Engine Files Comments on Embedded Software and Copyright Law

Copyright law has always had a complicated relationship with software. Supreme Court Justice Stephen Breyer presaged the difficulties in applying copyright law to software in a seminal law review article in 1970, and despite a few legislative revisions of copyright law since then, many of those same inherent difficulties persist. In the past year, these problems received public attention in a few high profile news stories, including John Deere’s claim that tractor purchasers don’t actually “own” the tractors they buy. Instead, purchasers merely receive an implied license to operate the vehicle and the software it contains. To just about any rational person, this seems like a Kafka-esque absurdity that only the most creative lawyer could dream up. But as more and more of our everyday products become computerized and connected, it’s likely that we’ll see many more examples of how copyright laws meant to encourage creative production can produce bizarre outcomes when applied to products containing embedded software.

Spurred in large part by the John Deere story, the Copyright Office opened a public inquiry seeking commentary on the legal and policy challenges related to copyright’s application to software embedded in everyday products. Last week, Engine filed comments with the Copyright Office identifying the many challenges to startup innovation that arise from this application. Written by a crack team of legal students at Stanford Law School’s Juelsgaard Intellectual Property and Innovation Clinic under the guidance of Phil Malone and Jef Pearlman, the comments examine difficult questions surrounding the appropriate scope of software copyrights, focusing on how granting copyright protection to essentially functional code can hurt startup competition by undermining interoperability between platforms and services, and how limiting a user’s right to modify software in devices they own poses a range of threats to innovation and security.

The innovation-stifling threat of overbroad copyright protection for software is perhaps best encapsulated in the ongoing litigation between Google and Oracle over the copyrightability of Application Programming Interfaces (APIs) that facilitate communication between computer programs. As the comments explain, “APIs have been and are indispensable to interoperability in standalone software platforms and products and will be equally indispensable to software-enabled consumer devices,” such that allowing companies to assert copyrights over APIs to will create “incentives for incumbents in almost any industry to misuse copyright law to try to exclude new entrants and emerging competition.” Particularly in the emerging Internet of Things, where startups will be well-positioned to build apps and services that interact with the innumerable connected devices that will soon be a part of everyday life, protecting interoperability is paramount to encouraging innovation and competition. This competition will foster both enormous economic growth and consumer value, so it’s critical that we rein in rules that give incumbents the power to use ill-fitting copyright laws to exclude competitors.

The comments make a compelling case for sensible copyright rules in the age of embedded software, and we at Engine are incredibly grateful for the fantastic work of the Stanford team. Read the full submission here.

More Companies Comment on Net Neutrality

In our continuing series of filings with the FCC and their open docket on Net Neutrality rules, we have a series of comments this week from a broad range of companies and organizations, again focusing on one critical viewpoint: that the Chairman of the FCC has within his power the ability to reclassify the Internet as a utility under Title II, and that he should do so. From the web, Opera Software is one of the world’s leading web browsers with more than 350 million users worldwide, and comments have been written by Chief Technology Officer Haakon Wium Lie from their head office in Oslo, Norway in support of reclassification with a global perspective. 

Opera Software services many users in sub-optimal situations, mostly those with poor connectivity or lower-end devices, which is first among many reasons that in a marketplace designed for ease of switching with only marginal cost, speed is a key factor in retaining consumers. And with one of Opera Software’s key differentiators being their proprietary compression service, Lie points out they would “have to” secure fast lane agreements under the Chairman’s proposal in order to stay effective for their users. In a sense, Opera Software provides a service on the margin for those on the margins of our society, and the reason they do so is that the Internet is the great equalizer. Even those without the latest and most powerful devices, or the best connectivity and bandwidth, can still explore the vast recesses of information and connect with people around the globe.

And, as Lie points out, if other countries copy the FCC’s current proposal, we run the risk of continuing to chip away, not just at the innovative Internet which has brought us so many products and services to enrich our life, but the very fabric of the community built online by restricting access to those who may not be able to afford to connect. In that “undue bureaucratic burden” says Lie, we find the greatest cause for alarm, all of which can be averted, in his words, by reclassifying the Internet as a utility under Title II of the Telecommunications Act.

