A copyright protects original works of authorship fixed in any tangible medium. That is, any sound recording, literary, textual (including software code), musical, dramatic, graphical, audiovisual or architectural work, once created and fixed (e.g., placed on paper or saved onto a computer storage medium), receives automatic worldwide protection.
Thus, the more artistic elements of a new product — and software development is, at least in part, an art form — may be covered by copyright. An author may claim copyright protection by using the “c in the circle” symbol, ©, followed by the date and the name of the author (either an individual or legal entity).
For evidentiary and other advantages, however, it is suggested that such works (especially released, distributed versions of software) be forwarded to the U.S. Copyright Office, which is a division of the Library of Congress) for registration. It is important to understand that copyrights, unlike patents, protect the expression of an idea and not the idea itself.
A copyright grants the copyright holder the exclusive right to control the reproduction of the work, preparation of derivative works based upon the copyrighted work (e.g., preparing a new localized version of an existing copyrighted software program), distribution or digital transmission of copies, public performances and displays of the work.
A copyright owner can directly exploit any of these exclusive rights license third parties to do so in exchange for royalty payments. The copyright owner may also sue, in federal court, any party who has not received permission to exercise these exclusive rights (i.e., an “infringer”).
The federal court, upon finding infringement, may award monetary damages, order an injunction and/or grant attorneys’ fees and costs. There are also federal criminal penalties for certain forms of copyright infringement (e.g., “bootlegging” copyrighted music or software having more than a certain value).
The copyright registration process for most works is not nearly as complex as the patent application process, and much cheaper. However, if a firm chooses to pursue IP rights, the overriding goal should be to find patent-worthy elements in what has been created, and then to surround these elements with copyrights and other IP rights.
Patents and copyrights together comprise a very secure network of protection for a product or line of products. That is, together they can carve out a niche of innovation for your company that protects an entire line of products.
But, in using both forms of IP rights, it is important to realize that in general, patents are a better focus for a small company than copyrights, especially from the perspective of strategy.
First, due to their more extensive and rigorous application process, patents give your firm more credibility. This translates into better positioning. Second, the legal machinery surrounding patents typically lead to significantly greater damage awards against infringers.
With patents in hand, this well-known fact force larger entities to pay attention to you. Third, while they cost more, they are much easier to trade and manage as an asset, which means greater flexibility in how you monetize your IP *.
Lastly, copyrights can be more difficult to manage than patents as the scope of copyright protection can vary widely from work to work. The only real advantages of copyright over patent are simplicity and cost — copyrights are granted virtually for free.
* Mikko Valimaki, Strategic Use of Intellectual Property Rights in Digital Economy — Case of Software Markets
