currently paying fees to Ashlar because Ashlar no longer holds the patent on the technology; it was initially invalidated by the lower courts in June, 1996 and that decision was upheld by the appeals court in September, 1997. That same month, the Japanese patent agency invalidated Ashlar's patent claims for smart cursor technology in that country. "SDRC and Diehl Graphsoft [now Nemetschek North America] together spent over $1,000,000 in legal fees, and we finally prevailed in proving that this was not a valid patent. "Proper credit should be given to Eric Bier, who invented the technology at Xerox Parc research center. He published the paper in 1986; he never made any money off his invention, but he certainly deserves the credit. "Prior to
the patent being invalidated, Autodesk obtained a license to use
this technology. Of course, once the patent is invalidated, there
is no longer any need to pay." The editor replies: "Thank you for the update on this court case.'
"It is a rare patent application that is granted without comment from an examiner. In the numerous patents I've reviewed in the past few years, one, two, and even more rejections of claims are the rule, not the exception. "A patent is granted on the _claimed invention_. This is the invention which is described by the patent claims, of which there must be at least one, but of which there can be hundreds as well. In U.S. patents, the claims are listed at the end of the patent document. "(The document starts with an abstract, then figures/drawings, background of the invention, perhaps a section on state-of-the-art at the time the application was filed, an overview of the figures, the description of one or more exemplary embodiments of the invention, and then the claims.) "Most people not familiar with the intricacies of patents make the mistake of assuming that a patent covers what is listed in the abstract or in the specification, and they tend to ignore the claims (possibly because many claims appear cryptic at first blush). This is not the correct way to read a patent from the perspective of determining infringement - you must use the claims to make such determinations. "I have not read the patent at issue, but have found sometimes that when reading a specification that the subject matter may appear obvious and possibly even anticipated by prior art, but that when I get to the claims, the distinctions between what is the claimed invention and the prior art becomes more distinct. "However, it's certainly possible for a patent examiner to make mistakes. For a company which wants to verify the validity and veracity of its patent, asking for a reexamination is a good move, because if a patent survives reexamination without substantial narrowing of the subject of the claimed invention, then the patent becomes virtually bulletproof (subject, of course, to the practice of claim interpretation, which is a whole separate can of worms). "In terms of the decision regarding shrinkwraps, I find that disappointing. There was a case about a decade ago, where Nintendo sued Atari for reverse engineering the interface for the game cartridges so that Atari could make their games compatible with Nintendo's systems. The courts ruled reverse engineering to provide compatibility was acceptable under the Copyright Law's Fair Use doctrine. "Our rights
as consumers, however, in terms of Copyright Fair Use, and, as part
of that, our ability to even make copies of software, DVD, etc.
for personal use (and back-ups) have been trod upon of late. The
DMCA [Digital Millennium Copyright Act] is a stellar example of
such a travesty, as it bans the use of any software or hardware
which can decrypt digital data (like on a DVD), even if the end
use is to make a personal copy as permitted under earlier laws." The editor replies: "The Nintendo vs Atari case is mentioned in the judge's decision."
Reaction From the Computer World 'InfoWorld' magazine's Ed Foster editorialized that the court's decision "has the potential to destroy the software industry in this country" if it became law. You can read his entire column on this case at <http://www.infoworld.com> A contributor to a discussion on Slash-Dot notes that
"if the United States chooses to cripple its technological
development by the means of overly restrictive intellectual property
licenses, it will eventually see the torch of intellectual leadership
pass to other nations." Companies are modifying their license "agreements" to prevent reverse engineering, such as this added sentence to one from Microsoft: "Any attempt to disassemble, decompile, create derivative works of, reverse engineer, modify, further sublicense, distribute or use for other purposes either the hardware or software of this system is strictly prohibited." I wonder if this case might affect other American legislation. For example, "it is not against the law for users to own copies of their DVD movies, but the DMCA [Digital Millennium Copyright Act] prohibits the distribution of any tools that make such copying possible." Fred von Lohmann, senior staff attorney for the Electronic Frontier Foundation sums it up this way: "If nobody can build the tools, then essentially we've all been denied our fair use rights," - http://www.pcworld.com/news/article
Update: The Court Battle Continues The decision has benefits and drawbacks. It benefits companies
because then their software has exclusive features, which competitors
cannot copy, at least in the United States, creating a 'de facto'
monopoly. Reverse-engineering would move entirely outside its borders,
where much of it already occurs. The next step, I can see, would
be the banning of software developed outside the USA -- not a far-off
idea, considering the trade barriers the USA has been erecting against