We also hear from organizations in the global health space, including the Global Healthy Living Foundation, which creates disease-specific communities and networks to help many facing chronic illness get the support they need. And from the interactive world, Heyzap and TouchCast create new experiences online. Without rules that keep the Internet open for innovation, their businesses won’t reach their users.

In all of these cases, especially in the delivery of high-bandwidth content like YouTube videos or other interactive devices, user experience could be hamstrung to the point of dysfunction without clear rules keeping the Internet open for innovation. “If we aren’t in a fast lane, by definition we are in a slow lane,” says GHLF. According to Heyzap, “If we had pay a special fee to each phone company to get the same treatment as our competitors, we would have to slow our growth and our hiring,” and that even if litigation under commercial reasonableness standard were available, it wouldn’t help them with ISPs. And TouchCast points out, “When someone views a TouchCast, they not only stream video, but also download web pages and data from the Internet all at the same time. Any perceived delays in video streaming rates or the presentation of any other information within a TouchCast would result in high consumer abandonment rates.”

We have links to the full comments comments and some key quotes below. If, like any of these organizations, your business and customers will be adversely affected by the Chairman’s proposal, sign up with us at startupsfornetneutrality.org. And if you can file a comment, let us know at comms@engine.is.

---

Opera Software

“In the hyper-competitive market for web browsers, speed is key. Consumers will switch browsers to experience the web marginally. Competition would suffer if some browser vendors have fast lane arrangements, or if the non-fast lanes do not provide sufficient capacity. Under the Chairman’s proposal, in order to have a viable web compression service, we would have to secure agreements for a fast lane. “

“Our worst-case scenario is that other countries copy FCC’s proposal. The United States is not only influential with new technological innovations, but also Internet policy. Opera Software would never be able to provide web companies, including U.S. companies, with access to 350M end users if we had to negotiate Internet fast lane agreements with all network operators globally. If other countries follow the logic of the FCC proposal, we and other Internet companies would have to prioritize countries and regions.”

Global Healthy Living Foundation

“We are the first source of health-related news for thousands of people. When several contaminated vials of methotrexate (an arthritis medication) were recalled, we were one of the first organizations to reach out to the people in our community. Within two hours of disseminating the recall message through the Internet, we received two replies from members who were scheduled to take the contaminated medicine that afternoon. Our ability to quickly and efficiently reach a large number of people very likely saved lives. If we had slow or patchy service, we likely would have had a much smaller network that relied on us less often for information.”

Heyzap

“We could not have become the company we are today under the rules proposed by the FCC. We provide real-time recommendations of apps based on data gathered from users. This requires gathering a lot of data, bringing it to our computers, processing it, and sending recommendations and ads back to our users—all in fractions of a second. We need to process a lot of data, quickly. Any limitations in speed or consistency of our service would be noticeable to our users.

Meanwhile, under the Chairman’s proposed rules, broadband providers have strong incentives to make the differences between their standard and premium access options noticeable. If there were no noticeable differences, then no edge provider would feel the need to pay for premium access.”

TouchCast

“We are hoping to change the way people watch videos and TV. Established broadcast companies are wealthy and powerful, and they could easily forge exclusive agreements with broadband providers and lock us from those providers’ networks. While the Chairman’s proposal prevents NBC from forming an exclusive agreement with its affiliate, Comcast, it does nothing to prevent NBC from forming the same agreement with Verizon, or CBS with both Verizon and Comcast. These exclusive agreements could shut us out of the game entirely.”

Open Letter for Patent Reform

Julie Samuels, Engine's Executive Director, penned a letter to Senator Leahy and the Senate Judiciary Committee to express why startups need patent reform, and how the delay is already impacting businesses and the economy.

Letter From Startups to FCC on Net Neutrality

Yesterday, Engine and The Open Technology Institute at the New America Foundation filed this letter, signed by over 150 Internet companies, calling for the FCC to rethink the proposed rules and instead recommit to protecting and preserving an open, equal internet.

Comments to the FCC on Net Neutrality

In response to proposed rules for the open Internet released by Chairman Wheeler, we provided these comments.

Startup Investors for Patent Reform

To aid the movement of comprehensive patent reform, we organized a letter to Congress signed by forty prominent venture capitalists and angel investors.