Chapter 3: Copyright Protection of Software:
Reproducing “Copies” of Works
This chapter addresses various aspects of the issue of when conduct is properly characterizable as reproduction of copies of a work protected by copyright. (The phrase “reproduce the copyrighted work in copies” is now found in 17 U.S.C. § 106's enumeration of the exclusive rights of a copyright owner. Violation of these rights — e.g., reproduction of a copy — lays the basis for a claim of copyright infringement.)
It is not manifest that we can dissect the statutory phrase to arrive at its meaning. Nevertheless, some opinions focus on whether a “copy” results from the conduct of an accused infringer. Other decisions focus on whether an accused infringer's conduct was an act of “reproduction.” Some decisions simply consider whether the copyright laws were intended to reach the kind of conduct involved, without letting on what part of the statutory phrase is carrying the burden of the legal analysis.
The verb “reproduce” and noun “copy,” individually or in combination, are not so self-defining and so full of intrinsic content that it is a simple task to discern from studying them as words what policies the copyright law embodies in defining infringement (and its correlative, owners' rights). As will appear, some courts have nonetheless tried to do that; other courts have looked elsewhere for aid in determining what conduct is reproduction of a copy.
Muller v. Triboro Bridge Authority
United States District Court
43 F. Supp. 298 (S.D.N.Y. 1942)
Leibell, District Judge.
Plaintiff brings this action for an infringement of a copyright of an unpublished work, described in the application for the copyright as “Bridge Approach — The drawing shows a novel bridge approach to unsnarl traffic congestion”. The application for the copyright was filed as an unpublished work, that is, a work of which “copies are not reproduced for sale.” The copyright was registered in the United States Copyright Office. The application for the registration specified that the work should be classified as a drawing of “a scientific or technical character.”
Plaintiff alleges that the defendant “wrongfully and unlawfully appropriated and used said copyrighted design and plan in the design, plan, construction and operation of the Approach to Cross Bay Parkway Bridge, which was designed, planned and constructed by defendant and which is maintained by defendant and for the use of which defendant charges a toll.” Plaintiff asks that the defendant be compelled to account to plaintiff for all profits that have accrued to defendant from the use of said copyrighted design and plan and to pay to plaintiff his just share of said profits and in addition such damages as may be just and proper.
The points made by defendant are (1) that a physical structure such as the bridge approach complained of cannot properly be made the subject of a copyright, since it belongs to the useful rather than to the fine arts; (2) that if plaintiff had invented a new method of handling traffic, he should have sought protection under the patent law.
Even if it were assumed that the defendant actually used plaintiff's copyrighted drawing in designing and constructing the bridge approach, plaintiff would be without any remedy. The applicable principle of law has been stated in the oft-cited case of Baker v. Selden, wherein the court held that a claim to the exclusive property in a peculiar system of bookkeeping cannot be maintained, under the law of copyright, by the author of a book in which the system is exhibited and explained.
Plaintiff's copyright of a drawing, showing a novel bridge approach to unsnarl traffic congestion, does not prevent any one from using and applying the system of traffic separation therein set forth. The complaint is dismissed on the merits.
1. This case is representative of the American rule that, when a copyrighted picture depicts a not merely ornamental physical object, the copyright in the picture does not extend to reproductions of the physical object. Some decisions say that the physical object is not a “copy” of the picture, as the Supreme Court said of the piano roll and the music, at one point in its opinion in White-Smith Music Pub. Co. v. Apollo Co., 209 U.S. 1 (1908). Some decisions say that the physical object is not copyrightable or is not capable of being protected by copyright. Another way to express the latter point is to say, in the words of 17 U.S.C. § 102(b), that the copyright in the picture does not extend to the depicted physical object.
2. Do you consider the preceding rule an immutable or inherent feature of copyright law, dictated by the nature of copyright itself?
A 1990 statute, implementing the accession of the United States to the Berne Convention (an international copyright treaty), provides an exception. The 1990 amendment places “architectural works” within the subject matter of copyright. Hence, making a building in accordance with the plans for a protected architectural work is now an act of copyright infringement. (However, it is not the preparation of a derivative work for the owner of the building to modify it. See 17 U.S.C. § 120.)
