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Table of Contents

Lead Story

Security and the changing face of the POS

News

Industry Update

PayPal introduces dongle for smart phone payments

Good works make for good TV

Square deals

Retailers looking for larger role in POS mobile

TradeHill takes Dwolla to court

Features

Court affirms viability of merchant's direct claim against Visa

Eugene Rome and Liz Wang
Rome & Associates A.P.C.

Research Rundown

Mobile Payments Conference raises EMV questions

Meet The Expert: Justin Milmeister

ISOMetrics:
Payments industry 2012 salary guide

Selling Prepaid

Prepaid in brief

APPPA to tackle calling card complexities

Big challenge to comply with AML's 'Big Seven'

Views

Micropayments are no small matter

Patti Murphy
ProScribes Inc.

New developments in payments (and winemaking)

Brandes Elitch
CrossCheck Inc.

Education

Street SmartsSM:
A year of learning, writing, sharing

Bill Pirtle
C3ET Credit Card Consortia for Education & Training Inc.

Mining the digital gold rush

Dale S. Laszig
Castles Technology Co. Ltd.

Enhance your security protocols

Nicholas Cucci
Network Merchants Inc.

Pricing surprises: Don't let processors eat your lunch

Adam Atlas
Attorney at Law

Company Profile

2000Charge Inc.

New Products

An EMV/NFC ready POS terminal

Xion 2.5
First American Payment Systems L.P.

Mobilizing agents

CB Mobile Office
Merchant Warehouse

Inspiration

Big results from small talk

Miscellaneous

2012 events Calendar

Departments

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

March 26, 2012  •  Issue 12:03:02

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Mining the digital gold rush

By Dale S. Laszig

The digital age has spawned a new kind of gold rush. Winners still stake claims and losers perish in the wilderness. However, instead of mules and pick axes, today's tools are software development and digital technology. Yet an age-old question persists: why do some companies make it big, while others file for bankruptcy?

Although case studies may differ, corporate leadership guru and former Stanford Graduate Business School faculty member Jim Collins attributes success to a few timeless principles, beginning with finding the right people and facing some harsh realities.

Principles for company building

Collins advises readers of his book Good to Great to do the following:

Intellectual property rights

With these timeless principles in mind, individuals and companies also need to protect intellectual property. The original ideas that form the basis for a company's identity, products and services are considered intellectual property and need to be protected from theft by competitors.

While copyrighting a concept is not always possible, the way in which a concept is expressed is subject to protection and can't be duplicated without an author's permission.

To understand the nuances of software copyright laws, let's isolate the individual components of a software program. They include the architectural framework, code and program applications. The architecture of the program itself consists of its overall structure and how the program assigns precise functions to its various components.

Code comprises strings of data functioning interdependently within an integrated piece of software. Object code is a lower form of code, usually represented by strings of binary digits, while source code is the conceptual vision created by a software developer. It contains a more sophisticated sense of logic.

Inevitably, progress in software development leads to productized modules of object-oriented programs that are readily available in software developer kits and on the Internet. This makes it more challenging for legal analysts to determine which parts of a software program belong to the public domain and which modules, when grouped in a unique and novel way, could be considered original and creative work.

Finally, the holistic combination of object and source code, program structures and program notes represents completed pieces of software known as program applications.

Made in the USA

In a perfect world, when a software developer employed by a company designs and creates a program, the finished program belongs to the employer, not the individual developer. During the design process, if the developer made use of specific items of object code that were openly available on the Internet, the object code would be considered public domain.

The unique way in which the developer incorporated the public elements of the object code into a conceptual framework is the part of the design that would be considered the source code, and that source code would be subject to copyright protection. If the resulting product created by the software developer answers a very broad need in the market, other software developers should not be prohibited from finding other, similar methods to address the same circumstance and problem. However, if the software developer works for a U.S.-based enterprise, that company may seek patent protection for the software and concept. To meet requirements for a patent, a product must be:

  1. Patent-eligible subject matter
  2. Useful
  3. Novel
  4. Nonobvious

Other countries, such as the United Kingdom, do not allow the patenting of a piece of software.

Protecting trade secrets globally

Intellectual property rights are challenging to enforce globally because laws differ from one country to another. Additionally, a growing concern is the import and export of counterfeit merchandise, which causes billions in lost revenue for the original brand companies. Moreover, undetected counterfeiting of branded products aids and abets international organized crime. If patent protection for intellectual property is not available in a particular country, an alternative is to keep details a trade secret, focusing on your ability to prove in a court of law that you took the necessary steps to keep the information secret.

Ways to safeguard intellectual property are keeping employees on a "need to know" basis, obtaining confidentiality agreements, and registering software products with the U.S. Patent and Trademark Office.

The flywheel versus the doom loop

Collins and his researchers were impressed by the volume of companies that have succumbed to the gold-rush mentality by replacing their business models with new, revolutionary programs. "After years of lurching back and forth, [they] failed to build sustained momentum and fell instead into what we came to call the doom loop" of reactively changing course and jumping on short-lived trends, he wrote.

In contrast, companies that understand their markets and systematically grow their businesses keep the flywheel moving forward and deliver the gold standard of true innovation.

Dale S. Laszig is Senior Vice President of Sales in the United States for Castles Technology Co. Ltd., a manufacturer and global provider of smart card, contactless and POS solutions. She can be reached at 973-930-0331 or dale_laszig@castech.com.tw.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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