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Protecting Intellectual Property in the Internet Age

Protecting Intellectual Property in the Internet Age

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Protecting Intellectual Property in the Internet Age

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  1. Protecting Intellectual Property in the Internet Age Conference on Information Technology Laws and Related Intellectual Property- Faculty of law, Delhi University 20th March 2010 Karnika Seth Cyber-lawyer, Attorney at law & Partner, SETH ASSOCIATES ADVOCATES AND LEGAL CONSULTANTS

  2. Presentation Plan • Introduction to Intellectual Property Rights • Protecting Copyright in the digital millennium • Passing off, Trademark infringement and dilution • Linking, framing & metatagging • Cybersquatting • Domain name dispute resolution • Trade secrets in software and reverse engineering • Database Protection • Legal remedies

  3. INTRODUCTION TO INTELLECTUAL PROPERTY RIGHTS (IPR) • Intellectual Property (IP) is defined as any "original creative work manifested in a tangible form that can be legally protected“ • Right associated with intellectual property which gives legal protection is referred to as IPR. • When we speak of IP rights, we refer to controlling the way IP is used, accessed or distributed.

  4. Trademark & domain names Copyright Trade secrets Patent Categories of IP rights Utility model/Designs Geographical Indications Plant Breeder’s rights

  5. Classification of IPR IPR Intellectual Property Patents Broadcasting Music Dramatics Works Trademarks Copyright Literature Sound Recording Industrial Design Works of Art Computer Programs Geographical Indications

  6. Intellectual Property can be clearly distinguished from Goodwill. UK & Australian Generally Accepted Accounting Principles (GAAP) has specified goodwill as an umbrella concept consisting of unidentifiable intangible assets and should not include those Intellectual Properties which are capable of individual identification and can be sold separately. Copyright- is a bundle of rights granted to an author of an original artistic, literary or musical work to print ,publish, distribute, and sell, lease copies of his work and other allied rights. Copyright protection also extends to cinematographic film and sound recordings. Designs- The designs entitled to protection are new and original designs having aesthetic value which have not been previously known or published in India or elsewhere. Rights that different IP assets protect

  7. Trademarks- is an identification symbol which may be a word, a device, a label or numeral etc. or a combination thereof used in the course of trade that enables the purchasing public to distinguish one trader’s goods from similar goods of other traders The purpose of Brand is:• To uniquely identify a company and its product.• To differentiate them from competitor.• To enhance the perceived value, the quality and satisfaction that a customer experiences.• To evoke distinct associate stands for certain personality traits and carries emotional attachment.• Above all brand is supposed to inspire trust. Trust failure can lead to brand failure and brand failure can be fatal. Patents- is the grant of a monopoly right to an inventor who has used his skill to invent something new. Rights that different IP assets protect

  8. Different Acts governing IP assets The Trade Marks Act, 1999 Trade Marks The Patents Act, 19 70 Patents The Copyright Act, 1957 Copyright The Designs Act, 2000 Designs The Geographical Indications Of Goods Act, 1999 Geographical Indications The Protection of plant varieties and Farmers’ Right Act, 2001 Plant Varieties Semi conductor IC layout design Act,2000 Semi conductor IC layout

  9. IP- Duration of Term of Protection • Patents (20 years) • Trademarks (10 years + renewals) • Copyrights in published literary, dramatic, musical, and artistic works (Lifetime of author +60 years). • Copyright in photographs ,cinematographic film, sound recordings –(60 years from year in which it was published) • Broadcast reproduction right-(25 years from the beginning of the calendar year next following the year in which the broadcast is made.) • Performers right-(25 years from the beginning of the calendar year next following the year in which the performance is made) • Industrial designs (10 years+ renewal permitted once for 5 years ) • Trade-secrets and know how collectively “proprietary technology” (contract period-protected by contract provisions, doctrine of breach of trust)

  10. Ownership Valuable Assets Intangibles Special Rights Time & cost intensive Transferable AdditionalProfits “Most creations resulting from human endeavors in various fields of art, literature ,science and technology constitute Intellectual Property” Intellectual Property

