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COMPARISON OF PATENT AND COPYRIGHT PROTECTION FOR COMPUTER SOFTWARE UNDER US LAW
Under US law, there are three forms of intellectual property protection that are potentially available for the technical content of computer software 1 -patent, copyright and trade secret. In general, patent protection is available for an invention implemented wholly or partially in software to the extent the invention has technological application or utility. Copyright protection is available for the expressive (creative) elements of software to the extent that the expression is original and is not dictated by the function to be performed, or by other external design or operational constraints. Trade secret protection is available for any aspect of software that is not generally known by others and provides a competitive business advantage. Since the late 1960s, the application of long established principles of US patent and copyright law to computer software has posed many difficult legal questions concerning the nature of the protected subject matter and the scope of protection to which that subject matter is entitled. However, the same has not been true with regard to trade secret protection. This is because of the inherent breadth of trade secret protection, subject only to the requirements of secrecy and competitive advantage. Accordingly, this article will focus on patent and copyright protection for software and the interplay between these two forms of protection in terms of protected subject matter, scope of protection and enforcement of rights, Ronald S, Laurie reports. INTRODUCTION PROTECTED SUBJECT MATTER & SCOPE OF PROTECTION COPYRIG HTS Program Structure ('SSO') Protection. The 1992 decision of the Second Circuit Court of Appeals in Computer Associates v Altai 2 was the first US appellate decision to unequivocally reject the analytical methodology formulated by the Third Circuit 10 years earlier in Whelan v Jaslow 3 to determine whether copyrighted and allegedly infringing computer programs were "substantially similar" in terms of protected non-literal expression. (In Whelan, the two programs at issue were written in different languages.) Whelan gave a very broad scope of copyright protection to the non-literal (i.e. non-code) elements of program design, referred to by the court as the "structure, sequence and organization" of the program. Under the Whelan 'rule', every aspect of high level program design (e.g. overall architecture,
subroutine organization, logic flow, data flow, algorithms, etc.) was copyrightable 'expression' except the program's ultimate purpose or function which is an uncopyrightable 'idea' under Section 102(b) of the US Copyright Act, codifying the 'ideaexpression dichotomy'. (However, in a footnote the court did acknowledge that, in certain cases, the 'idea' of a program may be to accomplish a desired function in a particular way.) The Whelan decision was based upon the highly questionable premise, at least in the general case, that computer programs are like traditional literary works such as novels and screenplays. The court relied on three prior copyright decisions where broad protection for nonliteral expression was granted. These cases all involved highly imaginative works of fantasy or science fiction, i.e. the movie Star Wars,4 the book Fahrenheit 451, 5 and a children's television programme, H.R. Puffenstuff, 6 which featured fanciful characters. The Altai court - relying heavily on the opinion of the courtappointed expert, Professor Randall Davis of the MIT Artificial Intelligence Lab7 rejected the Whelan rationale principally because it incorrectly assumed that there is only one 'idea' in a program. The Altai court adopted a three part test to determine whether similarities in non-code programmatic elements constitute infringement. The steps are: abstraction, filtration and comparison. The abstraction step follows the analytical 'levels of abstraction' model formulated by Judge Learned Hand in the 1930s, 7 according to which the elements of a copyrighted work are organized into a hierarchy of levels from the most detailed literal expression to the most abstract ideas. (Applying levels of abstraction to Romeo and Juliet, the lowest level of abstraction is Shakespeare's literal text in Elizabethan English and the highest is, 'boy meets girl'.) Under the classic analysis, in each case, a line separating the idea levels from the expression levels is drawn and the protected and accused works are then compared to determine on which side of the line the similarities fall. If on the expression side, there is infringement; if on the idea side, there is not. The primary contribution of Altai was the addition of a filtration step between the abstraction and comparison steps. The purpose of filtration is to eliminate from the infringement analysis (i.e. from the 'substantial similarity' comparison) ideas and what may be described as 'permitted expression'. Permitted expression includes: (a) that which has been licensed by, or under the authority of, the copyright owner; (b) that which is unprotected because it is (i) non-original to the plaintiff, (ii) common or 'stock' treatment (scenes-a-faire), or (iii) public domain; and (c) that which is constrained by 'externalities', such as functional requirements, industry practice, historical or biographical fact, the rules of a game etc. In the case of software, external design constraints include, inter alia, hardware requirements, interoperablility with other programs, functional efficiencies and standard programming practice. The Altai three-step methodology has been adopted by several other Circuit courts 8 and has almost completely displaced the overly simplistic Whelan test.
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plaintiff's work should nevertheless be considered during the comparison step on the theory that their arrangement or combination with each other, and with the protected elements, might represent copyrightable authorship, in the nature of a compilation.
