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How Does "Intellectual Property" Hamper Technology?

By Shannon Peevey,  UNT Central Web Support

As the Free Software/Open Source movement is gaining momentum, many companies are struggling to comprehend this phenomenon.  They wonder how it is possible for a company to either make money “doing 'Open Source'”, or how they can protect their investments from a seemingly endless sea of developers who seem to give away their time for free.  In response, the Free Software/Open Source movement is studying the laws that affect their products, and are trying to understand how to use them to protect the rights of the users.  As the enmity between the movements seems to deepen, some companies are trying to attack the Open Source/Free Software movement, and it's products, by declaring a breach of “intellectual property”.  They are saying that code has been illegally transferred from their products into free software products, which is a breach of their rights and their “intellectual property”.  

What is “intellectual property”?  How does “intellectual property” effect software development, and/or the products that are integrated into a companies product?  These questions will be answered by looking at, first, a description of “intellectual property” and the laws that it encompasses, second, how these laws effect Free Software/Open Source software development, and third, the copyright laws and licenses that have been created to protect users rights.

But first...

it is important to understand the term “intellectual property”. According to Black's Law Dictionary, intellectual property is “A category of intangible rights protecting commercially valuable products of the human intellect. The category comprises primarily trademark, copyright, and patent rights...”. In other words, what is often called “intellectual property” is, in fact, a group of laws, that are very dissimilar, namely, laws pertaining to “trade secrets”, patents, and copyright.

Trade secrets “consist of... anything that makes an individual company unique and that would have value to a competitor.” (Miller 302)  Trade secrets have not been used extensively by companies to protect their products.  A possible reason for this is the fact that there are currently no laws that are specifically geared towards “trade secrets”.  They are currently protected at the state level by Common Law, which is set at the state, and not the federal, level.  Therefore, trade secrets will be protected differently depending on state, and are difficult to defend consistently throughout the United States of America.

A patent “is a grant from the government that gives an inventor the exclusive right to make use, and sell an invention for a period of twenty years from the date of filing the application for a patent.” (Miller 297)  These have become very popular over the last twenty years, as companies try to patent every new technology so that they may beat out competitors.  As patents give the inventor exclusive rights to their patent, companies are able to sell, license, or shelve, a technology in any way they see fit.  Patents can be a very important part of any “intellectual property” portfolio, and are currently the most useful for litigation.

Copyrights are “an intangible property right granted by federal statute to the author or originator of certain literary or artistic productions.” (Miller 298)  Copyrights are very easy to obtain, and are the most useful laws in protecting software from illegal usage.  By holding the copyright of a product, it is possible to, not only protect yourself legally, but to also create a licensing scheme from which a company may generate income.  Though many things may be copyrighted by simply publishing the work with the appropriate wording set forth by the Copyright Law and the U. S. Copyright Office, it is also possible to register your copyright with the  U. S.  Copyright Office, which affords you some advantages over simply securing a copyright.   (U. S. Copyright Office)


Many assume that all Free Software/Open Source software is released into the public domain, but, in fact, this is not true at all.  Most software that uses a Free Software/Open Source license is, in fact, held legally by the copyright holder.  Therefore, it is important for developers to understand the laws covered by “intellectual property”, and the impact that these laws have on Free Software/Open Source software.

Patents are, from a free software point-of-view, currently the most dangerous tool from the “intellectual property” portfolio.   They are used to keep technological advances from flowing to possible competitors, and allow a company to have complete control over a technology for twenty years.  One example of patents impacting the use of technology has to do with the LZW compression format that is used to create GIFs, an image format that is popular in web development.  “Unisys and IBM both applied for patents in 1983” and have had exclusive rights to this technology until July 2004. (Free Software Foundation GIF)  They have used this advantage to generate income through a licensing scheme that allows for free use of this format for non-commercial usage, but requires a charge for any software that includes this technology and which is for sale.  Therefore, many free software projects have had to use other image formats exclusively, in order to avoid the possible legal entanglement.  Though GIFs are an important component of web development and the advances associated with it they have had limited success, and are now being replaced by other formats that are available under a true Free Software/Open Source license.

