OMAR UACAAAITA
`
`US 20050076334A1
`
`as) United States
`a2) Patent Application Publication (10) Pub. No.: US 2005/0076334 Al
`
` Demeyer (43) Pub. Date: Apr. 7, 2005
`
`
`(54) SYSTEM AND METHOD FOR LICENSING
`SOFTWARE
`
`(52) US. C1. eeeeeecseessseseecsecnecneeeneess T1777; 717/172
`
`(76)
`
`Inventor: Michael Demeyer, Danville, CA (US)
`
`(57)
`
`ABSTRACT
`
`Correspondence Address:
`THOMAS, KAYDEN, HORSTEMEYER &
`RISLEY, LLP
`SyAeA PARKWAY, NW
`
`ATLANTA, GA 30339-5948 (US)
`
`(21) Appl. No.:
`(22)
`Filed:
`
`10/678,882
`Oct. 3, 2003
`
`Publication Classification
`
`(SL) Ute C0 eee ceeccccsssssssssneescceceennnnseeseeseee GO6F 9/445
`
`A system and method for licensing software using a clear-
`inghouseto license only the technology modules that an end
`user
`registers. The clearinghouse maintains registration
`information which can be usedto bill a software providerfor
`the technology licensed to the end user. The system can be
`used to compensate technology owners only after the end
`user registers an unlicensed technology module. Thus, the
`system and method allows software vendors to reduce costs
`by licensing only the technologies that an end user actually
`uses. The clearinghouse can also be used to track the usage
`of software functionality to determine the popularity of a
`particular technology.
`
`Restricted Software
`Ald
`
`Registration Request
`9
`4
`
`Registration Grant
`
`
`End User(First Party) 160
`
`
`User Computer System 100
`
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`Software Provider
`(Second Party) 150
`
`Technology Holder
`4120
`
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`Patent Application Publication Apr. 7, 2005 Sheet 1 of 14
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`US 2005/0076334 Al
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`Patent Application Publication Apr. 7, 2005 Sheet 2 of 14
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`US 2005/0076334 Al
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`APPLE EXHIBIT 1105
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`Patent Application Publication Apr. 7, 2005 Sheet 3 of 14
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`APPLE EXHIBIT 1105
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`Patent Application Publication Apr. 7, 2005 Sheet 4 of 14
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`US 2005/0076334 Al
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`
`
`(ThirdParty)170
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`
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`HardwareProvider
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` 5>u>Dy£Bos9Gfor_2O-<OoBOCSO56oS062Ow9norOoSE©acncBBe88BU38aoaoof5S«f
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`Mechanism
`
`Restricted
`Software
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`Paymentfor
`Each
`Registered
`Technology
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`Each
`Registered
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`Patent Application Publication Apr. 7, 2005 Sheet 5 of 14
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`US 2005/0076334 Al
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`100
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`Patent Application Publication Apr. 7, 2005 Sheet 6 of 14
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`Technology FIG.2D
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`Patent Application Publication Apr. 7, 2005 Sheet 7 of 14
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`US 2005/0076334 Al
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`Restricted
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`egistration
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`Functionality?
