Legal Protection against Code Leakage in Software Companies

2024 05/23

In today's digital era, as the core of software and Internet enterprise operations, software security is increasingly concerned. Software code leakage (broadly defined as leaks, including cracking and leaking executable programs) may lead to the loss of intellectual property and the leakage of trade secrets, posing a huge threat to the company. This paper aims to delve into the issue of software code leakage and focus on how software companies can protect themselves at the legal level.


The complexity and leakage hazards of software code


Software not only includes code and programs, but also involves generated and dependent data files. Its complexity is determined by scale, structure, and function. Modern software typically consists of millions of lines of code, involving the collaborative work of multiple modules and components. This complexity increases the cost and value of software development, but also implies higher risk exposure and potential consequences. Once software leaks, attackers may exploit vulnerabilities and defects to obtain sensitive information, and even control the entire system, posing significant risks.


The harm of software leakage mainly manifests in the following aspects:


Firstly, software leaks may lead to the loss of intellectual property rights. Software is one of the core assets of a company, which includes its innovative achievements and trade secrets. If software leaks, competitors can easily replicate and use these intellectual property rights, thereby weakening the company's market competitiveness.


Secondly, software leaks may lead to the exposure of trade secrets. The software may contain sensitive information such as the company's customer list, marketing strategy, financial data, etc. If this information is leaked, it will cause huge losses to the company and may even lead to bankruptcy.


In addition, software leaks may also lead to potential financial losses. Attackers can exploit leaked software vulnerabilities to attack, steal company funds, or engage in other illegal activities. These activities not only bring direct economic losses to the company, but also damage its reputation and image, leading to customer loss and a decrease in market share.


In order to reduce the risk of software leakage, companies need to take a series of measures to protect the security of software. Firstly, it is necessary to strengthen the management of the software development process to ensure its quality and safety. Secondly, software encryption and access control should be strengthened to restrict unauthorized access. In addition, regular security checks should be conducted, and any behavior of leaking or stealing code should be protected and cracked down on.


Overview of software leakage pathways and methods


There are various ways for software leakage, including current developers, former employees, outsourced developers, code and cloud service hosting, collaborative development, and even copyright applications. Each pathway has its unique risks, and understanding these pathways is an important prerequisite for developing effective preventive measures.


Current employees may intentionally or unintentionally leak code. Intentional disclosure may be due to personal interests, dissatisfaction, or other motives. Inadvertent disclosure may be due to employee negligence or lack of understanding of security measures, such as sending code to the wrong recipient or handling code in an unsafe environment; Resigning employees may take away the code or leak it after leaving. They may still have access to the code and may intentionally or unintentionally use it for personal gain or share it with new employers; Outsourcing teams may not have as much ownership and security awareness of code assets as internal development teams within the company; If the security measures of outsourcing partners are not comprehensive enough or there are internal issues, the code may be leaked to unauthorized personnel; Storing code on cloud services or third-party hosting platforms also carries certain risks. If the security of these services is threatened, the code may be stolen or accessed; When collaborating with other companies or teams for development, code may be leaked during the collaboration process; Employees of the cooperating party may intentionally or unintentionally leak code, or the security measures of the cooperating party may not be sufficient; When applying for software copyright, it is necessary to submit part or all of the code content; If the security measures during the application process are not appropriate, the code may be leaked to third parties.


Legal Prevention and Contract Constraints for Code Leakage Pathways


In response to the code leakage channels mentioned above, legal persons and related personnel serving software companies can be constrained through corresponding agreements or contracts.


For in-service development employees, the following measures can be taken to regulate: 1) clarify confidentiality clauses in labor contracts, stipulating that employees have confidentiality obligations towards the company's software code; 2) Sign a specialized confidentiality agreement, detailing the scope, duration, and breach of contract responsibilities of confidentiality; 3) Implement non compete agreements to prevent employees from joining competitors or leaking code after leaving.


For departing employees, the following measures can be taken: 1) During the resignation procedures, employees are required to sign a resignation commitment letter and reconfirm their confidentiality obligations regarding the code; 2) Check if employees have returned all code related materials, equipment, and related access permissions; 3) If necessary, confidentiality agreements or non compete agreements can be signed with departing employees.


For outsourced developers, the following measures can be taken: 1) In the contract signed with the outsourcing company, clearly define the confidentiality responsibility and breach clauses of the code; 2) Require outsourcing companies to take appropriate security measures to protect the code and assume joint and several liability; 3) Conduct background checks on employees of outsourcing companies to ensure their reliability.


