kurt@fluke.UUCP (Kurt Guntheroth) (08/13/85)
1. Software and Economics:
Software has value because it does work for you. Making it "free" won't
decrease that value. People can charge money for software exactly in
proportion to its (perceived) value. Even if there was no way to protect
software people will still be able to charge money for it just because they
already have a known copy of it and you don't. Even if it were impossible
to charge money for software, a way would be found to recognize its value,
probably by bundling "free" software with something for which money could be
charged; hardware, training, service, etc.
It costs money to develop software. The amount of software produced will be
in proportion to the amount that can be charged for it. There are people
(artist-hackers) who derive non-monetary satisfaction simply from the
existence and use of their software. Also, a certain amount of software will
be produced because it adds value to hardware, or because it reduces the cost
of some other function. Thus even if it was not possible to charge money
for software a certain amount of development work would continue.
As was pointed out earlier, the chief difference between software and
previous kinds of goods, it that you can give away software and still have
it. Software is like information in this sense. On the other hand the
value of information to you depends (in various ways) on how many people have
access to it, while the value of a software product is likely to be just as
valueable to you no matter how many other people have a copy.
2. Software and Ethics
When an individual buys tangible goods, s/he owns the goods and can use them
in any desired way. The physical posession of the goods serves as an
excellent temporary marker or ownership, and the tangibility of the goods
gives real meaning to transfer of ownership. Because of the intangibility
of software, restrictions on use are arbitrary, and largely unenforceable.
Restrictive license agreements thus encourage people to act in a way that is
technically illegal but seems morally defensible in the frame of reference
of tangible goods. Taking a copy of software doesn't degrade or deface
they physical original, it doesn't cost money. The (non-developer) owner of
the original is no worse off and the copier is better off. In fact the only
thing that has been damaged is the monopoly of the developer. People seem
to see piracy as a somewhat heroic act under certain circumstances.
3. Effective Copy Protection
There is no means to protect software from a determined pirate, just as
there is no unbreakable safe, or perfect military defense. Further, any
means of protecting software must not be more restrictive than the
protection placed on tangible goods or people will not see the protection as
reasonable. Thus any protection scheme must allow unlimited use of the
physical medium which represents the software by the purchaser.
The best copy protection schemes I am aware of are:
CD-ROM: The media is difficult to make individual copies of, and
large-scale copying is easy to stop with legal action. CD-ROMS hold more
information than other storage forms. It is physically possible to copy a
CD-ROM onto floppies, just as it is possible to photocopy a book onto loose
pages. However, the copy is not as useful as the original and thus the
advantage of a pirate copy is reduced. In fact, the CD-ROM is a very
tangible kind of software.
Bundling with manuals: Again, the key here is the physical presence of the
manual. If it is difficult to use the software without manuals, and the
manuals are bound, and of good quality, people will seek out originals.
These two methods assume the cost of the software is not so high that users
will bear the reduced utility of the copies to achieve the monetary price
savings.
Bundling with hardware: This scheme worked for IBM for years, and still
works for many hardware manufacturers in smaller markets. If it takes
another copy of difficult-to-make hardware to run a stolen copy of the
software, piracy is effectively useless.
Of course in many markets software is now the dominant cost, so this scheme
is not universally applicable.
I also like hardware serial numbers built into the computer, but this
requires the manufacturer or vender to manufacturer each copy of the
software specially.
--
Kurt Guntheroth
John Fluke Mfg. Co., Inc.
