- Case Law Developments Relating to Copyright Protection for Computer Software
and Notice Requirements
to Copyright Protection
Millennium Copyright Act
Until recently, copyright was not regarded as being of much relevance to the sale of products other than traditionally "artistic" products such as books and gramophone records. Today, however, in addition to these traditional areas, copyright has become an extremely important weapon in preventing piracy of computer software and preventing copying of various useful items to which "art" has been applied. In this section, we shall consider the application of the Copyright Act to computer software.
The U.S. Copyright statute provides copyright protection for original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.
Subject to certain provisions relating to "fair use", the Copyright Act gives the copyright owner exclusive rights over the reproduction, preparation of derivative works, distribution and public performance and display of the copyrighted work. Since the passage of the Computer Software Rental Amendments Act in 1990 it has also been an infringement in copyright to distribute a computer program (including any tape, disk or other medium embodying such a program) for direct or indirect commercial advantage by way of rental, lease or lending.
It is not necessary to take any particular steps once a work has been created and "fixed in tangible form" for copyright to exist, although as noted above, in many cases it will be necessary to register a copyright in a work before one can proceed with an action for infringement of it. Once it exists, for works created after January 1, 1978, copyright, in general, lasts for a period of seventy years from the death of the author, or in the case of joint works from the death of the last-to-die of the authors of the work. In the case of works made for hire, however, protection runs for a period of ninety five years from publication or one hundred and twenty years from its creation, whichever comes first.
In order to succeed in a copyright action, it is of course necessary for the plaintiff to establish that the defendant "copied" the work in question. Since it is rarely possible to produce direct evidence of the act of copying, the courts will normally infer that copying has occurred if the plaintiff can show that the defendant had access to the copyrighted work and that the alleged infringement is substantially similar to the copyrighted work. However, if the defendant can show that there was independent creation of the work in question, there is no copyright infringement.
Unlike the patent statute, there is no statutory provision for an action for contributory infringement of a copyright by providing an actual infringer with the necessary equipment or materials to make a copy of a copyright work, the courts have recognized the existence of such a right. In order to succeed, however,, the Supreme Court in Sony Corporation of America v. Universal City Studios held it is necessary to demonstrate that there are no "substantial non-infringing uses" of the materials or equipment in question. The issue of contributory infringement lies at the core of the dispute between the music recording industry and Napster Inc. Napster provides a service through which users can, through the Internet, download music recordings that were resident on computers of any other person who was logged on to Napster's site at the time. This is done by software on the Napster site which searched out computers on which the requested piece of music was present. The recording industry regards this as being harmful to it as being likely to reduce the legitimate sales of its recordings. The industry argued that by providing this service, Napster was contributing to the actual infringement of the copyright in a musical work that occurred when that work was down-loaded. In response to a motion for a preliminary injunction, the district court judge rejected Napster's claims that there were substantial non-infringing uses and also analogies to taping of films broadcast in television which has been held by the Supreme Court to be permissible as a fair use in the Sony case, at least when done to enable the viewer to watch the film at a more convenient time. The Ninth Circuit Court of Appeals immediately stayed the injunction and ordered an early oral hearing of Napster's appeal against the injunction on the ground that the appellant had raised "substantial questions of first impression going both to the merits and the form of the injunction."
A basic principle laid down by the Supreme Court in the case of Baker v. Selden in 1879 is that there is no infringement of copyright in using or copying something if such copying or use is the only way for putting a particular idea into practice. Copyright protection is available only for a particular expression of an idea, not for the idea itself. (The case related to a book explaining a new system of bookkeeping and including certain blank forms). In that case, it was held that for the position to be otherwise there would be a grant of a monopoly "when no examination of its novelty had ever been officially made which would be a surprise and a fraud upon the public." The protection of ideas was to be a matter of Letters Patent not copyright. Indeed Section 102(b) of the Copyright Act 1976 specifically provides that
In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle or discovery regardless of the form in which it is described, explained, illustrated or embodied in such work.
What copyright protection does give to the owner is a bundle of particular rights that are to some extent dependent on the type of work involved. As noted below, case law has classified computer software as falling within the statutory definition of copyrightable subject matter as literary works., although some manifestations of the software may be protectable as audio-visual works.
Literary works are defined as works, other than audiovisual works, expressed in words, numbers, or other verbal or numerical symbols or indicia, regardless of the nature of the material objects, such as books, periodicals, manuscripts, phonorecords, film, tapes, disks, or cards, in which they are embodied.
The bundle of rights given to the owner of copyright in literary works are the rights to control 1)reproduction of the work, 2) preparation of derivative works, 3) distribution of copies of the work, 4) public performances of the work and 5) public display of the work.
Case Law Developments Relating to Copyright Protection for Computer Software
The Early Days
Early in the development of the art of software writing, the originators thereof feared that traditional forms of protection such as patents and copyrights would not give them sufficient protection and relied upon trade secret law. It soon became clear, however, that this was not the best solution to the problem since to establish trade secret protection, one must take some steps to impose a confidential relationship on those who have access to the secret. In a free flowing industry such as the computer software business, this is difficult.
Attention has, therefore, returned to the traditional protection of patents and copyrights. As discussed in above many computer-related inventions are patentable. However, patent protection cannot be obtained for inventions in this field that do not meet the current test for patentable subject matter. Furthermore, to be patentable the program must be "not obvious". This can be a difficult requirement to fulfill. Furthermore, patent protection requires a fairly prolonged examination by the Patent Office before any rights arise and is thus not the ideal way of dealing with copyists who may be extremely quick off the mark.
When a computer program is written out on a piece of paper, it is quite clear that copyright exists in this work in the same way as it would in respect of any other literary work. The first problem with which the courts had to grapple was whether copyright law could be extended to cover computer programs which exist merely in magnetic or electric form or as specific circuits etched on to a silicon chip.
The United States Copyright Office has provided for the registration of computer programs since 1964. However, that practice was on the basis it was the duty of the Copyright Office to give applicants the benefit of a doubt as to whether computer programs were protectable by law. Indeed, prior to the Copyright Act of 1976, court decisions and the opinions of the leading writers in the field were widely split on the question of whether computer programs were entitled to copyright protection and, if so, to what extent protection was to be given.