`220
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`
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`Functionality
`
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`240
`
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`
`Patent Application Publication Apr. 7, 2005 Sheet 8 of 14
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`US 2005/0076334 Al
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`
`Provide Computer
`System and Bundled
`
`Software to a First Party
`
`200
`
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`Invoke Functionality
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`280
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`
`FIG. 3
`
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`Patent Application Publication Apr. 7, 2005 Sheet 9 of 14
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`Patent Application Publication Apr. 7,2005 Sheet 10 of 14
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`US 2005/0076334 Al
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`Software Provider 150 /
`Hardware Provider 170
`
`Computer System
`100
`
`Registration
`Clearinghouse 140
`
`300 Provide the
`Computer System with
`Protected Software
`
`301 Use unprotected
`functionality modules
`
`302 Request use of
`functionality module
`using unregistered
`
`technology modules
`
`307 Receive Request
`and PrepareIdentifying
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`information
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`RequestIdentifying
`Information
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`310 Record the
`technology module as
`registered
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`Registration Information
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`Provider With
`Registration Information
`
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`Patent Application Publication Apr. 7, 2005 Sheet 11 of 14
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`Patent Application Publication Apr. 7, 2005 Sheet 12 of 14
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`Patent Application Publication Apr. 7,2005 Sheet 13 of 14
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`US 2005/0076334 Al
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`Sending a license
`identification to a server
`
` Activating 582
`
`584
`
`
`
`Fetching a license acknowledgement
`to complete registration 586
`
`588
` Relieving the technology limitation
`
`FIG. 7B
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`software 632
` Delivering a protected
`
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`necessary technologies
`634
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`for necessary technologies 636
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`Payingthe royalty 638
`
`FIG. 8
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`Apr. 7, 2005 Sheet 14 of 14
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`US 2005/0076334 Al
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`Apr. 7, 2005
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`SYSTEM AND METHOD FOR LICENSING
`SOFTWARE
`
`TECHNICAL FIELD OF THE INVENTION
`
`[0001] The present invention generally relates to a system
`and method for licensing software, and more particularly
`relates to a system for licensing specific technology modules
`within a software product on an as-needed basis and a
`method for the same.
`
`BACKGROUND OF THE INVENTION
`
`[0002] Personal computers are often sold with bundled
`software packages that are pre-installed on the computer.
`Similarly, peripherals for computers are sold with bundled
`software packages made available on an enclosed media
`such as a DVD, CD-ROM,floppy disk, or other known
`portable medium. Alternatively, software used with personal
`computers and computer peripherals may be downloaded
`from a remote server over a network. These software pack-
`ages typically provide functionality to be used by the end
`user with the purchased computer or peripheral device. For
`example, a DVD optical drive may be bundled with software
`used to play or record DVD movies or data. Similarly, an
`optical scanner may be sold with bundled software for
`capturing and viewing a scanned image, manipulating
`images, providing optical-character recognition (OCR), or
`software to enable a scanner and printer shared by the same
`personal computer to be used as a photocopier. Likewise, a
`personal computer may be sold with pre-installed anti-virus
`software, software tools for viewing digital photographs,
`video editing software, or operating system software.
`
`[0003] These bundled software products often include
`features that incorporate portions of executable softwarethat
`require the paymentof royalties to technology holders. The
`technologies used in a single software product may be
`developed and licensed from one or more technology hold-
`ers. A software provider typically licenses the intellectual
`property rights from each of the technology owners before
`selling the product to the end user. A license typically covers
`each copy of the software sold. This licensing cost
`is
`incorporated into the cost of the software product and passed
`on to the end user. In the case of playback software used to
`play commercially produced DVD movies,
`this software
`generally involves considerable per-unit licensing fees asso-
`ciated with licensed technologies that are required for play-
`back of certain content. The costs of these licenses are
`passed on to the end user in the purchase price of the
`playback software or hardware that bundles the software. An
`example of such a licensed feature is Dolby® Digital audio
`decoding, provided by Dolby Laboratories. Specifically, a
`license to the Dolby Digital technology is required within
`DVD playback software used to decode a DVD movie
`incorporating this audio technology.
`
`[0004] However, the actual percentage of end users who
`playback DVDsrequiring the Dolby technologyis less then
`100% because someusers only play personal content, while
`others may use the DVD drive only for data storage or other
`computing purposes. Further, some users may not use their
`DVDdrive at all. In the case of Dolby Digital audio cited
`above,this technology is required for playback of commer-
`cial DVD discs using this technology. However, the decod-
`ing technology is not needed to view the large library of
`
`DVD movies which do not use Dolby Digital technology.
`For these users, the license fees associated with the tech-
`nologies are wasted.
`
`[0005] Prior art licensing systems, as shown in FIG. IA,
`provide for an interaction between an end user 10 and a
`software provider 20. In a first instance, the software pro-
`vider 20 directly provides a software product to the end user
`10 in exchange for compensation from the end user 10. In
`this case, the licensing fees for technologies such as Dolby
`Digital may be paid to the technology holders 30 by the
`software provider 20 for each copy of software sold, without
`regard to the actual use of the licensed technologies by the
`end user 10. In return, technology holder 30 provides a
`technology license for each copy of software sold by soft-
`ware provider 20.
