Louisiana Software License Enforcement Act

The Louisiana Software License Enforcement Act refers to the Software License Enforcement Act (SLEA) adopted by the state of Louisiana. The bill was voted into law in September 1984 under Title 51 (Trade and Commerce) of the Louisiana Revised Statutes by the Louisiana State Legislature

Louisiana State Legislature

The Louisiana State Legislature is the state legislature of the U.S. state of Louisiana. It is bicameral body, comprising the lower house, the Louisiana House of Representatives with 105 representatives, and the upper house, the Louisiana Senate with 39 senators...

. Sponsored and mostly written by Vault Corporation, the SLEA defines the permissible terms and conditions of a software license agreement and the requirements for enforceability. The reverse engineering, decompiling or disassembling provision of the Louisiana SLEA was invalidated by the United States Court of Appeals for the Fifth Circuit

United States Court of Appeals for the Fifth Circuit

The United States Court of Appeals for the Fifth Circuit is a federal court with appellate jurisdiction over the district courts in the following districts:* Eastern District of Louisiana* Middle District of Louisiana...

ruling in Vault Corp. v. Quaid Software, Ltd., 847 F.2d 255 (5th Cir. 1988).

Summary of act

The Louisiana SLEA consists of sections 1961-1966 of Title 51 of the Louisiana Revised Statutes, which outlines and specifies: relevant definitions, requirements for enforceability, accepted licensing terms, proper display of licensing terms, and enforceability.
Under section 1963, a software license agreement can only be enforced if the following conditions are met:

The end user can clearly read a software license notice on the software packaging.
The software license notice indicates that by opening the package or using the software the end user accepts the terms of the enclosed license agreement.
The notice states that the software may be returned if the end user does not accept the license agreement.

Under section 1964, the terms of a software license agreement can enable the licensor

License

The verb license or grant licence means to give permission. The noun license or licence refers to that permission as well as to the document recording that permission.A license may be granted by a party to another party as an element of an agreement...

to retain ownership of a licensed software copy. If retained, the agreement may also include the following limitations of the end user’s ability:

To reproduce/replicate the licensed software copy.
To modify, adapt, translate, reverse engineer, decompile, disassemble, and/or develop derivative works of the licensed software copy.
To further transfer, assign, rent, sell, or otherwise dispose of a licensed software copy.

In addition, the licensor may automatically terminate the software license agreement without notice if any provision of the agreement was breached by the licensee.

Road to becoming law

The Louisiana SLEA was first announced at Softcon in New Orleans by Louisiana Secretary of State James H. Brown during a press conference sponsored by Vault Corporation.
Vault Corporation’s, a company that developed software protection systems (anti-piracy tools), Chairman Krag Brotby was attributed to saying, “[Vault] helped write most of the bill...and that the announcement was timed to coincide with Softcon coming to New Orleans.” Brotby predicted that the law would provide a model for the other 49 states; Vault Corp. had invested $50,000 in an effort to push the bill.

The SLEA was introduced to the Louisiana State Legislature by State Senator William Atkins and Representative Al Ater

Al Ater

Alan Ray Ater , known as Al Ater, is a farmer and businessman from Ferriday, Louisiana, who served from 1984-1992 as a Democratic member of the Louisiana House of Representatives from District 21 in the eastern portion of his state....

. Supporters of the bill hoped it would encourage the growth of the software industry in Louisiana. It passed with minimal opposition in September 1984. Louisiana was the first state to adopt the SLEA, and the only state to adopt the bill as written by Vault Corporation. The bill was criticized for being, “a special-interest legislation designed to improve the economic position of software manufacturers without doing anything of substance to challenge software piracy,” Jay BloomBecker.

Role in Vault Corp. v. Quaid Software Ltd.

The Louisiana SLEA was first examined in court when Vault Corporation sued Quaid Software Ltd. for copyright infringement

Copyright infringement is the unauthorized or prohibited use of works under copyright, infringing the copyright holder's exclusive rights, such as the right to reproduce or perform the copyrighted work, or to make derivative works.- "Piracy" :...

, trade secret

Trade secret

A trade secret is a formula, practice, process, design, instrument, pattern, or compilation of information which is not generally known or reasonably ascertainable, by which a business can obtain an economic advantage over competitors or customers...

misappropriation, and patent infringement

Patent infringement

Patent infringement is the commission of a prohibited act with respect to a patented invention without permission from the patent holder. Permission may typically be granted in the form of a license. The definition of patent infringement may vary by jurisdiction, but it typically includes using or...

. Vault argued that Quaid's actions in decompiling and disassembling PROLOK constituted a violation of the software license agreement. Therefore, by Louisiana’s Software License Enforce Act, Quaid would be in violation of the Louisiana Uniform Trade Secret Act for trade secret misappropriation.

In Vault Corp. v. Quaid Software Ltd., 655 F.Supp. 750 (US District Court, E.D. Louisiana 1987), the United States District Court for the Eastern District of Louisiana

United States District Court for the Eastern District of Louisiana

The U.S. District Court for the Eastern District of Louisiana is a federal trial court based in New Orleans. Like all U.S...

ruled that the SLEA was preempted

Federal preemption

Federal preemption refers to the invalidation of US state law when it conflicts with Federal law.-Constitutional basis:According to the Supremacy Clause of the United States Constitution,...

by the Copyright Act

The Copyright Act of 1976 is a United States copyright law and remains the primary basis of copyright law in the United States, as amended by several later enacted copyright provisions...

, because, “Louisiana's License Act ‘touched upon the area’ of federal copyright law.” Upon appeal, the United States Court of Appeals for the Fifth Circuit affirmed the district court’s ruling. Thus, the Louisiana Revised Statutes 51:1963:4 provision for reverse engineering, decompiling, or disassembling, was invalidated.

External links

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