There will allways be someone trying to copy what you are doing. If you got a patent you are "safe", but anyone can reverse engineer as much as they want as long as it does not infringe the patent. To my knowledge there is no *legal* issues about reverse engineering, unless this is either an infringement to the patent, or as a *signed* agreement with both parties, (a signed agreement of confinentiality). If they make infringement to the patent you can sue them, but it costs no matter how you look at it or what the outcome is.
Copyright and Patents are two very different things.
Patents protect ideas. You get a patent on post-it notes and you can sue people who manufacture self-stick notepads. Even if they invented their notepads independently and without knowledge of post-its.
Copyright protects expression. To infringe a copyright you must actually copy the original work. Thus, in the unlikely event that two people independently wrote the same novel, there would be no infringement if neither copied the other.
Copyright encompasses a number of rights including the rights to: reproduce, distribute, create derivative works, display and performance. A copyright owner can license those rights to others and the license can be carved up into very specific rights.
Have you ever noticed the notice at the beginning of a video tape that you rent saying that it is for home use and not public display? That's the copyright owner protecting his/her display rights. If you show that video tape in a theatre, you're liable for infringement.
Note that almost every piece of software you think you own is actually licensed. A licensor can restrict the use of that licesne. While there is some debate on the enforceability of "shrink wrap" licenses, reasonable restrictions are likely to be enforced, particularly if the software is provided without charge.
If a license restricts reverse engineering and you use your copy of the software for that purpose, you violate your license (some countries will not enforce a reverse engineering restriction). It's not that there is a general ban on reverse engineering, it's whether you had the right to use the software to begin with.
There is also an issue of contributory infringement. Does a freehost permit (an in fact encourage) the use of client software in a manner inconsistent with its license? If so, the creator of such software could be liable for contributory infringement.
I'm not sure that the analogies that have been offered are helpful because copyright law is a world unto itself. However, consider the following: A company publishes a book for $34.95. Another company, let's say Xerox, develops a device that allows people to create their own copies of the book for substantially less than $34.95. Should Xerox be liable when people make these cheap copies? Probably not. But what if Xerox's machine was useful for copying only that book and served no other purpose. Well that's a different story.
Rolo