The 1976 Act itself was not very helpful in resolving these doubts, although as noted above, Section 102 states that copyright protection exists in works that are fixed in any present or future tangible medium even if it can be reproduced only by means of a machine or other device. On the other hand, Section 117 of the 1976 Act as originally enacted specifically stated that it was not the intention of the Act to change the preexisting law in respect to protection of computer programs. The Act, however, did not indicate what the preexisting law was. This problem was finally resolved in 1980 by the passage of the Computer Software Copyright Act 1980 which repealed original Section 117. This repeal removed any doubt as to whether the broad definition of Section 102 extends to software. Furthermore, a new Section 117 was enacted which provided that the owner of a computer program had a limited right to copy or adopt that program if this was necessary to ensure that the program could be used in a particular computer. Indeed, the new Act even provided a definition of a computer program as "a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result".
The first generation of cases to come before the courts mostly involved actions for copyright infringement in ROM's (Read Only Memory). Three main lines of argument were used by defendants to try to resist actions brought by the originators of a computer program which have been incorporated into the defendants ROMs. The first was that ROMs are utilitarian (the sub-argument of this being that even if not all such ROM's are utilitarian, at least those whose function is to work the computer itself are). The second was that since the program as it appears on a ROM is in object code form and therefore not intelligible to human beings, it falls outside the definition of "copy" in the Copyright Act. The final line of argument used was that it is against public policy to give computer manufacturers copyright protection for their software because such protection would hinder competition in the development of new computers.
The courts have not been impressed by arguments that computer software is purely utilitarian when they are presented in the context of direct copying of a particular program. For example, in an early case the Third Circuit Court of Appeals has rejected the argument that the use of a computer program encoded in a ROM was utilitarian and the argument that since the coding was in object code it was not a copy intelligible to humans and, therefore, outside the Copyright Act protection. The latter point was established by analyzing the definition of "copy" in the Copyright Act. Section 101 of the Act defines copies as:
material objects, other than phono records, in which a work is fixed by any method now known or later developed and from which the work can be perceived, reproduced or otherwise communicated either directly or with the aid of a machine or device.
The court held that since Congress had chosen to define "copy" broadly in this manner, it would be perverse to seek to interpret this broad language in a manner which would severely limit the copyrightability of computer programs by restricting this protection to the text and not to duplication of the program on a fixed silicon chip. The court further rejected an argument that ROMs were utilitarian objects and, thus, not subject to copyright protection by observing that ROM's were not the objects which had to meet the test of copyrightability. Only the original program had to be copyrightable. Once copyright existed in that program, the only question remaining was whether a ROM constituted a copy of it. As noted above, the court had no difficulty in deciding that this was the case. A similar conclusion was drawn by the District Court in the Northern District of Illinois.
One might have expected defendants to be more effective in utilizing the idea-expression dichotomy running through the United States copyright law when the defendant has done something more than copy the source or object code expression of the copyright owner's program. With a few exceptions, however, the courts have still tended to favor the copyright owner. One case where the argument was successful, however, was in Q-Co Industries, Inc. v. Hoffman. In that case, the court denied a preliminary injunction to prevent the defendants selling a program that was inspired by the program of the copyright owner in a case where the alleged infringer had taken a program designed to run on one type of hardware and had expended substantial effort to produce a program that would fulfill the same function on different hardware. The court noted that although the general structure of the two programs in question are very similar, they were written in different languages and employed wholly distinct algorithms. It concluded that the similarities "can be more closely analogize to the concept of wheels for the car rather than the intricacies of a particular suspension system ... it was the idea that was used rather than its expression. Therefore, copyright infringement has not been established".
As can be seen from the cases discussed above where consideration of the meaning of "copy" was of importance in determining whether there was copyright protection for a given product, in copyright law unlike patent law the issues of what constitutes protectable subject matter and what constitutes infringement are often intertwined. Furthermore one should bear in mind the fact that unlike the situation with patents, there is no Court of Appeals with nationwide jurisdiction for copyright cases and so different views may be taken in different circuits.
Once the basic issue of whether copyright protection could exist at all for computer software had been resolved the next issue, which is still with us, was to determine what exactly might be covered by copyright, particularly if the alleged infringer had not copied code line by line but had taken something less specific. The first group of cases to tackle this issue considered whether the "look and feel" of the two programs is the same and if so and if the defendant had access to the plaintiffs program, then copyright infringement was likely to be held to have occurred . Thus, if there was substantial copying of details of a program designed to fulfill a particular function on one type of hardware in producing software to fulfill the same function on different hardware, the mere fact that substantial effort was involved in making the conversion or even that different programming languages were used might not avoid a finding of copyright infringement. This is particularly the case if what is shown on the screen at each stage of running both the copyrighted and the allegedly infringing program or if similar errors appear in both programs.
The "Look and Feel" Test
In Whelan Associates the Third Circuit Court of Appeals was confronted with the question of whether, even if there was no copying of object code or source code, there could be copyright infringement in copying the "overall structure" of a program. The case was one where the alleged infringement was a rewrite of a program written in one computer language in a different language. The court concluded that since computer software was classified as a literary work under the Copyright Act and since prior decisions had held that there could be infringement of copyright in a play or book by copying the plot or plot devices of the play or book when the total "concept and feel" of the alleged infringing work was substantially similar to that of the copyrighted work, the same test should apply to infringement of copyright in computer programs. The defendants had argued that this conclusion was inappropriate in cases of computer software because of the basic premise in copyright law that copyright should apply only to the expression of an idea and not the idea itself. According to the defendants, the structure of a computer program is by definition an idea rather than an expression. The court, however, dismissed this argument by pointing out that it was possible to write a totally different program to perform the same tasks as both programs performed in the present case. The court thus concluded that the detailed structure of a program was part of the expression of an idea rather than an idea itself and upheld a finding of copyright infringement.
Similar reasoning was subsequently used to uphold the copyrightability of menu screens as shown on monitors when a computer was running a particular program as audio visual works.
Copyright infringement was also found in the unauthorized writing of a computer program to implement a scheme embodied in a copyrighted literary work that had previously been operated manually.