3. As discussed earlier in Legal Mythology (ch. 1), British Commonwealth jurisdictions follow a rule contrary to the American rule. The next two decisions illustrate the UK and Commonwealth rule. Japan and most European jurisdictions have a copyright rule similar to the American rule which the decision in the Triboro case illustrates.
LB (Plastics) Ltd. v. Swish Products Ltd.
House of Lords
 R.P.C. 551,  F.S.R. 145
Lord Wilberforce. — The appellants claimed, in this action in the Chancery Division, that the respondents had infringed their copyright in certain drawings relating to plastic knock-down drawers. A “knock-down drawer” is a furniture drawer made of components, usually delivered unassembled, which the customer puts together, and which he can if he wishes, dismantle. The trial judge (Whitford, J.) held that there had been infringement. The Court of Appeal reversed his judgment; the appellants now ask to have it restored.
It is not now disputed that the two drawings are entitled to copyright as artistic works within section 3 of the Copyright Act 1956 nor that the appellants are the owners of this copyright. Nor I think is it disputed that the drawings are “original” artistic works as that word is used in this Act — comporting not “originality” but that the work is the product of the author's work and labour. The only issue is whether the respondents have infringed the copyright by “reproducing the work in any material form.” An infringement occurs if there has been reproduction of “a substantial part of the work.”
The infringement alleged consists of the reproduction of the drawing, or of a substantial part thereof, by the manufacture of three components. Since these alleged reproductions are in three dimensions whereas the drawings are in two, it becomes necessary to consider the provisions of section 9(8) which reads:
The making of an object of any description which is in three dimensions shall not be taken to infringe the copyright in an artistic work in two dimensions, if the object would not appear, to persons who are not experts in relation to objects of that description, to be a reproduction of the artistic work.
My Lords, though reference was made, quite properly, to authorities on copyright law, I do not think that the present case raises or involves any legal issue. The protection given by the law of copyright is against copying, the basis of the protection being that one man must not be permitted to appropriate the result of another's labour. That copying has taken place is for the plaintiff to establish and prove as a matter of fact.
It is obvious to the eye, testified by expert witnesses, and held by the judge, that, though on inspection there are differences, there is a striking general similarity between the respondents’ drawer and those of the appellants. Moreover, it is clear, and was so held by the judge, that the respondents had the opportunity to copy the appellants’ drawer. They had specimens of the appellants’ components (based of course on the appellants’ drawings) in their possession, and later, before finally designing their own, they had re-drawings and even tracings of some of the appellants’ drawings passed to them by an associated company, Grovewood, to whom the appellants supplied Sheerglide drawers. These components and drawings the respondents must have known were components and drawings of the appellants. These facts establish a prima facie case of copying which the respondents had to answer. They could do this by bringing forward some alternative explanation of the similarities such as would convince the judge. His task would then, on the evidence as a whole, be to decide whether there had been copying or not. His conclusion was [that] there had been copying of the appellants’ designs.
How then, it remains to ask, did the Court of Appeal reach the conclusion that his judgment should be set aside? I summarize, I hope adequately, the basis of their decision as follows. The defendants adopted the concept of the plaintiffs’ device for a corner clip and facia clip but did not actually copy the plaintiffs’ corner clip, or facia clip in any respect except the reverse countersink.
The reason why I am unable to follow the reasoning of the Court of Appeal is that it effectively ignores the evidence of the witnesses as assessed by the judge. For this fundamental reason, and because I find the judgment of the trial judge entirely satisfactory, fair and convincing, I am of opinion that it must be restored. I would allow the appeal and restore the judgment and order of Whitford, J.
Lord Hailsham of St. Marylebone. — In this case I am sure that the appeal should be allowed and the judgment of Whitford, J. restored. Since in all important respects my opinion coincides with that of my noble and learned friends, and, since in my view the questions at issue are mainly of fact it may be considered that a separate opinion is unnecessary, but I feel bound to put my own reasoning as shortly as I can out of respect for the argument of counsel and the very careful judgment of the Court of Appeal from which I have the misfortune to differ.