{uw-beaver,decvax!microsof,ucbvax!lbl-csam,allegra,ssc-vax}!fluke!kurtmalloy@ittral.UUCP (William P. Malloy) (08/20/85)
> From: kurt@fluke.UUCP (Kurt Guntheroth) > > Bundling with hardware: This scheme worked for IBM for years, and still > works for many hardware manufacturers in smaller markets. If it takes > another copy of difficult-to-make hardware to run a stolen copy of the > software, piracy is effectively useless. Some good points, but there's one thing to remember. It is ILLEGAL to bundle the software with your hardware and refuse to sell it to anyone any other way. I believe some company (DG??) just lost a court case on this very point. It comes under the antitrust laws. It was used by the manufacturers as a method of locking people into using their hardware. IBM stopped doing this in 1969 when they we're being sued by the Justice Dept. on monopoly charges. The same case which was dropped about 12 years later without ever going to court. Discussions on that lawsuit should probably go to net.legal or net.flame. -- Address: William P. Malloy, ITT Telecom, B & CC Engineering Group, Raleigh NC {ihnp4!mcnc, burl, ncsu, decvax!ittvax}!ittral!malloy
dgary@ecsvax.UUCP (D Gary Grady) (08/26/85)
> [...] > Some good points, but there's one thing to remember. It is ILLEGAL to bundle > the software with your hardware and refuse to sell it to anyone any other way. > -- > Address: William P. Malloy, ITT Telecom, B & CC Engineering Group, Raleigh NC > {ihnp4!mcnc, burl, ncsu, decvax!ittvax}!ittral!malloy It is true that IBM (at least) has been forced to "unbundle" its operating system software so that firms like Amdahl could compete in the hardware market. However, I am fairly sure that this is a court order operative against IBM, not other firms. Note, for instance, that when Apple sued Franklin for copying parts of the Apple ][ ROM, Franklin attempted to get the court to buy a view similar to that taken against IBM; that is that Apple's refusal to license its ROM software gave it an unfair competitive advantage. The court didn't buy it and Franklin is now out of business. I'm sure we can all think of other examples of software that cannot be obtained unbundled. The Yourdon newsletter once had a comment about a very nice microprocessor that, the author lamented, was only available bundled with a bomber (sort of a secure form of packaging...). By the by, certain categories of copyrighted materials are subject to mandatory licenses, with the royalty being fixed by a government agency (the Copyright Royalty Tribunal, if memory serves). The main example is recorded music. The idea is it is impractical for every jukebox owner to independently negotiate with the artists and publishers. -- D Gary Grady Duke U Comp Center, Durham, NC 27706 (919) 684-3695 USENET: {seismo,decvax,ihnp4,akgua,etc.}!mcnc!ecsvax!dgary
kurt@fluke.UUCP (Kurt Guntheroth) (08/27/85)
Re: legality of bundling with hardware.
It is indeed illegal to refuse to sell software w/o the hardware, but that
does not deter people from doing it. If you are in a niche market, you can
build hardware that is expensive for another company to duplicate. Then you
sell software to go with the hardware. You will (of course) sell software
to anyone who wants it, but what are they going to do with it if they can't
run it. They havn't got the resources to duplicate your hardware and there
are no other vendors. Also, maybe part of your hardware is patented, thus
rendering it even more difficult for another company to duplicate.
Variations on this scheme have routinely been used by "turnkey system"
vendors for years. The hardware is unique and only supported by one (small)
vendor. The vendor has a de-facto monopoly once you've bought the
equipment. If the vendor is IBM, the volume is big enough for somebody
(like Amdahl) to duplicate the expensive hardware. If the vendor is small,
he gets away with it because he doesn't own a sufficiently large segment of
the "market" (where market means all computers or all business machines or
something like that).
--
Kurt Guntheroth
John Fluke Mfg. Co., Inc.