A further development has occurred in consideration of whether copyright protection exists for what is known as "microcode", i.e., the programs embodied in a semiconductor chip for operating a computer. These had been arguments that in view of the utilitarian nature of such "operations" software it should be treated differently from the prior cases that had dealt with "application software". However, in the first case of this type to come before the courts, copyright protection was upheld. The judge commented "the methodology employed in the creation of a microcode is to the court indistinguishable from that employed in the creation of any computer program".
Early in the 1990's, however, the pendulum began to swing as software writers started to complain that the protection being given by the courts was overly broad and as such was inhibiting new developments. Concern that the "look and feel" test was leading to overly broad protection led at first to adoption of a two part test assessing intrinsic and extrinsic similarities. In Johnson Controls the court focused on the question of whether the structure, sequence and organization of the alleged infringement was the same as that of the plaintiffs program and in Lotus Dev Corp v. Paperback Software a different court looked at the flow charts of the parties to determine whether there was infringement.
In 1992 the idea began to take hold that a computer program was in some ways like a play or other literary work in which a variety of possibilities presented themselves for protection from, at the most specific the actual script to, at the most general, the broad outlines of the plot. Other traditional copyright doctrines such as the concepts that in some cases there could be a merger between the idea and its expression because of the limited ways in which a particular idea could be expressed or that protection would not be afforded to features that were dictated by external requirements also started to be applied in the computer software field. The advantage of these approaches was that copyright lawyers had already grappled with these issues over many years and if the principles that had evolved in dealing with plays could be applied to computer programs, thus should facilitate rapid development of the law.
One of the earliest case to use such an approach was Autoskill Inc v. National Educational Support Systems Inc. In this case Judge Mechem specifically declined to follow the look and feel cases and stated:
A better approach for determining what is idea as opposed to expression is known as the abstractions test articulated by Judge Learned Hand in Nicholls v. Universal Pictures Corporation (17 USPQ 84 2nd Cir 1930)... [u]pon any work, and especially a play, a great number of patterns of increasing generality will fit equally well, as more and more of the incident is left out. The last may be no more than the most general statement of what the play is about, and at times may consist of only its title; but there is a point in this series of abstractions where they are no longer protected, since otherwise the playwright could prevent the use of his ideas to which, apart from his expression, his property never extended.
The "Abstraction, Filtration, and Comparison" Tests
This abstractions test approach was developed more fully by the Second Circuit Court of Appeals in the case of Computer Associates International Inc v. Altai Inc. The court started its analysis by pointing out that since the statute provided that computer programs are to be protected as literary works then, as is the case with other literary works some protection of non-literal structures of computer programs must be covered analogously with the position in other literary works. After noting with approval Judge Learned Hand's decision in the Nichols case mentioned above, and pointing out that "nobody has ever been able to fix that boundary [between an idea and a expression] and nobody ever can" the court went on to propose a three step analysis which has become to be known as the abstraction-filtration-comparison test. In doing this the court should first try to determine the level of generality at which it can be said that expression of an idea differs from the idea itself. The court noted that this was a standard technique in dealing with plays and other literary works and suggested that in dealing with computer software it would be useful to follow the designer's steps to try to establish the appropriate level. The court noted that:
At the lowest level of abstraction, a computer program may be thought of in its entirety as a set of individual instructions organized into a hierarchy of modules. As a higher level of abstraction the instructions in the lowest-level modules may be replaced conceptually by the functions of those modules. At progressively higher levels of abstraction, the functions of higher level modules conceptually replace the implantation of those modules ... until finally one is left is left with nothing but the ultimata function of the program.
The court did not indicate at which of these levels it felt the idea-expression boundary was being crossed. However, from the general tenor of the decision as a whole there is an implication that the highest level at which expression might be found is in the organization and structure of hierarchy of modules.
The second step in the test is the filtration step; the object of which is to separate out protectable elements of the expression from nonprotectable material. Such nonprotectable materials include elements dictated by efficiency, elements dictated by external factors, and elements taken from the public domain.
Finally the court noted that "the primary object of copyright is not to reward the labor of authors but rather their original contribution.
The final test is to compare what remains with the alleged infringement.
The abstraction-filtration-comparison test for determining whether there has been infringement in cases other than where there has been direct actual copying has now been endorsed by several appeal courts including: the Fourth, Tenth Eleventh and Federal Circuit Courts of Appeals. In Lotus Development v. Borland, however, the First Circuit doubted its usefulness in cases where the issue was one of literal copying of a literal element of a program. As noted by the Eleventh Circuit, this is not surprising since the test was developed to deal with the problem of non-literal copying of non-literal elements (the court defining literal elements as source code and object code only)
In Computermax Inc v. UCR Inc. a district Court in Georgia (which is in the Eleventh Circuit) adopted the abstraction-filtration-comparison test to find that there was copyright infringement in copying the plaintiff's file structures since these structures or not dictated by outside factors such as market forces and are not merely analogous to blank forms since they collect and organize information entered by the user.
The Fifth Circuit first apparently held that only literal copying of elements of a computer program could be considered an infringement, then simply recognized that non-literal elements of computer programs "such as structure sequence and organization", may be copyrightable, and subsequently applied the abstraction-filtration-comparison test to conclude that copyright protection could in principle exist in input and output formats and used interfaces as long as these formats were not dictated by external requirements. As long as such factors were not involved, the court found that the expressive nature of such interfaces outweighed their utilitarian function.
In Harbor Software Inc. v. Applied Systems Inc. the court in its abstract analysis noted the possible applicability of the case law relating to protection of compilations to the selection and arrangement of modules in a program and that such protection was likely to be "thin". the court in its abstract analysis noted the possible applicability of the case law relating to protection of compilations to the selection and arrangement of modules in a program and that such protection was likely to be "thin".
In O.P. Solutions Inc.v. Intellectual Property Network Ltd. the court listed the filters that must be passed through before reaching the point at which a comparison is made as including: 1) a test for originality, 2) whether there has been a merger of the idea and the expression or the related scenes a faire doctrine applies and 3) whether a public domain exception applies.
In Bateman v. Mnemonics the Eleventh Circuit Court of Appeals held that the district court erred in instructing a jury to filter out only nonliteral similarities in carrying out the filtration stage of the abstraction-filtration-comparison test since the purpose of this stage was to eliminate from consideration all unprotectable elements such as ideas, facts, public domain information, merger material, scenes a faire material and other unprotectable elements of the ... program under consideration.
