The Evolution of Intellectual Property Rights: From Punch Cards to Pixels

David Kalat discusses a 1971 story that shows how laws protecting IP struggle to keep pace with technology.

In 1971, a small accounting firm decided to take advantage of the dawning computer age and switched over some of its services to automation. The company hired a software engineer to write custom code, only to watch in horror as the developer literally took their software hostage to extort a higher fee. The developer stole the punch cards—which is what contained the custom code in those days—and went into hiding. He also demanded $100,000.

The police caught the blackmailer in just three days, charged him with grand theft and impounded the stolen punch cards. The company’s president pleaded with the sheriff to return the cards, but the sheriff refused. The cards were evidence in the case, to be securely locked up until trial.