Shareware Developers Fight Court Battle Over Copyright Infringement Milwaukee - Two tiny developers of "shareware" are fighting in court over alleged copyright infringement. System Enhancement Associates Inc. (SEA) claims that PKWare INc. copied an SEA shareware program to use in its own shareware offering. SEA has filed suit in U.S. District Court here. The suit points out the growing commercial success of shareware, software that developers distribute freely on electronic bulletin boards and ask that users send them a payment. Most shareware companies are small operations with few employees, often run from a developer's home. In the last two years, a handful of shareware companies have grown large enough to rival commercial developers. The overall shareware market has expanded from approximately $5 million to about $15 million, according to Marshall Magee, president of the Association of Shareware Professionals, an industry group based in Norcross, Ga. With the growth have come squabbles over ownership of programs, perhaps inevitable in an industry where developers make their source code available to millions of users across the country. Users can copy shareware, Mr. Magee said. But users can't resell a shareware program they've copied or use part of a copied program in their own shareware offerings, he explained. In SEA vs. PKWare, SEA officials claim PKWare copied one of its programs in two of its commercial products. Two archive utilities that PKWare sells, called PKARC and PKXARC, are at the center of the controversy. An archive utility compresses data files so they can be stored in less space and transmitted more quickly over phone lines. SEA, of Fort Wayne, N.J., sells an archive utility called ARC. SEA claims PKARC and PKXARC violates both the trademark on its product's name and the copyrights on the product's appearance and user interface. SEA released its product in 1985. PKWare started selling its products in 1986. Last December, SEA asked PKWare to pay licensing fees on PKARC and PKXARC. PKWare refused. Philip Katz, the president of PKWare, a four-employee company that he runs from his Glendale, Wis., home, denied copying SEA's software. Mr. Katz claimed his products have more features than SEA's product. SEA president Thom Henderson wouldn't comment on the lawsuit, nor would his lawyer. PKWare's Mr. Katz said he worries about the effect of the suit on his business. "We're a small company. Any kind of litigation is a drain," he said. -By Daniel J. Lyons, PCWEEK (May 31, 1988)