Let's suppose you're a software developer who wants to create a look-
alike product to compete with a very popular program (which we'll call
"Popular"). Or perhaps you only want to create a new software product
that is compatible with the file formats or interface specifications of
Popular, rather than competitive with Popular itself.
You approach Popular Inc. and ask for a license for, let's say, the
interface specifications so that you can design a new product, which
will interoperate with Popular. However, they aren't interested at
Popular Inc., at least unless you pay a royalty, which you consider to
be prohibitive. You are informed that Popular Inc. intends to eventually
exploit the market for add-on or enhancement programs that operate with
Popular, and they do not wish to hand that market, developed at
Popular's expense, over to another.
After some technical analysis, you determine that you can
disassemble and decompile Popular and can obtain enough information on
the interface specifications from this process to create your own
interoperating program. You create a new Popular-compatible program and,
to boot, go on to create a software product (which you call "4-5-6")
that directly competes with Popular. None of your programs include any
Popular code, and all are originally written by you from scratch, except
that all your programs take advantage of the interface information you
gleaned from your reverse engineering activity.
However, the disassembly and decompilation processes have required
that you make several copies of Popular, both in object code form and in
its disassembled and decompiled form. Popular Inc. discovers this and
brings suit for copyright infringement, claiming that your
"intermediate" copying of Popular was wrongful, even though your final
product doesn't contain any Popular code and doesn't "look and feel" at
all like Popular.
Such a case recently arose and was effectively decided by the
Federal Court of Appeals for the Ninth Circuit, which has jurisdiction
in California and is thus considered to be a relatively important court
for the software industry. In the case, "Popular" was the Genesis video
game distributed by Sega Enterprises. The copier was Accolade, Inc., an
independent developer and manufacturer of computer entertainment
software.
Sega had a licensing program by which it offered its code to
independent developers of computer game software, and the Sega licensees
developed and sold Genesis-compatible games, in competition with Sega.
Accolade had explored the possibility of becoming a Sega licensee but
abandoned the effort because the terms sought by Sega were, in
Accolade's estimation, too onerous.
Undeterred by the setback in licensing negotiations with Sega,
Accolade set out on a course of self-help. It disassembled the code for
the Genesis game and then created a version of its "Ishido" game, which
had been previously released for the PC and the Mac, to operate on
Genesis.
Sega brought suit and obtained a preliminary injunction from the
trial court. On appeal to the circuit court, the trial court's decision
was reversed and the injunction was dissolved.
Sega argued that Accolade's actions were clear violations of the
Copyright Act and were for commercial purposes rather than for the
purposes of research and education that are considered to be "fair." In
opposition to this, Accolade argued that it had done no more than to
engage in a "fair use" of Sega's code, for purposes of understanding the
underlying ideas that were embodied in that code. The court agreed with
Accolade and absolved it of liability in the matter. The court declined
to go so far as Accolade had requested, which was to declare all such
intermediate copying to be automatically lawful. Instead, the court
pointed out, each case would be decided on its individual merits.
The court thought that if Sega's position were accepted, the result
would be to give copyright owners a de facto monopoly over the
functional aspects of their work, a result that was not intended by the
Copyright Act. "In order to enjoy a lawful monopoly over the idea or
functional principle underlying a work, the creator of the work must
satisfy the more stringent standards imposed by the patent laws. Sega
does not hold a patent on the Genesis console." The court then remanded
the case to the trial court for further proceedings.
The Sega v. Accolade decision has created considerable controversy
in the software industry. The court's opinion is expected to have a
significant impact on software protection strategies in the computer
industry, reaching far beyond the context of computer games. One result
may be a greater emphasis on signed software licenses, which are after
all the bane of many a software user. Some software companies may place
greater emphasis on signed agreements, as a way of trying to ensure that
all software users are bound by contract. That is, to the extent that
copyright becomes less attractive as a protection strategy, written
contracts may come to supply more of the legal protection. These may
contain explicit promises by the user to refrain from reverse
engineering and to prevent others from doing so with the licensed code.
Software companies have come to rely on the copyright law as their
best protector. We should anticipate some new and different strategies'
emerging--some technical, some business, and some legal--emerging as a
result of this influential decision, which limits the scope and power of
a copyright owner's claims against developers of compatible, and even of
competing, software.