Small Texas Firm Wins Big Suit on Software

In what could provide a boost for fledgling computer industry firms, a federal appeals court has ruled in favor of a small Texas software publisher in a closely watched copyright infringement case.

The U.S. 2nd Circuit Court of Appeals in New York upheld an earlier district court decision that Altai Inc.’s software products do not infringe on any copyrights of Computer Associates International, the nation’s No. 2 software company.

Computer Associates originally filed the copyright infringement and misappropriation of trade secrets suit in August, 1988. It maintained that Altai, publisher of a mainframe computer program, improperly used a portion of a program whose copyright is held by Computer Associates.

The suit reflected a broader battle over intellectual property rights in the computer industry. In part, it is a fight between large companies that have asserted broad copyright protection and smaller firms that want the freedom to develop new programs that are similar to existing products.

In addition, the case reflected a division in the computer industry over whether copyright protection hinders or fosters technological innovation.

Experts say the decision could influence the outcome of legal battles involving some of the biggest companies in the personal computer business.

Computer Associates could not be reached for comment. But Altai said that “Finally, after nearly four years of litigation, and the overwhelming burden of time and expense it entailed, we can focus solely on the company’s future.”