SCIENCE / TECHNOLOGY : Networking Creates a Legal Thicket for Software Publishers

The explosion of personal computer networks is creating headaches for software publishers who license copies of their programs to large companies, and it is forcing them to come to grips with the legal implications of technological advance.

“The question is, how does a software publisher get a return on a product used on a network,” said Mark F. Radcliffe, a patent attorney in Palo Alto.

That was one of the topics discussed at the Computer Law Assn.’s Pacific Rim Computer Law Conference in Newport Beach last week. Some 125 computer law experts from around the globe attended the event.

Software publishers have taken different approaches to enforcing copyrights on software used by large numbers of people in big businesses, and Radcliffe said the result has been confusion in the marketplace.

R. Duff Thompson, general counsel for Word Perfect Corp. in Orem, Utah, said only 2% of the company’s programs were used on computer networks in 1982 but that figure is expected to rise to 70% by 1995.

Thompson said a typical company might have 100 computers, of which 80 would be capable of using the Word Perfect software, 70 might have an actual copy of the program stored on a hard disk drive, but only 60 could use the software simultaneously.

Companies such as Seattle-based Aldus Corp. argue that such a company should have to pay for licenses for 60 copies of its program based on the number of employees who could sign on at once. But Thompson said Word Perfect’s policy in such a scheme would be to charge for 80 licenses, based on the numbers of machines that could quickly load the software and use it.

“Word Perfect recognizes reasonable minds can differ on this solution,” Thompson said. “In the final analysis, our customers will drive the solution, as will technology changes.”

Rainbow Technologies Inc., an Irvine maker of computer security systems, has one technological innovation that can be used to help software vendors enforce a different kind of licensing scheme, said Peter M. Craig, vice president of marketing.

In the next six months, the company will begin shipping its NetSentinel network management product, Craig said. The system can be used to enforce licensing agreements with big network operators because it can determine how many employees are using a given software program.

In addition, if a person isn’t authorized by license to use the software, the system will deny them access. Instead of relying upon the company to update its license payments as it adds new users and equipment to the system, the software vendor could automatically check to see if the company’s network is in compliance with licensing policies that could be based on the amount the product is used, Craig said.