Thom Henderson, president System Enhancement Associates voice: (201) 473-5153 data: (201)
Thom Henderson, president
System Enhancement Associates
voice: (201) 473-5153
data: (201) 473-1991
Now That It's Over, What Did It Mean?
Now that the dust has settled in the first shareware copyright
case, it is time for SEA to make public the facts that many
members of the shareware community deserve to know.
For the record, SEA is a family owned business. Andy Foray, the
company chairman, and Thom Henderson, the company president, are
brothers-in-law. Irene Henderson, the secretary/treasurer and
office manager, is Andy's sister and Thom's wife.
As the creators, publishers and defenders of the industry
standard ARC file compression format, we have always maintained a
strong belief in a fundamental concept of shareware -- that
shareware be distributed for free for all non-commercial use. To
this end, we have never, and will never, charge for the use of
ARC in a non-commercial environment. We also believe that full
program sources should be available, at least to registered
users, and we have always made the full ARC sources available to
all users. We have also licensed a great many people to use the
ARC sources in their own programs.
We discovered that PKWARE had obtained our source code without
obtaining a license. He modified that code so that the program
ran faster and provided several other enhancements. However, the
nuts and bolts of the program were done by SEA. That is called
PIRACY, plain and simple. And this industry has no place for
We tried to politely ask PKWARE to obtain a license. He
ungraciously told us where to go.
We asked our lawyer what we should do. He said we were bound by
law to protect our rights to the trademark and copyrights on ARC.
If we did not, then anyone could use the ARC trademark and
copyrights. It is very much like a candy bar calling itself
Hershey. If another company used the Hershey name without
permission, you can imagine what would happen.
Also, it should be noted that PKWARE did not live up to the high
standards set by the shareware industry. He didn't make his
source code available. He sought out our market and competed
directly for our corporate market by using the funds he had
received from non-commercial users (whom we would not charge!) He
authorized ads with false and misleading comparison statements to
run in the magazines we advertised in. And he placed those ads
on the same pages as our ads. If we did not protect our
investment in the ARC trademark, we would have lost our
trademark, our market and our business. Furthermore, the
industry would have been left in disarray, as two standards would
So after Phil Katz told us he would not settle this case like a
gentleman, we were forced to ask the courts to settle it for us.
We didn't want to go to court. We couldn't afford the lawyers
fees. We couldn't afford the time away from programming the
updated versions of ARC that will work on other systems, such as
Unix, Macintosh, and VM/CMS. And we couldn't afford to create a
controversy in an industry that we helped to pioneer. We also
couldn't afford to create ill will among users -- both our users
and PKWARE users. But PKware left us no choice.
Anyway, the case didn't get very far, thanks to the testimony of
an expert witness, John Navas. He looked at the source code of
both programs and found, lo and behold, that the PKWARE program
was indeed a blatant copy of the SEA code.
When Katz heard this, he called us directly -- bypassing the
attorneys -- and said he wanted to settle.
We were only too happy to put a quick end to this. We wanted the
facts to come out. Unfortunately, Katz demanded that part of the
settlement terms be kept under court seal. We agreed, and we
probably should not have, but we did because we wanted to end the
case quickly so we could get back to updating and improving ARC.
Some of the terms are public: PKWARE cannot distribute the
program after January 1, 1989, they cannot substantially change
the program (though they can make bug fixes) and if they receive
inquiries for the product, they must send out SEA literature.
Also, PKWARE is prohibited from creating a new program that is
compatible with ARC or PKARC.
If those terms sound one-sided, then it only goes to prove the
extent to which PKWARE felt that it had no legitimate right to
its program. After all, why would he give up everything if he
was right? He obviously was not above board in this case, even
though the settlement terms said he was not admitting fault in
any way (a standard legalese ploy).
We are a bit perturbed that one of PKWARE's part-time employees
obtained a copy of the sealed court document, typed it into a
file along with numerous typos and loaded it onto several
bulletin board systems. She also included her own biased,
editorial opinion on the case and its terms. While we don't
believe PKWARE had authorized this action, it obviously violates
the sense of fair play that we have lived with, at Mr. Katz'
Now we are faced with several problems.
The bulletin board community has heard many comments by people
who did not possess the facts of this case, and therefore made
ill informed opinions. Those opinions seemed like fact because we
did not respond to them while the case was in progress.
You are well aware that no party in a legal action can really
speak his mind while the action is occurring. Because we didn't
respond, people assumed that we were wrong.
Well, we weren't wrong and we won't be silent any more. We have
begun responding to the outrageous and outlandish opinions
expressed against SEA. We realize that people came to the only
conclusion possible, given the lack of reliable information about
We will respond to any and every comment about this case. We
welcome questions and urge people to call us at our office. When
the dust settles, no one will doubt our sincerity in trying to do
the right thing.
We'd also like to clear up a few basic misconceptions that have
appeared on the boards:
- SEA waited too long to take action.
Response: The legal world moves slowly. First we have to be
aware of the situation, determine that a violation of our
copyright existed, try to settle amicably and then take legal
action. That takes time.
- SEA doesn't upgrade it's program.
Response: We have updated the program nine times in three
years. We have made it available for several other operating
systems, such as OS/2 and CP/M. We will continue to upgrade
the program to benefit all users on all systems.
- SEA used the courts when it realized it couldn't compete on
raw programming talent.
Response: We have a very good program and one that is getting
better. We wouldn't be the defenders of an industry standard
if we didn't have programming talent to begin with.
- SEA is a Goliath pursuing a David called Phil Katz.
Response: Phil Katz is a not just a person. He is a
company, and a big one at that. PKWARE is a bigger company
than SEA, despite the fact we publish four programs. We
calculate that PKware currently grosses almost $2,000 a day,
or about five times what we do. We challenge him to make his
audited figures public.
- PKWARE must be a small company because we hear there are only
three employees including his mother.
Response: We applaud Mrs. Katz and wish her the best of
success. We too are a family run company. Andy Foray and
Thom Henderson are brothers-in-law and Irene Henderson serves
as secretary/treasurer. We have hired a programmer and a
license manager. We didn't do this because we had a windfall
profit, we did this because we needed to stay competitive and
to serve new markets.
- SEA should have pursued the case to a jury trial so a
precedent could be set for the industry.
Response: We wish we had the money to support our lawyer to
take this case to a jury trial conclusion. However, we were
eating hot dogs every night and had to take on outside
consulting jobs to make ends meet. We needed to end this
case before the legal fees devoured our company. Besides, we
weren't out to crucify the guy -- we just wanted him to stop
stealing our work.
If there are more questions, be assured, we will respond to them.
We have also issued a new policy statement regarding the
licensing of ARC. It has been uploaded to the IBMSW forum on
CompuServe, the utilities/archivers conference on BIX, and has
been disseminated to other BBSes as well. The terms probably are
the most liberal for any licensing policy for any software
company. And if that isn't enough, give us a call and we'll see
what we can work out.
We welcome the opportunity to better serve the shareware
community. We invite your comments and your suggestions.
E-Mail Fredric L. Rice / The Skeptic Tank