USER INTERFACE ('LOOK AND FEEL') PROTECTION The recent Ninth Circuit appellate decision in Apple v Microsoft/Hewlett-Packard 9 similarly narrowed the scope of copyright protection for computer graphical user interfaces (GUIs). In the Apple case, the court essentially rejected the notion of broad protection for the 'look and feel' of the GUI and instead adopted an analytical methodology, not unlike the filtration analysis used in the Altai case to limit the scope of protection for nonliteral (non-code) elements of program design. The appellate court affirmed the trial court's decision which had rejected Apple's claim that the Macintosh GUI was protectable as a whole, and instead dissected the GUI into 180plus individual graphical or pictorial elements (e.g. overlapping windows, zooming window animation effect, trash can icon, etc.). The court found that the great majority of these elements were individually either: (a) covered by a prior licence from Apple to Microsoft; or (b) unprotectable because they were not originated by Apple (e.g. borrowed from Xerox), commonly used, functionally dictated, etc. Based on this finding, the court held that the scope of protection for the Macintosh GUI as a whole was very narrow, and that, in such a case, the 'substantial similarity' copyright infringement standard became a 'virtual identity' test. The Lotus v Borland 1° case, decided by the First Circuit last year, involved the copyrightability of the command hierarchy (menu structure) for the Lotus 1-2-3 spreadsheet software product. In Lotus, the appellate court reversed the trial court's finding of infringement. The appellate court never reached the issue of the scope of the copyright, finding that the command hierarchy did not constitute copyrightable subject matter, i.e. expression, but rather was an unprotectable 'method of operation' under Section 102(b) of the Copyright Act. The reason was that the command structure was the only way for a user to communicate with, i.e. to 'operate', the program. The court analogized the command hierarchy to the control buttons on a video-cassette recorder (play, pause, reverse, fast forward) - not to the labels on the buttons but to the buttons themselves. This analogy is interesting from the standpoint of the equivalency of hardware and software, a subject which plays a critical role in the debate over 'software patents' (see below).
REVERSE ENGINEERING (DECOMPILATIONI DISASSEMBLY)
As in the case of protection for program structure and user interface design, recent cases have narrowed the scope of copyright protection in the context of whether reverse engineering of object code constitutes infringement. In Atari Games v Nintendo 11 (Federal Circuit) and Sega v Accolade 12 (Ninth Circuit) - the only two US appellate decisions to have considered the question - the courts found that the creation of an 'interim copy' which necessarily results from decompilation or disassembly is a 'fair use' and thus does not constitute copyright infringement, provided: (1) the copy that is reverse engineered is legitimately obtained; (2) clecompilation or disassembly is the I/only way/~ to extract the uncopyrightable ideas and functionality in the program (e.g. interface information); and (3) the protected expression in the reverse engineered program is not carried forward into the derived program. The Sega decision placed great emphasis on the potential anti-competitive effects of allowing Nintendo to use its copyright to 'lock out' other game cartridge manufacturers from the market defined by its installed base of game decks. This may represent the beginning of a new trend in using antitrust (competition law) considerations to limit the scope of copyright protection in functional works that define (and control) industrial markets. (The EC Software Directive's interoperability exemption is another example.) OBSERVATIONS ON SCOPE OF COPYRIGHT PROTECTION FOR SOFTWARE
Considering the recent decisions discussed above, one can see a pendulum swing in connection with copyright protection for the 'functional' aspects of software. In the 1980s, US Courts gave very broad protection to nonliteral (non-code) elements of program and user interface design, In the 90s, the courts have limited the scope of protection to exclude highly functional aspects. At the same time that the scope of copyright protection for software is being narrowed, the extent to which software is patentable under US law is expanding (see below). There may, in fact, be some connection between these two trends. In the previous decade it was generally (although incorrectly) believed that software-based inventions as a class, were not patentable. Because US law does not recognize a general category of unfair competition claims (the two exceptions are trade secret misappropriation and 'passing off'), some judges attempted to stretch copyright law to prevent or punish what they felt was inappropriate behaviour or an unjust result, usually characterized by a large economic investment by the plaintiff-copyright owner and a minimal investment by the defendant-copier. As patent protection becomes more available (or, at least, more apparent) for most kinds of software, courts are less likely to balance the equities in favour of the copyright owner in a marginalcase, i.e. where the defendant is not an obvious pirate and the plaintiff is attempting to use a copyright to obtain 'patent-like' protection for functional aspects of the program.
