Ownership of Software Rights

There is an interesting fight currently at the US Patent Office that involves all of us in the telecom industry. The argument is over the right of ownership of the software that comes along these days with almost any type of electronics. The particular fight is between John Deere and tractor owners, but the fight is a precedent for similar software anywhere.

John Deere is arguing that, while a farmer may buy one of their expensive tractors, John Deere still owns the software that operates the tractor. When a farmer buys a tractor they must agree to the terms of the software license, just like we all agree with similar licenses and terms of service all of the time. The John Deere software license isn’t unusual, but what irks farmers is that it requires them to use John Deere authorized maintenance and parts for the term of the software license (which is seemingly forever).

The fight came to a head when some farmers experienced problems with tractors during harvest season and were unable to get authorized repair in a timely manner. Being resourceful they found alternatives and there is now a small black market for software that can replace or patch the John Deere software. But John Deere is attacking farmers that use alternate software saying they are violating the DMCA (Digital Millennium Copyright Act) which prohibits the bypassing of copyrighted locks on content. They argue that farmers have no right to open or modify the software on the tractors which remains the property of John Deere. The Patent Office is siding with John Deere.

This is not a unique fight for farmers and the owners of many electronics companies are taking the same approach. For example all of the major car manufacturers except Tesla have taken the same position. Apple has long taken this position with its iPhone.

So how does this impact the telecom industry? First, it seems like most sophisticated electronics we buy these days come with a separate software license agreement that must be executed as part of a purchase. So manufacturers of most of the gear you buy still think they own the proprietary software that runs your equipment. And many of them charge you yearly after buying electronics to ‘maintain’ that software. In our industry this is a huge high margin business for the manufacturers because telcos and ISPs get almost nothing in return for these annual software license fees.

I don’t think I have a client who isn’t still operating some older electronics. This may be older Cisco routers that keep chugging along, an old voice switch, or even something major like the electronics operating an entire FTTH network. It’s normal in the telecom industry for manufacturers to stop supporting most electronics within 7 to 10 years of its initial release. But unlike twenty years ago when a lot of electronics didn’t last more then the same 7 – 10 years, the use of integrated chips means that electronics are working a lot longer.

And therein lies the dilemma. Once a vendor stops supporting a technology they literally wash their hands of it – they no longer issue software updates, they stop stocking spare parts. They do everything in their power to get you to upgrade to something newer, even though the older gear might still be working reliably.

But if a telco or ISP makes any tweaks to this older equipment to keep it working – something many ISPs are notorious for – then theoretically anybody doing that has broken the law under the DMCA and could be subject to a fine up to $500,000 and a year in jail, for a first offense.

Of course, we all face this same dilemma at home. Almost everything electronic these days comes with proprietary software and the manufacturers of your PCs, tablets, smartphones, personal assistants, security systems, IoT gear and almost all new appliances probably think that they own the software in your device. And that raises the huge question of what it means these days to buy something, if you don’t really fully own it.

I know many farmers and I think John Deere is making a huge mistake. If another tractor company like Kubota or Massey Ferguson declares that they don’t maintain rights to the software then John Deere could see its market dry up quickly. There is also now a booming market in refurbished farm equipment that pre-dates proprietary software. But this might be a losing battle when almost everything we buy includes software. It’s going to be interesting to see how both the courts and the court of public opinion handle this.

Another Hassle for ISPs – Policing Pirated Music

Louis_Armstrong_restored_(color_version)You probably remember the attempts of the Recording Industry Association of America (RIAA) last decade when they tried to stop file sharing of music by randomly suing those who shared music files on line. They would go after college students and others and sue them for $750 to $12,000 per song shared and made the cases public to scare other people from sharing music. They stopped this practice in 2008 and instead went after ISPS, asking them to deny service to people who violated their copyrights more than three times.

But now the issue is back in play and ISPs are going to find themselves routinely asked to chase file sharers. Some of the music industry has made a deal with a new company called Rightscorp which is now chasing file sharers instead of the RIAA. Rightscorp asks file sharers to settle for $20 per song violation instead of being sued, and any collected proceeds are shared 50/50 with the recording labels like BMG and Warner Brothers.

The company started in 2012. In 2013 they collected around $750,000 in settlements, but they have a technology that could let them pursue these violations by the millions. And that is where the new hassle for ISPs will come in.

Rightscorp monitors file uploads and downloads at file sharing sites like BitTorrent. They are capturing the IP address of people sharing songs illegally. While they don’t know the identity of the violator they know the ISP involved, and they are asking ISPs to forward their demands for settlements on to violators.

Rightscorp is relying on the Digital Millennium Copyright Act (DMCA) which they believe requires ISPs to forward on their notices. They claim to be working now with 70 ISPs, but there are many ISPs who either do not think they are required to pass on settlement offers, or who pass on only an abbreviated version of the Rightscorp demand for payment. But one would expect with the technology they are using that they are going to be asking every ISP to help them.

There are existing alternatives to what Rightscorp is doing. There is already a process under development among ISPs that is creating a ‘six strike’ system that will deny Internet access to people who violate copy rights multiple times. But Rightscorp and others believe that this system will not have teeth since the ISPS are not heavily invested in kicking out paying customers.

Rightscorp has developed a technology that lets them track file sharing across multiple IP addresses. This is needed since ISPs issue a new IP address to a user any time they initiate a new connection to their server. Rightcorp believes that their audit trail showing multiple violations gives them the leverage to get ISPs to help them. Certainly that is the kind of evidence that could be used in court against an ISP who refuses to help them. They have not sued an ISP yet, but the threat is there. And obviously some ISPs are helping them since they have collected so far from over 70,000 violators.

As an ISP you need to decide what to do when you get one of these demands from Rightscorp. Do you do nothing, do you pass on the full demand to your customers or do you somehow edit the demand before forwarding it? Do you share your customer’s identity with Rightscorp? These are not easy questions to answer. But one thing is for sure and this is just one more of the little hassles that keep getting loaded onto being an ISP today.