Remote Control: How Remote Access Technologies Can Ensure Compliance with a Recent Ninth Circuit Decision
FindLawBy Kevin Fayle
The Ninth Circuit recently held that the Los Angeles Sheriff's Department violated a software vendor's copyright by installing licensed software on more computers than the Sheriff's Department had purchased licenses for, even though the use of the software on those computers was restricted to the correct number of users. The case, Wall Data Inc. v. Los Angeles Cty. Sheriff's Dep't has important implications for firms that purchase large numbers of software licenses. This article will briefly examine the court's reasoning behind it's holding, particularly its rejection of the Sheriff's fair use defense, and then discuss ways that companies and firms can flexibly utilize software without violating copyright laws.
The Facts of the Case
The Department purchased 3,663 licenses to Wall Data's RUMBA software, which allows users on one operating system to open files stored on computers with different operating systems. Rather than installing the software to individual computers one-at-a-time, the Department opted to make a hard disc image from one computer containing the software, then install that image on nearly every computer in one of the Department's new facilities. This copied the software to 6,007 computers altogether.
The Department chose to use this method for two reasons: first, the extra time needed to copy the software to each individual computer would delay the opening of the new facility; second, the Department did not know where the employees who needed access to the software would end up working.
In an attempt to comply with the software license, the Department password-protected the computers with a system that restricted access to the RUMBA software to only those users for whom the Department had purchased licenses. The Department claimed that the number of users with access to the software corresponded to the number of licenses it had purchased at all times.
Wall Data eventually discovered the Department's practice and claimed that the Department had violated the software licenses by copying the software onto more machines than the Department had purchased licenses for. The parties attempted to settle out of court, but eventually Wall Data filed suit. The only claim that made it to trial, and the only issue raised on appeal, was whether the Sheriff's Department had infringed Wall Data's copyright by duplicating the software more than the software license allowed.
The Holdings: Unfair and Unessential Duplication
The Sheriff's Department claimed two affirmative defenses: first, the Department argued that its practice constituted a fair use under 17 U.S.C. § 107; second, the Department made the case that the hard drive imaging process was an essential step in the software installation under 17 U.S.C. § 117(a)(l). The court rejected both arguments in turn.
Fair Use
In order to determine whether a use qualifies as a fair use under 17 U.S.C. § 107, courts will examine four factors: 1) the purpose and character of the allegedly infringing use; 2) the nature of the copyrighted work; 3) the amount and substantiality of the portion used; and 4) the effect of the use upon the potential market.The Purpose and Character
Courts will examine whether the use is transformative in nature in order to determine whether it constitutes a fair use. If the use is transformative, it weighs heavily towards a finding of a fair use. Here, the court held that the Department's use of the software was not transformative since it involved a complete and total reproduction of the data with no additions or modifications. The court also determined that the use was commercial since the Department's copying allowed it to bypass the purchase of additional licenses to obtain flexibility in how its employees used the software. Thus, the purpose and character of the use did not support its classification as a fair use according to the Ninth Circuit.
The Nature of the Work
Creative works receive the most protection under copyright law. While not entirely creative, computer software receives protection under copyright law because of the 1980 amendments to the Copyright Act. Plus, Wall Data presented incontrovertible evidence that the development of the program took years and several million dollars to accomplish. These two factors combined to undermine the Department's fair use argument as far as the nature of the work was concerned.
The Portion Used
The Sheriff's Department copied the entire program. While this doesn't necessarily preclude fair use, it does weigh heavily against it.
The Effect on the Market
Finally, the court considered the effect that the Department's installation procedures had on the market. The Sheriff's Department argued that it was only trying to use the software efficiently, and that it would not have bought more copies of the software in order to obtain the same flexibility had it known that it's installation method violated the software license.
The court countered that this argument would force Wall Data to rely on the Department's word of honor that it would not allow additional users to access the secured copies. The Department's "sub-licensing" system, as the court called it, made it nearly impossible for Wall Data to track or monitor infringement, since it could never be sure how many people the Department was allowing to access the software at any given moment. This ease of infringement suggested to the court that the use was not fair.
The Essential Step Defense
An essential step defense exists for "owners" of software programs when a copy of the program is an “essential step in the utilization of the computer program in connection with the [computer, and] is used in no other manner.” This covers such activities as making a temporary copy of the program into a computer's random access memory in order to run the program, or making an archival copy of the program so long as the copy is destroyed once the owner no longer has legal rights to the software.
Here, the Ninth Circuit determined that the Department was not an "owner" of the software, but simply a licensee. Since Wall Data provided the software subject to severe restrictions, the court concluded that the Department did not own the software for purposes of the essential step defense. Functionally, this reasoning basically writes the defense out of the statute. Since every piece of software is sold to consumers and enterprises subject to license agreements, it's difficult to see how anyone in a real world situation could ever be an owner such that they qualify for the defense.
In this case, however, it didn't matter one way or the other. The court went on to say that, even if it had owned the software, the Department could not claim the defense since the copying of the program was not an essential step in its installation. The Department's method was more a matter of convenience that necessity, and the court concluded that the essential step defense did not apply to such situations.
The New Challenge: Flexibility Without Infringement
In the wake of this ruling, companies and firms should examine the way they utilize licensed software to ensure that they do not make more copies than allowed under the licenses.
The easiest way for firms to ensure that they do not over-install programs is to incorporate a remote access program into their computing routines. By using remote computing schemes, companies can install a single version of the licensed software at a central location. They can then allow users to access the software according to the number of licenses they have. This solves the copyright infringement issues, and also ensures that access to the program is limited to the exact number of users for which the company has purchased licenses.
If the Sheriff's Department had utilized a remote computing scheme, it would not have had to install a new copy of the program on each computer. Instead, the Department could have given each new employee that needed to use the RUMBA software access to the central computer that contained the program. This approach would have maintained the flexibility that the Department needed, while preserving Wall Data's copyright and rights under the software license.
There are several commercial options available, as well as some quality open-source, cross-platform programs that will satisfy the needs of most organizations. The remainder of this article will examine the most popular program in each category, then examine a built-in tool that comes with Microsoft Windows.
Citrix
Citrix Systems, Inc. creates powerful software for on-demand access to applications across a network. The Citrix Access Platform combines a number of Citrix products to create a full access suite for enterprises. The programs allow access by employees in any location, whether local, remote or mobile. Over 180,000 organizations use Citrix products to manage their access needs, and the company has assisted organizations of all varieties and sizes.
RealVNC
VNC stands for Virtual Network Computing, and it allows one computer to control another computer from anywhere on the Internet. Fortune 500 companies use VNC to remotely access workstations and servers, and for "hot desking" within their enterprises. RealVNC is a software application created by the developers of VNC technology, and it is flexible and scalable to fit the needs of any organization.
Remote Desktop Computing
Microsoft also bundles a remote access program into its Windows operating system. Called Remote Desktop Computing, this feature allows users to access a remote computer with the proper credentials. Users have unique profiles, and the ability to do anything on the remote computer that the administrator has given permissions for. This is a powerful native application for Windows, and can dramatically improve mobility, flexibility and productivity.
Conclusion
As with all remote computing, these solutions will require a thorough security analysis to ensure that no confidential or privileged data could be compromised. As a means to comply with the holding in Wall Data, however, remote computing represents a powerful tool that will both meet the terms of software licenses and comply with copyright law.
Hardware
© 2006 FindLaw