Canada, Europe, and other nations. - - - For this reason, the decision has become a big deal among those
fighting for freedom in the American software industry. Baystate
(now CADKEY) has filed for a rehearing. They want the court to answer
this question: "Can the owner of copyrighted computer software
prohibit the ubiquitous industry-accepted practice of reverse engineering
the unprotectable features of that software, by a standard-form
'shrinkwrap' license not negotiated by the parties, when federal
law and this Court authorize reverse engineering as a fair use under
the Copyright Act and when the law and public policy recognize reverse
engineering as a means of promoting the arts and sciences?" The brief makes this fine point: "In some circumstances, such as in a true trade secret context, a restriction on reverse engineering may be consistent with copyright policy. We are concerned, however, that the [appeals court] in this case has gone to the opposite extreme, adopting a blanket rule that such restrictions are never preempted." Below the Radar A summary of CAD industry news you may not have read elsewhere, or that I found interesting: GDL Scripter ($US149) create GDL Objects outside of Graphisoft. The GDL is created as a Java app that Web-publishes for instant viewing with the GDL plugin. http://GDLalliance.com/Tools/3nf.html QuadriSpace Presenter v2.2 (US$995) presentation software is for architects, engineers, and non-technical staff to create interactive presentations from existing 2D/3D CAD files. http://www.quadrispace.com/purchase.htm dwgBase v2.05 now has the ability to search by layout and to explode proxy entities for better searching. http://www.dwgbase.com Autodesk is shipping Map 6 (its AutoCAD-based mapping software) and will be shipping OnSite 7 later this month. VariCAD v8.2.0.4 3D/2D mechanical CAD package for Windows 98/NT/2000/XP and Linux (RedHat, SuSE, Mandrake)is US$399. Free eval download from http://www.varicad.com nPower Software has two Max/VIZ plug-ins, Power Translators and Power Solids, that directly import Rhino geometry (3DM, IGES, STEP, and SAT files) into 3D Max or 3D VIZ as trimmed NURBS surfaces and solids. http://www.npowersoftware.com/index.html
Seminars & Conferences Instrumentation & Electrical Forum 2002, October 25, at the Congress Plaza Hotel, Chicago IL USA. http://www.p2c2.org AEC Design Computing Conference, Oct 29-30th, in London, England. http://www.caduser.com/descom02/ 6th annual Pacific Design, Manufacturing Show, Feb 19-21, in Anaheim CA USA. http://www.pacdesignshow.com GeoSpatial World 2003, May 19-21, 2003 in New Orleans LA USA. http://www.geospatialworld.com
People/Companies on the Move Autodesk appointed Tom Vadnais as executive vp of its new Professional Services organization. Elysium appointed Hans M. Fink as director of reseller channel. Dassault Systemes appointed John Squire as vp of marketing for the ENOVIA business unit. 'CATIA Solutions', 'SOLID Solutions', and 'Pro/E: The Magazine' magazines are celebrating their fifth anniversaries. Publisher ConnectPress is offering as much as 80% off the cover price for new subscriptions and renewals until Jan 1, 2003. (505) 577-3129
Redo "While is has been said that my career goal is to work for
every CAD company, in the interest of full disclosure I must point
out that I have never been an employee of Bentley Systems. While
I have had the pleasure of working with many of the good folks who
are currently at Bentley, it was while we were all employees of
Intergraph."
Computer News Summaries First review of a PalmOS 5 device: http://www.geek.com/pdageek/features/pegnx70v/index.htm Five music companies and three American music retailers have agree to pay a US$67.3 million fine and and donate US$75.7 million of CDs to charities and schools as compensation for over-pricing music CDs. The companies deny, however, that their "minimum advertised pricing" policy amounted to price-fixing (the music companies jointly paid for advertising if the retailer agreed to sell CDs above a minimum price). - CNET TRIUMF transfered a terabyte of research data at peak transfer rates over 1 gigabit/sec, twice the previous known record for the distance of 12,000km between Vancouver, Canada and Geneva, Switzerland.
Market News IBM intends to acquire EADS Matra Datavision, a wholly-owned subsidiary of EADS Group. EADS Matra Datavision will provide PLM products to IBM. Intergraph is acquiring from Carl Zeiss Group its minority interest in Z/I Imaging, The earth imaging company will become a wholly-owned subsidiary of Intergraph.
The WorthWhile Web http://www.ibizcorp.com/pda_accessories/xela/xela2.html
Letters to the Editor "For the architectural and construction industry it is very
important that congress pass current legislation on Terrorist Related
Insurance Coverage for construction projects. At this moment,
there are approximately $15 billion dollars worth of projects, and
approximately 350 A/E jobs on hold, that depend on passing this
Bill. You can make a difference by contacting the Real Estate Round
Table. They have made it east to send emails to your representatives
asking them to pass this Bill. Please visit their site now and help
pull our industry out of this recession. http://www.rer.org/index.html
"
Re: Trade Shows and Students: "As someone who has helped produce many student events at
trade shows, let me say the insurance thing is a much bigger issue
than any reasonable person would suspect -- it can be the difference
between a show organizer getting a contract with a facility and
not.
Notable Quotable "We hoped that things would work out for the best. Instead, they worked out the way they always do." - Viktor Chernomyrdin, former prime minister of Russia
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