Supreme Court to Decide Issue of Copyrights on Software : Technology: Panel agrees to hear Lotus vs. Borland, first case to address how much protection developers should be given.
The Supreme Court said Wednesday that it will decide how much copyright protection should be given to makers of computer software, a high-stakes issue that has divided the industry.
The high court agreed to review a bitterly fought case pitting Lotus Development Corp. against Borland International Inc. Lotus, now owned by International Business Machines Corp., alleges that the Quattro Pro spreadsheet program developed by Borland illegally copied key features of Lotus’ enormously successful 1-2-3 spreadsheet software.
A U.S. appeals court in Boston ruled in January that the 1-2-3 features in question are basic commands for running a program and thus could not be copyrighted. The judges cited a portion of the Copyright Act of 1976, which said that a “procedure, process, system [or] method of operation” cannot be copyrighted, and they characterized the Lotus spreadsheet program as a method of operation, not an original expression.
In persuading the high court to review that ruling, lawyers for Lotus and two computer software trade groups told the court that the decision was a threat to the entire software industry.
“Billions of research and development dollars ride on the disposition of these issues. Developers will not risk such substantial sums for the time and talent of creative programmers without assurance of sufficient legal protection for the fruits of that investment,” said Intellectual Property Owners, whose members include software developers.
But other software companies claim that granting the copyright protection that Lotus seeks will dampen innovation in the industry. The high court review, the first to directly address the way copyright law applies to computer software, is likely to clarify issues that have been at the center of a number of high-profile computer industry lawsuits, including a five-year battle between Apple Computer Inc. and Microsoft Corp. Arguments in the case, Lotus Development Corp. vs. Borland International Inc., 94-2003, are scheduled to be heard in January.
In general, neither facts nor ideas can be copyrighted. Rather, the law protects an original or creative expression of those facts or ideas. But drawing a line between a creative expression and a routine procedure is not easy.
On one hand, established software companies such as Lotus say their menu commands are an original creation and deserve long-standing protection from imitators. On the other side, new software developers say they should not be forced to pay copyright fees simply for using commands that are standard in the industry.
In 1983, Cambridge, Mass.-based Lotus introduced the 1-2-3 spreadsheet, which soon became an industry standard. Quattro Pro deliberately mimicked the 1-2-3 menu commands, reasoning that customers would be more likely to switch programs if they didn’t have to relearn the commands. Lotus sued for copyright infringement in 1990.
After a 12-day trial, a federal judge in Boston ruled that Borland, based in Scotts Valley, Calif., had infringed the Lotus copyright, a decision that threatened to cost Borland hundreds of millions of dollars in damages. But an appeals court reversed the decision and threw out the lawsuit. The Quattro Pro program has since been sold to Novell Inc., but Borland remains liable for any copyright problems.
Two well-known Harvard Law professors, Arthur M. Miller and Charles Fried--who was recently named to the Massachusetts Supreme Judicial Court--filed an appeal on behalf of Lotus. They said the appellate ruling “comes as a jarring departure from the prevailing consensus” in the industry.
But Gary L. Reback, a Palo Alto attorney representing Borland, said the copyright laws were not intended to “grant a broad government-sanctioned monopoly for a method of operation.” He said the case does not concern a computer program so much as “the menu words that are used as buttons and switches to operate the program.”
A similar issue has arisen recently in the medical field, where some doctors have tried to patent medical procedures that have become routine in the industry.
In other business cases, the court:
* Agreed to decide whether the former owners of property can be sued under a federal hazardous waste law and forced to pay the cost of the cleanup. The justices will hear an appeal filed by Alan and Margaret Meghrig, a brother and sister, who once owned a former gasoline station site in Los Angeles. They sold the lot to a Kentucky Fried Chicken franchise in 1975, and that company is now suing them to recover the $211,000 cost of cleaning up contaminated soil. (Meghrig vs. KFC Western, 95-83)
* Agreed to decide whether patent disputes can be decided by juries rather than judges. The lower courts are split on this issue. (Markham vs. Westview Instruments, 95-26)
* Agreed to decide whether states can stop small-town banks from selling insurance. The court said it will hear an argument by Florida-based Barnett National Bank that a federal law requires states to allow insurance sales by national banks in towns with populations of less than 5,000. (Barnett Bank vs. Gallagher, 94-1837)
* PC PASSE?: Some expect a return to the pre-PC era of computing. D2