As noted above, in addition to the "abstraction" concept that is derived from traditional copyright law, two other traditional doctrines are now often referred to in computer case. These are the "merger" doctrine and the "scenes a faire" doctrine. Both of these may have the effect of limiting copyright protection in the software area. An example of the application of the former is found in the recent case of Interactive Network Inc. v. NTN Communications Inc. In this case it was held that the idea behind a prediction scheme for an interactive video game played with televised football games merged with its expression and so there was no infringement in copying the elements of the game in which such merger had occurred. The copied elements were stated to be "inherent in, inseparable from, or constrained by" the idea of an interactive football game. The scenes a faire doctrine excludes from copyright protection those elements that follow naturally from a works theme rather from the author's creativity. The doctrine was applied, for example in Computer Associates v. Altai discussed above as part of the filtration stage to eliminate from consideration any features that were themselves incapable of protection.
In the case of Feist Publications Inc. v. Rural Telephone Service Co. Inc., the United States Supreme Court considered the question whether copyright protection can exist in compilations of data. A key question was what was required to satisfy the "originality" requirement of the Copyright Act. In her opinion, Justice O'Connor noted that this required not only that the author not copy the work from another, but also the work involved "at least some minimal degree of creativity". Although she noted the requisite level of creativity is extremely low, she went on to note with approval that Supreme Court decisions in the late 19th century had referred to the originality requirement that what should be protected by copyright were the "fruits of intellectual labor". Thus, in order for protection to arise something more than the "sweat of the brow" was required.
Even though in principle there may be a broad interpretation of what may be protected as a literary work, it must be recognized that in some circumstances the degree of protection given even to a literary work may be rather narrow. Two such situations have been seen which either are directly related to the computer industry or are clearly relevant to it. The first is where the plaintiff's own acts have the effect of narrowing its protection. A case in point is Apple Computer Inc. v. Microsoft Corp. In the early days, Apple had licensed Microsoft to use certain visual displays produced by graphical user interface (GUI) programs. Subsequently it sued Microsoft for infringement on the basis of certain displays that were present in late generation Windows programs. The Court found that most of the acts complained of were in fact covered by the license and concluded that so far as unlicensed material was concerned, Apple's copyrights should be construed narrowly because of the external limitations imposed upon Microsoft in view of the limited number of ways in which a GUI could be expressed. In Adobe Systems Inc. v. Southern Software Inc. It was held that a program for creating type fonts could have the minimum degree of creativity required since in this area two independently working programmers using the same data and the same tools can produce an indistinguishable output that will have few points in common.
A second area in which narrow protection is traditional is in respect of compilations. Thus, copyright in a compilation extends only to that which has been created by the person making the compilation and does not give any new right in preexisting material that has been compiled. Similarly, the protection given to standard forms and similar documents has been held to be very narrow.
In the Feist case noted above the data constituted a list of names and telephone numbers taken from a small rural telephone directory. The U.S. Copyright Statute specifically refers to compilations being protectable by copyright only if the facts included in the compilation have been "selected, coordinated or arranged in such a way that the resulting work as a whole constitutes an original work of authorship". Twentieth century cases in which compilations of data had been held to constitute copyrightable subject matter had been those wherein the person making the compilation had contributed original elements of selection and arrangement. In the case of a telephone directory, the compiler had no choice in the selection of entries and the arrangement of them in alphabetical order was, she believed, so commonplace as to preclude the necessary element of originality.
Some concern has been expressed by those involved in other types of database compilation that this decision may affect copyrightability in such databases. It should, however, be noted that the court focused heavily on the question of the way in which data was selected and arranged and indicated that copyright protection clearly could exist in such selections and arrangements as long as at least a minimum degree of creativity was involved. It remains to be seen how courts will view this requirement when confronted with databases organized in accordance with, for example, commercial computer programs. In O.P. Solutions Inc. v. Intellectual Property Network Ltd. noted above it was held that it might be possible to show that the screen lay-out of a trademark docket management system was "sufficiently original and creative to deserve copyright protection as a compilation of facts". However, protection would be narrow and infringement found only if the defendant's program "differs by no more than a trivial degree".
Another traditional doctrine that has required review and application to the computer age is the "blank forms" doctrine. Based on the Supreme Court's decision in Baker v. Sedden noted above, it had long been the practice of the Copyright Office to refuse to register blank forms for recording information unless the form itself conveyed information. This practice has implications in the computer field in connection with the design of screens and computer interfaces. In a non-computer case, Kregos v. Associated Press, the Second Circuit pointed out that "if [a blank form] contained a group of headings whose selection (or possible arrangement) displayed cognizable creativity, the author's choice of those headings would convey to users the information that this group of categories was something out of the ordinary."
A attack on the protectability of a database on the ground that it was a "utilitarian object' failed in General Precision Tool Co. v. Pharma Tool Corp. However, the effect of the Feist decision and its requirement that for protection there must be some minimal degree of originality has been felt in the software area as is shown by Mitel Inc. v. Iqtel Inc. where it was held that short arbitrary sequences of numbers, forming part of what were known as "command codes" lacked sufficient originality to be the subject of copyright protection. Other aspects of the command codes did require intellectual effort for their creation, but even here the court found that "much of the expression in [the] command codes was dictated by the proclivities of technicians and limited by significant hardware, compatibility and industry requirements and application of the scenes a faire doctrine meant that there was nothing left that could be protected by copyright.
On the other hand, Feist's recognition that compilations of elements that are themselves not protectable can be the subject of copyright protection when there is the necessary selection coordination and arrangement was combined with the abstraction-filtration-comparison test in Sofitel Inc. v. Dragon Medical and Scientific Communications to conclude that copyright protection could exist in the "architecture" of a computer program even if this was made up of unprotectable elements where it was possible to conclude that there was a degree of expression in establishing interrelationships between the various elements involved.
Once filtration is complete the court moves on to comparing that which has been found to be susceptible of protection with the alleged infringement. Although traditionally it has been said that for there to be infringement a "substantial" part of the work must be taken, the word "substantial" has often been construed in a qualitative rather than a quantitative sense. The Second Circuit has expressed the requirement as follows:
It is only when the similarities between the protected elements of the plaintiff's work and the allegedly infringing work are of "small import quantitatively or qualitatively" that the defendant will be found innocent of infringement.
