les Nouvelles - June 2009


Software & Valuation In The Information Society Part Three: The Software Inventory Valuation—TSV (OV)

Dwight Olson

CLP, LESI Copyright Committee, V3Data, Principal, San Diego, CA, USA

Software based intellectual assets are known in the computer industry as the software inventory. This software inventory could be considered to include both Intellectual Property (IP) and Intellectual Assets (IA). Like Vertex of Canada one could consider traditional IP to comprise just patents, trademarks, copyrights and industrial design registrations because these four Intellectual Properties have legislation to protect the legal owners in the disclosure of these assets.1 Non disclosed Intellectual Assets (IA) in the software inventory then could be considered to include trade secrets, unpublished copyrights, and know-how or the codified, tangible descriptions of specific knowledge which a business uses to support commercialization. Although Canada does not have specific laws that apply specifically to trade secrets, U.S. state jurisdictions do.2 Trade secrets, unpublished copyrights, and know-how are those software inventory assets that contain valuable proprietary information that belongs exclusively to the business, and which is used in the business to provide economic or competitive advantage. Many proprietary software vendors consider trade secrets to include unpatented inventions, formulas, processes, devices, patterns, designs, design drawings, source code, customer databases, and internal operations manuals. However, in the open source world, disclosure of the source code is covered by copyright protection.

Many investments today are secured using traditional IP such as software patents belonging to the organization, but seldom are unpublished copyright, know-how and trade secrets used.3 This is most interesting because for many industries, including the software industry, the trade secrets and non disclosed software inventory are in many cases more valuable than the traditional IP.

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