OPEN ISSUES: APPLICATION OF THE NEW INFRINGEMENT TESTS After Computer Associates v Altai and Apple v Microsoft/
HP the main area of controversy concerns what one does with the results of the filtration (Altai) or dissection (Apple) step during the comparison step. The question is, what is compared during the final (infringement) phase of the analysis - the works as a whole (pre-filtration/dissection) or only their protectable elements (post-filtration~dissection)? Taken literally, Altai seems to require that after filtration, only the remaining elements in the protected and accused works should be collectively compared. However, the Apple approach suggests using the dissection step to determine the scope of the plaintiff's copyright - i.e. the degree of similarity between the two works which is necessary in order to support a finding of 'substantial similarity' - and then comparing the works as a whole using that similarity standard. There is also the argument that the individually unprotected (and licensed) elements of the
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primarily because it is based on the belief that in Benson the Supreme Court was simply wrong when it created a new category of nonstatutory subject matter relating to mathematical algorithms. The radical view subscribes to the rationale of Judge Rich's 1970 CCPA opinion in In re Musgrave. TM It was in Musgrave, that Judge Rich first expressed the view that Section 101 reflected Congress' intent to exhaust its Constitutional power to enact patent laws in order to "promote the progress o f . . . t h e useful arts".19 Thus, he concluded, the only subject matter limitation should be that the claimed invention is "within the technological arts", i.e. that it have some technical application or provide some technologically useful effect. The relevant question under the radical view is whether the claimed subject matter is no more than an abstract, i.e. unapplied, idea. The middle position, which may be characterized as the 'literal' view, is based on the premise that as long as a claim is directed to a 'machine', (one of the specifically enumerated categories of patentable inventions in Section 101), the statutory subject matter requirement is satisfied, even if the machine is a computer that is programmed to perform a mathematical algorithm. On the other hand, where a method or process involving a mathematical algorithm is claimed, the FreemanWalter-Abele Test must be applied to determine if the algorithm has been wholly preempted. Both the traditionalists and the radicals criticize the literalists as exalting form over substance. Not surprisingly, Alappat did not produce a statutory subject matter 'rule', or even a definitive set of guidelines, which could be consistently applied to claims involving mathematically based algorithms implemented in software in order to predict the outcome of a particular case. Rather, Alappat's main contribution was to highlight the philosophical differences on the Court in this area. Despite these differences, however, it is possible to identify a number of factors that are likely to affect the Court's determination of whether a particular claim survives scrutiny under Section 101. In general, the factors that improve the likelihood that a claim will be held to constitute statutory subject matter by a particular judge will have a positive effect, or at worst a neutral effect, on the other judges. That is, drafting techniques that improve a claim's chances of being held patentable by one judge are not likely to reduce the claim's chances of being held patentable by another judge. These drafting techniques involve both the specification and the claims. For the literalists, the claim format and language often appear to be dispositive in deciding whether the claimed subject matter is statutory or not. Thus, Judges Plager, Lourie and Clevenger in Warmerdam found Claim 5 (machine-plusmemory) to be statutory without any real discussion of what the machine was doing; whereas they summarily rejected Claim 6 drawn to a 'data structure', because it did not fall neatly into one of the statutory categories listed in Section 101 and was thus found to comprise merely an abstract idea. (It is submitted that the claim does in fact fall within a Section 101 category, as recognized by the court's tacit approval in Lowry of the Board of Appeal's characterization of the data structure claims in that case as defining a statutory "article of manufacture".) Contrast this rather superficial approach with the analysis of
PATENTS RECENT FEDERAL CIRCUIT CASES
In the nearly 12 year period between the formation of the Federal Circuit Court of Appeals in (CAFC) October 1982, and April 1994, the CAFC decided only three cases involving the question of whether inventions implemented partially or wholly in software constituted patentable subject matter under Section 101 of the US patent statute. The three cases were In re Grams 13 and In re Iwahashi TM in 1989, and Arrhythmia Research is in 1992. However, in the nine months from April through December of 1994, the Court issued five more decisions in this area, in which a total of 12 judges participated, including the much anticipated en banc decision in In re Alappat. The five 1994 cases16, and the CAFC judges involved in each decision (with the author of opinion listed first), are: In re Schrader (April) Plager/Mayer; Newman (dis.) In re Alappat (July) en banc (seven separate opinions) In re Warmerdam (Aug.) Plager/Lou rie/Clevenger Rader/Rich/Skelton In re Lowry (Aug.) In re Trovato (Dec.) Nies/Michel/Schall When one examines these decisions, it becomes apparent that each of the judges has his or her own particular view of the extent to which software-based processes and systems ought to be patented as a matter of legal policy. These views occupy a spectrum which includes three separately identifiable, though somewhat overlapping, regions. At what one may call the restricted-patentability end of the spectrum is the view that a method or apparatus claim involving a computer program which performs a 'mathematical algorithm' is not patentable unless the claimed subject matter has a qualitatively sufficient interaction with, or effect on, objects, substances or processes in the 'physical' environment external to the computer. At the expansive-patentability end of the spectrum, is the view that as long as the claimed invention has some technological application or utility it satisfies the subject matter criteria of Section 101, even if it is essentially mathematical in nature. A middle view would distinguish software-based inventions claimed as apparatus or machines from those claimed as processes or methods, with the former having a greater likelihood of surviving the Section 101 inquiry. The first position may be characterized as the 'traditional' view and is based on a series of decisions by the Federal Circuit's predecessor, the Court of Customs and Patent Appeals (CCPA) between 1972 and 1982. These cases represented an attempt to interpret and apply the US Supreme Court's 1972 decision in Gottschalk v Benson, 17 which held that a claim is nonstatutory if it "wholly preempts a mathematical algorithm". The CCPA cases produced a rule known as the FreemanWalter-Abele two-step test which purports to distinguish claims that wholly preempt a mathematical algorithm from those that do not. The first step of the test is to determine whether the claim in issue recites a mathematical algorithm, either directly or indirectly. If it does, the inquiry focuses on whether the algorithm is applied in such a way as to modify claimed structural elements (in an apparatus claim) or to limit process steps (in a method claim). The second position may be characterized as the 'radical' view,
