News Column

Patent Issued for System and Method for Software Site Licensing

June 12, 2014

By a News Reporter-Staff News Editor at Computer Weekly News -- From Alexandria, Virginia, VerticalNews journalists report that a patent by the inventors Gaetano, Jr., Arthur Louis (Chandler, AZ); Gin, Jerry (Gilbert, AZ); Durant, John (Chandler, AZ); Merriam, Michael Mathew (Phoenix, AZ), filed on September 30, 2003, was published online on May 27, 2014.

The patent's assignee for patent number 8738535 is Inter-Tel (DE) Inc (Tempe, AZ).

News editors obtained the following quote from the background information supplied by the inventors: "In a non-networked computer environment, it is a simple matter to enforce a software site license. Licensed software is installed on a single computer and each user's access to that computer is controlled by individual logins. The software is restricted to one machine and the number of logins is limited to a particular software application to prevent unauthorized use that is not covered by the site license. As more processing systems gradually become networked together, thereby enabling a single software application to be 'shared' over multiple computers, the issue of enforcing the software site license becomes increasingly problematic. Thus, controlling the legal distribution and use of licensed software is critical to prevent unauthorized software use or 'piracy.'

"Any unauthorized duplicating, browsing, or using of a software product or data constitutes software piracy. There are various categories of software piracy including; (i) 'soft-lifting' or purchasing a single licensed copy of software and loading it onto several computers; (ii) making unauthorized copies of software available to end users through online downloading and uploading; (iii) illegally duplicating and selling software; and (iv) selling stand-alone software that was intended to be bundled with specific hardware. Although most computer users are aware that the unauthorized duplication and use of software is illegal, there is a general disregard for the importance of treating software as valuable intellectual property. Often times the legitimate owner of the software or data product knowingly permits the software to be duplicated onto multiple machines to avoid the extra cost of additional licensing fees or the time needed to obtain additional licenses, even if they are free. These acts of software piracy are typically the most difficult to control.

"The Internet provides increased connectivity for users worldwide but unfortunately at the cost of preserving software security. File sharing over the Internet is a common occurrence due to the elimination of physical as well as international software barriers. Even the software publishers that have proactively attempted to protect their software through site licenses, encryption, passcodes, and various other methods, were not fully prepared for the numerous hacking programs that compromise software security and licensing mechanisms.

"In spite of the potential of increased software piracy, using the Internet as a legal vehicle for software distribution can be advantageous. Internet distribution of software from the licensor to the licensee altogether eliminates lost or damaged goods as well as late deliveries. Software vendors can electronically distribute software upgrades and additional components or modules, in conjunction with the original software license over the Internet and in higher volumes. For software recipients, Internet distribution means receiving the products faster and discounted by saving on media, shipping, labor, and storage costs.

"Unlike software, hardware products cannot be distributed over an Internet channel but must be physically delivered to the customer. The separation between the software and hardware introduces additional challenges for the software vendor to track software intended for a particular hardware unit. Thus, the licensor often pre-packages the software with the machine at the time of purchase (establish the hardware/software match prior to the sale). For example, the software vendor can distribute software on computer-readable media containing a serial number or some other special identifier. When the software is installed on the machine, the unique identifier stored on the media is matched with the particular machine, thereby 'unlocking' the software and essentially providing a hardware/software match. If the software is moved to another machine, the licensee typically contacts the licensor again for permission to install the software on a different machine. This approach does not generally work well for software that is downloaded from a communication channel, such as the Internet, or otherwise mass distributed.

"Alternatively, the licensor can request that the customer download the software after the hardware purchase and enter the unlocking ID information at that time. The problem with this approach is that the integrity of the information can be jeopardized since it is not the licensor or manufacturer entering the information, but the customer. Also, there is no provision to track the hardware from manufacture to sale. On the other hand, during the online software registration process the system can obtain a serial number or such from the CPU in a completely transparent process to the user. While this latter approach may help eliminate some entry errors, it does not allow any flexibility in configuring the software license.

"Software licenses are typically generated for the end user at the time of purchase of the associated software or at installation. For instance, the license may be created initially for a certain number of users and specific features. Any changes to the initial license require the licensee to contact the licensor and request an updated license which generally incurs additional cost to the licensee. The licensee is not able to pre-purchase software licenses or individual features of the license and store these intangible items for some future date. Rather, the vendor creates the license for the user for immediate installation of the software and charges the user at the time of installation. In this manner, the user has no opportunity to update the license without additional intervention from the licensor due, in part, to the user's inability to pre-pay for a license or license features, store the intangible items, and at some future date create a license from the stored features.