`
`Inthe context of bundled DVD player software, the
`[0006]
`prior art system shown in FIG. 1B provides for licensing
`bundled software between an end user 10, hardware provider
`40, a software provider 20, and a technology holder 30. A
`software provider 20 provides a license for a software
`product with unlimited functionality to a hardware provider
`40 in exchange for compensation. The end user 10 is
`provided the software product 12 as bundled software
`included with a computer or computer peripheral supplied
`by the computer or hardware provider 40. Under the current
`state of the art, the licensing fees for technologies such as
`Dolby Digital are paid to the technology holders 40 by the
`software provider 20 (and/or the hardware provider 40)
`without regard to the actual use of the licensed technologies
`by the end user 10. Thus, because usage of the specific
`features within a software productare not typically tracked,
`a license to a particular technology is required for each
`software product 12 sold containing the technology. There-
`fore, there is a discrepancy between the cost of the technol-
`ogy license (by the hardware or software provider 20) and
`the actual need (by the end user 10), which is disadvanta-
`geous for both the end user 10 and software provider 20. For
`end user 10,
`the money for the license is wasted if the
`technology is not used. For the software provider 20, the
`high cost of license fees will either reduce profit margins or
`be passed on to the end user 10 in the selling price, which
`can inhibit market share.
`
`[0007] Accordingly, a need exists in the industry for a
`system and methodoflicensing software that addresses the
`aforementioned deficiencies and inadequacies.
`
`SUMMARYOF THE INVENTION
`
`[0008] The present inventionis broadly directed to a novel
`system and method that, in response to a request or activa-
`tion of software by an end user, triggers a financial payment
`or accounting between two other enterprises (such as
`between a hardware provider and a software provider, or
`between a software provider and a technology holder, or
`between a hardware provider and a technology holder,etc.)
`
`In accordance with one embodimentof the present
`[0009]
`invention, a methodis provided for licensing software on a
`computer hardware platform. The software includesat least
`one function that is restricted to a limited use. The method
`
`includes the step of transmitting an activation request to a
`registration clearinghouse in order to activate a technology
`that must be registered to use the function. The method also
`includes causing registration information related to the tech-
`
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`nology to be compiled in a registration database within the
`registration clearinghouse. The method also includes receiv-
`ing a communication that is capable of relieving the limited
`use restriction of the function. Finally, actual usage of the
`technology is determined based on the registration informa-
`tion compiled in the registration database.
`
`[0010] According to a further enhancement of the above
`process, a software developer may pay the owner of a
`technology based on the registration information compiled
`in the registration database.
`
`[0011] Accordingly, one object of the present invention is
`to reduce costs to a companyoffering bundled software(e.g.
`a personal computer or DVD drive manufacturer) by only
`paying technology license fees for copies of software that
`actually use the technology.
`
`[0012] Another object of the present invention is to com-
`pensate technology holders for each copy of the software
`that actually uses their technologies, and to provide a clear
`understanding and documentation of the value of the tech-
`nology in the marketplace.
`
`[0013] Another object of the present invention is to lower
`prices for the end user, who benefits from the reduced costs
`to the company providing the bundled software while allow-
`ing convenient access to all technologies required to meet
`their needs.
`
`[0014] Another object of the present invention is to allow
`a software provider to deliver more value to the companies
`offering bundled software, and to provide expanded oppor-
`tunities for direct interaction with the end user.