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the essence of the apparatus claim in Trovato by traditionalist Judges Nies, Michel and Schall; in Trovato they held that, based on the "paucity of disclosure" in the specification, that the claim was, in reality, a method claim in the "guise" of an apparatus claim. It is not clear, however, that the result would have been any different in Trovato had the specification contained more "structure". Judge Nies, who wrote the Trovato opinion, dissented in Alappat, finding the meansplus-function apparatus claims in that case to be nonstatutory, notwithstanding a very detailed disclosure of specific discrete logic hardware elements in the specification. For the radicals, the lack of specific 'structure' in the specification would seem to be less of a problem, so long as the 'technological application' and 'tangible benefits' of the claimed invention are sufficiently described. In this regard, Judges Rader, Rich and Newman would not distinguish between method and machine claims nor between specifications that disclose discrete logic hardware implementations from those where the preferred embodiment is merely a software-programmed digital computer. US PATENT & TRADEMARK OFFICE INITIATIVES
In January 1994, the US Patent & Trademark Office (USPTO) held a two day public hearing in San Jose, California on the question of whether software-based inventions should be patented. The large computer manufacturers (IBM, Apple, AT&T, Digital Equipment, Silicon Graphics, Intel, etc.), and a few large software companies, (e.g. Microsoft), generally supported extending patent protection to software inventions. On the other side, several large software companies (including Adobe, Autodesk and Oracle) and many small software developers opposed patent protection for software, as inhibiting the development of new software products. Following the Federal Circuit's decision in Lowry (extending statutory subject matter status to data structures stored in a computer memory), the US Justice Department (on behalf of the USPTO) filed an appeal with the US Supreme Court challenging the decision. However, on 15 March 1995, the PTO announced that it was withdrawing its appeal of l o w r y to the Supreme Court and would be formulating new internal guidelines for the examination of software-related inventions. The PTO also agreed to withdraw its pending Federal Circuit appeal in In re Beauregard 2° for further consideration (i.e. allowance of claims) in light of Lowry. Draft Examination Guidelines were released for public comment on 1 June 1995. The new Guidelines reflect a much more tolerant attitude towards software-based patent claims, and explicitly authorize "article of manufacture", (i.e. software product) claims to computer programs and data structures perse, i.e. without any recitation of hardware other than a computer-readable memory in which the program or data structure is stored. The Guidelines recognize three distinct categories of statutory subject matter: • a Machine - "a computer or other programmable apparatus whose actions are directed by a computer program or other form of 'software'"; • an Article of Manufacture "a computer-readable memory that can be used to direct a computer to function in a particular manner when used by the computer"; and • a Process - "a series of specific operational steps to be
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performed on or with the aid of a computer" but state that claims to the following types of subject matter are non-statutory because they are "indistinguishable from abstract ideas, laws of nature and natural phenomena": • "a compilation of arrangement of data, independent of any physical element" [such as a computer-readable memory]; • "a known machine-readable storage medium that is encoded with data representing creative or artistic expression (e.g. a work of music, art or literature)... The specific words or symbols that constitute a computer program represent the expression of the computer program and as such are a literary creation." [Thus, it is not permissible to incorporate program source code in a claim.] • "a 'data structure' independent of any physical element (i.e. not as implemented on a physical component of a computer such as a computer-readable memory to render that component capable of causing a computer to operate in a particular manner"; • "a process that does nothing more than manipulate abstract ideas or concepts; (e.g. a process consisting solely of the steps one would follow in solving a mathematical problem." [e.g. a claim to a process for converting one set of numbers to another without recitation of any computerimplemented steps.] It should be noted that mathematical algorithms are only nonstatutory to the extent that they represent an abstract idea or concept. It appears that the PTO has unequivocally abandoned the practice of rejecting claims under Section 101 of the patent statute (relating to subject matter) based on the presence of a 'mathematical algorithm' in the claim in favour of rejections for attempting to claim abstract ideas, which will typically arise under Section 112 (relating to ambiguity and indefiniteness of claims). Thus, the PTO has adopted the view espoused by the Federal Circuit radicals (see above). In addition, like the CAFC radicals, the PTO will now instruct its examiners to focus on the 'utility' (technological application) of the invention as claimed: • Determine what the applicant has invented by reviewing the written description and the claims. Identify any specific embodiments of the invention that have been disclosed, review the detailed description of the invention and note the specific utility that has been asserted for the invention. •
Pay particular attention to the specific utility contemplated for the invention - features or elements of the invention that are necessary to provide the specific utility contemplated for that invention must be reflected in the claims.
