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Why is Bill Gates So Rich

Bill Gates probably has an above-average level of intelligence. He definitely had a good idea. It helped that both his parents were lawyers—at least he knew that he could trust his attorneys and that they were arguably able to find the type of specialized legal counsel he needed. This helped ensure that his contracts were enforceable and that these contracts considered the most significant issues respecting his rights. However, Bill Gates would be, at best, a freelance computer programmer today, were it not for the Copyright Laws.

When I say the Copyright Laws, I don't just mean those of the United States. I include those of all industrialized nations and the corresponding infrastructure which helps ensure that a person's copyrights are respected. These laws, though regional, basically protect the author or computer programmer to a similar extent. Blatant copying of a copyrighted work is protected. Penalties for copying are often very stiff. For example, in the United States, recoveries range from statutory damages from between $20,000 and $100,000 (if the copying was intentional and the author registered his copyright with the Copyright Office) to an unlimited amount, based on actual damages.

Why are the Copyright Laws responsible for Bill Gates's wealth? Because the underlying program code of DOS was protected from copying under the Copyright Law and, later, DOS became the standard operating system for the personal computer industry. The original code was the blue print of codes to come, making just about any duplication of the underlying code (the duplication being almost mandatory in the development of DOS compatible software) an infringement unless Microsoft's Copyrights are respected, i.e., through entering into a licensing agreement with Microsoft. Such licensing agreements included clauses which prohibited the reverse engineering of the code, thus further protecting Bill Gate's intellectual property under the Contract Law.

On top of all this, a copyright is valid for the life of the author plus 50 years or, as in this case, either 75 years from publication or 100 years from creation, whichever expires sooner (due to the fact that the code as it was developed, was a "work for hire", i.e., written by employees of Microsoft). This validity term is much longer than the Patent Laws provide protection (maximum of 20 years from a patent application's filing date). This means that it will be the middle of the next century before anyone can identically copy the original DOS code. And it will be 2073 before anyone can copy Windows 98™. In other words, the value of the code will have long expired before the protection runs out. This, combined with the overlapping, interdependent nature of upgrades, results in a perpetual monopoly.

Some might rightly argue that other factors had a strong influence on the explosive growth of the Gates fortune. However, legal experts have considered the fact that applying the Copyright Laws to an industry which is epitomized by technology may not be appropriate. After all, software is much more like hardware than it is like a novel, a song or a play. Experts and other interested parties have recognized this fact and successfully lobbied the United States Patent and Trademark Office and European Patent Office to permit the issuance of patents for computer software-related inventions. However, the protection offered by Copyright is concurrently available and often more valuable than that offered under the Patent Laws. The Patent Laws, however, promise broader, complementary protection for the programmer. Unlike the Copyright Laws, the Patent Laws protect against use of the same method as that of the owner or exclusive licensee of the patent.

Conclusion: Consult with an Intellectual Property Attorney early and consider all the tools you may have at your disposal to best ensure that your high tech startup will succeed.



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