Of the various issues raised at different stages of the proceedings only two substantial questions survive apart from one short but sophisticated argument for the appellants with which I will deal at the end of this opinion. The two questions are whether the respondents’ three-dimensional product reproduces a substantial part of the appellants’ two-dimensional drawings, and if so, whether, notwithstanding such reproduction, the respondents can raise a defence under section 9(8) of the Copyright Act 1956. In the ultimate analysis, both are, it seems to me, questions of fact. Both were decided in the appellants’ favour by Whiford, J. and both were decided in the respondents’ favour in the Court of Appeal.
How then had the Court of Appeal fallen into error? They seem to have been led into error by two independent but closely related chains of reasoning. The first is the belief that, subject to the second chain, all the respondent were shown to have “adopted” was the appellants’ “concept” or “idea,” and that this was not copyright. Of course, it is trite law that there is no copyright in ideas, and it may be that if all the respondents were shown to have copied from the appellants was the idea of some sort of external latching of the moulded corner pieces and clips to the extrusions this would have been a sound enough conclusion. But, of course, as the late Professor Joad used to observe, it all depends on what you mean by “ideas.” What the respondents in fact copied from the appellants was no mere general idea. It was, to quote the respondents’ own language to “follow the pattern” or principle “in part or in whole” with “minor changes” to the design, with the same choice of principal members interfitting in the same way to the same critical dimensions, and even incorporating such a trivial element as the reverse countersink, and then to countercheck their work by superimposing their own drawings on the appellants’ to make sure that they had made no mistake.
It remains to me to consider the almost metaphysical point raised by junior counsel for the respondents in an admirably concise following argument. This he based on what I fear is in this case an insubstantial foundation, namely a paragraph of Lord Pearce's speech on page 293 of the report of Ladbroke (Football) Ltd. v. William Hill (Football) Ltd.,  1 W.L.R. 273. The argument was that although it be conceded that the appellants’ draughtsman's drawings were copyright artistic works within section 3, the information acquired by preliminary work going into the drawing was not, and that what was copyright was simply the particular sketch by the particular draughtsman, which was not reproduced in the three–dimensional product.
It would follow of course that a three–dimensional moulding of the present sort could not easily infringe the copyright in a drawing of this sort at all and that a two–dimensional drawing would not do so if drawn as a different sketch. The advantage claimed for counsel's argument is that it reduces the danger of the consequences of the overlap between the law relating to regis– tered design and patent and that relating to copyright which has long given trouble to lawyers and legislators.
But we must take copyright law as we find it. I do not believe the Ladbroke passage in its context has any bearing on this case, which, unlike Ladbroke, is not a compilation case. I believe the drawing was a team effort by the whole of the appellants’ drafting and design body and all the information embodied in the drawing can, if a substantial part of the drawing be reproduced in a three-dimensional form, be considered for the purpose of deciding whether the three-dimensional form is an infringement, subject of course to section 9(8), and though I admired the elegance and subtlety of the presentation, I feel bound to reject junior counsel's argument.
I therefore consider that this appeal should be allowed, and the order of Whitford, J. be restored.
1. This House of Lords decision, Swish, definitively established the interpretation of the UK copyright statute that a physical object was an infringing copy of a blueprint depicting the object, if an ordinary person could recognize that physical object was that which the drawing depicted. European copyright law tends to parallel the position of US law on this point, but other Commonwealth or former Commonwealth nations tend to follow the Swish position.
2. What is the significance of “the almost metaphysical point raised by junior counsel for the respondents”:
The argument was that although it be conceded that the appellants' draughtsman's drawings were copyright artistic works within section 3, the information acquired by preliminary work going into the drawing was not, and that what was copyright was simply the particular sketch by the particular draughtsman, which was not reproduced in the three-dimensional product. It would follow of course that a three-dimensional moulding of the present sort could not easily infringe the copyright in a drawing of this sort at all and that a two-dimensional drawing would not do so if drawn as a different sketch.
Consider the following rephrased version of junior counsel's metaphysics, and ask whether it fairly restates his argument:
What Americans would call the “work of authorship” was the information describing the physical, three-dimensional drawers.
