Louisiana Software License Enforcement Act

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The Louisiana Software License Enforcement Act refers to the Software License Enforcement Act (SLEA) adopted by the state of Louisiana. The bill was voted into law in September 1984 under Title 51 (Trade and Commerce) of the Louisiana Revised Statutes by the Louisiana State Legislature. Sponsored and mostly written by Vault Corporation, the SLEA defines the permissible terms and conditions of a software license agreement and the requirements for enforceability. The reverse engineering, decompiling or disassembling provision of the Louisiana SLEA was invalidated by the United States Court of Appeals for the Fifth Circuit ruling in Vault Corp. v. Quaid Software, Ltd., 847 F.2d 255 (5th Cir. 1988) .

Contents

Summary of act

The Louisiana SLEA consists of sections 1961-1966 of Title 51 of the Louisiana Revised Statutes, which outlines and specifies: relevant definitions, requirements for enforceability, accepted licensing terms, proper display of licensing terms, and enforceability. Under section 1963, a software license agreement can only be enforced if the following conditions are met: [1]

Under section 1964, the terms of a software license agreement can enable the licensor to retain ownership of a licensed software copy. If retained, the agreement may also include the following limitations of the end user's ability: [2]

In addition, the licensor may automatically terminate the software license agreement without notice if any provision of the agreement was breached by the licensee. [2]

Road to becoming law

The Louisiana SLEA was first announced at Softcon in New Orleans by Louisiana Secretary of State James H. Brown during a press conference sponsored by Vault Corporation.

This bill is intended to strengthen significantly the ability of software publishers and distributors to enforce their rights under trade secret and copyright laws. This bill strikes a balance between the legitimate interests of the software industry in preventing piracy and the legitimate interests of the customers who acquire copies of software pursuant to license agreements.

Louisiana Secretary of State James H. Brown [3]

Vault Corporation's, a company that developed software protection systems (anti-piracy tools), Chairman Krag Brotby was attributed to saying, "[Vault] helped write most of the bill...and that the announcement was timed to coincide with Softcon coming to New Orleans." [3] Brotby predicted that the law would provide a model for the other 49 states; Vault Corp. had invested $50,000 in an effort to push the bill. [4]

The SLEA was introduced to the Louisiana State Legislature by State Senator William Atkins and Representative Al Ater. [3] Supporters of the bill hoped it would encourage the growth of the software industry in Louisiana. [3] [5] It passed with minimal opposition in September 1984. [4] [5] Louisiana was the first state to adopt the SLEA, and the only state to adopt the bill as written by Vault Corporation. [4] [5] The bill was criticized for being, "a special-interest legislation designed to improve the economic position of software manufacturers without doing anything of substance to challenge software piracy," Jay BloomBecker. [4]

Role in Vault Corp. v. Quaid Software Ltd.

The Louisiana SLEA was first examined in court when Vault Corporation sued Quaid Software Ltd. for copyright infringement, trade secret misappropriation, and patent infringement. [6] Vault argued that Quaid's actions in decompiling and disassembling PROLOK constituted a violation of the software license agreement. Therefore, by Louisiana's Software License Enforce Act, Quaid would be in violation of the Louisiana Uniform Trade Secret Act for trade secret misappropriation. [7]

In Vault Corp. v. Quaid Software Ltd., 655 F.Supp. 750 (US District Court, E.D. Louisiana 1987) , the United States District Court for the Eastern District of Louisiana ruled that the SLEA was preempted by the Copyright Act, because, "Louisiana's License Act 'touched upon the area' of federal copyright law." [8] Upon appeal, the United States Court of Appeals for the Fifth Circuit affirmed the district court's ruling. Thus, the Louisiana Revised Statutes 51:1963:4 provision for reverse engineering, decompiling, or disassembling, was invalidated. [8]

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An end-user license agreement is a legal contract entered into between a software developer or vendor and the user of the software, often where the software has been purchased by the user from an intermediary such as a retailer. A EULA specifies in detail the rights and restrictions which apply to the use of the software.

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Shrink wrap contracts are boilerplate contracts packaged with products; usage of the product is deemed acceptance of the contract.

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<i>Vault Corp. v. Quaid Software Ltd.</i>

Vault Corporation v Quaid Software Ltd. 847 F.2d 255 is a case heard by the United States Court of Appeals for the Fifth Circuit that tested the extent of software copyright. The court held that making RAM copies as an essential step in utilizing software was permissible under §117 of the Copyright Act even if they are used for a purpose that the copyright holder did not intend. It also applied the "substantial noninfringing uses" test from Sony Corp. of America v. Universal City Studios, Inc. to hold that Quaid's software, which defeated Vault's copy protection mechanism, did not make Quaid liable for contributory infringement. It held that Quaid's software was not a derivative work of Vault's software, despite having approximately 30 characters of source code in common. Finally, it held that the Louisiana Software License Enforcement Act clause permitting a copyright holder to prohibit software decompilation or disassembly was preempted by the Copyright Act, and was therefore unenforceable.