Regarding code and cloud service hosting, you can: 1) sign a contract with the cloud service provider to clarify the rights and obligations of both parties, including data security and confidentiality clauses; 2) Regularly review the security measures and compliance of cloud service providers; 3) Specify the responsibility and compensation method for data leakage in the contract.


For cooperative developers, it is necessary to: 1) clarify the confidentiality responsibilities and usage restrictions of each party regarding the code in the cooperation agreement; 2) Establish an evaluation and selection mechanism for partners to ensure they have sufficient security capabilities; 3) Define code management and access control measures during the collaboration process.


When applying for software copyright, it is possible to: 1) specify confidentiality responsibilities and data security requirements in agreements signed with copyright agencies or relevant departments; 2) Choose a reputable agency and understand its confidentiality measures and processes; 3) During the application process, pay attention to protecting the confidentiality of the code and avoiding unnecessary disclosure.


It should be noted that legal agreements and contracts are only a means to prevent software code leakage, and efforts need to be made in combination with technical measures, employee training, and management to ensure code security.

Rights protection measures for software developers


Software developers can use various technical means to track code leakage behavior, enhance code security, and reduce leakage risks. Firstly, active reporting code can be embedded in the software to proactively report infringement clues when infringement is discovered. This program can collect reporting information through secure channels and effectively detect infringement behavior.


Secondly, developers can use code watermarking technology. By embedding unique identifiers or comments in the code, the source of the code can be identified after leakage. These watermarks can be imperceptible specific encoding patterns, annotations, or variable naming schemes that can be embedded into code without affecting software functionality.


In addition, code auditing tools and static code analysis tools can also help detect and prevent code leaks. These tools can scan the code repository to identify potential leakage risks and suspicious activities. By combining log analysis, developers can monitor code access and download behavior to discover abnormal access patterns.


Another effective measure is to implement strict access control and permission management. By refining permission allocation, ensuring that only personnel who need to access code can access critical code segments can significantly reduce the risk of leakage. At the same time, technologies such as Multi Factor Authentication (MFA) and Single Sign On (SSO) are enabled to further improve access security.


Finally, it is crucial to establish specialized procedures to secure evidence. When a suspected leakage event is discovered, developers can provide conclusive evidence for legal protection by recording logs, saving communication records, and extracting relevant data. These pieces of evidence not only help identify the responsible person, but also provide strong support in legal proceedings.


By comprehensively utilizing these technological means, software developers can effectively track code leakage behavior and protect software asset security.


Criminal crackdown on software leaks


Criminal crackdown is a powerful means to deal with software leaks. Punishing infringement through legal means can effectively deter potential violators and protect the core interests of enterprises. Specifically, crimes such as copyright infringement, infringement of trade secrets, infringement of the right to network dissemination of work information, and embezzlement of duties can all be used to combat software leakage.


The crime of copyright infringement refers to the act of copying, distributing, and disseminating a work without the permission of the copyright owner. As a work protected by copyright law, unauthorized dissemination or use of software code constitutes the crime of copyright infringement. The crime of infringing on trade secrets refers to the illegal acquisition, use, or disclosure of company trade secrets, including technical and business information in software.


Infringement of the right to online dissemination of work information refers to the act of disseminating one's work to the public through the information network without the consent of the rights holder. This crime can be used to crack down on the spread of leaked software through the Internet. The crime of embezzlement applies to situations where employees within a company illegally occupy company property by taking advantage of their position, including unauthorized copying and selling of company software code.


By applying the above charges, enterprises can hold violators accountable through criminal means, not only recovering losses, but also playing a deterrent role in preventing similar incidents from happening again.


epilogue


In the digital age, software security is crucial, and any code leakage can lead to serious economic and reputational losses. By understanding various ways of code leakage, such as current and former employees, outsourcing teams, cloud service hosting, etc., companies should not only take technical precautions, but also constrain behaviors that may infringe on software rights. In addition, using legal means such as copyright infringement and trade secret infringement to crack down on leaks can not only protect the interests of enterprises, but also deter potential violators, prevent similar incidents from happening, and build a safer development environment. In the digital age, software companies need to comprehensively apply technology and legal measures to ensure software security and maintain the long-term development of the enterprise.