How SMEs Protect Computer Software

Author:Mr Lee Gage
Profession:Kaltons Solicitors

A recent survey of small and medium sized enterprises (SMEs) has demonstrated that the most common methods they employ to protect computer software are copyright, technical systems of protection, licensing and secrecy. They apparently patent less, as they find the system complicated, expensive and do not view patents as conferring any particular advantage for their software-based products. Patenting was thought to be laborious and complex and made no sense in the fast pace development environment of software development. They think that patenting is not particularly appropriate for their software products as other forms of IP protection, such as informal methods - technical systems and licensing - are equally effective. The most effective technical systems of protection involved use of dongles, encryption, stenographic techniques, key diskettes, firewalls and passwords.

The survey found that 27% of the SMEs interviewed regard licensing as the most effective means of protection and 24% ranked technical systems of protection as the most important means. 21% found copyright effective, while only 8% thought that patents were of any use.

Awareness Of SMEs Of Intellectual Property Rights (IPRs)

Yet another survey shows that SMEs recognise the importance of IP for their business. However, generally, they find informal methods of protection generally more effective than formal ones, such as patenting. SMEs which use copyright to protect their software were satisfied with its effectiveness. They also appear to have a penchant for methods of protection based on trust, secrecy and contract. As to the benefits to be gained from patenting software, the study shows that there is little evidence that SMEs would obtain any further gains from expanded patent and copyright systems. Indeed, SMEs are more focused on getting their products to the market place as quickly as possible, rather than worry about how to formally protect their software creations.

However, SMEs are aware of and understand the basic methods of protection such as copyright, trade marks and patent. They know what these can do for their businesses, however they are not overly fixated with them nor do they approve of expansions of these rights which they fear will only lead to complexity and increased costs.


Almost all UK and European software companies resort to copyright protection because it is cheap and automatic. A small number resorted to escrowing their source codes...

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