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Computer software programs have various unique characteristics as copyrightable works. Among other things, unlike traditional copyrightable works, it is necessary to copy and often to modify software programs in order to use them. In addition, as functional works, the development of additional programs, an overarching goal of copyright protection, often requires the “efficient reuse” of protected elements of preexisting programs. The copyright law currently provides an ambiguous and contradictory response to these issues. While section 117 of the Copyright Act provides program users with the privilege to prepare “adaptations” of copyrighted programs, section 106 reserves to copyright holders the exclusive right to prepare derivative versions of their programs. This article proposes that user adaptation privileges can be distinguished from, and reconciled with, copyright holder derivative work exclusive rights by virtue of the impact that a user-prepared adaptation will have upon the market for the original copyrighted program: “market benign” adaptations should be treated as privileged adaptations, while “market pernicious” adaptations should be treated as derivative works and therefore, subject to the rights of the copyright holder in the original program. In addition, the “practical-use versus market-impact” balancing rationale used to draw the foregoing distinction can also be used to reconstruct the traditional derivative work right into a narrower “software derivative work right.” This software derivative work right would limit the copyright holder’s exclusive right to that of creating derivative programs that are likely to compete with, or otherwise have an undue impact on the market for, the original copyrighted software program. This would enable judicial recognition of a new “public derivative work privilege” to create non-competitive derivative software programs from preexisting works.

So Dark the Con(tu) of Man: The Quest for a Software Derivative Work Right in Section 117