A failure to limit the claim to reflect features of the invention that are necessary to impart the specific utility contemplated may also create a deficiency under Section 112, first paragraph. In summary, under the draft Guidelines, the PTO has followed the lead of Judges Rich, Rader, and Newman and has abandoned the mathematical algorithm rejection which has produced 23 years of confusion, inconsistency and unpredictability in the courts and among patent practitioners. The PTO has reinstated the three basic classes of nonstatutory subject matter recognized by the US Supreme Court prior to the illconceived Benson decision, i.e. abstract ideas, laws of nature and natural phenomena, and has in effect replaced the subject matter inquiry with one directed to the utility of the invention as claimed. •
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The application of both the means-plus-function type of equivalents under section 1 12 and the Doctrine of Equivalence to software-based inventions presents challenging legal questions. For example, does a means-plus-function claim in a patent that discloses only a hardware (e.g. hardwired logic) implementation cover an accused device in which the same function is performed entirely by a programmed general purpose digital computer? Is the software implementation 'equivalent', in terms of either structure, material or acts, to the disclosed hardware embodiment? Under the Doctrine of Equivalents, does a software implementation perform the function set forth in the claim (or a substantially similar function) in "substantially the same way" as a disclosed hardware embodiment? Surprisingly, there have been relatively few reported decisions that have addressed these issues. It is interesting to consider the extent to which the equivalents analysis under patent law should parallel the analysis of the "structure, sequence and organization" of protected and allegedly infringing computer programs under copyright law. Recent Federal Circuit cases have cautioned that the Doctrine of Equivalents should be applied as the exception rather than the rule because it introduces uncertainty and unpredictability into the public's determination of what is and is not infringing conduct. In this sense, the copyright parallel is particularly relevant. Patents provide a much stronger form of protection than do copyrights because patents confer an exclusionary right while copyright confer only an exclusive right. Thus, independent development is always a defence to copyright infringement but not to patent infringement. One of the reasons for this difference is the higher quantum of contribution required of patentees, i.e. novelty and non-obviousness, or inventive step, versus only originality (lack of copying) in the case of copyright authors. Another justification for the greater power of patent rights involves predictability. Thus, the patent claims are supposed to provide notice by which members of the public, including competitors, can determine precisely what conduct is infringing and thereby avoid inadvertent infringement. In the case of copyrights, the scope of a particular copyright, as measured by the elastic 'substantial similarity' standard, is much more difficult to evaluate in advance of a judicial determination. However, because copyright infringement liability presumes copying, it is not unreasonable to require that one who copies the work of another should bear the legal risk of any uncertainty as to whether the nature or amount of the copying constitutes infringement. Within the next few months, the Federal Circuit will issue its en banc decision in the case of Hilton-Davis Chem. Co. v Warner-Jenkinson Co. 23 It is expected that this decision will address, and hopefully resolve, many of the inconsistencies between prior decisions both in regard to Section 112 equivalents and the Doctrine of Equivalence.
EFFECT OF GAll" TRIPS ARTICLE 27 Article 27 of the GAll- TRIPS21 text relating to patentable subject matter is quite relevant to software-related inventions. The text states that inventions "in all technical fields" should be patentable provided they are "capable of industrial application." According to footnote 5 of the text, the phrase "capable of industrial application" is synonymous with "useful". Thus, one can argue that by virtue of the adoption of TRIPS, technical utility is now the sole criterion for determining the presence of statutory subject matter under Section 101 of the US Patent Act. As discussed above, this is precisely the view of the 'radicals' on the CAFC and is reflected in the PTO's proposed new Examination Guidelines. Article 27 also provides that "patents shall be available and patent rights enjoyable without discrimination as to ... the field of technology ..." To the extent that software can be considered to be a field of technology, this further reinforces the patentability argument. OBSERVATIONS ON PATENTABILITY OF SOFTWARE-BASED INVENTIONS
It is submitted that the US (CAFC/PTO) and EPO positions on the patentability of software-based inventions may not be very far apart. In particular, as discussed above, under the view of the CAFC radicals, and the draft PTO guidelines, the critical question is whether the claimed subject matter has a technological application or is merely an abstract, unapplied idea such as a scientific principle, method of doing business (not involving a computer) or a purely mental process. At least on the surface, this appears to be quite similar to the 'technical effect' or 'technical character' requirement currently applied by the EPO. SCOPE OF PROTECTION FOR PATENTED SOFTWARE MEANS-PLUS-FUNCTION CLAIMS AND THE DOCTRINE OF EQUIVALENCE
Under Section 1 12 of the US Patent Act, an invention may be claimed partially or entirely in means-plus-function format, and the scope of the claim will be construed to cover the specific implementation of the invention disclosed in the patent specification as well as any "equivalent structure, material or acts" that perform the claimed function. It is important to note that equivalence under Section 112 acts to limit the scope of claims. That is, the claim does not cover any device, system or method that achieves the recited function but only those that are the same as, or equivalent to, whatever is disclosed in the specification. The Doctrine of Equivalence, on the other hand, is a judicially created mechanism whereby the scope of a patent claim is interpreted in such a way as to cover devices, systems or methods that are outside the literal meaning of the claim language. The Doctrine is based on equitable principles and was introduced to prevent "unscrupulous copyists" from committing a "fraud on the patent" by making insubstantial changes to the patented invention, thereby avoiding (evading) infringement by operating just outside the precise literal language of the claims. Under the Doctrine, a claim could be held to cover any device or method which "performs substantially the same overall function or work, in substantially the same way to produce substantially the same overall result "22 as the claimed invention.
