San Diego’s economy is outpacing the nation’s economy as a whole, and continued growth is predicted. A recent economic report by the city of San Diego cites a diversity of industries as a significant factor in our economic health, placing software development as one of the top six industries driving the local economy.

Last quarter, venture capitalists poured more than $50 million dollars into San Diego’s software development sector. Additional money was given to industries such as telecommunication, networking and bioinformatics in which software development also plays an integral role. This, in turn, has attracted many former dot-com employees, who are fleeing the Silicon Valley to start anew in San Diego.

For software developers this means a chance to gain other highly skilled workers, and much-needed venture capital. Maximizing this opportunity requires these companies to properly safeguard proprietary software without stepping on the toes of predecessors.

Understanding Copyright Protection

Software developers have a variety of options for protecting their intellectual investment, one of which is copyright. A copyright protects the creative expression of an idea but not the idea itself. More specifically, a copyright is granted for “an original work of authorship fixed in a tangible medium of expression.” Embodiment of source, object or micro code in some form of computer readable memory satisfies the requirement of “fixed in a tangible medium of expression.” The more difficult hurdle relates to creating an “original work of authorship.”

Determination of whether a new program is considered an original work of authorship begins by asking two initial questions.

First, ask, “Who will write the program?” Employees who have created similar pre-existing works for a previous employer may unknowingly contribute copyrighted expressions to the new work. For these employees, it is important to find new ways in which to express these former ideas so as to avoid a potential claim of copyright infringement.

The second question to ask is, “What pre-existing works will the program be based upon?” Answers to these two initial questions shed light on what obstacles are posed by pre-existing works. The next step is for a legal expert to determine the extent of protection for these pre-existing works.

Holders of pre-existing works are given exclusive rights to their creative expressions embodied both in the copyrighted work and in “any derivatives thereof.” Derivatives include translations, abridgements, or revisions based upon the pre-existing program. Thus, the copyright holder is given wide latitude of protection. For works produced later, finding the line between infringement and originality is no easy task. Because software copyright law is still in its infancy, courts subjectively draw the line on a case-by-case basis, leaving software developers with a daunting task.

Courts have developed many different tests to determine what part of a software program is “expression” and what part is “idea.” Although the U. S. Supreme Court has yet to endorse any one of these tests, the trend seems to be leaning towards an “abstraction/filtration test.”

Abstraction refers to deconstructing a software program into its various structural levels. At the very highest level is the idea of the program itself, which is not protectable. At the other extreme of the continuum is the source code, which is easily protected from literal copying. Between these poles lie the modules, routines and organizational flowcharts. To the extent that these elements are creative expression, they are protected by copyright.

Filtration of these middle level elements removes the non-protectable elements from those considered protectable. Non-protectable elements include:

• those that are part of the public domain, which consists primarily of works whose copyrights have expired or have failed to satisfy a statutory requirement, and thus are available to all for use.
• those that are dictated by external factors, which have been circumscribed by considerations such as design standards of the computer and software compatibility requirements.
• those that are dictated by efficiency, which are defined as expression that may be copied when there is but a limited number of ways to express a given idea.

As a result, the otherwise protectable expression merges with the idea and is rendered non-protectable. After the non-protectable elements have been filtered away from the protectable expression, what remains is copyright protected. An original work of authorship will avoid using these protected elements.

Registering With The Copyright Office

Software that has been developed following these above guidelines is itself copyrightable. At this point, the difficult work is done, and the owner of the new program need only register the program with the Copyright Office.

Applying for copyright registration, unlike other intellectual property protection options, is relatively inexpensive and quick. There are also special procedures for dealing with situations in which a computer program contains trade-secret material. Following registration, the program’s original expression of an idea is protected from copying by competitor software manufacturers. Copyright will add to the strength and security of any intellectual property portfolio, assuring that investors continue to view your company as a good investment.

Reidelbach is a Partner and Chair of the Intellectual Property group at Higgs, Fletcher & Mack, L.L.P. Landes is an Intern in the Intellectual Property Group.