Finally in this section we should note certain acts that have been considered by the courts to determine whether they constitute an impermissible use of copyrighted software. Thus in MAI Systems Corp. v. Peak Computer Inc, the Ninth Circuit Court of Appeals found that the simple unauthorized act of loading a program into the random access memory of a computer constituted infringement since it created a copy that can be "perceived, reproduced or otherwise communicated". In Sega Enterprises Inc. v. Maphiait was found that not only was uploading a computer game on to a computer bulletin board a direct copyright infringement but that the person who did this was also liable as a contributory infringer whenever someone accessed the bulletin board to down load the program. . On the other hand, it has been found that unauthorized creation of a hypertext link to pages within someone else's web site was not of itself a copyright infringement since a user of the link was being transferred to a genuine page that had been made available by the copyright owner.
Like the copyright laws of almost all countries, the U.S. Copyright Law provides for exceptions that permit certain acts which would otherwise be actionable as copyright infringements. These provisions, known as the "fair use" provisions apply to all copyright works and provide exceptions from copyright protection for "purposes such as criticism, comment, news, reporting, teaching (including multiple copies for classroom use) scholarship or research". In deciding whether a use is fair, courts must consider:
- (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the copyrighted work.
On October 25, 1992 the Fair Use Provision was amended to make it clear that "The fact a work is not published shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors. 
Certain additional specific provisions are made for fair use in various fields. For example, it is not a copyright infringement for the owner of a copy of a computer program to make or authorize the making of another copy or adaptation of that computer program provided:
- (1) that such new a copy or adaptation is created as an essential step in the utilization of the computer program in conjunction with a machine and that it is used in no other manner, or
(2) that such new copy or adaptation is for archival purposes only and that all archival copies are destroyed in the event that continued possession of the computer program should cease to be rightful.
The first two cases in which the application of the Fair Use Provisions to computer software were considered by appellate courts both related to the programs used in game consoles where competitors had carried out reverse engineering to try to determine what programming needed to be included in a game cartridge to enable it to be used in the game console in question. In the case of Sega Enterprises v. Accolade Inc. the court carried out an analysis of the above listed factors emphasizing in particular the question of the effect of the competitors on the value of the copyrighted work (a factor on which the Supreme court had focused in the case of Harper & Row v. Nation) and noted that the purpose of the copyright statute was to promote the useful arts rather than necessarily to give an inviolable monopoly to the original producer of a copyright work. In the present case the court felt that permitting a wider range of games to be played on the consoles in question was unlikely to reduce sales of such consoles and thus held that such reverse engineering so as to make a separate program operable with the console in question was a fair use. A similar conclusion was reached by the Federal Circuit court of Appeals in Atari Games Corp. v. Nintendo.
Later the Ninth Circuit in Sony Computer Entertainment v. Connectrix, was faced with a case in which the defendants analyzed the basic input-output system (BIOS) of Sony's Play Station so as to produce a program that would enable a regular computer to emulate a Play Station. None of Sony's code ended up by being included in the emulation software. The analysis had involved making copies of Sony's BIOS. It was admitted that this was an act of copyright infringement unless it was excused under the fair use doctrine. The court analyzed the four factors set out above and concluded that the use was fair in the present case.
On the first factor (purpose and character of the use), the Court focused on the Supreme Court's decision in Campbell v. Acuff-Rose Music Inc., where it had been held that a key question in fair use analysis was the extent to which the new work "adds something new, with a further purpose or different character, altering the first with new expression, meaning or message, in other words, whether and to what extent the new work is transformative". The Ninth Circuit found that in the present case, the defendant's product was "modestly transformative".
On the second factor (the nature of the work), the Ninth Circuit concluded that Sony's BIOS "lies at a distance from the core" of Sony's protection since "it contains unprotected aspects [of the program] that cannot be examined without copying". It was therefore entitled to a "lower degree of protection than traditional literary works". Moreover, the copying was necessary for the defendants to determine the functional elements of Sony's BIOS.
On the third factor (the amount and substantiality of the portion taken), the court found for Sony since the entire BIOS had been copied. However, it held that "in a case of intermediate copying when the final product does not itself contain infringing material, this factor is of very little weight"
On the fourth factor (effect of the use on the potential market) the Ninth Circuit again relied on Campbell v. Acuff-Rose, noting that the mere fact that the copying was done for a commercial purpose is not dispositive and that the harm to the copyright holder is less likely when the infringement is a transformative work than when it supplants or supersedes the original work. Unlike the Sega case, in the present situation there would be some economic loss to the copyright owner. But the court held that the competition that would arise to Play Stations by sale of the defendant's emulation software "does not compel a finding of no fair use". With virtually no reasoning or analysis to support its view, the court held that "because [the defendant's emulation software] is transformative, and does not merely supplant the PlayStation console, [it] is a legitimate competitor in the market for platforms on which Sony and Sony-licensed games can be played."
The court therefore found that three of the factors that needed consideration favored the defendants and so the use in question qualified as fair use.
One should not, however, read too much into these decisions. In both cases the reverse engineering (which involved dismantling chips incorporated in the games console to determine the nature of the program used) was done as part of a research program to enable the production of an article that was not itself a copyright infringement. As was pointed out in the Atari case reverse engineering to discern a program's nonprotectable ideas constitutes fair use but any reproductions of the program must not exceed what is necessary to understand its unprotected elements. Furthermore the fair use claim was only open to those who possessed an authorized copy of the program in question.
A case where it was found that the fair use provisions legitimized intermediate copying to study a computer program to disassemble it to discover its nonprotectable elements is DSC Communications Corp v. DGI Technologies Inc. The defendant purchased microprocessor cards embodying firmware that was the subject of the plaintiffs copyright claim. They had the cards disassembled to reveal the plaintiff's source code and then produced their own flow diagrams to design a card that was compatible with but "not substantially similar" to that of the plaintiffs.
The fact that the defendant's copying was done for a commercial purpose did not destroy as fair use defense since the "hybrid nature of computer software in possessing both creative and functional aspects meant that it was entitled to a lower degree of protection than more traditional literary or musical works. However, in the same case the defense of fair use failed in respect of other software where the defendants possession was unauthorized (it had been down loaded from another party that had use of it subject to certain contract terms that did not permit such down loading).
