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California Court Invalidates Ashton-Tate’s Copyright on dBase Programs

When Ashton-Tate filed its copyright infringement suit against Fox Software and Santa Cruz Operation in November 1988, it could hardly have imagined a worse outcome than it experienced two years later at the hands of federal judge Terry Hatter. Ashton-Tate’s suit alleged that Fox and SCO’s “FoxBASE” line of programs infringed Ashton-Tate’s copyrights in dBase II, dBase III, dBase III Plus and dBase IV. In its complaint, Ashton-Tate claimed that the “organization, structure and sequence” of the dBase programs reflected forms of expression “original” to Ashton-Tate and that Fox and SCO had illegally copied the “unique look and feel” of the programs, including “commands, menus and text.”

On December 11, 1990, Judge Hatter issued an order invalidating Ashton-Tate’s copyrights in its own dBase line of programs, the foundation of its business, on the ground that Ashton-Tate had knowingly deceived the United States Copyright Office when it filed its copyright registrations for the dBase programs. The court stated that although Ashton-Tate knew that its programs were derived from JPLDIS, a public domain program developed by the Jet Propulsion Laboratory, it had “repeatedly failed” to disclose this fact to the Copyright Office when it filed its copyright applications for the programs.

The sanction imposed by the court on Ashton-Tate falls under the quaintly (but descriptively) named legal doctrine of “unclean hands.” The defense of unclean hands may be raised by the defendant in a copyright suit when the plaintiff has acted in a highly inequitable manner with respect to the work in question (e.g., by procuring a copyright through fraudulent representations made to the Copyright Office). However, because the copyright owner’s transgression must be of serious proportions, this defense is seldom successful. Judge Hatter’s rare application of the rule indicates that he found Ashton-Tate’s failure to disclose the antecedents of its programs to have been intentional, rather than negligent or inadvertent.

 

The consequence of the ruling, if it is upheld on the appeal which Ashton-Tate is certain to seek, is to strip Ashton-Tate of its copyright rights in dBase, and permit any company to copy the user interface of the program.

TLB Comment : The outcome of the Ashton-Tate case shows that a company may have more to lose than to gain when its sues a competitor for proprietary rights violations. Although Ashton-Tate may have thought it was stepping on an ant when it brought its claim against Fox and SCO, it stumbled instead onto a landmine. Lotus took the same risk when it brought suit against Paperback Software for infringement of 1-2-3 (see TLB July 1990), knowing that the defendant would argue that 1-2-3 was derived from VisiCalc. Fortunately for Lotus, this defense was emphatically rejected by the court.

One lesson to be learned from Ashton-Tate’s fall is that before commencing an aggressive campaign to protect proprietary rights, a company must consider all possible counter-attacks, and carefully weigh the benefit of its contemplated action, if successful, against the risk that the defendant’s counteroffensive will succeed, and the consequences if it does.

The Ashton-Tate decision also is interesting, coming as it does on the heels of the Lasercomb decision, where a court invalidated Lasercomb’s copyright under another branch of the “unclean hands” doctrine. In this case, the court held that the owner had “misused” its copyright by requiring a licensee to agree to a non-compete as a condition to a copyright license (see TLB, October f1990). The existence of this single clause in a license led the court to invalidate the copyright. Although two events usually don’t constitute a trend, invalidation of a copyright is rare, and for two courts to take such an action so close in time sends a strong message to the software industry that the doctrine of unclean hands is here to stay.