`
`[0021] FIG. 2D is a diagram of one embodiment of a
`software licensing system in which a third party provides a
`paymentto a fourth party based on registration information
`recorded by a second party;
`
`[0022] FIG. 2E is a diagram of one embodiment of a
`software licensing system in which a third party provides a
`paymentto a fourth party based on registration information
`recorded by the third party;
`
`[0023] FIG. 3 is a flow diagram of the systems and
`methods of the software licensing system;
`
`[0024] FIG. 4 is a diagram depicting an embodiment of
`the software licensing system;
`
`[0025] FIG. 5 is a flow diagram showing the steps for
`executing a software licensing system as described in the
`systems and methods of the present invention;
`
`[0026] FIG. 6 depicts an overview of the three parties
`used in a prior art software trading system;
`
`[0027] FIG.7A shows a diagram of the protected software
`used in a software trading system;
`
`[0028] FIG. 7B is a flow diagram of a first preferred
`embodiment of a software trading system;
`
`[0029] FIG. 8 is a flow diagram of a second preferred
`embodiment of the software trading system; and
`
`[0030] FIG. 9 depicts a third embodimentof the software
`trading system.
`
`DETAILED DESCRIPTION OF THE
`PREFERRED EMBODIMENTS
`
`BRIEF DESCRIPTION OF THE DRAWINGS
`
`[0031] FIGS. 2A-2E depict an overview of several
`embodiments of the proposed efficient software licensing
`[0015] Manyaspects of the invention can be better under-
`system.
`In accordance with the broader aspects of the
`stood with reference to the following drawings. The com-
`system, FIG. 2A depicts a first embodiment of a software
`ponents in the drawings are not necessarily to scale, empha-
`licensing system includingafirst party (typically an end user
`sis
`instead being placed upon clearly illustrating the
`160), a second party (typically the software provider 150),
`principles of the present invention. Moreover, in the draw-
`and a technology holder 120. In such a system, the second
`ings, like reference numerals designate corresponding parts
`party 150 pays the technology holder 120 for a license
`throughout the several views.
`associated with each copy of a software product 110 sold
`containing technology ownedbythe technology holder 120.
`Thefirst party 160 acquires software product 110, which is
`fully licensed, but contains unregistered software function-
`ality. Thus, neither the first party 160 or the second party 150
`are required to provide further compensation to the technol-
`ogy holder 120 for the software functionality used. How-
`ever, despite the functionality being licensed, certain soft-
`ware functionality is disabled until
`the first party 160
`requests registration of the functionality with the second
`party 150. Upon receiving the registration request,
`the
`second party 150 records the registration and enables the
`newly registered software by delivering a relieving mecha-
`nism to the first party 160. The second party 150 may now
`use the registration information obtained from the first party
`160 to determine which features of the software 110 are used
`
`[0016] FIG. 1A is a diagram of a prior art software
`licensing system;
`
`[0017] FIG. 1B is a diagram of anotherprior art licensing
`system for bundled software;
`
`[0018] FIG. 2A is a diagram of one embodiment of a
`software licensing system in which a second party records
`first party registration information for licensed technologyin
`a software product;
`
`[0019] FIG. 2B is a diagram of one embodiment of a
`software licensing system in which a third party supplies
`bundled softwareto a first party, and a second party records
`the first party registration information in order to determine
`payment to a fourth party in exchange for a license to
`registered technology;
`
`[0020] FIG. 2C is a diagram of one embodiment of a
`software licensing system in which a third party supplies
`bundled softwareto a first party, and a second party records
`the first party registration information in order to determine
`payment to a fourth party for a license to the registered
`technology;
`
`more frequently. The second party 150 may then make
`decisions as to which technologies are included in future
`software releases.
`
`[0032] FIG. 2B depicts the broader aspects of a second
`embodiment in which a third party (typically a hardware
`provider 170) provides the first party 160 with bundled
`software containing functionality restrictions. The bundled
`
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`software is produced by the second party 150, and the
`software incorporates technology requiring a license from a
`fourth party (typically a technology holder 120). The first
`party 160 requests registration of the unregistered function-
`ality with the second party 150. Upon receiving the regis-
`tration request, the second party 150 recordsthe registration
`and enables the newly registered software by delivering a
`relieving mechanism to the first party 160. Finally,
`the
`second party 150 compensates the fourth party 120 for a
`license to the actual technology used bythefirst party 160.
`Compared to FIG. 2A, the system of FIG. 2B provides
`compensation to the fourth party 120 only when an end user
`160 registers technology owned by the fourth party 120.
