I recently read the book "Protecting Your #1 Asset", which talks about intellectual property (IP) protections. Though it was a technical reading with many legal terminologies I wasn’t familiar with, I learned how IP protections apply to the software world. I'll talk, with plenty of examples, about three forms of protections that are most relevant in software; patent, copyright, and trademark.

Patent
Patents can protect certain functional aspects of software, though historically software used to be considered mathematical algorithm and hence was not protected under patent laws. For a patent to be granted, the invention in question has to be novel and non-obvious.

There are many software-related patents. Perhaps Amazon.com's "One Click" patent and Eolas' "browser plugin patent" are two of the most infamous ones, while the RSA patent for public key encryption is probably the most famous example.

Speaking of patents and inventions, Intellectual Ventures, a private company founded in 2000 by Nathan Myhrvold, is an interesting company whose business is pure invention and licensing. It aims to develop a large patent portfolio through invention and purchase of existing patents.

Copyright
Copyright, unlike patents, is granted automatically and protects non-functional aspects of software. Copying of source code without a license constitutes copyright infringement.

The Apple vs Microsoft legal dispute of the late 80s was a copyright infringement lawsuit in which Apple claimed that the "look and feel" of MacOS was protected under copyright law. In accordance to the copyright law, however, analysis was made on specific GUI elements as opposed to the overall look and feel itself, and it was found that most elements were already properly licensed to Microsoft. If Apple were successful in obtaining a software patent to protect the "look and feel" as an invention (which it wasn’t), Apple would have pursued Microsoft under patent law.

One aspect of copyright protection that is relevant to software (and the Internet in particular) is that knowingly facilitating copying of unauthorized materials contributes to copyright infringement. This explains why Napster was sued by major recording companies, and why there is a similar lawsuit against YouTube.

It is interesting to note that "fair use" of copyright material is allowed. For example, the use of partial text by major search engines is considered fair use.

Trademark
Trademark aims to protect reputation and goodwill of businesses that provides products and services to consumers. A recent article about the use of the term "Google" is an interesting example that illustrates how trademark works. Under the trademark law, arbitrary or fanciful term(s) receive the highest level of protection while generic terms receive the lowest. Hence, it is in Google's interest to not let the term "Google" become generic. In fact, they published guidelines for the use of the term.

Another aspect of trademark protection relevant to software is that distribution of unauthorized software may constitute trademark infringement, as it damages the reputation of the maker of the software. Obviously Microsoft is the main victim of software piracy.

With the rise of the Internet, trademark law has been extended to protect domain names. Businesses are protected from the so-called cybersquatting though some critics claim that it unfairly favors large corporations.