The work could be symbolized in two dimensions in a variety of ways by sketching the drawers from different vantage points, as one might describe the number of fingers on one's hand as “five,” “cinq,” “5,” “1011,” and so on, or might write many different codes to generate the same video screen display.
Hence, with such a many-to-one mapping one cannot say that the work (as embodied in a physical drawer) is a reproduction of the particular one of the many possible sketches that the plaintiff's draftsman drew.
3. Is the code that generates a screen display a “copy” of the pictorial or audiovisual work embodied in the screen display? See M. Kramer Mfg. Co. v. Andrews, 783 F.2d 421 (4th Cir. 1986). Is the screen display a copy of the code, so that reproduction of the screen display (with other code) is an infringement of the copyright in the first code?
4. What does Lord Hailsham mean by characterizing the argument as “almost metaphysical”? Would you characterize the point of the argument as more or less metaphysical than quasi-property?
5. Junior counsel's argument, if accepted, would have made the UK copyright law parallel with European and U.S. law on the point of whether a physical object is an infringing copy of a technical drawing depicting the object. Of course, the ideas of a junior counsel cannot be taken too seriously (as we all know from watching Rumpole of the Bailey), and Lord Hailsham dismissed them with the remark:
The advantage claimed for counsel's argument is that it reduces the danger of the consequences of the overlap between the law relating to registered design and patent and that relating to copyright which has long given trouble to lawyers and legislators. But we must take copyright law as we find it.
Did the House of Lords’ interpretation constitute no more than taking copyright as the court found it? Did the statute leave it no choice?
6. Lord Hailsham on Transubstantiation. Lord Hailsham said junior counsel's argument was elegant and subtle, but he felt bound to reject it, at the end of the day, because the plaintiff's drawing drew upon all of the plaintiff's team information in existence, so that all of this information (visible or invisible) must be considered for the purpose of deciding whether a three-dimensional embodiment was an infringement of the drawing. How does that fact (assuming that the statement is true) convert the physical object into a copy of an indefinite number of things not actually shown in the given drawing? Now who's making metaphysical points?
British Leyland Motor Corp. v. Armstrong Patents Co.
House of Lords
 1 A.C. 577,  1 All E.R. 850
link to full text
Lord Scarman — My Lords, I had intended to deliver a reasoned speech in this very important appeal. But I find myself in total agreement with the speech to be delivered by my noble and learned friend, Lord Templeman: further words from me are, therefore, superfluous.
The Copyright Act 1956 is, I gladly hear, presently under review. This case illustrates that more than redrafting with a view to clarification is needed: nothing less than an overhaul of some of the principles of the modern extended law is necessary.
Judicial decision has extended copyright protection to industrial drawings of purely functional objects. These objects in themselves do not attract copyright protection; nor are they patentable, since they embody no new invention, and their design is not registrable under the registered designs legislation since they have no “eye appeal.” Thus there has arisen the anomaly that in effect (though not, perhaps, in jurisprudential theory) a manufacturer can achieve in respect of such objects (of which a Marina car exhaust pipe is but one example), a more enduring monopoly then would have been available even if the object had been, which it is not, patentable or its design had been, which it is not, registrable.
If it be right, as my noble and learned friend Lord Templeman asserts and as I also think, “that Parliament did not intend the protection afforded by copyright to a drawing should be capable of exploitation so as to prevent the reproduction of a functional object depicted in a drawing,” the present review of law should lead to legislation to bring the law back within the limits intended by Parliament. This would involve a legislative rejection of the view of the law upon which the House acted in deciding L.B. (Plastics) Ltd. v. Swish Products Ltd.
But further it would be helpful if the current review of the law could lead to incorporating in the Copyright Act the principle latent in our law but not fully discussed or expressed until the present case that the manufacturer of an article such as a motor vehicle or other “consumer durable” cannot by the exercise of copyright preclude the user of the article from access to a free market for spares necessary to maintain it in good working order.
Lord Edmund-Davies — My Lords, the facts and the law relevant to this appeal have been spaciously discussed in the speeches prepared by others of your Lordships and which I have had the advantage of reading in draft. This obviates the necessity of my doing more than indicating with brevity why I concur in holding that this appeal should be allowed.