  11. Why are IP assets important ? • Its creation is both time and cost intensive • Requires an assembled trained workforce for its creation • Requires building of goodwill through advertising programs • Generates customer loyalty • Adds to commercial value of organization • Its exploitation brings consistent additional profits to an organization

  12. IP adds value at every stage of the innovation and commercialization process Patents / Utility Models Trademarks, Ind. Designs, Geo. Indications Industrial DesignsTrademarks All IP rights Invention CommercializationMarketing Exporting Financing Product Design Licensing Literary / artisticcreation Copyright All IP rights

  13. Need To Protect IPR To allow IP creators to benefit from their work Artists and creators should be able to enjoy the fruits of their labor for a specified time period, after which the material becomes available for public use. If a business comes up with an attractive marketing logo, then no other businesses should be allowed to use that logo to promote their own products without permission. Protecting IP is a method of promoting creativity If one is not allowed to copy another person's work without permission then creativity is encouraged .

  14. Need To Protect IPR (Contd.) Leads to increased global trade Example: Jordan- where strengthened patent protection has been linked to tangible economic benefits. The International Intellectual Property Institute (IIPI) released a comprehensive report in August 2004 that analysed the establishment of globally competitive pharmaceutical and biomedical technology industries in Jordan. The findings of the report indicate that "Jordan's economy has benefited greatly from the recent adoption of better intellectual property protections This was reflected in a jump in the health-service contributions to the Jordanian GDP from 2.8 percent in 1997 to 3.5 percent in 2001. Employment in the health-services sector has increased 52 percent since 1997.”

  15. There are multiple perspectives about intellectual property rights on the Internet • Nature of internet- Borderless space, ease of flow of information, promptness, anonymity, easy to share, distribute and copy information at very less cost. • These multiple perspectives to IPR include: • "Information Wants to be Free." These people believe there should be no copyrights or other protections of intellectual property; everything made publicly available should be public domain. • "Right of Attribution." These people believe that the only rights owed to authors and creators is the right of attribution; otherwise, all information is free. • "Limited Use Rights." These people believe that copyright has validity but minor infringing behavior, whether "fair use" or not, should be legal. • "Strong IP Regimes." These people adhere strictly to intellectual property protections. (Note that there is also the moral rights perspective, which exists on a different scale but is most closely aligned with the Strong IP Regimes category.)

  16. Concerns of protecting intellectual property. • The Internet makes it possible to distribute any kind of digital information, from software to books, music, and video, instantly and at virtually no cost. The software industry has struggled with piracy since the advent of the personal computer, but as recent controversy over file-sharing systems such as Napster and Gnutella ,Aimster. ( , demonstrates, piracy is now a serious issue for any individual or business that wants to be compensated for the works they create. And since the Internet knows no borders, piracy is now a serious global problem. • Strong legislation such as the Digital Millennium Copyright Act (DMCA), cooperation between nations to ensure strong enforcement of international copyright laws, innovative collaboration between content producers and the technology industry, and standards developed by organizations like the Secure Digital Music Initiative (SDMI) that can prevent or deter piracy have already made an impact on addressing this problem. But as more and more digital media becomes easy to distribute over the Internet, the government and private sector must work together to find appropriate ways to protect the rights of information consumers and producers around the world.

  17. Protecting Copyright in the digital millennium • Copyright is about protecting original expression. In contrast to traditional analog methods of recording works of intellectual property - on paper, film , on magnetic tape etc. now is the era of digitalization. • Digitization converts all words, images, sounds, graphics and films into some binary numbers, either ones or zeros. • These digitally stored works, disassociated from their physical form, are then transferred over the networks to be finally reconstructed into recognizable art by a reference to their binary values. • This transformation represents that we are no longer transferring fixed expression of works as we would buy a book or license a video, but the digital representation of those works. • This liberation of works from their form or media, calls for a change in the way that we protect and enforce intellectual property rights and copyright in particular.

