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Executable code is composed of sequences of binary digits (zeros
and ones). Each digit is called a “bit”, and eight-bit sequences
are called “bytes”.3 A computer program can be written onto a
magnetic disk or tape by encoding its particular executable code
on the surface of the disk or tape.4 That magnetic recording
allows the computer processor to read the executable code and to
perform the specific tasks directed by the code.
Generally, the cost of a blank tape, similar to one upon
which the computer programs acquired by petitioner were placed,
was less than $25 during the years in issue. An encoded computer
program can easily be transferred or copied onto additional blank
tapes and disks, resulting in identical reproductions of the
program. A computer program can also reside on media other than
magnetic tapes and disks, such as punch cards and CD-ROMs
3 For example, in the American Standard Code for Information
Interchange (ASCII), the binary representation for the letter “A”
is 01000001, and the binary representation for the letter “Z” is
01011010.
4 The surface of the computer disk or tape is magnetically
encoded with the executable code by magnetizing the crystals or
particles in the recording medium corresponding to the sequence
of zeros and ones making up the binary system of executable code.
For example, under the “nonreturn to zero inverted” (NRZI)
encoding method, every zero is represented on the disk or tape by
a magnet pointing in a certain direction, and every one by a
magnet pointing in the opposite direction. The amount of
information contained on a disk or tape is a function of the
magnetic recording density of the disk or tape. The information
on the disk or tape is interpreted by the computer when the
magnetic bits are converted into electrical signals.
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Last modified: May 25, 2011