Why Software Startups Need to Register Their Copyrights Now

When it comes to building an IP portfolio, patents aren’t the only–or even necessarily the most important–ingredient.

(c) flickr Irish Typepad

flickr/Irish Typepad

I am consistently surprised by the number of software startups who spend their last nickel on patent applications, but never even consider dropping $35 to register a copyright. The fact is that copyright registration offers many of the same advantages as patents–and in some respects are even more powerful–but for a whole lot less money.

Patents Are Great, If You Can Afford Them

Patents certainly have their advantages. For example, they protect an invention (such as a method of accomplishing a particular task) without the inventor having to have actually completed or marketed the invention. Instead, in essence, you just need to be able to describe how you could do it. This is one reason big tech companies rack up treasure chests full of patents without having any intention of bringing them to market. And if you prove infringement, you might be able to force the infringer to pay you a royalty.

These are powerful tools. and I don’t mean to knock them. By all means, if you can get a patent, you should–especially now that the United States has joined the rest of the world in awarding patent registrations to the first inventor to file for one, rather than to the first person to actually invent the claimed invention.

But the patent system certainly has its drawbacks, too.  Chief among them is the expense. Applying for a patent is no joke. To be done right, it requires an attorney deeply versed in the often-byzantine lingo and procedure of the patent world. A skilled artist and a background search of the prior art are important, too. This usually translates into several thousand dollars per application–more if your invention is particularly complex, or you’re making lots of claims.

For this reason, too many of the eager start-up entrepreneurs think about “IP” as something beyond their reach.

Add to that the fact that the courts keep whittling down the availability of software patents. The latest Supreme Court decision on the topic–Alice Corporation Pty. Ltd. v. CLS Bank International, issued on June 19, 2014–held unanimously that you can’t patent a method of dong something just because you use software to do it. Court watchers had feared (as they have several times before) that this might be the time that the court eliminated software patents altogether.

Copyrights: Cost-Effective and Powerful

flickr / maria elena

flickr / maria elena

Contrast that with copyrights. The application consists of two sides of a single piece of paper. The application fee is $35 if you file online. (Yes, that’s three-five, a two-digit number, as in the cost of the lunch you’ll eat while searching for a patent attorney). There is no substantive review process by the Copyright Office; if you fill in all the lines and don’t submit something completely absurd, it will rubber-stamp your application and issue you a registration.

Sure, the scope of a copyright is different than a patent. It protects only “creative expression,” which is sometimes an odd fit for software. But courts have been clear for decades that software code merits copyright protection if it is original to the author. That won’t protect ideas, program logic, algorithms, systems, methods, concepts or layouts. But it will protect original subroutines and other code, even if they perform a similar function as other programs. In the recent Oracle v. Google decision, the Federal Circuit even recently extended copyright protection to APIs, opening up a potentially expansive range of protection.

Does your program include portions of open source or other third party code? No problem. You can register the entire program and simply disclaim the third-party portions in the application, without having to undertake a detailed separation of the two. Easy peasy.

Copyrights are also “fuzzier” than patents, in that their application is more subjective. They protect against such straightforward actions as reproducing, distributing, or performing your work, but they also prohibit the creation of “derivative works” that build upon your creative expression. In the case of software, copyright protection also extends to all media in which the program may be expressed, including object code and visual displays.

Get Those Copyrights Registered ASAP

So what does a copyright registration get you? Oh, just the potential of getting (1) either your actual damages or statutory damages of up to $30,000 per infringed work (or up to $150,000 for bad-faith infringement), without having to prove any actual damages from the infringement; (2) a permanent injunction against the infringer; and (3) an award of your attorneys’ fees.  Not too shabby.

But these options are only available to you if your work was registered before the infringement began. Although it’s possible to register your copyright after it’s published and infringed, that only enables you to get, at most, your actual damages (which can be difficult to prove, especially for a program with established market) and an injunction. No statutory damages. No attorneys’ fees.

So what are you waiting for? In the amount of time it took you to read this blog post, you could’ve filled out your copyright application, reserving for yourself some powerful pieces of leverage for protecting your valuable IP. Regardless of your approach to patenting your work, remember that copyrights are another cost-effective way for building and protecting your IP portfolio.