  18. Protecting Copyright in the digital millennium (contd.) • With the advent of digital technology some new types of work came into being and questions arose about how, and to what extent, they should be protected: • Computer programs have some of the characteristics of a literary work but are not written to be read directly by another person; rather a computer program is a set of instructions for a machine. European approach-to be patentable it should lead to a technical effect. A technical contribution typically means a further technical effect that goes beyond the normal physical interaction between the program and the computer. • Even though the European Patent Convention and its Article 52 excludes the patentability of programs for computersas such and despite the fact that the European Patent Organisation (EPO) subjects patent applications in this field to a much stricter scrutiny when compared to their American counterpart, that does not mean that all inventions including some software are de jure not patentable. • T 928/03, Konami, Video Game System -how to make the computer easier to use .

  19. Protecting Copyright in the digital millennium (contd.) • The question of new, sui generis form of protection was seriously considered in the 1970s, but copyright protection became the norm. the TRIPS Agreement requires that ‘Computer program, whether in source or in object code, shall be protected as literary works under the Berne Convention’. Case on point-Ibcos computers v BarclaysFinanceLtd(1994)FSR 275,Apple computer inc vsFranklin ComputerCorpn714F2d1240(3rd Cir 1983). • India party to Berne convention, Paris convention and UCC1952. • India-Copyright Act-Section 2(o)-computer programme is literary work.section 2(ffc) defines computer programme.,section 2(ffb) defines computer-copyright –tangible –storage in any medium

  20. 5 Exclusive Rights of a Copyright owner- • Section 14 Copyright Act,1957 • To fix information in any tangible form • To reproduce copyrighted work • To sell, rent, lease or otherwise distribute copies • Perform and display copyrighted work • To prepare derivatives of a copyrighted work.

  21. Making of a RAM copy without authorization would constitute infringement • MAI systems corp v Peak computer 991F2d511(9th circuit 1993) • Copyright owner of OS software sued a computer repair company for infringement, based on repair company’s turning on a computer running the OS for servicing the machine. In doing so, the defendant was able to view the software program to assist him in diagnosing the problem. • Held, loading of copyrighted computer software into the memory of a cpu causes a copy to be made which in absence of permission from copyright owner constitutes infringement.

  22. Digital downloads and reproduction & display rights • Kelly v Arriba Soft Corp 280 F3d 934(9th Cir2002) • Plaintiff leslie kelly had copyrighted many images of American west. Some were located on her website. Defendant produced thumbnail pictures in its search engine’s search results and by clicking on them, larger version could be viewed within Arriba’s page. • Circuit court held, use of thumbnails is fair use but display of larger image within its webpages is violation of author’s exclusive right to publicly display his works.

  23. Digital downloads and distribution rights • Marobie – v National Association of Fire Equip Distributors 983 F Suppl1167(NDIll) • Court held that the act of placing unauthorised copies of Plaintiff’s electronic clip art files on the defendant’s webpage constitutes an infringement of distribution rights of the plaintiff as plaintiff’s files became available for downloading by internet users. • Another case in point-Playboy enterprises ,inc v Frena 839 F Supp 1552(M.D.Fla1993)

  24. Types of Copyright Infringement Direct Infringement It is wholesale reproduction and distribution of Copyrighted works Contributory Infringement It occurs when someone knowingly encourages infringing activity Vicarious Infringement When for financial benefit the operator in spite of his ability to control and check infringements deliberately restrains from checking the users from committing such acts-playboy enterprises inc vs webbworld,inc 991 F Supp 543(N.DTex.1997)

  25. E-Copyright Protection and digital music • The MP3 revolution • The Napster story • P2P file sharing technology facilitates 1-store MP3 music files on individual computer hard drives available for copying by other Napster users 2-search for MP3 music files stored on other users computers and 3-transfer exact copies of the contents of other users MP3 files from one computer to another via the Internet. • Napster free of charge music share software ,napster internet site. It provided technical support for indexing and searching of MP3 files also.-complaint for being contributory and vicarious copyright infringer. Napster used fair use defence. • Court held Napster is guilty of contributory and vicarious copyright infringement • DMCA 1998-Section 512-safe harbour doctrine for ISPs-ISP to prove that it lacks requisite knowledge of infringing activity. (analogous to Section 79 IT Act,2000) • New avtaars-Gneutella and kazaa.

