Microsoft Has Law on Its Side After Code Leak

Code might be viewable, but intellectual property laws prevent its use by legitimate software companies, says expert.

After incomplete portions of source code from Windows 2000 and Windows NT were leaked over the Internet in early February, do Microsoft and other software companies have something to worry about?

According to Christopher Brody, partner at Clark and Brody, an intellectual property law firm in Washington, D.C., the Microsoft code leak might not be a big deal. Considering the sheer complexity of the source code, Brody said, "Maybe only a handful of people could do something with it. It would be hard to make something useful from partial code."

"Microsoft can't do anything now that [the partial code] is out there, but they can if someone uses it," said Brody. The U.S. Copyright Office allows software companies to block portions of the code they want to keep secret, which provides the benefits of copyright protection while keeping software products undisclosed publicly.

The advantage of having copyright registration is that a company can get an injunction, attorney fees and statutory damages-which can get pretty high-for copyright infringement, according to Brody. There's also something called a common law copyright, which allows a company to sue after the fact if it doesn't have a registered copyright. "If the code wasn't copyrighted and a theft occurred, and Microsoft then got a copyright registration, they could still [be awarded] damages and bring into action a lawsuit," Brody explained. "If the company lost sales or profit because of an infringement, they could be granted that loss."

The majority of software companies religiously protect their intellectual properties with copyrights, patents and trademarks. "We've been busy without any dips in workload-even when the economy slows down," said Brody. "A copyright is a 'check,' or insurance, for source codes." After all, it's a globally competitive market, and companies are looking to protect themselves.

What is still to be determined is whether the release of the code will turn out to expose possible security holes that a future cracker can exploit.

About the Author

Kristen Kazarian has been Associate Editor at MCP Magazine for nearly two years. Before this, she worked at Weider Publications as a copy editor for JUMP Magazine and a licensing permissions administrator. Kristen has been in the publishing field for more than 12 years.

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Reader Comments:

Fri, Apr 16, 2004 Anonymous UK

Why do everyone have a go at Microsoft? Considering they're the most sucessful company in the world, does this mean that everyone who has a go at them are jealous? I am proud to be in ownership of their software and would be willingly to work for them any day.

Wed, Mar 31, 2004 Ethical Hacker Anonymous

I agree, the biggest issue here is security and how MS is going to react to protect those companies that put trust into Microsoft's products. Expressing how much you hate MS just wastes valuable time that can be used for a solution.

Sun, Mar 28, 2004 Anonymous Anonymous

My god. Does everyone hate MS? Fact of the matter is, they're a company just like any other. They're successful, have done things that are "shady", but seriously; does your MS bashing here really hurt them? Grow up. (/soapbox)
I'm thinking the software leak could risk XP as well as it's structure is inherited from 2000.

Fri, Mar 26, 2004 Anonymous Anonymous

Of course Industrial espionage happens every single day. Microsoft is the biggest perpetrator of all!

Fri, Mar 26, 2004 Anonymous Anonymous

Of course any corp who hates Microsoft, and thats a long list, would use code gather by less than ethical means. Dont think that industrial espionage does not happen every single day!

Thu, Mar 25, 2004 gt Anonymous

The issue that this article does not address is the security flaws that were exposed. No ethical company is going to use the code but the black hat community has no such constraints. The fact that a proof of concept has already been released shows that MS is going to have to do some serious damage control in the next few months as the code is digested by the dark side

Thu, Mar 25, 2004 Chris Indiana

This article is no suprise.
Of course Microsoft has the Law on it's side, they have already bought control of the legal system.

Yeah, I am sarcastic.
Microsoft first monopolized our PC's and now they control our legal system.

In a few years we will have to pay Microsoft each and every time we want to use a computer.

The worst part of this whole deal is that so many people continue to support microsoft.

Chris Watkins

Thu, Mar 25, 2004 Jason Boche Minneapolis

Anyone know how the leak occurred? I'm surprised this has not happened more often than it does in the software industry.

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