Copyright For Software Is Upheld

Copyright For Software Is Upheld

By David E. Sanger
Special to the New York Times

September 2, 1983

In an important victory for major computer and software manufacturers, a Federal appeals court has ruled that all computer programs can be copyrighted, even if they are an integral part of a computer's circuitry.

The decision, in a case that has been closely watched by the industry, clarifies an issue that has been the source of several conflicting decisions in lower courts. But further appeals are expected.

Manufacturers and lawmakers have expressed fear in recent months that the current copyright and patent laws do not sufficiently protect the nation's computer technology, which falls into a gray area between literary works and inventions. Computer and software producers have urged an early resolution of the debate because millions of dollars are potentially at stake if they are unable to protect their designs.

For the consumer, the ruling could mean that fewer low-priced imitations of the most popular personal computers and programs will be available in the American market.

The decision came Tuesday in a unanimous decision by a three-judge panel in the United States Court of Appeals for the Third Circuit, in Philadelphia. It overturned a lower court's ruling in a legal battle between Apple Computer Inc. and the Franklin Computer Corporation. Franklin, a small company based in Philadelphia, markets a computer that virtually duplicates the Apple II, the Apple company's most popular personal computer.

Franklin acknowledged that it had copied 14 operating system programs - the basic instructions that tell a computer where to store and retrieve information - but it contended that such systems were not protected under existing United States copyright law. The court rejected those arguments in its decision Tuesday.

Apple now returns to the Federal District Court in Philadelphia to seek an order barring Franklin from selling its Ace 100 computer. Should it succeed, it may deter other companies from imitating computer and software designs. ''Had it gone against Apple, everyone would be up to their chins in Taiwanese Apple knockoffs,'' said David Lawrence, a computer analyst with Montgomery Securities, a San Francisco brokerage firm.

In dispensing with Franklin's arguments that a program embodied in computer hardware is part of the machine - and not a literary work that is covered by copyright law - the court wrote that ''the medium is not the message.''

Basically a Series of 1's and 0's

While conceding that in their most basic form, the contested computer programs are simply a series of ones and zeros arranged in sequence, the court said that copyright protection ''is not confined to literature in the nature of Hemingway's 'For Whom the Bell Tolls.' ''

''I think this puts all of the questions to rest,'' said Jack E. Brown, a senior partner of Brown & Bain, the law firm that represented Apple in the case. ''People who have made millions of dollars copying other people's programs had better start spending some time developing their own.''

The appeals court's logic runs counter to a decision issued last year by a Federal district judge in Philadelphia who refused to issue a temporary restraining order to block Franklin from selling its computer. That judge ruled that the programs in question were not written ''in a language of description'' and thus were not eligible for copyright protection.

The case has attracted attention throughout the computer industry, because of Apple's prominence and a growing fear that United States technology may be stolen by lower-cost manufacturers abroad.

American Companies Complain

In several cases now in the courts, American companies are contending that domestic and Japanese rivals have copied their proprietary microchip designs and programs. Congress is currently considering legislation that would give explicit protection to the ''masks'' or circuit designs, of computer chips.

Franklin's lawyer, Jerome J. Shestack, said yesterday that he would ask for a rehearing before the entire Court of Appeals, and he left open the possibility that the issue could be appealed to the United states Supreme Court. ''We still contend that Apple was abusing the copyright laws to gain a monopoly on equipment compatible with its machine,'' Mr. Shestack said.

Tuesday's ruling focused on two related issues of computer law.

The first issue concerns whether programs imbedded in computer chips, the heart of microcomputer technology, are protected under current copyright statutes. Franklin contended that they are not, arguing that programs on a chip, known as ''read only memories,'' or ROM's, are an essential part of the computer machinery. As a utilitarian article, the chips might be protected under patent law - a course that computer manufacturers have resisted for a number of tactical reasons - but ordinarily could not be copyrighted.

Like Paper or Tape, Ruling Says

The appellate court ruled, however, that treating the program as part of the machine ''mistakenly focuses on the physical characteristics of the instruction.'' ROM chips are entitled to the same protection as computer programs written on paper or stored on tape, the court ruled.

As for the second issue, Franklin argued that operating systems, unlike ordinary word processing or financial planning programs, are more than simply the expression of an idea. Instead, the company argued that the programs are indistiguishable from the concept of the system itself. But the court rejected that approach, saying, ''Apple does not seek to copyright the method which instructs the computer to perform its operating functions but only the instructions themselves.''

The distinction is crucial from a legal standpoint. Under United States law, copyrights protect the expression of an idea, such as a literary work. Ideas themselves, in the form of novel inventions, are protected by patents. However, patents take so long to obtain - and the lifetime of a computer program or operating system is so short in the highly competitive computer industry - that manufacturers have shied away from using the patent system to protect their programs. Moreover, it is not clear whether most computer programs are sufficiently novel and distinct from one another to merit patent protection.