  26. Passing off, Trademark infringement and dilution Passing off “No body has any right to represent his goods as the goods of somebody else” Lord Halsbury Passing off action allows trader A to prevent trader B from passing their goods off as if they were A’s. Passing off is available where there is a prospect of confusion of identity through the unauthorized use of similar marks or get up, and such use damages, or is likely to damage the goodwill and reputation of a business. Passing off can apply to virtually any name, mark, logo or get-up which distinguishes a company, business, product or service from the other. Passing off attracts doctrine of strict liability: the intention of the person passing itself off as another trader is irrelevant.

  27. Attributes of Passing Off Lord diplock in Erven Warnink v J Townend 1979 (2)AllER 927-To Succeed in an action for passing off, a claimant should establish that: The claimant has a goodwill Passing off is made in the course of trade. The defendant made a misrepresentation that is likely to deceive the public. The misrepresentation damages or is likely to damage the goodwill of the claimant.

  28. Example of passing off action Domain name similar to that of known companies are used by persons in order to promote their products or services. A company creates a website to promote his business of soft drinks and deliberately gives it the domain name , now this domain name is bound to confuse and mislead the customers as that of the well known Coca-Cola and encourage them to buy the product which infact is of another company. This can be termed as passing off.

  29. Cases on Passing off Yahoo! Inc. vs Akash Arora(1999) FACTS: The defendant installed a website nearly identical to plaintiff’s renowned and provided services similar to those of the plaintiff. DECISION: The Delhi High Court granted an injunction restraining defendant from using yahoo either as a part of his domain name or as a trade mark .It held that trade mark law applies with equal force on the internet as it does in the physical world.

  30. Precedents on Passing off In the case of Marks & Spencer Plc and others v. One in a Million Ltd. and others, the deputy judge of the English Court held that: "Any person who deliberately registers a domain name on account of its similarity to the name, brand name or trade mark of an unconnected commercial organization must expect to find himself on the receiving end of an injunction to restrain the threat of passing off, and the injunction will be in terms which will make the name commercially useless to the dealer.“ In the case of Rediff Communication Limited v. Cyberbooth and Ramesh Nahata of Mumbai (1999), the Bombay High Court supported an action of passing off when the Defendants used the term ‘RADIFF’ (similar to the name ‘REDIFF’ of the Plaintiff) to carry on business on the Internet.

  31. Passing off action under the Trade Marks Act, 1999 • A registered Trademark has the backing of infringement and passing off remedies under the TMA act. • The Act does not provide for infringement action in respect of unregistered Trademarks. • Only Passing off remedy is available in case of unregistered Trademarks. (Section 27 of TMA Act, 1999).

  32. Trademark infringement Section 29 of the Trademark Act states that when a registered trade mark is used by a person who is not entitled to use such a trade mark under the law, it constitutes infringement. A registered trade mark is infringed ,if:- 1. The mark is identical and is used in respect of similar goods or services or 2. The mark is similar to the registered trade mark and there is an identity or similarity of the goods or services covered by the trade mark 3. And Such use is likely to cause confusion on the part of the public or is likely to be taken to have association with the registered trade mark. For example, if you are not the Nike® company or authorized by it, it is an infringement to sell sports clothes called "Nikestuff “ Legal remedies under Indian Trademarks Act- Injunction ,damages, delivery up of infringing goods, destroying infringing goods and material, etc. For cases see heading cybersquatting Satyam infoway vs Sifynet solutions 2004 (6)SCC 145..

