In The
For The Federal Circuit
HAROLD L.
BOWERS, d/b/a HLB TECHNOLOGY,
Plaintiff – Cross-Appellant,
V.
BAYSTATE TECHNOLOGIES, INC.,
Defendant – Appellant.
ON APPEAL FROM
THE UNITED STATES DISTRICT COURT
FOR THE
DISTRICT OF MASSACHUSETTS
IN CV-91-40079
JUDGE
NATHANIEL M. GORTON
_________________
_________________
(510)
642-2670
Counsel
of Record for Amici Curiae
TABLE OF CONTENTS
Page(s)
TABLE OF AUTHORITIES............................................................................. vii
I.
Software Reverse Engineering is Critical to Innovation and Competition in
the Computer Industry.......................................................................... 1
II...... The Panel’s Opinion Wrongly Suggests That Copyright
Law Imposes No Restriction
on Shrinkwrap Licenses....................... 3
III.
The Panel’s Ruling Undermines Copyright’s Exceptions
and Limitations.............................................................................. 10
CONCLUSION................................................................................................ 10
CERTIFICATE OF SERVICE
Page(s)
Alcatel
166 F.3d 772 (5th Cir. 1999).................................................................. 1,
2
ASCAP v. Pataki,
1997 Copr.
L. Dec. ¶27,649 (S.D.N.Y. 1997)............................................. 6
Atari Games Corp. v. Nintendo,
975 F.2d 832 (Fed. Cir.
1992)............................................................ 1,
6, 9
Bateman v. Mnemonics, Inc.,
79 F.3d 1532 (11th Cir. 1996).................................................................... 2
Bonito Boats, Inc. v. Thunder Craft Boats, Inc.,
489
479
DSC Communications Corp. v. DGI Techs.,
81 F.3d 597 (5th Cir. 1996)........................................................................ 2
Feist Publications,
Inc., v. Rural Telephone Serv. Co., Inc.,
499
Goldstein v.
412
Lotus Dev. Corp. v. Borland Int’l,
49 F.3d 807 (1st Cir. 1995),
aff’d, 516 U.S. 233 (1996).............................. 2
ProCD v. Zeidenberg,
86 F.3d 1447 (7th
Cir. 1996)....................................................................... 5
Sega Enter. Ltd. v. Accolade, Inc.,
977 F.2d 1510 (9th Cir.
1992)................................................................ 2,
6
Sony Computer Ent. Corp. v. Connectix Corp.,
203 F.3d 596 (9th Cir. 2000)...................................................................... 2
Vault Corp. v. Quaid Software Ltd.,
847 F.2d 255 (5th Cir. 1988)...................................................................... 7
Wright v. Warner Books, Inc.,
953 F.2d 731 (2d Cir. 1991)..................................................................... 10
Rules and Statutes
17 U.S.C. §108............................................................................................... 10
17 U.S.C. § 117............................................................................................... 7
17 U.S.C. § 301............................................................................................... 4
17 U.S.C. § 1201(f).......................................................................................... 2
Local Rule 40(g)............................................................................................... 1
S. Rep. No. 105-190 (1998).............................................................................. 2
Copyright (Amendment) Bill
of 1998 (
Copyright Amendment
(Computer programs)
Bill of 1999 (
O.J. No. L122/42 (May 17,
1991)...................................................................... 3
Ord. No. 92 of 1997 (
Republic Act 8293 of 1996 (
Other Authorities
David A. Rice, Public Goods, Private Contract and
Public Policy: Federal
Preemption of Software License
Prohibitions Against
Reverse Engineering,
53 U. Pitt. L. Rev. 543 (1992).................................................................... 6
Dennis S. Karjala, Federal
Preemption of Shrinkwrap
and On-Line Licenses, 22 U.
Pamela Samuelson &
Suzanne Scotchmer,
The Law and Economics of
Reverse Engineering,
111 Yale L.J. 1575 (2002).......................................................................... 3
Pursuant to Local Rule
40(g), this brief is submitted by the Electronic Frontier Foundation, Americans for Fair Electronic
Commerce Transactions, the Digital Future Coalition, the Association of
Research Libraries, the American Library Association, the American Association
of Law Libraries, Computer & Communications Industry Association and U.S.
Association for Computing Machinery (Public Policy Committee) and 33 professors
of intellectual property law at universities throughout the United States. Amici represent the interests of many sectors
of the technology, telecommunications and information services industries, as
well as users of information. Common
among all amici is a commitment to encouraging
authorship and innovation by maintaining the free flow of ideas and
information. Amici are concerned that
the Panel decision could disrupt this flow.