`
`[0033] FIG. 2C depicts the broader aspects of a third
`embodiment in which the third party 170 providesthefirst
`party 160 with bundled software 110 containing function-
`ality restrictions. The bundled software 110 is produced by
`the second party 150, and the software 110 incorporates
`technology requiring a license from a fourth party 120. The
`first party 160 issues a request to register an unregistered
`function to the second party 150. Upon receiving the reg-
`istration request, the second party 150 records the registra-
`tion and enables the newly registered software by delivering
`a relieving mechanism to the first party 160. The second
`party 150 compensates the fourth party 120 for the actual
`technology used bythe first party 160. Finally, the third
`party 170 compensates the second party 150 for the actual
`technology used by the first party 160.
`
`[0034] FIG. 2D depicts the broader aspects of a fourth
`embodiment in which the third party 170 providesthefirst
`party 160 with bundled software 110 containing function-
`ality restrictions. The bundled software 110 is produced by
`the second party 150, and the software 110 incorporates
`technology requiring a license from a fourth party 120. The
`first party 160 issues a request to register an unregistered
`function to the second party 150. Upon receiving the reg-
`istration request, the second party 150 records the registra-
`tion and enables the newly registered software by delivering
`a relieving mechanism to the first party 160. Finally, the
`third party 170 may compensate a fourth party 120 for the
`actual technology used by the first party 160. Accordingly,
`the fourth party 120 may deliver a license to the third party
`170.
`
`[0035] FIG. 2E depicts the broader aspects of a fifth
`embodiment in which the third party 170 providesthefirst
`party 160 with bundled software 110 containing function-
`ality restrictions. The bundled software is produced by the
`second party 150, and the software incorporates technology
`requiring a license from a fourth party 120. The first party
`160 issues a request to register an unregistered function to
`the third party 170. Upon receiving the registration request,
`the third party 170 records the registration and enables the
`newly registered software by delivering a relieving mecha-
`nism to the first party 160. Finally,
`the third party 170
`compensates the fourth party 120 for the actual technology
`used bythefirst party 160. Accordingly, the fourth party 120
`delivers a license to the third party 170.
`
`It will be understood that there are many obvious
`[0036]
`variations of the above embodiments, and these variations
`are intendedto be included within the scope andspirit of the
`broader aspects of the invention. The system is designed
`such that an intermediate party (e.g.
`the second or third
`
`party) between an end user and a technology holder pays the
`licensing fees to a technology holder based on the actual
`usage of the technology by an end user. Logistics of the
`system such as: which party delivers the software, which
`party tracks the registration, which party providesthe reliev-
`ing mechanism to the end user, and which party compensates
`the technology holder can be interchanged and still remain
`within the scope of the invention. This concept reflects an
`improvement from prior art systems which rely on the
`intermediate party to pay a technology holder for a full
`license for each copy of the software sold. Likewise, the
`system is distinguished from prior art systems which require
`the end user to pay a fee for additional functionality.
`
`[0037] FIG. 3 describes the broader aspects of a method
`for implementing a system as shownin FIGS.2A-2E. First,
`a protected software with restricted functionality is provided
`to a first party (step 200). Thefirst party may, for example,
`be an end user who has received the software as bundled
`
`with a computer system. At step 210,the first party invokes
`software functionality within the protected software. The
`restricted functionality requires registration, such as func-
`tionality including the playback of DVDs using Dolby
`Digital decoding. Thus, at step 220 the software determines
`if registration is required to execute the functionality. If the
`functionality does not require registration (the “NO” condi-
`tion), the user may execute the functionality without further
`action, as represented by step 230. If the functionality does
`require registration (the “YES” condition), the software is
`registered with a second or third party (step 240). The
`second or third party, for instance, may be the hardware
`provider or software provider. At step 250,
`the software
`determines if payment
`is required to license the newly
`registered functionality. If a payment is not required (the
`“NO”condition), as in the system of FIG. 2A,thefirst party
`may execute the newly registered software (step 230). If a
`payment is required (the “YES” condition), the registration
`triggers a paymentto a fourth party from the secondorthird
`party (steps 270 and 280). For example, a hardware or
`software provider may pay a technology holder for the
`registered technology. Likewise, the registration may trigger
`a payment from a second party to a third party (step 260).