  33. Dilution • Dilution is a trademark law concept forbidding the use of a famous trademark in a way that would lessen its uniqueness. In most cases, trademark dilution involves an unauthorized use of another's trademark on products that do not compete with, and have little connection with, those of the trademark owner. For example, a famous trademark used by one company to refer to hair care products, might be diluted if another company began using a similar mark to refer to breakfast cereals or spark plugs. • A trademark is diluted when the use of similar or identical trademarks in other non-competing markets means that the trademark in and of itself will lose its capacity to signify a single source. In other words, unlike ordinary trademark law, dilution protection extends to trademark uses that do not confuse consumers regarding who has made a product. Instead, dilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular product, perhaps imagined if the trademark were to be encountered independently of any product (i.e., just the word Pepsi spoken, or on a billboard).

  34. Case law on Dilution Avery Dennison Corporation Vs. Jerry Sumpton, et al. Facts: Jerry Sumpton and his company Freeview registered thousands of domain names - primarily typical surnames - and used these domain names to offer "vanity" email addresses to people who want an address incorporating their name.  Two of the names registered included and  Avery Dennison brought suit against Sumpton claiming trademark dilution. Decision: The Ninth Circuit held that Avery Dennison failed to meet the required of elements of dilution.  The court concluded that the Avery and Dennison trademarks were not famous.  Although the court acknowledged that the trademarks had reached a level of distinctiveness, dilution requires that a mark be both distinctive and famous.  According to the court for a mark to meet the "famousness" element of dilution it must be truly prominent and renowned. Additionally, the court held that Avery Dennison failed to meet a second requirement for dilution:  commercial use.  Commercial use under the dilution statute requires that the defendant use the trademark as a trademark, capitalizing on its trademark status.

  35. Cases on Dilution Teletech Customer Care Management, Inc. vs Tele-Tech Company, Inc Facts: The plaintiff, a large provider of telephone and Internet customer care services, had been continuously using the mark for approximately fifteen years and had waged an extensive promotion and advertising campaign for its services. The defendant, a contractor providing engineering and installation services to the telecommunications industry, registered the domain name Decision: The court held that there was no likelihood of confusion, because the parties’ businesses were so dissimilar. However, the court found dilution, ruling that TELETECH was a famous mark, and ordered the defendant to transfer the domain name to the plaintiff.

  36. Metatagging • Metatagging, sponsored listings amount to trademark infringements • Playboy Enterprises inc v Netscape Communications corp 55 FSupp2d1070(S.D Cal1999)-plaintiff trademarks –playboy, playmate alleged infringement by defendant by marketing selling 450 words including these trademarks to advertisers., banner ads on search results page ,diversion of traffic • Held PEI cannot monopolize these words. violates First amendment rights of netscape, other trademark holders of these words ,users of search engines. • Playboy Enters v Calvin designer label 985 Fsupp 1220(NDCal1997)-Defendants repeated use of words ‘playboy’ within machine readable code in defendants internet webpages constituted trademark infringement

  37. Linking and framing LINKING A link is simply a connection between the content of two different files (or between different parts of a single file). It is a technique through which the author of a website connect his text with others and enable web browsers to quickly move from one page to another. A link may lead either to another page in the same web site, or to a page on a different computer located elsewhere on the Internet.

  38. TYPES OF LINKING. Surface linking: When the home page of a site is linked, it is the case of surface linking. When a link bypasses the home page and goes straight to an internal page within the linked site, it is the case of deep linking. Deep linking:

  39. PRECEDENT ON LINKING Ticketmaster vs. Microsoft Facts: In April, 1997, Ticketmaster filed a complaint in federal court in the Central District of California alleging that "Microsoft's actions diluted their trademarks; created a false, deceptive and misleading representation that there was a formal relationship between the two of them; constituted unfair competition and business practices; and constituted a commercial misuse of their trademarks.“ Microsoft at that time operated Sidewalk, a recreational and cultural guide Web site. What Microsoft was doing was simple -- if a Sidewalk user wanted to buy a ticket to a particular event mentioned on the site, Sidewalk offered them a link to Ticketmaster's ticket purchase page. They were actually promoting Ticketmaster sales and sending them customers. A month after the suit was filed; Ticketmaster blocked Sidewalk users from their site. Links set up from Sidewalk then took users to a Ticketmaster page that read, "This is an unauthorized link and a dead end for Sidewalk.“ Status: In February of 1999, the 2-year-old lawsuit was settled out of court. "Details of the settlement were not made public, but the deep links were removed, directing Sidewalk users to the Ticket master homepage.