I. Software Reverse Engineering is Critical to Innovation and Competition in the Computer Industry
In Atari
Games Corp. v. Nintendo, 975 F.2d 832 (Fed. Cir. 1992), this Court found
that the copying incidental to reverse engineering could constitute a fair use:
“The Copyright Act permits an individual in rightful possession of a copy of a
work to undertake necessary efforts to understand the work’s ideas, processes,
and methods of operation.”
Legislatures
around the world have also acknowledged the importance of software reverse
engineering. The Digital Millennium
Copyright Act, enacted by Congress in 1998, permits the circumvention of
technological protections for the purpose of engaging in reverse
engineering. 17 U.S.C. § 1201(f). See S. Rep.
No. 105-190, at 13 (1998). Many other
nations have also amended their laws to permit software reverse engineering.[1]
Likewise, this past July, the
National Conference of Commissioners on Uniform State Laws amended the Uniform
Computer Information Transaction Act to render unenforceable contractual
restrictions on reverse engineering under certain circumstances. Most commentators, too, have endorsed the
permissibility of reverse engineering.
See, e.g., Pamela Samuelson & Suzanne Scotchmer,
The Law and Economics of Reverse
Engineering, 111 Yale L.J. 1575 (2002).
II. The Panel’s Opinion Wrongly Suggests That Copyright Law Imposes No Restriction on Shrinkwrap Licenses
The
question before this Court in the instant case is to what extent a provider of
copyrighted content can unilaterally override the Constitutional privilege to
reverse engineer by printing a shrinkwap license on
the content’s packaging. Enforcement of shrinkwrap license terms depends on questions of contract
law, antitrust, copyright misuse and preemption. In this brief we address only
the question of preemption of state enforcement of such contracts by the
Federal intellectual property system.
Amici do not argue that shrinkwrap licenses that diverge from the Copyright Act are
always preempted, nor that all shrinkwrap
restrictions on reverse engineering are preempted. In some circumstances, such as in a true
trade secret context, a restriction on reverse engineering may be consistent
with copyright policy. We are concerned,
however, that the Panel in this case has gone to the opposite extreme, adopting
a blanket rule that such restrictions are never preempted. We believe that rule is both bad law and bad
policy.
Copyright preemption of state law can
take one of two basic forms. First, Congress has to a limited extent “preempted
the field” of copyright by passing the Copyright Act of 1976. This statutory
preemption is governed by Section 301 of the Copyright Act, 17 U.S.C. §301,
which provides in part that “all legal or equitable rights that are equivalent
to any of the exclusive rights within the general scope of copyright . . . are
governed exclusively by” federal copyright law.
Second, copyright preemption of state law
also occurs where there is a conflict between state law and the federal
intellectual property system. This Constitutional preemption based on the U.S.
Constitution's Supremacy Clause, Article VI, and its Intellectual Property
Clause, Article I, Section 8, can occur either when the federal and state laws
directly conflict, so that it is physically impossible for a party to comply
with both, or when a state law “stands as an obstacle to the accomplishment and
execution of the full purposes and objectives of Congress.”
The leading case treating Constitutional
preemption under the copyright laws is Goldstein
v. California, 412 U.S. 546 (1973). In that case, the Supreme Court stated:
Where the need for free and unrestricted distribution of a writing is thought to be required by the national interest, the Copyright Clause and the Commerce Clause would allow Congress to eschew all protection. In such cases, a conflict would develop if a State attempted to protect that which Congress intended to be free from restraint or to free that which Congress had protected.
Goldstein, 412
of
protecting that which the copyright laws intended to be free from restraint.[2] See David A. Rice, Public Goods, Private Contract and Public Policy: Federal Preemption of
Software License Prohibitions Against Reverse Engineering, 53 U. Pitt. L.
Rev. 543 (1992).
Such a contract could conflict with
federal policy, at least in certain circumstances. As noted above, this Court in Atari found that reverse engineering
promoted the Constitutional objective of the progress of science. Likewise, the Ninth Circuit in Sega found that a legal prohibition on
the reverse engineering of programs would
preclude[] public access to the ideas and functional concepts contained in those programs, and thus confer[] on the copyright owner a de facto monopoly over those ideas and functional concepts. That result defeats the fundamental purpose of the Copyright Act - to encourage the production of original works by protecting the expressive elements of those works while leaving the ideas, facts, and functional concepts in the public domain for others to build on.