{uw-beaver,decvax!microsof,ucbvax!lbl-csam,allegra,ssc-vax}!fluke!kurtdmt@mtgzz.UUCP (d.m.tutelman) (08/28/85)
> Re: legality of bundling with hardware. > > It is indeed illegal to refuse to sell software w/o the hardware, but that > does not deter people from doing it. Would someone who knows please take a crack at this? I was under the impression that "bundling" was an anti-trust offense. That is, it's not illegal per se, but is illegal for those whose "market power" makes them a monopoly. Thus IBM couldn't do it, but the small turnkey system vendor is perfectly legal. Dave Tutelman Physical - AT&T Information Systems Holmdel, NJ 07733 Logical - ...ihnp4!mtuxo!mtgzz!dmt Audible - (201)-834-2895
steveh@hammer.UUCP (Stephen Hemminger) (08/29/85)
What about educational software. My sister runs a computer education program for inner city kids, and they have the typical group of apple ii's. All the educational progs seem to be copy protected, WHICH IS TOTALLY BRAINDAMAGED. My advice was to make one copy of each program (using one of the cracker programs), and lock up the original. NEVER let the kid's run on the original. Unless a solution is developed, we are raising kids as software pirates because the teachers have to be pirates.
doc@cxsea.UUCP (Documentation ) (08/31/85)
> > Re: legality of bundling with hardware. > > > > It is indeed illegal to refuse to sell software w/o the hardware, but that > > does not deter people from doing it. > > Would someone who knows please take a crack at this? > > I was under the impression that "bundling" was an anti-trust offense. > That is, it's not illegal per se, but is illegal for those whose > "market power" makes them a monopoly. Thus IBM couldn't do it, > but the small turnkey system vendor is perfectly legal. "Product tying" is illegal per se, by virtue of decisions under the Sherman Act. To have a case of product tying, the vendor must be selling two products, the tied product (the one everybody wants) and the tying product (which nobody wants, but has to buy anyway in order to get the one they really want). The tied product must have market power; that is there must be substantial demand for it. IBM could probably get away with making you buy a PC to get IBM software, but not the other way around. Look at it this way: product tying is normally illegal because it produces an artifical demand for a product (the tying product) by linking it to a product for which there is an organic demand (the tied product). So, the crucal distinction here is that the tied product be the dominant product in it's particular market. This was the rule articulated in the Data General antitrust litigation. A number of companies were selling DG-NOVA clones, but DG would not sell to end-user the OS (RDOS) unless the end-users also purchased a NOVA. The competitors sued and prevailed. The court decided that the relevant market (for the purpose of deciding whether or not DG's RDOS had market power) was NOVA-compatible operating systems, that would run RDOS applications, not computers in general. Similarly, the IBM PC has all kinds of market power (PC compatible cpu's), while IBM software has almost none. Requiring you to buy a PC in order to buy IBM software is not per se product tying (but is sheer stupidity from a business standpoint; why make an unpopular product that much more difficult to obtain). Requiring you to buy their software in order to buy a PC, however, is a different situation, because the PC is popular enough to leverage artificial demand for the software. See the difference?
rms@meccts.UUCP (Roger M. Shimada) (09/09/85)
In article <1471@hammer.UUCP> steveh@hammer.UUCP (Stephen Hemminger) writes: >What about educational software. My sister runs a computer education >program for inner city kids, and they have the typical group of apple ii's. >All the educational progs seem to be copy protected, WHICH IS TOTALLY >BRAINDAMAGED. My advice was to make one copy of each program (using one of >the cracker programs), and lock up the original. NEVER let the kid's run on >the original. Unless a solution is developed, we are raising kids as >software pirates because the teachers have to be pirates. After seeing what happens to non-copy protected software in schools, I must disagree. It was very typical for teachers to ask students to make copies of diskettes. I remember some kids making copies of particular programs, taking the cream of the crop from various diskettes. (I should know, I was one of them!) That was a few years ago - imagine it today when some of these kids actually have machines at home! Teachers were able to get together and pirate software.... One solution to the problem itself is a licensing agreement. This can apply to schools as well as businesses. The heavy users of MECC software are "Institutional Members" who can make any number of (copy-protected) copies of a diskette. Roger Shimada Minnesota Educational Computing Corporation !ihnp4!dicomed!meccts!rms "There's no way that I could possibly be a spokesperson for my company."