In August 2012, after a year of contentious courtroom battles, a San Jose, CA judge handed down a verdict that had a ripple effect through the smartphone and technological industries. In the case, which was one of dozens involving software manufacturers and telecommunications companies, Apple was awarded $1.05 billion from Samsung after a jury determined that Samsung had copied Apple’s designs and ideas for the iPhone. While most of the damages were overturned in March 2013, and the two giants seem to be on their way to settling their disagreements, the effect of the Apple v. Samsung case is clear: within the technology world, piracy and copyright or patent infringement is big business.
Solutions Are No Longer in the Box
From the earliest days of computing, software piracy and intellectual property issues have been a concern. Software developers have lost billions of dollars thanks to users making unauthorized copies of software to give to friends - or sell on the black market - while hackers have used reverse engineering to develop their own versions of popular software. In fact, a 2009 survey by the Business Software Alliance estimated that more than 40 percent of all installed software is illegal and that software developers lose nearly $60 billion in revenue each year due to illegal installations and copies.
Compounding the problem is that in many cases, popular software programs are no longer sold separately and installed using an authentication key that helps prevent piracy or copying. These programs only allow users to access a limited number of features until the appropriate license key code is entered.
In many cases these days, software is not sold separately but is instead embedded within the device’s hardware, such as the Android or Apple operating systems on smartphones and tablets. When software is embedded in devices without the proper protections, that intellectual property is vulnerable to misuse, theft, tampering or copying, leading to potential losses to the developer.
However, protecting embedded software isn’t just about keeping hackers away and ensuring that a low-rate - or better - version of your software doesn’t pop up. Embedded software licensing ensures that only authorized users have access to the software, that only the software functions that have been paid for are accessible and that your intellectual property within the software - code and other aspects of the software design - are not vulnerable to theft, tampering or reverse-engineering.
The right software licensing protocols allow software developers to effectively monetize their designs and ensure that they receive the proper payment for the all of the features of the program. In the past, when a customer purchased software, they could choose a version based on the functionality they needed. In general, if they wanted top-of-the-line features and functions, they had to purchase the top level software package, at top-level prices.
Embedded software has changed that model. When customers purchase a device with software already installed, they receive the entire version of the software, which may include the most advanced features. Developers looking to make the most money from their software have to remember that devices must also be affordable for their software to truly be useful. Embedded software licensing is a solution, as users can customize the software license according to their needs, paying for the extra features they need or want and restricting access to the features that they don’t need. Customers also have a better experience with the software; not only can they save money by not paying for features they don’t need, but they aren’t encumbered with unnecessary functions.
Intellectual property protection is a serious issue, and failing to properly license embedded software products could spell disaster for your company. When your code, algorithms or other proprietary information falls into the wrong hands your profits and brand identity are at stake. As the Apple/Samsung case shows, proving damages and getting restitution is no easy feat. Employing a robust software-licensing protocol and taking steps to manage user licensing of your products can help prevent the revenue losses that come from piracy and copyright or patent infringement and keep your business on firm footing.