RENEWED INTEREST IN SUI GENERIS PROTECTION IN THE US THE MANIFESTO
For many years, there has been a vocal group of American lawyers, mostly academics, who have proposed a new sui generis form of protection for computer software. Two of the leading advocates for this view are Professors Pamela
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Samuelson (from the University of Pittsburgh School of Law) and Jerome Reichman (from the Vanderbilt University School of Law). Professor Samuelson has stated that, software is too much like a machine to be comfortable with copyright law and too much like a work of authorship to be comfortable with patent law. The latest articulation of this position is the 'Manifesto' article recently published in the Columbia Law Review 24. In addition to Professors Samuelson and Reichman, the authors of the Manifesto include Professor Randall Davis of MIT (the court-appointed expert in the Altai case) and Mitchell Kapor, founder of Lotus Development Corporation. The authors argue that the present system of patent, copyright and trade secret protection for software results in "cycles of overprotection and underprotection". They discuss a number of possible sui generis models, involving various combinations of 'anti-cloning' protection, registration schemes and automatic (non-voluntary) royalty-bearing licences.
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ENFORCEMENT OF RIGHTS IN SOFTWARE PRELIMINARY (INTERLOCUTORY) INJUNCTIONS. Conventional wisdom says that it is much easier to obtain a preliminary injunction in a copyright case than in a patent case. However in a case involving complex computer software, this may be less true than in other cases. One of the determinative factors US courts use in deciding whether to grant a preliminary injunction is the likelihood of success on the merits (i.e. at trial) by the party requesting the injunction. In a copyright case involving traditional subject matter such as literature, art or music, the validity of the copyright is seldom in dispute and a judge can easily assess the likelihood of success on the question of infringement by simply comparing the works at issue. In a patent case, however, validity issues are almost always presented and the likelihood of success is consequently more difficult to assess. Thus, prior to the creation of the Federal Circuit Court of Appeals in 1982, US District Court judges would grant a request for preliminary injunction in a patent case only in certain limited circumstances where there was some indication that patent validity would be established at trial, such as where the validity of the patent in suit had previously been adjudicated or where there was substantial industry acceptance of the patent by licensing. In the case of copyright litigation involving nonliteral copying of complex software, while there is usually no issue as to the validity of the copyright, a finding of infringement may not be so easily predicted in advance of trial. Thus, it may be more difficult as a practical matter to obtain a preliminary injunction in a software copyright infringement case. At the same time, it may be getting somewhat easier to obtain a preliminary injunction in patent cases. According to one recent study, in the 11 year period between the formation of the Court of Appeals for the Federal Circuit in 1982 and the end of 1993, of the 142 motions for preliminary injunction filed in patent cases, 61% were granted, and of the approximately one third of the decisions granting a preliminary injunction that were appealed, 58% were affirmed. The historic difficulty of establishing the necessary likelihood of success on the issue of patent validity has been mitigated by the Federal Circuit's renewed acceptance of the statutory presumption of validity. This statutory presumption shifts the burden of going forward with the evidence on the issue of invalidity at the preliminary injunction stage (as well as the ultimate burden of persuasion at trial) to the alleged infringer. If the alleged infringer offers evidence of invalidity, a patent owner seeking a preliminary injunction must show that the invalidity defense "lacks substantial merit". The Markman v Westview Instruments26 case decided by the Federal Circuit in 1995 may assist those seeking preliminary injunctions in patent cases. In Markman, the court held that interpretation and construction of patent claims is a question of law, within the court's exclusive power to decide. The court also held that claims may be construed without any extrinsic evidence beyond the patent and the prosecution history. Thus, courts may now be more willing to construe claims at the preliminary injunction stage in such a way as to increase the likelihood of success on both validity and infringement. The US Supreme Court has recently agreed to review another Federal Circuit case involving the same issue, In re Lockwood 27.
THE MAGNA CARTA Another interesting paper recently released in the US is titled, "Cyberspace and the American Dream: A Magna Carta for the Knowledge Age" which is jointly written by Esther Dyson, George Gilder, George Keyworth, and Alvin Toffler. 2s It discusses a wide variety of public policy issues, among them, the law of property in intangibles. The discussion of IP rights begins with the observation that clear property rights are needed for markets to work. It criticizes current government policy makers for attempting to use 'Second Wave' (industrial age) concepts to deal with 'Third Wave' (knowledge age) phenomena. The Third Wave, they assert, has fundamentally altered the nature of knowledge as a good. The operative shift comes about not because of the evolution of technology so much as in the shift to mass-media, mass-production, massculture, and general 'de-massification' of society. The dominant new form of knowledge will be perishable, transient, and customized knowledge. If information in the Second Wave was a public good, knowledge in the Third Wave is by its nature (in their view) a private good. Patent and copyright may not be necessary anymore, they say, but rather new forms of rights may emerge. OBSERVATIONS ON SUI GENERIS PROTECTION FOR SOFTWARE As the construction of the global information infrastructure (GII) expands, we can expect to see a renewed debate over sui generis protection for software. There are two primary problems presented by sui generis protection as compared with copyright. First, the ability to argue by analogy to existing case law precedent would be lost (this is, of course, less of a problem in civil law jurisdictions). Second, copyright protection for software on an international level is facilitated by the Berne Convention (to the extent that software is protected as a literary work as it is under the US Copyright ACt and the EC Software Directive) although in this context the 'national treatment' versus 'reciprocity' question is relevant. If a sui generis approach were adopted, it might be very difficult to implement a worldwide protection regime, as illustrated by the WlPO Chip Treaty. On the other hand, perhaps GATI- TRIPS is a better model.
