Singularity Law

Second Epoch (1969-1982)

IBM’s announcement, which launched the worldwide software industry,¹ ushered in the Second Epoch of Computer Law. During this second time period contracting issues became increasingly important, as companies had to develop a new body of licenses and other contracts to deal with the myriad transactions taking place.

In addition, technology allowed companies to develop small, faster and cheaper computer hardware. This was the period of mid-sized and mini-computers from such companies as DEC, Prime and Basic Four. These machines allowed small to medium size businesses to buy or lease their own computers. This in turn exposed many business lawyers to their first experience in negotiating a computer purchase agreement, a software license agreement, or a maintenance and support agreement. Computer lawyers moved from a small cadre of in-house counsel to a growing body of private practitioners. During the early years of this epoch, a group of these lawyers founded the Computer Law Association (now renamed the ITLaw Association), which continues to be the preeminent international legal organization in the field today.² (More after the jump.)

As the investment in software development increased, companies began looking for ways to protect their investment through the application of traditional intellectual property laws. Copyright, patent and trade secret law were all examined and a great deal was written on their applicability vel non to computer software.³

The Copyright Office had agreed in 1964 to allow computer programs to be registered as literary works, but did so under its “rule of doubt.”⁴ The Copyright Office left it up to the courts to decide whether computer programs were copyrightable, and if so which aspects. In its run-up to passage of the 1976 Copyright Act, Congress was also unsure about the copyrightability of computer programs, so it created the CONTU Commission to investigate the matter.⁵ The Commission’s final report was not released until 1978,⁶ two years after the new copyright law was enacted, and its recommendations for software copyright protection were not incorporate into law until the 1980.⁷

At the same time, the Patent and Trademark Office (PTO) was struggling with the patentability of computer programs. During the 1970s, the PTO took the position that programs were simply not patentable subject matter for a variety of reasons, primarily because programs were just mathematical algorithms that were not patentable.⁸ It was not until the early 1980s that the courts began to chip away at the PTO’s recalcitrant position.⁹

Trade secret law was already a well-developed area of law that was sufficiently flexible to protect not only computer software itself, but many different aspects of software, including documentation, design information, and algorithms, mathematical models and formulae. Attorneys began drafting their software licensing and development agreements to provide for trade secret protection.

Privacy was not a significant issue for the computer industry until the late 1960s, when newspaper reports began disclosing how the federal government was using data it was collecting for one purpose for an entirely different purpose, namely, to track anti-war activists and draft dodgers. A growing public concern about government misuse of data led to the passage of the Privacy Act of 1974,¹⁰ which placed some limits on the federal government’s use of information it collected. Various states enacted similar laws directed at state government information gathering.

The increased use of computers in companies to manage their financial activities, as well as computer usage in banks and other financial institutions, did not go unnoticed by criminals. By the mid-1970s, computer-related crime was on the rise. Yet, there were no criminal laws specifically directed at these activities, and traditional criminal laws were often found wanting in prosecuting computer criminals. The first federal computer crime law was proposed in 1979, but not enacted until 1984.¹¹

© 2007, 2008 Michael D. Scott. All rights reserved.

Next: “History of Computer/IT Law Third Epoch (1982-1993).”
Previous: “History of Computer/IT Law First Epoch (1960-1969).”

1. See Stanley Gibson, Software Industry Born with IBM’s Unbundling, Computerworld, June 19, 1989, at 6. [↩]
2. The association has published its own fascinating history. [↩]
3. At this time, trademark law was not an issue. It was not until the 1990s with the emergence of domain names on the Internet that trademark law became an important aspect of computer law. [↩]
4. U.S. Copyright Office, Compendium of Copyright Office Procedures II, § 324.04. [↩]
5. Despite the importance of the Commission’s recommendations to the growth of the U.S. computer industry, the Commission had no computer lawyers as members. [↩]
6. CONTU Final Report (1978). [↩]
7. 17 U.S.C. § 101. [↩]
8. See generally Susan Nycum, Legal Protection for Computer Programs, 1 Computer/L.J. 55 (1978). [↩]
9. See Diamond v. Diehr, 450 U.S. 175 (1981). [↩]
10. Pub. L. No. 93-579, 88 Stat. 1896 (1974), codified at 5 U.S.C. § 552a (1982). [↩]
11. Act of Oct. 12, 1984, Pub. L. No. 98-473, title II, § 1602(a), 2102(a), 98 Stat. 2183, 2190 (1984), codified at 18 U.S.C. §§ 1029-30. [↩]