Ben Baker, 44/76 SEA vs PKWare - What's It About? I suppose most of you know by now know t

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Ben Baker, 44/76 SEA vs PKWare -- What's It About? I suppose most of you know by now know that System Enhance- ment Associates (SEA) is suing Phil Katz and PKWare. There has bee a lot of comment (I hesitate to call it discussion) on the suit in conferences in FidoNet and the commercial services. Most of what I have read gave me the impression that the writer thought about it for at least 30 milliseconds, then flamed! So what's it really about? First, a little history. In CP/M days, there were a number of utilities for compressing and decompressing files, based on the Huffman coding technique. The most popular were called SQ and USQ, but there were several variations. There was at least one utility called LIB, which did not do compression (remember the total memory space was only 64K, and CP/M used at least 4K of that), but it did collect files, "squeezed" or otherwise, into a single file so that they could be treated as a unit. When MS-DOS came along, many of the old CP/M utilities were ported. Among them were several (often incompatible) variations of SQ/USQ. Our own Tom Jennings ported LIB to DOS. DOS BBS op- erators then had all the functionality they had in CP/M; they could compress files, and they could pack them into "library" files, in separate steps of course. But DOS wasn't memory poor like CP/M. The climate was right for something "new." Enter Thom Henderson. Henderson, one of SEA's principals, borrowing from concepts developed by Brian Kernigan, wrote a "library" utility which overcame a limitation of LIB by using a distributed directory in- stead of a fixed-length directory at the front of the file. It also had built-in Huffman code compression, eliminating the need for SQ/USQ. He called it ARC. Almost overnight, it became a standard among bulletin board operators. As ARC developed, it acquired a number of useful features, encryption and LZ compression, for example, stirring interest in the commercial marketplace. Thus ARC became one of those prod- ucts marketed both commercially and as shareware. In an effort to encourage porting ARC to other systems such as Unix, SEA made the sources for ARC available for download on its bulletin board. These files bear the SEA copyright notice, and before people may legally do anything with them other than study them, they need SEA's permission. When someone asks per- mission to port, it is granted with three restrictions on the re- sulting program: it may not be sold, it may not be used commer- cially and a copy must be submitted to SEA for redistribution (under the same restrictions). Someone may also use the sources in a commercial product, but in this case, a source license fee is charged and the resulting program may NOT be a general purpose archive utility. A short time later PKXARC appeared on the scene, followed quickly by PKARC. Katz hadn't followed the rules, but then, ARC wasn't making anybody rich as shareware, and Katz wasn't address- ing the much more lucrative commercial market SEA had developed for ARC, so SEA overlooked it. Then, last year, an ad for PKARC and PKXARC appeared in "PC Tech Journal" on the page facing SEA's ad for ARC. Katz' ad priced the product a dollar and a half less than ARC, and even went so far as to make comparisons to "the other ARChive utility." SEA then sent a "cease and desist" letter to PKWare, propos- ing the following agreement: PKWare would withdraw all commer- cial advertising and cease attempts at commercial distribution, and SEA would forgive past violations and grant PKWare an unlim- ited cost-free license to market its derivative products as shareware with a non-commercial restriction. Katz refused. I suspect, though I don't know, that there were additional exchanges between SEA and PKWare. Were it me, I would have de- manded a source license fee and royalties on sales to date. In any event, no agreement was reached, so SEA filed suit. As I understand it, there are four counts in the complaint (not necessarily in this order): 1) "look-and-feel" violation, 2) copyright violation, 3) trademark violation, and 4) unfair trade practice. Let's look at them one at a time. I placed "look-and-feel" first because it's fairly easy to dismiss. I personally don't think SEA has a prayer on this one. "Look-and-feel" is the current legal buzz-word so SEA's lawyer tossed it in, but I can't imagine it applying in this case. A concept or idea cannot be copyrighted, but the expression of a concept or idea sure can, and a program is the expression of one or more concepts or ideas. If the development of PKXARC and PKARC were entirely independent of ARC, merely employing the con- cepts used there, then the second count cannot be sustained. If it can be shown that Katz obtained or had access to the sources for ARC, then he probably infringed on SEA's copyright. If it can be shown that he actually used them in developing his pro- grams, then he IS guilty of copyright infringement. Even if he translated them to assembly language, he violated the copyright. Translating a novel from English to German without the permission of the author and/or publisher is prohibited by copyright laws world-wide. Same principle. Is ARC a trademark? As relating to archiving or compression utilities, you bet. Does the name "PKARC" violate that trade- mark? Suppose I developed a new soft drink and began marketing it under the name "BBCOKE." How quickly would I find myself in court? And isn't there a network developer using the name "ARC," and are they in jeopardy? No! If I were a fuel dealer, I could sell all the "Coke" (a coal derivative) I wanted and the Coca Cola Co. couldn't care less. This one will be tough for Katz to beat. Why is a trademark important, anyway? A company spends con- siderable effort, not to mention money, establishing a trademark. I mentioned Coke in the previous paragraph. Did anyone have any doubt what company I was referring to? This is called "product recognition" and it is an extremely valuable asset. SEA has it with "ARC," but that didn't just happen. They worked at it. My "BBCOKE" would be trading on product recognition it didn't earn on its own. If I then sought out advertisements for Coca Cola, and placed ads of my own, claiming (whether right or not) "BBCOKE is better than the other cola" next to all I could find, would I be engaging in fair trade? Do you think I could argue that I was not trying to deliberately undermine the effect of their adver- tising and take advantage of their recognition? Do you suppose that Coca Cola would give me the courtesy of a letter before they fell on me like a ton of bricks? If any of the first three counts can be sustained, then the fourth probably should be also. A recent "PC Week" article has caused considerable comment on this issue. One mentioned a "fact" cited in the article that PKWare was a four-employee company operating out of Katz' home, and implied this was a Goliath attacking a David. The "facts" may or may not be true. The article was so badly written and so poorly researched as to call into question all of its "facts." The fact is that SEA is a four-employee (counting the principals) company. The Wayne (not Fort Wayne) NJ corporate address is Andy Foray's home. These are TWO small companies. Neither has the resources to pursue a protracted legal battle. I think we can expect a reasonably quick resolution. So how does it all affect you? Will you still be allowed to use a Unix port of ARC? Of course. Most ports have been made with permission, and even those which have not are not encroach- ing on SEA's commercial market. Will you still be able to use PKARC or PKXARC copies you obtained through shareware? You did so in good faith and SEA has neither the resources nor the in- clination to search you out and persecute you. In fact, should Katz lose the suit, he might still be granted a license to market his programs as shareware. For that, we'll have to await the fi- nal resolution. SEA is NOT being vindictive. They are trying to protect what they regard as a valuable commercial asset. If you are a shareware software developer, as I am, it may affect you in a different way. The lawyers have been telling us for several years that the copyright laws do in fact protect products marketed as "shareware." But so far, no court has said so, and the courts of the land are the final arbiters of the law. A win for SEA, particularly on the second count above, would place all, big or small, on notice! Shareware is NOT public do- main! A win for Katz, on the other hand, is a signal to share- ware authors, and a source of inexpensive, quality software might well dry up. If that happened, it would hurt developers and users alike. Think about it.

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