World faces question of copyright

PUBLISHED : Tuesday, 07 September, 1993, 12:00am
UPDATED : Tuesday, 07 September, 1993, 12:00am

COPYRIGHT is a popular topic in this part of the world but if legislation presently under serious consideration in Australia is enacted, then the impact of the new software copyright principles will reverberate at least around the region, if not the globe.

For many traditional software houses the activities of the software pirates will pale into insignificance and the vigilantes at the Business Software Alliance will appear impotent.

The high profile of the Microsofts, Lotus, Borlands and the like, with off-the-shelf packaged PC software, together with the ''excitement'' of the chase in the anti-pirate wars has tended to focus attention only on one area of copyright, but that is about to change.

During the 1970s in Hong Kong, perhaps even more than in other parts of the world, software houses proliferated.

In general, these small-to medium-sized development companies attached themselves to one or more mini-computer manufacturer and built application systems which best used the equipment and provided a good solution for the customer.

The foundation of each software firm often depended on just one customer.

It was commonplace for that single customer to pay the entire cost of the development of a system for a given application area.

Once the ''tailored'' software had been completed and implemented in that customer site, then it would be packaged and sold to others with a similar requirement.

Future profit-sharing deals were not always made with those initial customers because, sometimes, the software houses believed they were doing the job at such a minimum cost the customer was benefitting anyway.

But sometimes the whole issue was discussed and agreement reached to share future profits from the particular software.

Unless there were very special circumstances, and that normally meant very special and sizeable payments, copyright was always deemed to remain solely with the software developer.

It was assumed, though rarely tested in the courts, that the intellectual property rights automatically remained with the author, or at least the authorising firm.

In Australia, there has been much concern over ''blackmailing'' antics of software developers and a direct parallel can be drawn with traditional software houses there.

The Copyright Law Review Committee (CLRC) aims to place ownership of copyright in the hands of those who commissioned the software development and not the software company.

It is not clear what rights would be left with the developer, but whatever they were, it would no longer be legal for them to apply recurring service or rental fees based purely on ownership.

The principle of a ''Licence to Use'' fee, whether one-time or recurring, is being totally invalidated.

It is critical to realise that what was an acceptable practice is in the process of becoming illegal, hopefully not on a retroactive basis, but that should not be ruled out. Look at the precedents created by the corruption laws.

An example given in Australia is of an insurance company which was forced to pay double the quoted sum to acquire ownership of software it had contracted out, after the event.

A further proposal of the CLRC is to legalise reverse engineering of software.

The justification for this idea is that it will enable software developers to deconstruct the code of other programs to achieve interoperability.

This proposal has unbelievable ramifications throughout the world and would almost certainly have remendous impact on current multi-million-dollar Lotus v Borland court case.

That is not to say it is unreasonable. The concept would enable smaller developers to dovetail specialist applications into the facilities provided by market leaders in the software business.

Of course, this ''interfacing'' has been the case with operating systems for many years but, because it is not normally directly related to a given application area, the parallel has rarely been drawn.

The PICK operating system, which embodies data management facilities beyond most, is a good example of a professional application/operating system integration.

My advice would be for both customers and developers to speedily review any and all current contracts for software and services to avoid insurmountable hurdles in the near future.