Proprietary software, also known as non-free software or closed-source software, is computer software for which the software's publisher or another person reserves some rights from licensees to use, modify, share modifications, or share the software. It sometimes includes patent rights.

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Copyright infringement Intellectual property violation

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Digital Millennium Copyright Act Copyright law in the United States of America

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<i>Sega v. Accolade</i> 1992 American court case

Sega Enterprises Ltd. v. Accolade, Inc., 977 F.2d 1510, is a case in which the United States Court of Appeals for the Ninth Circuit applied American intellectual property law to the reverse engineering of computer software. Stemming from the publishing of several Sega Genesis games by video game publisher Accolade, which had disassembled Genesis software in order to publish games without being licensed by Sega, the case involved several overlapping issues, including the scope of copyright, permissible uses for trademarks, and the scope of the fair use doctrine for computer code.

<i>MDY Industries, LLC v. Blizzard Entertainment, Inc.</i>

MDY Industries, LLC v. Blizzard Entertainment, Inc and Vivendi Games, Inc., 629 F.3d 928, is a case decided by the United States Court of Appeals for the Ninth Circuit. At the district court level, MDY had been found liable under theories of copyright and tort law for selling software that contributed to the breach of Blizzard's End User License Agreement (EULA) and Terms of Use (ToU) governing the World of Warcraft video game software.
The court's ruling was appealed to the United States Court of Appeals for the Ninth Circuit, which reversed the district court in part, upheld in part, and remanded for further proceedings. The Court of Appeals ruled that for a software licensee's violation of a contract to constitute copyright infringement, there must be a nexus between the license condition and the licensor’s exclusive rights of copyright. However, the court also ruled, contrary to Chamberlain v. Skylink, that a finding of circumvention under the Digital Millennium Copyright Act does not require a nexus between circumvention and actual copyright infringement.

<i>Vernor v. Autodesk, Inc.</i> United States district court case

Vernor v. Autodesk, Inc. was a case in the United States District Court for the Western District of Washington regarding the applicability of the first-sale doctrine to software sold under the terms of so-called "shrinkwrap licensing." The court held that when the transfer of software to the purchaser materially resembled a sale it was, in fact, a "sale with restrictions on use" giving rise to a right to resell the copy under the first-sale doctrine. As such, Autodesk could not pursue an action for copyright infringement against Vernor, who sought to resell used versions of its software on eBay. The decision was appealed to the United States Court of Appeals for the Ninth Circuit, which issued a decision on September 10, 2010, reversing the first-sale doctrine ruling and remanding for further proceedings on the misuse of copyright claim. The Ninth Circuit's decision asserted that its ruling was compelled by Ninth Circuit precedent, but observed that the policy considerations involved in the case might affect motion pictures and libraries as well as sales of used software.

<i>Bowers v. Baystate Technologies, Inc.</i>

Bowers v. Baystate Technologies, 320 F.3d 1317, was a U.S. Court of Appeals Federal Circuit case involving Harold L. Bowers and Baystate Technologies over patent infringement, copyright infringement, and breach of contract. In the case, the court found that Baystate had breached their contract by reverse engineering Bower's program, something expressly prohibited by a shrink wrap license that Baystate entered into upon purchasing a copy of Bower's software. This case is notable for establishing that license agreements can preempt fair use rights as well as expand the rights of copyright holders beyond those codified in US federal law.

Quaid Software, Ltd. was a software publisher based in Toronto, Ontario. The company's best known product was Copywrite which company president Robert McQuaid claimed was "for making legal backup copies of a protected program."

References

  1. Software Enforcement Act - Louisiana Revised Statutes 51:1963.
  2. 1 2 Software Enforcement Act - Louisiana Revised Statutes 51:1964.
  3. 1 2 3 4 Bartimo, Jim (19 March 1984). "Louisiana legislation would punish software pirates". InfoWorld. p. 17. Retrieved 17 October 2011.
  4. 1 2 3 4 Bloombecker, Jay (Spring 1986). "Lobbying for Computer Legislation". ACM Special Interest Group Computers and Society. 16 (1): 2–6. Retrieved 17 October 2011.
  5. 1 2 3 Bloombecker, Jay (4 August 1986). "Software laws: A brief history". Computerworld. p. 58. Retrieved 17 October 2011.
  6. Bates, James (24 June 1986). "High-Tech Piracy: Dispute Points Up Copying Controversy". Los Angeles Times. Retrieved 17 October 2011.
  7. Vault Corp. v. Quaid Software Ltd. , 655F.Supp.750 (United States District Court, E.D. Louisiana12 February 1987).
  8. 1 2 Vault Corp. v. Quaid Software Ltd. , 847F.2d255 (United States Court of Appeals, Fifth Circuit20 June 1988).