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notified of the finding and advised that he may file a statement denying infringement and alleging that detention of the product will result in a material depreciation in its value or other economic loss or damage. In the absence of receipt of such a denial by Customs within 30 days of notice of detention to the importer, the products are subject to seizure and forfeiture. If the importer files a denial of infringement, the copyright owner is notified that the article will be released to the importer unless a written demand for exclusion is filed within 30 days. If the copyright owner files a written demand, and posts a bond in an amount determined by Customs, the parties have 30 days to file and exchange briefs and evidence in support of their position. The entire file is then forwarded from the District Director to Customs headquarters in Washington, DC for decision based on the written submissions. Depending on the decision, the goods are either seized or released to the importer. If they are seized they are forfeited (destroyed or given to the copyright owner) or if, the importer can establish that he was unaware of the infringement and otherwise acted in good faith, he may be allowed to return the goods to the country of origin. If the goods are released based on a decision of non-infringement, the copyright owner's bond is transmitted to the importer
IMPORTATION CONTROL IN GENERAL.
US patent 28 and copyright 29 statutes (as well as those dealing with protection of trademarks 3° and mask works 31) expressly prohibit importation of infringing articles into the US Of course, the patent or copyright owner, or an exclusive licensee, can enforce these rights in civil litigation by establishing personal (in personam) jurisdiction over the importer or foreign manufacturer and obtaining an injunction barring further importation. In addition, there are two administrative (in rem) mechanisms available for preventing importation into the US of products that infringe US patents or copyrights registered with the US Copyright Office. These are seizure of the infringing goods by the US Customs Service and an exclusion order issued by the US International Trade Commission. CUSTOMS SEIZURE The US Customs Service has implemented regulations 32 which provide for a relatively streamlined and expedited procedure to identify and seize imported goods that infringe copyrights registered with the US Copyright Office (as well as trademarks registered with the US Patent & Trademark Office). On the other hand, a patent owner may only enlist the aid of Customs after obtaining an injunction from a Federal court or an exclusion order from the US International Trade Commission. Under this procedure, the registered copyright is 'recorded' with Customs by submitting an application identifying: (a) the copyright owner; (b) the circumstances of the actual or potential injury which would result if the goods were allowed to be imported; (c) the country (or countries) of manufacture of genuine copies of the copyrighted work: (d) any foreign persons or business entities authorized to distribute copies of the work (and a description of the nature and scope of the authorization); (e) the foreign title(s) of the work, if different from the US title; and (f) details of any known infringements (e.g. suspected ports of entry, name of manufacturer or importer, etc.) 33. The application for recordation must be accompanied by: (a) a certified copy of the copyright registration certificate, (plus, if the applicant is other than the copyright owner identified in the registration, a certified copy of an assignment or exclusive licence from the listed owner to the applicant); (b) five photographic or other likenesses of the work reproduced on paper; and (c) a fee of $190 per work for which recordation is sought. 34 In the case of copyrighted software, the Customs service has established a central testing laboratory which has limited capabilities of comparing the copyrighted software product with the allegedly infringing imported product. Sometimes, the copyright owner provides the Customs laboratory with hardware and/or software to perform an automated comparison. This technique has been used successfully in a number of product areas including personal computer BIOS software and video games. The procedure 3s is as follows. After the Customs officials at a particular port of entry detect what they suspect might be an infringing software product, they forward a sample of the product to the testing laboratory for analysis. At this point, Customs may or may not inform the copyright owner. If testing indicates infringement (e.g. more than 30% overall similarity in object code), the goods are detained and the importer is
INTERNATIONAL TRADE COMMISSION EXCLUSION ORDERS