  40. Universal vs Movie-List Facts: Movie-List , a collection of links to over 900 movie trailers, was deep linking to trailers within the Universal Web site. Originally, they were actually running the trailers, which were the property of Universal Studios, on the Movie-List server.  Not only were they deep linking to trailers, Movie-List was also selling CD-ROMS with trailers they had downloaded.  Universal then sent them a cease and desist, stating, "You are not permitted to link to other sites that contain our copyrighted material without our authorization. Accordingly, you must remove all images from our films as well as links to other sites that have our servers.“ Status: All trailers have been removed from the Movie-List server, and the owner no longer sells the CD-ROMS. He has removed all of the deep linking to Universal pages. Case law on framing- Washington post Co v Total news inc97Civ1190(SDNY)

  41. Shetland Times vs. Shetland News Facts: The first deep linking case was filed in 1996 in Scotland, involving The Shetland Times,a newspaper and The Shetland News, a news delivery Web site. The News posted headlines from the Times, using actual Times headlines as the text of the hypertext link. For example, one such link on the Shetland News home page was "New Prime Minister Elected," which linked directly to a story in the Shetland Times with the exact same headline. The links also bypassed the Shetland Times home page which carried large volumes of advertising. Decision: In October, 1996, Scotland's Court of Session banned the links, "finding it plausible that a headline is a literary work and that the News practice of incorporating the Times headlines verbatim in its link lines violated the latter's copyright" (Kaplan). The Scottish Court did not rule on the matter of deep linking.

  42. CASES ON FRAMING The Washington Post Company et al. vs. Total News, Inc. Facts: As a one-stop news site, linked to many news sites, but kept a frame, or border around them, which the news sites argued made it look like the content was from, changed the ad layout on the page, and kept as the address for book marking purposes. In the complaint the news companies claimed that TotalNews misappropriated their trademarked and copyrighted material, thereby engaging in a host of crimes including unfair competition, federal trademark dilution, and trademark and copyright infringement. The news organizations said that their websites, as they appeared within the Totalnews frames, were substantially altered from the form in which they intended them to appear to users and that it was done solely for Totalnews' profit. TotalNews argued that the case was in essence about its freedom to link, which it claimed was a fundamental right on the Internet. Status: The court never decided the TotalNews case because the parties settled. Totalnews agreed to remove the frame.

  43. Framing Hard Rock Café International (USA) Inc. vs. Morton Facts: Peter Morton was a founder of the Hard Rock Café who sold his interests in the business to the parent company. Morton retained ownership of a Hard Rock Hotel and Casino and was granted a license to use certain service marks and trademarks. The parent company later sued Morton, claiming that he violated the license agreement by illegally framing the site to sell CDs. Decision: The court pointed out that the framing made it unclear to a user whether he or she had left the Hard Rock Hotel website, especially since, though the content on the page changed, the bookmark able domain name stayed the same. This use was found to violate the license agreement and Morton was ordered to either permanently cease framing the CD store’s website or present evidence that it can frame that site in accordance with the terms of the license agreement.

