The ProblemAlthough there were lots of other personal computers, the IBM PC was the one that really took off for business use, and quickly surpassed all others, including Apple. As the IBM PC and clones began to gain significant traction, software developers were faced with a dilemma. The world of Software was a bit of a wild west. Was software subject to patent law? The Patent and Trademark Office of the United States initially said "NO!" Software was like a mathematical algorithm, they said, and as such was not subject to patent law. Was it subject to copyright? If so, did changing the variable names, and moving some subroutines around constitute a unique work? Most software was delivered on 5 1/4 inch floppy drives. The YouTube clip below gives a demonstration of these floppies.
From day one developers of software were paranoid about someone stealing their software and reselling it. Anyone with 2 floppy drives could make a full copy of one floppy to another. It was easy to print out labels that would look like the original software. You could then resell potentially hundreds of copies of someone's software. You'd get all the profit but the original authors got nothing. Because you didn't have the cost of developing or supporting the software, you could undercut them.
One solution to this was a product called Copylock. They came up with a way to write to a track on the floppy, with special hardware, in such a way the the drives could read the track, but when copying the track, it defied the normal formatting and the drives would not copy the track.
Details of how Copylock worked are available here:
One of the most successful PC software companies, one that used Copylock protection, was Lotus. Lotus 1-2-3 came on 5 1/4 inch floppies with Copylock protection. It was not uncommon for users to encounter a problem with their installation and would need to re-install Lotus. Copylock kept a count of how many times you had installed it, and it would only allow 3 installations before telling you that you had run out. You could uninstall Lotus from a computer and it would increment its counter, but if your hard drive packed it in, or your 8 year old had discovered the "del" command, you had lost an installation.
Prior to my joining them, Synex had sent a software product that they had developed to an American software publishing company, in a bid to convince them to resell it. The company asked to see the source code, ostensibly to see its quality, and Synex sent it to them. That company told them shortly thereafter that they weren't interested in the software. A month later that company released it under their own name. Remember that this was the wild west. There was no precedent of anyone being successfully sued for copyright over software, so Synex didn't pursue it.
As a result, they were very paranoid about piracy. For their PC Harmony products for Business BASIC and Wang BASIC they enlisted Copylock to protect their software.
When I joined Synex as their development manager, I noticed that we had a significant number of support incidents around people running out of installs on their floppy disks. In addition to taking a lot of support time, we had the cost of mailing them another floppy disk. Then one day, one of our Lotus 1-2-3 disks ran out of installs. I phoned Lotus support, who sent me another floppy, but instead of being another 1-2-3 diskette, it was software to disable the copy protection. They had figured out that the cost of supporting Copylock was higher than the risk of someone making a copy of the disk!
Removing ProtectionismI tracked for a time how much of our software support was due to Copylock issues and we quickly decided that we would stop using Copylock. Our support costs dropped and our sales stayed steady!
One thing we had learned was that our product was complex enough that most users would want support, at least for installing the host software, so there was no real value in using the Copylock protection. The complexity of our product coupled with our excellent customer support was protection enough! Lesson learned!