The defense of fair use also failed in the case of Triad Systems Corp. v. Southeastern Express Co. Triad makes and services computers, some of which are leased subject to a license barring third parties from using the operating software incorporated into the computers. Southeastern also services Triad computers, which involves the step of causing Triad's copyright operating software to be copied into the computers random access memory. This act constituted copyright infringement and the court went on to consider a fair use defense. In balancing the fair use factors, the court noted that the situation was very dissimilar from that in Sega v. Accolade because in this case there was no independent creation as the end result and the activities of the defendant had a direct adverse effect on the plaintiff's market. Thus no public benefit arose from the defendants' activities and the could not be permitted under the fair use doctrine.
The issue of fair use came up in a totally different context in Kelly v. Arriba Soft Corp. In this case the act of infringement was the display of "thumbnail" pictures of the plaintiffs work as part of a listing of works produced by use of a "visual search engine" which was used for searching the Internet. The site that was alleged to infringe produced a list of sites where pictorial works meeting the criteria of the search could be found together with a small image of the work that could be found at such a site. The search engine operated against a data base containing approximately two million thumbnail pictures. The owner of the copyright in some of the original works referenced in the data base alleged copyright infringement and claimed that it was damaged in that the search engine when giving a site address for the original work took the searcher direct to the image in question and so by-passed other material that browsers approaching the image in other ways would have to view before reaching the images in question. This deprived the owner of the copyright in the original work of advertising opportunities. Relying heavily on the Supreme Court's decision in Campbell v. Acuff-Rose referred to above, the court held that in the present case the most important of the four factors that need to be considered in a fair use analysis was the first. Since the product in this case was a significantly transformative one, and there was no evidence to support a claim possible harm to the copyright owner the factors in favor of a finding of fair use outweighed the facts that the entire work had been copied and that this therefore included the core of what was protected by copyright.
Registration and Notice
Prior to the United States adherence to the Berne Copyright Convention becoming effective on March 1, 1989, publication of a copyright work without inclusion of a notice could destroy the copyright in the work and registration of the work with the Copyright Office was an essential prerequisite before one could bring suit against an infringer of the copyright.
The Berne Convention requires that for those who are eligible to take advantage of it, copyright protection should be available without formalities and since March 1, 1989, the notice provisions are no longer in effect and the registration provisions no longer apply in respect of works that were produced outside the United states and whose claim to protection in the United states arises under the Berne Convention, for example as a result of the author being a national of a Berne Convention Country and not resident in the United States. If rights arise in the United States in some other way, the old rules on registration still apply. The courts are split on the question of whether an actual registration certificate or merely the filing of an application for registration is required before an infringement action can be brought with respect to a non-Berne Convention work.
Although copyright exists automatically by virtue of creation of the work and for works qualifying under the Berne Convention registration is no longer required before one can bring suit, there remain a number of advantages in registering a work with the Copyright Office. These include: the ability to obtain attorney fees and statutory damages which may be important if one cannot prove economic damages; registration provides prima facie evidence of the facts stated thereon; and protection is provided against a purported subsequent fraudulent assignment of rights in the work. Registration is a relatively simple procedure. However, it does normally require deposit of "identifying portions" of a computer program, although "special relief" may be available, for example if the program contains trade secret information.
Entitlement to Copyright Protection
Original Ownership, Work Made for Hire
Copyright for a work is in general owned by the authors. This is, however, subject to a provision that in the case of a "work made for hire" the employer or the person for whom the work was made is deemed to be the author unless there is a written agreement to the contrary. A work made for hire is one that either is made by an employee as part of his employment or is a specially ordered or commissioned work where the parties have expressly agreed in writing that the work in question is a work made for hire. It is, therefore, important when commissioning anyone who is not an employee to create a copyright work to ensure that a written agreement is signed by all parties that expressly sets out the ownership of the copyright in any program produced.
A not uncommon problem is whether or not a writer of a computer program is an employee for the purposes of the work for hire provisions of the statute. In 1989, the Supreme Court considered the issue of who should be considered as an employee for the purpose of this provision and indicated that a balancing test similar to that used in agency law should be applied, Community for Creative Non-violence v. Reid. This test has been widely perceived as being more favorable to the actual creator of a work than the previous law, thus making it important to ensure that anyone other a full time in-house programmer writes a program, rights in the program are defined fully in writing before the program is written. An example of the application of the new approach in the computer industry is found in MacLean Associates Inc. v. Mercer-MeidingerHansen where the court noted the writer of the software (a former principal of the party claiming ownership who was thought by outsiders still to be acting as an agent of that party) was at the relevant time working on a single project for the party that claimed ownership, that the writer had absolute discretion over how long and when to work, that he was paid on delivery of a product rather than given a salary and that he did much of the work involved on his own equipment in his own facilities and concluded that the work in question was not a work for hire. Similarly, in a case where the party who commissioned the writing of a program reported the payments that it made to the tax authorities as payments to an independent contractor rather than as an employee and had not withheld any portion of its payments for income tax or social security, the fact that the writer of the program traveled extensively with the person commissioning the work and he had directed the projects and hours that the writer worked did not result in the program that was created being a work for hire. However, not all works made by former employees automatically cease to be works for hire. If the modifications made after leaving employment lack sufficient originality, the post-employment work may still be deemed a work made for hire, the copyright in which belongs to the former employer.
Where the work was created abroad, the question of ownership of copyright in a work created by an employee it has been held that:
Copyright is a form of property, and the usual rule is that the interests of the parties in property are determined by the law of the state with "the most significant relationship" to the property and the parties.
Where the authors were Russian nationals and first publication was in Russia, Russian law was held to apply.
One further point to be borne in mind in connection with United States copyright law is that if a work has been published (i.e. copies have been distributed to the public or offered for further distribution or for public performance or display) copyright protection is subject to nationality requirements. Thus, there is no copyright protection for a work that was first published outside the United States unless:
(1) one or more of the authors is a national or domiciliary of the United States or of a country having a copyright treaty with the United States or is stateless
(2) the work was first published in a country that is a member of the Berne or Universal Copyright Conventions,
(3) the work was first published by the United Nations, one of its agencies or the Organization of America States, or
(4) copyright protection has been conferred by means of Presidential Proclamation relating to works of nationals or domiciles of a particular country or works first published in such a country.