Trade secrets, though not used extensively in litigation for protection of “intellectual property” rights, could nonetheless become the most dangerous weapon against the free flow of technological information.  As previously mentioned, there is no formal body of law that is directly related to trade secrets, and, therefore, there is no consistency with which trade secrets are protected or restricted.  For instance, it is currently possible to hold a “trade secret” indefinitely, (much longer than even a copyright), if the person holding the “trade secret” can prove the importance of that secret to their business.  Therefore, if a company can prove this assumption, they could conceivably hold a monopoly on that technology forever.  This has not happened yet, but just consider the implications of such an action over something as important as HTTP, the protocol of the world wide web.  With this in mind, it is important to realize that trade secrets can be extremely dangerous to free and open software.

Copyright, though used as a hindrance to user rights in some cases, is also the single most useful element of “intellectual property” with regard to the spread and dissemination of technological ideas.  Copyright can be used to protect any work created by an individual or a company, and gives them certain rights with respect to the management of those copyrights.  Companies, if they so choose, may make the copyright of the product exclusive, by means of the wording of the license that is attached to the copyrighted work.  This type of copyright does nothing to advance technology.  But, some people, like the Free Software Foundation, have discovered a way to turn the copyright law around, so that it protects the rights of end-users.  They are able to do this, because the copyright law gives the “exclusive rights to do and to authorize any of the following: 

  1. to reproduce the copyrighted work in copies or phonorecords;

  2. to prepare derivative works based upon the copyrighted work;

  3. to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership...”  (U. S. Copyright Office 16)

Therefore, these people, such as the Free Software Foundation, have created licenses under which you may license your copyrighted work in such a way that no end-user will have less rights than you do.  Effectively stopping any hindrance of access to technological innovation.


Free Software/Open Source has chosen to use the copyright laws to protect their rights, as well as, the rights of all end-users.  By creating licenses that are both liberal, in rights that are passed to the end-user for use, and restrictive, in program usage and rights that the end-user may take away, the Free Software/Open Source movement has allowed itself to perpetuate in a safe and legal manner. 

The best example of this type of license is the GNU General Public License, which is designed to “guarantee your freedom to share and change free software--to make sure the software is free for all its users”. (Free Software Foundation Preamble)  This license was designed in response to companies that were taking code created by the GNU Project, integrating them into their own products, and then asking the Free Software Foundation to stop distributing the free version of the software.  (Li-Cheng) In a stroke of genius, the Free Software Foundation began to study copyright law and found a way in which they could use the existing laws to protect the rights of the end-users and remove any possibility of this techno-leveraging from happening again.  Hence, the GNU General Public License, also known as “copyleft”, was born. 

Another license that is available to the Free Software/Open Source community is the BSD License.  This license was created by the University of California, Berkeley, and is a much more liberal license than the GNU General Public License.  It allows BSD Licensed products to be integrated into non-free software, and sold.  (Wikipedia) It also allows the BSD Licensed software to be bundled with multiple licenses.  For example, the BSD License and a Microsoft license.  The fear that many free software advocates have, is that the BSD License does not protect a product from ever being removed from the  free soft ware community.  It, therefore, is not considered to be as protective as the GNU General Public License.

In Conclusion

As Free Software/Open Source becomes “main stream”, it is important for its developers to understand the laws that are used to protect software development and distribution.  They do this by first, understanding the umbrella term “intellectual property”, and the laws that are held under its canopy.  Second, developers must understand the impact that these laws have on Free Software/Open Source software, and finally, they must understand the copyright laws, and licenses, under which they are able protect the software that they have developed.


Miller, Roget LeRoy and Frank B. Cross. The Legal and E-Commerce Environment Today. Cincinnati, Ohio: South-Western College Publishing, 2002.

Library of Congress U.S. Copyright Office. Copyright Basics. 2000.

    Internet on-line.  <>.

    [14 July 2003].

Free Software Foundation. Why there are no GIF files on GNU web pages. 1999.

    Internet on-line. <>

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Library of Congress Copyright Office. Section 106 - Exclusive Rights in Copyrighted Works.  2003.

    Internet on-line. <>.

    [12 July 2003].

Free Software Foundation, Inc. GNU General Public License Version 1. 1989. 

    Internet on-line.       

    [9 July 2003].

Free Software Foundation.  GNU GENERAL PUBLIC LICENSE. 1991.

    Internet on-line. <>.

    [10 July 2003].

Tai, Li-Cheng.  The History of the GPL. 2001. Internet on-line.

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Wikipedia. BSD License. 2003.

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