"Many software vendors are turning to trusted third parties or clearinghouses to manage the licensing process, often times over an Internet channel. In these systems, a third party acts as an intermediary between the software buyer and the vendor to monitor access to the software, authorize use of, report use of and various other functions relating to the licensing of the software. One problem with these types of systems is the added cost associated with using the third party.

"Accordingly, an improved system and method for software site licensing is needed. Preferably, a controlled system for tracking unique identifiers of machines from the time of manufacture through license generation of an installed software application is desired. It would be beneficial to utilize the speed and convenience of the Internet for licensing generation and distribution without compromising security. Additionally, it is desirable to allow the user to pre-pay for a software license and licensing features, and hold the license and features in a 'virtual warehouse' until such time as the user is ready to generate a specific license incorporating the stored features."

As a supplement to the background information on this patent, VerticalNews correspondents also obtained the inventors' summary information for this patent: "A software site licensing system of the invention generally includes a client site having a target hardware device, and a license sales site generating a software site license comprising licensable components purchased for the target hardware device. A virtual warehouse includes a personal inventory of intangible items for the client including the licensable components and software site license. A programming workstation receives the software site license from the virtual warehouse and provides the license to the target.

"In one particular embodiment, the programming workstation receives an electronic file transfer of the software site license.

"In another embodiment, the virtual warehouse is password protected and requests entry of a password unique to the client and an ID unique to the target hardware device.

"Another software site licensing system of the invention generally includes a license site receiving a purchase order on behalf of a client. The license site establishes a physical hardware component of the order and a corresponding intangible license component of the order. A physical warehouse receives the physical component and ships the hardware to the client. A secure virtual warehouse website created solely for and viewable by the client receives the intangible license component of the order as a paid-for item. The item remains in the virtual warehouse until a software site license is generated by the license site for installation to the hardware component.

"A method for generating a software site license generally includes marking a hardware unit with a distinctive identifier and electronically associating an identifier to an end-user purchasing the unit. Establishing a virtual warehouse uniquely for the end-user and configured to retain a personal intangible inventory for the end-user. The inventory includes a plurality of licensable components intended for the hardware unit. Associating one of the identifiers to the licensable components in the virtual warehouse and password-protecting the virtual warehouse so that viewing of the inventory is permitted upon correct entry of an end-user password and at least one of the hardware unique identifiers. The end-user makes a selection of the licensable components on the virtual warehouse and they are assembled to form the software site license intended for the hardware unit. The license stays on the virtual warehouse until a request for transmission is received and upon the request, the license is transmitted from the virtual warehouse to the hardware unit for installation.

"In one embodiment of the method, the selection from the end-user is reviewed and verified so that the selection provides the minimum required software site license for the hardware unit.

"In another embodiment, suggested additional licensable components for the license are provided prior to assembling the license.

"In yet another embodiment, the selection of licensable components is displayed for a confirmation from the end-user prior to assembling the license.

"In still another embodiment, the license is set with an expiration date.

"The method in accordance with the invention may be for generating a new software site license, upgrading an existing license, or transferring an existing license to a new hardware unit.

"A process for vendor site licensing of a hardware component generally includes receiving, at the time of manufacture, an electronic shipment of unique identifiers associated with the hardware component. Receiving from a warehouse, a data shipment of the physical whereabouts of the component and prior to the transmission of the data to the vendor, the data verified by matching the unique identifiers with an external code of the component. The vendor processes a purchase order for the hardware component, which includes determining an intangible portion of the order. The vendor creates a virtual warehouse and places the intangibles therein. The external code of the component is received by the vendor prior to the physical shipment of the CPU from the warehouse. An association between the intangible portion, the external code, and the unique identifiers is made. The site license is generated from the intangible portion and provided to the order originator for installation to the hardware component."

For additional information on this patent, see: Gaetano, Jr., Arthur Louis; Gin, Jerry; Durant, John; Merriam, Michael Mathew. System and Method for Software Site Licensing. U.S. Patent Number 8738535, filed September 30, 2003, and published online on May 27, 2014. Patent URL:

Keywords for this news article include: Software, Inter-Tel.

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Source: Computer Weekly News

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