As a practical matter, most major countries are parties to the Berne and Universal Copyright Conventions. A notable exception is Taiwan (which is apparently covered by an old treaty between China and the United States).
Unlike infringement of a patent, infringement of a copyright may, if carried out willfully and for purposes of commercial advantage or private financial gain, be prosecuted as a crime as well as a civil wrong. The maximum penalty depends on the exact nature of the defendants acts but in the most egregious cases can be a fine of $250,000 and /or imprisonment for five years.
More normally, however, enforcement is by a civil action by the copyright owner. In this case the plaintiffs remedies may include an injunction, impoundment and destruction of infringing goods and damages either in the form of actual damages suffered plus any additional profit made by the infringer or statutory damages. Normally statutory damages may lie in the range $500 to $20,000.The Statute of limitations for copyright actions is three years.
The general rule in civil litigation in the United States is that each party is fully responsible for its own costs in any litigation. Thus a party who feels aggrieved may bring a law suit against another without fear that if the suit is lost he or she will have to recompense the other party for the costs that it incurred in defending the suit.
Section 505 of the Copyright Act varies this general rule and provides that a court may in some cases award reasonable attorneys' fees to the prevailing party as part of the costs in any copyright infringement action. In Fogerty v. Fantasy, Inc., the U.S. Supreme Court recently held that attorneys' fees awarded in copyright infringement actions must be made on the same basis to both prevailing plaintiffs and prevailing defendants. In so holding, the Court reversed a Ninth Circuit decision and rejected its "dual standard", under which prevailing defendants needed to show that the lawsuit was brought frivolously or in bad faith in order to recover attorneys' fees. Prior to the Court's decision, the various circuit courts of appeal were divided in their approach in awarding attorneys' fees under the Copyright Act. The Second, Seventh and District of Columbia Circuits, for example, also followed this dual standard, whereas the Third, Fourth and Eleventh Circuits adopted an "evenhanded" approach, wherein no distinction is made between prevailing plaintiffs and defendants.
In the Fogerty case, Fantasy, Inc. brought a lawsuit against singer/songwriter John Fogerty, claiming that a song written by Fogerty in 1985 was copied from a song which Fogerty had written in 1970, but the copyright of which was owned by Fantasy. After successfully defending against this copyright infringement claim, Fogerty moved for attorneys' fees under the Copyright Act. The district court denied the motion because Fantasy did not bring the suit frivolously or in bad faith. The Ninth Circuit affirmed.
Fantasy presented several arguments to the Court in support of the Ninth Circuit's dual standard, each of which was rejected by the Court.
Fantasy argued that the statutory language of Section 505 supported this dual standard. In support of its position, Fantasy pointed to the Civil Rights Act of 1964, which has identical language with respect to attorneys' fees awards, but under which different standards for awarding attorneys' fees to prevailing plaintiffs and prevailing defendants have been routinely upheld. The Court rejected this argument, differentiating between the objectives of the Copyright and Civil Rights Acts. Civil rights plaintiffs, for example, often cannot afford to bring lawsuits against defendants with greater resources. Accordingly, Congress sought to provide incentives for these plaintiffs by treating them more favorably than defendants. Unlike the Civil Rights Act, where Congress sought to provide incentives to plaintiffs to bring meritorious lawsuits, the objective of the Copyright Act is to encourage the production of "original literary, artistic and musical expression for the good of the public" and, contrary to civil rights cases, both plaintiffs and defendants in copyright infringement actions range from "corporate behemoths to starving artists."
Fantasy had also argued that the policies and objectives of the Copyright Act support the dual standard because it encourages plaintiffs to bring meritorious copyright infringement claims. The Court rejected this argument, reasoning that the objective of the Copyright Act is to stimulate artistic creativity for the general public good and not simply to maximize the number of meritorious copyright infringement actions. A successful defense of copyright infringement may advance the policies of the Copyright Act as much as the successful prosecution of a copyright claim.
Although the Court did not set forth any precise formula for making a determination of when to award attorneys' fees, the Court noted that factors such as "frivolous, motivation, objective unreasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence" may be considered so long as they are applied equitably to both plaintiffs and defendants.
Digital Millennium Copyright Act
On December 20, 1996 two new treaties relating to copyright were signed in Geneva. Both contain provisions on computer-related issues, in particular having regard to matters arising from use of the Internet. The first of the new treaties, entitled WIPO Copyright Treaty amends the Berne Convention in a number of ways. The second, entitled WIPO Performances and Phonograms Treaty, complements the Rome Convention (a convention to which the United States is not a party), although membership of the Rome Convention is not a pre-requisite to membership of the new convention. A further proposed treaty that was expected to be considered in Geneva relating to protection for matter extracted from databases was deferred for later consideration.
In order to ratify the treaties two changes were required in United States Law. These relate to the provisions requiring member states to make it unlawful either to circumvent copyright protection devices or to remove or alter copyright management information. The changes were effected by the Digital Millennium Copyright Act.
The most significant changes effected by the new law are:
(1) to provide that from October 28, 2000 it shall in general be unlawful to circumvent a technological measure that effectively controls access to a protected work;
(2) to make it unlawful to manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that -
(a) is primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work or protects a right of a copyright owner in a work protected by copyright or as a mask work;
(b) has only limited commercially significant purpose or use other than to circumvent a technological measure that effectively controls access to a work or protects a right of a copyright owner in a work protected by copyright or as a mask work; or
(c) is marketed by that person or another acting in concert with that person with that person's knowledge for use in circumventing a technological measure that effectively controls access to a work or protects a right of a copyright owner in a work protected by copyright or as a mask work; and
(3) to make it unlawful to provide false copyright management information or intentionally to remove or alter any copyright management information.