Sega, 977 F.2d at 1527.
For this Court to allow software vendors
unilaterally and without restriction
to impose terms that prohibit reverse engineering
would frustrate the policy of encouraging the creation of innovative and
interoperable software products. It would also create a direct conflict among
the Circuits. The one reported decision
to consider the specific issue before this Court found that federal copyright
law preempts state laws enforcing contractual restrictions on reverse
engineering. Vault Corp. v. Quaid Software Ltd., 847 F.2d 255 (5th Cir. 1988),
examined the enforceability of a state statute which expressly validated shrinkwrap license terms precluding users from reverse
engineering computer programs. Relying on the Constitutional preemption cases,
the Fifth Circuit refused to enforce the term because it “conflicts with the
rights of computer program owners under [17 U.S.C.] §117 and clearly 'touches
upon an area' of federal copyright law.”
Contractual restrictions on reverse
engineering can also interfere with the operation of the federal patent
system. In Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141
(1989), the Supreme Court considered a
Like the
Citing Bonito Boats, this Court in Atari
found that using the copyright laws to prevent reverse engineering would
conflict with the federal patent laws.
To protect processes or methods of operation, a creator must look to the patent laws. An author cannot acquire patent-like protection by putting an idea, process, or method of operation in an unintelligible form and asserting copyright infringement against those who try to understand that idea, process, or method of operation.
975 F.2d at
842. If an author cannot receive
patent-like protection by means of copyright, surely an author cannot
willy-nilly receive patent-like protection by means of a shrinkwrap
license.
Amici take no position on whether
conflicts-based preemption should in fact apply in this case. It may be that enforcement of the contract in
this case does not conflict with copyright policy because – as the district
court found – the conduct at issue in the contract claim also infringed
copyright. If so, the Court could reach
the identical result by concluding that defendant had engaged in copyright
infringement. If the Court concludes
that defendant did not infringe the copyright, however, then its conclusion
that it is nonetheless liable for the same remedies for engaging in otherwise
lawful reverse engineering conflicts with the strong public policy in favor of
allowing reverse engineering of copyrighted works. This is particularly true because the
“contract” at issue here is an unbargained shrinkwrap license unilaterally imposed by one party. See Dennis
S. Karjala, Federal
Preemption of Shrinkwrap and On-Line Licenses, 22
U. Dayton L. Rev. 511 (1997) (preemption concerns heightened in shrinkwrap context).
III. The Panel’s Ruling Undermines Copyright’s Exceptions and Limitations
This brief has focused on a shrinkwrap prohibition on reverse engineering, but the
possible repercussions of the Panel’s holding go much farther. The Panel in essence held that by using a shrinkwrap license, a publisher could require users to
waive all their privileges under the Copyright Act. Such a result would remake copyright law as
we know it. A scholar could lose his
fair use privilege to quote a novel. See Wright v. Warner Books, Inc., 953
F.2d 731, 741 (2d Cir. 1991). A library
could lose its ability under the first sale doctrine to lend books, and its
ability to make preservation copies under 17 U.S.C. §108. An insurance company could lose its ability
to aggregate facts from numerous sources to create an actuarial table. See Feist.
Amici do not
suggest reversal of the Panel’s decision.
We merely urge the Court to consider conflict preemption, and to clarify
that in some cases the need for “national uniformity in the realm of
intellectual property,” Bonito Boats,
489
Respectfully submitted,
______________________
Professor Mark A. Lemley
[1] The 1991 European Union
Software Directive, which has been implemented throughout
[2] The continuing need for such conflicts-based
preemption under the 1976 Act should be clear.
Section 301 only preempts laws that grant rights equivalent to
copyright. But if a state law were to
restrict the reach of federal copyright, for example by immunizing certain
private parties from federal copyright liability or by restricting the
circumstances in which a plaintiff could bring a copyright suit, the law would
be preempted under the Supremacy Clause because it interfered with the federal
statute. See, e.g., ASCAP v. Pataki, 1997 Copr. L.
Dec. ¶27,649 (S.D.N.Y. 1997) (state law limiting the time in which copyright
owners could bring a copyright claim preempted under the Supremacy Clause).
[3] If Baystate’s
conduct infringed Bowers’ copyright, of course, it did not take information in
the public domain. Liability for
copyright infringement must be based on proof of copying in the commercial
product, however, not merely on proof of reverse engineering.