  44. Cybersquatting Cybersquatting is registering, trafficking in, or using a domain name with bad-faith intent to profit from the goodwill of a trademark belonging to someone else. The Cybersquatter then offers the domain to the person or company who owns a trademark contained within the name at an inflated price, an act which some deem to be extortion

  45. Cybersquatting Panavision International vs. Toeppen Facts: Toeppen engaged in dilution by cyber squatting in registering the domain panavision.comoffered to sell the domain to the plaintiff for $13,000. Mr. Toeppen put a map of Pana, Illinois up on his website. Decision: The Ninth Circuit upheld the lower court’s conclusion that Mr. Toeppen was engaged in extortive efforts and was diluting the famous PANAVISION mark. Mr. Toeppen’s cause was not helped by the fact that he had registered many domains containing known brands, such as,, and

  46. Domain name dispute resolution policy • Judicial dispute resolution under Federal Trademark dilution Act-Comp examiner agency vs juris inc • Judicial Dispute Resolution under Anti cybersquatting Consumer Prevention Act, • Dispute resolution under UDRP-ICANN approved domain name dispute resolution service providers.3 elements identical/deceptively similar mark,no legitimate use, bad faith registration • ADNDRC,CPR institute for dispute resolution, National arbitration forum, WIPO example Tata sons ltd case,Bennett coleman and co case, Asian case

  47. Domain name dispute resolution This .IN Domain Name Dispute Resolution Policy (the "Policy") sets out the terms and conditions to resolve a dispute between the Registrant and the Complainant, arising out of the registration and use of the .in Internet Domain Name. The .IN Registry shall appoint an Arbitrator out of the list of arbitrators maintained by the Registry. The Arbitrator shall conduct the Arbitration Proceedings in accordance with the Arbitration & Conciliation Act 1996 as amended from time to time and also in accordance with this Policy and rules provided there under. The remedies available to a Complainant pursuant to any proceeding before an Arbitrator shall be limited to requiring the cancellation of the Registrant's domain name or the transfer of the Registrant's domain name registration to the Complainant. Costs as may be deemed fit may also be awarded by the Arbitrator.

  48. Protection of Software in the e-world • There is some technology and logistical processes, of uncertain efficacy, in the pipeline that could result in extra-judicial prospective protection of software. These measures are legitimate as per Article 11WCT,Article 18WPPT, Some examples: • Technical Support • Limit technical support to registered users. This is the philosophy of many (all?) shareware companies offering technical support, including most prominently Netscape. This is a corollary of the principle of deriving value from ancillary services: Unregistered users can use the product for free, but will have to pay for support. • Limit technical help built into the software and rely instead on hard-copy documentation. Many shareware companies also offer hard-copy documentation as part of the benefits of registration. There is nothing to prevent photocopying or scanning of the documentation to defeat this decidedly low-technology approach, but it will require infringers to go through some extra steps that may not be worth the effort.

  49. Usage Metering and Encryption • "Super distribution" (Cox). Cox's approach is to use a hardware component that calculates fees based on usage and then submits periodic reports to a home base. (This could also be done as a debit card approach--each use would offset credits on a card; when the credits are zero, the user would have to recharge the card). This approach's advantages include that it would encourage free distribution of software and allow appropriate royalties to flow to creators of components. However, some serious concerns exist: the approach would impose hardware costs, misuse of the metering information could result in privacy invasions, and the hardware would be potentially subject to tampering. • Authorization codes. Software would require an authorization code that would permit the software to operate for a certain period of time. Authorization codes would be obtained (for a fee, of course) from a home base. While this does not impose hardware costs, the concerns about privacy and tampering exist here as well.

  50. Software envelopes (Griswold). Copyrighted material would be contained in an encrypted software envelope that would periodically communicate with a home base upon use. The software would require authorization from the home base to continue functioning. If the user has not paid for the use, authorization would be denied and the software would be disabled. (This is somewhat analogous to the process used for satellite transmission feeds). The periodic communication could be counted to determine a metering charge. Again, the privacy and tampering concerns remain. • Centralized software. Software could be centralized in one location and users access the program remotely via the Net on a subscription or per-use basis. This is analogous to the old timeshare models. Once again, there are privacy and tampering concerns. It also remains to be seen if consumers, accustomed to walking out of a software store with a tangible product, will adapt to lacking any possessory interest in software.