There are a few exceptions under the first two of these provisions, for example for:
(1) law enforcement;
(2) in order to carry out reverse engineering on a program that the researcher has a legitimate right to use if the reverse engineering is for the sole purpose of identifying and analyzing those elements of the program that are necessary to achieve interoperability of an independently created computer program with other programs, and that have not previously been readily available to the person engaging in the circumvention, to the extent any such acts of identification and analysis;
(3) certain encryption research; and
(a) the technological measure, or the work it protects, contains the capability of collecting or disseminating personally identifying information reflecting the online activities of a natural person who seeks to gain access to the work protected;
(b) in the normal course of its operation, the technological measure, or the work it protects, collects or disseminates personally identifying information about the person who seeks to gain access to the work protected, without providing conspicuous notice of such collection or dissemination to such person, and without providing such person with the capability to prevent or restrict such collection or dissemination;
(c) the act of circumvention has the sole effect of identifying and disabling the capability described in subparagraph (A), and has no other effect on the ability of any person to gain access to any work; and
(d) the act of circumvention is carried out solely for the purpose of preventing the collection or dissemination of personally identifying information about a natural person who seeks to gain access to the work protected, and is not in violation of any other law.
In addition to exposure to civil action by those who have been harmed by such unlawful acts, violation of either of these provisions for commercial advantage or private financial gain may result in fines of up to $500,000 and/or five years' imprisonment for the first offense and fines of up to $1,000,000 and/or ten years' imprisonment for any subsequent offense.
During the period before the law takes full effect, the Librarian of Congress is to make a determination as to whether rules are required to make exceptions from the general prohibition to prevent the new law from having an adverse effect on non-infringing uses of particular classes of work. A number of exceptions from the law are specifically set out including circumvention of such technological measures in the course of analyzing those elements of a program as are necessary to achieve interoperability with an independently created computer program or in the course of carrying out research into encryption technology.
As from April 28, 2000, most analog video cassette recorders and camcorders made, imported or offered to the public in the United States will have to conform to automatic gain control copy control technology. Furthermore it will be unlawful with immediate effect to manufacture, import or offer to the public most analog video cassette recorders and camcorders if they had been fitted with automatic gain control copy control technology and they had been modified so that they no longer conform to that technology.
In the case of Sony Computer Entertainment America Inc. v. GameMasters Inc  it was held that the prohibition on distribution of technologies products or services used to circumvent technological measures which control access to a system protected by copyright was breached by sale of a game "enhancer" that permitted the use of the plaintiffs PlayStation game console with games that were not authorized by the plaintiff. The enhancer overrides some of the computer logic in the system to enable players to modify the rules (i.e. to "cheat" in the game being played) and to permit the user to use the console to play games that were marketed by the plaintiff for distribution only in Japan or Europe. The games are supplied on a CD ROM which contains encrypted data which permit the games to be played only on consoles supplied to the appropriate jurisdiction unless that encrypted data is circumvented. This is what the enhancer does and the court therefore held that sale of the enhancer was a violation of the statute.
On-Line Service Providers
An additional feature of the Digital Millennium Copyright Act related to those who provide services on the Internet. As long as certain requirements are met, this provision protects on-line service providers from damages and most injunctive relief in respect of claims for copyright infringement that arise as a result of the activities of users of the service. For such a service provider to be protected, its involvement in any copyright infringement must be limited to transmitting, routing, or providing connections for, material through a system or network controlled or operated by or for the service provider, or by reason of the intermediate and transient storage of that material in the course of such transmitting, routing, or providing connections, and:
(1) the transmission of the material was initiated by or at the direction of a person other than the service provider;
(2) the transmission, routing, provision of connections, or storage is carried out through an automatic technical process without selection of the material by the service provider;
(3) the service provider does not select the recipients of the material except as an automatic response to the request of another person;
(4) no copy of the material made by the service provider in the course of such intermediate or transient storage is maintained on the system or network in a manner ordinarily accessible to anyone other than anticipated recipients, and no such copy is maintained on the system or network in a manner ordinarily accessible to such anticipated recipients for a longer period than is reasonably necessary for the transmission, routing, or provision of connections; and
(5) the material is transmitted through the system or network without modification of its content.
Service providers may also be protected against copyright infringement in certain situations relating to system caching where the material is sent by someone other than the service provider and is transmitted through the system or network and the storage is carried out through an automatic technical process for the purpose of making the material available to users of the system or network who, after the material is transmitted through the system to someone other than the sender, request access to the material from the sender as long as the service provider takes no steps to involve itself with the content of the material in question. Somewhat similar provisions protect service providers from damages and most injunctive relief for any copyright infringement for which they might otherwise be liable resulting from storage of information on their systems or networks where such storage is at the direction of users of the system or network.
Additionally protection is also provided where the service provider who refers or links users to information location tools (e.g. search engines). In this case, however, protection is subject to a number of conditions including the service provider's lack of knowledge that the material or activity in question is infringing or awareness of facts or circumstances from which infringement is apparent and does not receive any financial benefit directly attributable to the infringing activity. Furthermore on becoming aware of infringement or facts or circumstances from which infringement is apparent, the service provider must "respond expeditiously to remove or disable access to" the infringing material.
On the other hand, a service provider is required to respond to subpoenas requesting details of actual infringers who are using its system. Furthermore, the protection is only given if, inter alia, the service provider has adopted and reasonably implemented, and informs subscribers and account holders of the service provider's system or network of, a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider's system or network who are repeat infringers.
The meaning of the provisions relating to transitory network communications and information location tools came before the courts in A&M Records v. Napster Inc. Napster operated an Internet browser that its subscribers could use to find music stored on other computers that were linked to the browser and to down load such music to play on their own computers. It was claimed that insofar as music that was covered by copyright was concerned, such action amounted to contributory infringement of the copyright in such music. Napster claimed that it was protected by the "safe harbors" noted above for service providers and sought summary adjudication on this issue. The District Court disagreed. So far as Napster's claim under the "transitory network communications" safe harbor is concerned, the court found that Napster had not established that its role was that of transmitting, routing or providing connections through "its" system (as opposed to the Internet) and so failed to establish its right to claim protection at all. So far as the protection for search engine providers is concerned, the judge found insufficient evidence that Napster had adopted a copyright compliance policy that was timely or reasonable as required by the statute. The judge noted in particular that Napster had only adopted a formal copyright policy after the suit had been started and that Napster was alleged to have taken less rigorous methods than might be possible to prevent repeated infringement by the same user. This being the case, there were factual issues to be resolved so that summary adjudication was not appropriate.