`For example, a hardware provider may compensate a soft-
`ware provider for the registered technology. One skilled in
`the art would appreciate that depending on the implemen-
`tation, the payment may actually be made at a later time,
`even though the first party is authorized immediately to
`execute the software.
`
`[0038] Asa more specific example, referring back to FIG.
`2B, the system allows a software provider 150 to license
`software provided with a computer system 100 or bundled
`with a computer peripheral
`for only the technologies
`required by a end user 160. For example, as a way to reduce
`wasted license fees, software for playing DVD media can be
`provided by the hardware provider to an end user 160 with
`limited functionality, specifically eliminating certain tech-
`nologies that have associated licensing fees. The end user
`160 can, through the Internet or some other electronic or
`physical mechanism, downloador enable these technologies
`only when needed from the software provider 150. This can
`occur automatically when the end user 160 first attempts to
`play a commercial DVD, or on user request at any time prior
`to this.
`
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`[0039] When an end user 160 requests a necessary tech-
`nology, he will identify himself as a unique and authorized
`recipientof this technology to the companythat provides the
`technology activation service (in this proposal, the DVD
`software provider). There are several possible mechanisms
`for this, including the use of a serial number (provided with
`initial purchase) or some meansof uniquely identifying the
`computer system 100, such as the Service Code on a Dell
`personal computer. Based on this identifying information,
`the appropriate technology is provided to the end user and
`the software provider 150 is charged for the technology
`license. Software provider 150 may then choose to recoup
`the license fees from the hardware producer,or alternatively,
`a hardware provider 170 may be required to pay license fees
`to a technology holder 170 based on the end user 160
`registration of the software.
`
`[0040] When the end user 160 is receiving or activating
`the required technology, there is an opportunity for the sale
`of additional products, and to capture the user information
`for future sales. The revenue from these additional transac-
`tions can be shared with the hardware provider to help offset
`costs. This also provides an opportunity to sell more
`advanced technologies from the technology holders, result-
`ing in additional license fees.
`
`[0041] Referring to FIG.4, a more detailed diagram ofthe
`licensing system is depicted. Software product 110 may be
`executed within computer system 100. The computer system
`100 may also include input devices such as mouse and
`keyboard (not shown) to provide the end user 160 with a
`meansfor interacting with the user interface of the computer
`system 100. The computer system may includea variety of
`storage devices such as an optical drive to read data infor-
`mation from optical discs such as those using CD or DVD
`technology. Software product 110 contains functionality
`module 106. Functionality module 106 represents a licensed
`or unlicensed software feature. For example, where software
`product 110 is software for playing DVD movies,
`the
`software may contain a functionality module that allows
`decoding the compressed video in a DVD movie,or playing
`a DVD movie with audio technologies such as Dolby Digital
`decoding, Dolby Surround decoding, DivX decoding, or
`DTSdigital sound. While only one functionality module 106
`is depicted,
`it
`is to be understood that more than one
`functionality module may exist in software product 110.
`
`[0042] Each functionality module 106 may use one or
`more technology modules 107. Technology modules 107
`represent intellectual property rights embodied within soft-
`ware product 110 that may be needed to execute a specified
`software functionality module 106. For example, a technol-
`ogy module 107 mayincorporate the technology required to
`decode Dolby Digital audio. The technology modules 107
`embodied within the functionality modules 106 are owned
`by technology holders 120. For example, Dolby Digital
`audio is owned by Dolby Laboratories. Thus, technology
`holder 120 may ownpatents, copyrights, or other protectible
`rights associated with technology modules 107.
`
`[0043] Thus, software product 110 may contain function-
`ality modules 106 that require securing additional licensing
`from one or more technology holders 120. These modules
`will be referred to as unlicensed technology modules 107.
`Software product 110 may also contain functionality mod-
`ules 106 that do not require separate licenses beyond that
`
`required to use the basic software product 110. For instance,
`funct