Section 337 of the Tariff Act of 193036, as amended by the Omnibus Trade and Competitiveness Act of 1988, prohibits the importation and domestic sale of products that infringe a valid and enforceable US product or process patent or a registered copyright (as well as a federally registered trademark or a mask work registered under the Semiconductor Chip Protection Act of 1984). A party seeking exclusion of allegedly infringing products files a complaint with the International Trade Commission (ITC) which investigates the allegations and decides whether or not to institute a 337 action. In some cases, the ITC conducts an investigation on its own initiative. Upon commencement of the investigation the ITC publishes a notice of investigation in the Federal Register. It must then determine if there is a violation and either issue or deny an exclusion order within one year (unless the case is designated as 'complicated' in which case the time is enlarged to 18 months). In order to obtain an exclusion order a 337 claimant must demonstrate that a US industry related to the protected articles "exists or is in the process of being established". Prior to the 1988 Amendments, the US industry had to be "efficiently and economically operated". Also, before the 1988 amendments, there was a requirement of actual or potential injury to the domestic industry. The injury requirement was eliminated as to patents, copyrights, trademarks and mask works, but remains as to unregistered trademarks and trade secrets which are classified as "unfair methods of competition or unfair acts". The remedies and relief which the ITC may impose upon finding a violation of the statute include: a temporary exclusion order (similar to a preliminary injunction); a permanent exclusion order, a cease-and-desist order (regarding sales after importation); civil penalties (administrative fines) and consent orders based on settlement agreements. The President of the US has the power, at any time during a 60 day period after a
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final ITC determination issuing an exclusion order, to disapprove the order "for policy reasons". The ITC order is appealable to the Court of Appeals for the Federal Circuit, but the President's 'veto' is unappealable. The one important remedy which the ITC can not impose is an award of monetary damages to the complainant. For this reason, it is common for a patent or copyright owner to pursue
11996] 12 CfS]~,
parallel actions against infringing imports in the ITC and by way of a civil infringement action in Federal District court. In such a case, the ITC's findings on infringement and validity are not entitled to res judicata effect. Ronald S. Laurie, McCutchen, Doyle, Brown & Enersen, San Francisco & Menlo Park Offices
FOOTNOTES ......... ~The term 'computer software' commonly ~n:ludes programs, in both source code and object code fomn, data structures and user interfaces. The term is also sometimes used to refer to certain types of specifications such as programmatlc inter~aces (APIs) forma'ts and protocols. 2Computer Associates Int. Inc. v Altai Inc. 982 F 2d 693 (2nd Cir. 19g2} 3Wl~lan Associates Inc. v Jaslow Dental Lab. Inc. 797 F2d 1222 (3rd Cir. 1986). ~wentieth Century Fox Film Corp. v MCA Inc. 715 F.2d 1327 (gth Cir. 1986). SBradbury v Columbia Broadcasting System Inc 287 F.2d 478 (9th Cir, t961). 6Sid & Marly Krofft Television Productions Inc. v McDonald's Corp. 562 F.2d 1157 (9th Cir. 1977) ~see e.g. Nichols v Universal Pictures Co. 45 F.2d 119, 121 (2d Cir. 1930) 8See e.g. Gates Rubber Co. v Bando Chemical Ind. Ltd. 9 F.3d 823 (10th Cir. t993) 9Apple Computer Inc. v Microsoft Corp. & Hewlett-Packard Co, 35 F.3d 1435 (gth Cir. 1995) ~°Lotu/ Development Corp. v Bodand, 49 F.3d 807 (1st Cir.
1995). ~IAtari Games Corp v Nintendo of America Inc, 975 F.2d 832 (Fed. Cir. 1992). 12Saga Enterprises Inc. v Accoldale Inc. 977 F 2d 1510 (gth Or. 1992). ~In re Grams, 888 F.2d 835 (Fed Cir 1989) ~41n re lwal~shi, 888 F.2d 1370 (Fed Cir. 1989). ~SArrhy~mia Research Technology v Corazonix Corp., 958 F 2d 1053 {Fed Cir 1992). ~61n re Schrader, 22 F.3d 290 (Fed Or. 199~,); In re Alappat, 33 F3d 1526 (Fed Cir. 1994; en bane); In re Warmerdam, 33 F.3d 1354 (Fed Cir 1994); In re Lowry, 32 f.3d 15,'9 (Fed Cir. 1994); In re Trovato, 42 F.3d 1376 (Fed Cir 1994)
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" G o t t s ~ I k - v l~nson, 4Og US 63 (1972} 1"In re Musgrave, 431 F 2d 882 (CC.PA. 1970). IqUS Constitution, Article I, Section 8, clause 8 2°In re Beauregard, US Patent & Trademark Office Board of Patent Interferences & Appeals, Sept 29 1993 (unpublished) 2~Agreement on Trade-Related Aspects of Intellectual Property Rights, Including Trade in Counterfeit Goods, Section S. ArtEcle 27 (1994). 22Graver Tank & Mfg. Co. v Linde Air Products Co. 339 US 605 (I 950) 23Hilton-Davis Chem. Co. v Wamer-Jenkinson Co, No 93. 1088, 1993 US App. LEXIS38138 (Fed. Cir., Dec 3, 1993; older for rehearing en bane) 24A Manifesto Concerning the Legal Protechon of Computer Programs, Pamela 5amuelson, Randall Davls, Mitchell D. Kapor and J.H. Reichman, ColumbB Law Review, Volume 94, No 8 (December 1994). 25New Perspectives Quarterly, Copyright Center for the Study of Democratic Institutions 1994, Vol. I 1 No 4 (September 22, 1994) See also Intellectual Value, Esther Dyson, Wired, July 1995, p. 136, and The Economy of Ideas: Patents and Copynghts in the Digital Age (Everything You Know About Intellectual Property is Wrong). John Perry Barlow, W~red, March 1994, p.85 26Markman v Westview Instruments Inc. 52 F 3d 967 (Fed. Or 1995; en banc) 271n re Lockwood, F 3d, 33 USP 0 2d 1406 (Fed Cir 1995) 2835 USC ~ 271(a}. 2917 USC ~ 602 3°15 USC §1124. 3117 USC. § 905(2) ~219 CF.R § ~133.0 et seq 3319 C.FR. § 133.32 ~19 C.F.R. § §133.33-133.47 3:'19 C.F.R. § 133.43 3619 USC § 1337