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Software Copyright Litigation: The Year in Review

January 1990

1989 saw more computer software copyright suits filed and court decisions issued than in any previous year. Here is a review of some of the most significant developments of the year.

MTI v. CAMS . In late January, in the first “look and feel” decision of the year, a federal trial judge in Connecticut ruled that the copyrightable user interface of a computer-aided cost estimating software program had been infringed by programs produced and distributed by three competitors. This case is notable for the extremely simple, text-based menus that the court found had been infringed. The effect of the case was to reinforce the impact of similar decisions in 1987 and 1988, where the courts had showed themselves willing to protect user interfaces that many in the computer industry had considered too trivial and obvious to deserve protection.

NEC Corp. v. Intel . The most important software copyright decision of the year came in early February, when a federal trial court in California issued a decision holding that “microcode,” the software that controls the most fundamental operations of a microprocessor, is a computer program protectible under the Copyright Act. In this extremely comprehensive and technically competent decision, the court also condoned the use of “clean room” procedures as a means of copying the unprotected “ideas” in source code without infringing its copyrighted “expression.”

In December, NEC and Intel settled the remaining issues in this lawsuit. Thus, the February court opinion will not be appealed, and will stand as an important precedent for the computer industry.

Telemarketing Resources v. Symantec . This case, decided in September by California federal district court judge Robert Aguilar, is notable as one of the few cases in which a “look and feel” plaintiff lost. The court held that Symantec Corp.’s Grandview outlining software does not infringe the look and feel of Brown Bag Software’s PC-Outline program. The judge ruled that although some of the screens in the two programs shared similar ideas, these screens were, as a matter of law, not substantially similar. The court held that other screens were unprotectible under copyright law, since they were inherent in the idea of an outlining program. This decision emphasizes the point that there are limits to software copyright protection, which Telemarketing Resources overstepped when it sued Symantec.

Johnson Controls, Inc. v. Phoenix Control Systems, Inc . In October, in its first software copyright decision in more than five years, the Ninth Circuit Federal Appeals Court (whose jurisdiction includes California), held that the structure, sequence and organization of a computer program, as well as its code, are protected by copyright law. The court upheld a preliminary injunction based on a finding of infringement at this level of expression. The Ninth Circuit thus becomes the second federal appeals court to adopt the “structure, sequence and organization” test of infringement for source code, after the Third Circuit in the seminal Whelan v. Jaslow case, decided in 1987.

Apple v. Microsoft and Xerox v. Apple. Apple’s suit against Microsoft, alleging that Microsoft’s Windows 2.03 infringes certain Apple Macintosh programs which generate the Macintosh graphic user interface, has become by far the most complex saga in software copyright litigation.

However, Apple’s case was dramatically narrowed when, in late July, a California federal court judge ruled that all but 10 of the visual displays were subject to a 1985 license agreement between Apple and Microsoft. The remaining issues in the case are whether these 10 displays contain copyrightable expression, and if so, whether that expression has been infringed by Microsoft.

In mid-December, in what may prove to be the coup de grace in the battle for ownership of the Macintosh “desk top metaphor” interface, Xerox filed suit against Apple seeking to have Xerox declared the owner of this interface and to have Apple’s copyright registrations declared invalid. The Xerox case will put Apple, which has always been very aggressive in enforcing its intellectual property rights, on the defensive for the first time. If Xerox succeeds in proving that the Macintosh desk top metaphor is original with Xerox, not only will Apple lose its case against Microsoft, but Apple might find itself paying past and future royalties to Xerox.

Lotus v. Paperback . Lastly, Lotus’ two year old “look and feel” suit against Paperback Software, claiming infringement of the user interface of 1-2-3, continues to drag on in the federal district court in Massachusetts. However, both Lotus and Paperback have filed extensive legal briefs with the court, and it appears likely that in the first half of this year the court will decide whether, and to what extent, the Lotus 1-2-3 interface is protectible by copyright law. Based on the legal precedents to date, we predict victory for Lotus.