Gregory Aharonian has struck again. A well-known IP consultant and author of a widely read newsletter on patents, “PatNews,” Aharonian has been attacking the legitimacy of many software and business-method patents for years. Now this IP gadfly is taking aim at copyrights.

On Dec. 7, 2004, Aharonian, who is developing a proprietary database program, filed a declaratory judgment action asking the San Francisco federal court to declare software copyrights unconstitutional. He believes it’s difficult, if not impossible, to determine which aspects of a software program a copyright protects, pointing out that he could be prosecuted for criminal copyright infringement for building his database program.

Many experts believe it will be tough for Aharonian to win. But if he does succeed in killing software copyrights, how much difference would it make to businesses? Could companies turn to an alternative form of IP protection?

More and more companies are seeking patents on their software. In the 10 years from 1993 to 2003, the number of software patents granted annually shot up approximately 400 percent, from 4,938 to 19,638. And this despite the obvious disadvantages of patent protection: it’s difficult to obtain, costly and lasts for only 20 years from filing–approximately one-tenth of the period a copyright provides. Nonetheless, patents have become a crucial method for protecting rights in software.

“Software patents are becoming a normal part of doing business,” says Mark Radcliffe, an IP law expert in the Palo Alto office of DLA Piper Rudnick Gray Cary. “If you are not thinking about getting these patents, you are putting yourself at risk.”

Getting It Down Pat

Companies have traditionally relied on copyrights to protect their IP software from infringement. But the extent of such protection is limited.

One major reason is that the copyright statute doesn’t protect any “idea, procedure, process, system [or] method of operation.” The courts have interpreted this provision of 17 U.S.C. ?? 1/2 102(b) to exclude protection for all utilitarian aspects of software.

Suppose, for instance, your company developed an original database program. A copyright wouldn’t protect the software’s main attraction–the code that allows the program to provide useful functions. It only would protect the nonutilitarian aspects of a program, such as the unique design of the program icons. So a competitor could reverse engineer your program, copy the code for all the utilitarian features, add some new code that affects the aesthetic look and feel of the program–and voil?? 1/2 , no infringement.

A related shortcoming of copyright protection is that, since the Supreme Court’s 1879 seminal decision in Baker v. Selden, the courts have repeatedly declared that copyright protects only an author’s “expression” of an idea, not the idea itself. For instance, while copyright would forbid someone from making a mural that is almost identical to Picasso’s Guernica, the law wouldn’t prevent a painter from creating a mural that uses expressionistic techniques to show the horrors of war.

Unfortunately, it is extremely difficult to apply these two restrictions of copyright to software. Which parts of a program are utilitarian? Which parts are protectable expression?

In his suit, Aharonian claims there’s no good way to draw these distinctions, and that the courts have been all over the map in determining which aspects of software are protected. Thus, there is no way for him to know if his new business product will run afoul of copyright law.

Aharonian’s motivation for filing suit is personal. He is creating a database system that analyzes the quality of software patents and tries to distinguish idea from expression in software. This would require his database to contain all or part of many computer programs. But because the scope of software copyright is so vague, Aharonian can’t determine which portions of pre-existing software he can legally copy into the database. Should he guess wrong, he could be criminally prosecuted for copyright infringement.

This threat of criminal prosecution, he claims, violates the due process clause of the Constitution. The Supreme Court in 1999 ruled in City of Chicago v. Morales that “a law fails to meet the requirements of the Due Process Clause if it is so vague and standardless that it leaves the public uncertain as to the conduct it prohibits.” Thus, Aharonian has asked the district court to declare software copyrights unconstitutional.

Patently Obvious

Most likely, the courts won’t be too receptive to Aharonian’s argument, but it does raise some real issues about software copyrights.

“It is hard to tease out what is protectable,” says Walter Scott, a partner in the IP practice group at Alston & Bird. “With software, it is hard to say what is an idea and what is the expression of an idea. This problem is compounded because a good computer program is like a cog in a machine that makes something–so it starts to look like a ‘process’ that is excluded from copyright.”

As a result, companies have been searching for better ways to protect software. And they are beginning to turn to patents.

“Until about 15 years ago, people didn’t believe software could be patented,” Radcliffe says. “Five years ago, it was still controversial. Now, most software companies are getting patents for offensive and defensive purposes.”

Obtaining such protection isn’t easy or cheap. Prosecuting a patent application can take months or even years. And the cost for an average software patent runs between $10,000 and $20,000. By contrast, registering a copyright can take less than a day and can cost as little as $530 dollars in registration fees plus legal expenses.

A patent, however, can protect the key utilitarian features of the software–the underlying functions it performs, as well as the novel and useful features in its interface. These are exactly the elements that copyright can’t protect.

A patent also offers a much greater degree of protection. While a copyright only protects against unauthorized copying, a patent prohibits competitors from making substantially similar products. A patent protects the idea and any implementation of the idea. “It is much more difficult to reverse engineer around it,” Radcliffe says.

Yet software patents will continue to remain the exception, not the rule, according to Steven Lundberg, an attorney in Minneapolis-based Schwegman, Lundberg, Woessner & Kluth and the lead author of the book, “Electronic and Software Patents: Law and Practice.”

“Ninety-five percent of code wouldn’t define a patentable process,” he says. “Any given program might have a few patentable inventions, but you couldn’t patent the literal code sequences.”

Without copyright protection, Lundberg concludes, “the vast majority of programs would be exposed to ready piracy.”

The Long Run

Not all experts think software copyrights are so important. If these copyrights suddenly vanished, most companies wouldn’t care, according to Scott, because the businesses would use contracts to protect their rights in software. End-user license agreements (which usually require users to click “OK” to use the program) already set limits on copying and reverse engineering software programs, and these agreements would still be enforced, regardless of what happened in Aharonian’s suit.

Aharonian will have a very tough time winning this legal battle, according to most experts. “He has to overcome 20 years of court precedents that have held that software is copyrightable,” Radcliffe says.

For the foreseeable future companies can use a variety of methods to protect their rights in software–and courts will have to keep struggling to determine what copyrights actually protect.

“It is difficult … to distinguish between ideas and expression in software,” says Michael Sandonato, an IP attorney in the New York office of Fitzpatrick, Cella, Harper, and Scinto, “but many things in law are difficult.”