Two broad questions arise for consideration: (1) Did the appellants’ (“Armstrong”) indirect copying of the respondents’ (“BL”) copyright drawing of their exhaust system constitute “reproduction” within the meaning of the Copyright Act 1956? (2) Even if the answer to (1) be the affirmative, should BL nevertheless be barred from invoking the Act to prevent such reproduction by Armstrong? I proceed to deal shortly with these questions.
Question 1. I can find no support in the wide language of the Act or in the decided cases for Armstrong's submission that the indirect copying of drawings of functional objects (such as the BL exhaust system) is outside the Act. In particular, the decision of this House in L.B. (Plastics) Ltd. v. Swish Products Ltd. is to the opposite effect, and, though criticised, it was in my judgment correctly decided. My Lords, I have to say respectfully that I do not know what Parliament intended to do. We may think that they could, and should, have done better, but that is by the way. Recalling, as I do, the observation of Holt, C.J., that “Parliament can do no wrong, though it may do several things that look pretty odd” (City of London v. Wood) I hold, in common with the majority of your Lordships, that an affirmative answer must be given to this first question.
Question 2. I have found this question far more difficult. Neither party could usefully invoke settled practice. Instead, reference was made to such topics as public policy, fair dealing, the undesirability of permitting monopolies, the maintenance of legal rights, the prohibition of derogation from grants, and the existence of an implied licence in favour of Armstrong. These and other notions were canvassed widely and at length during the hearing of the appeal.
At the end of the day (I should perhaps say, at the end of very many days), I favour most the “spare parts exception” upheld in the speeches of the noble and learned Lords, Lords Bridge of Harwich and Templeman. I nevertheless share to a considerable extent the misgivings eloquently expressed by the noble and learned Lord, Lord Griffiths, on this topic.
But my doubts, though substantial and subsisting, are not sufficient to compel me to dissent from the conclusion arrived at by the majority of your Lordships. In the result, I hold that this question, like the first, should be answered in the affirmative. It follows that I concur in allowing the appeal.
Lord Bridge of Harwich — My Lords, BL claim to be entitled, as owners of the copyright in the drawings from which various spare parts of BL cars are made, to restrain other manufacturers from making and selling copies of BL's spare parts without the licence of BL. The market in spares for BL cars alone exceeds £800 million a year. In practical terms it would seem that the claim, if well founded, is effective to confer a monopoly in this market on BL and their licencees. Its importance, therefore, can hardly be overestimated. But beyond settling the dispute between BL and those, including Armstrong, who assert their independent right to make and market copies of spares for BL cars, your Lordships’ decision in the present appeal will have far reaching consequences for all sections of manufacturing industry whose products are of such a nature as to require replacement parts with any degree of frequency, where those parts can, in practice, only be effective if they reproduce the shape or configuration of the originals and where copyright is claimed in the drawings from which the original parts were made.
The present litigation is concerned only with exhaust pipes. The exhaust pipe is the part of a car which is likely to require the most frequent replacement. In the lifetime of a car, the exhaust may need to be renewed as many as ten times. Hence the market in replacement exhaust systems is one of the most important and, no doubt, lucrative sections of the spare parts market. But the issues on which the present appeal turns are issues of broad principle.
It is now either common ground or well established that copyright subsists in the drawings from which BL's exhaust systems are made and that the exhaust systems manufactured by Armstrong for BL cars are made by copying examples of BL systems by a process described as “reverse engineering” and are thus indirectly copied from BL's drawings, even though Armstrong have never seen those drawings. It is from these premises that the issues of principle must be addressed.
Having lost in both courts below, Armstrong challenge the validity of BL's claim, as a matter of English law apart from the EEC Treaty on two broad grounds. The essence of the first contention is that copyright in a drawing whose sole purpose is to serve as a blueprint for the construction of a three-dimensional article of purely functional or utilitarian value and with no aesthetic or decorative element is not infringed by the reproduction of an identical three-dimensional article. Success in this first contention would be sufficient for success in the appeal.
But if the first contention fails, Armstrong contend in the alternative that special considerations apply to the manufacturer of replacement parts necessary to the repair of cars, or indeed any other machinery, which operates in law to preclude the owner of the copyright in the drawings from which the original parts were made from so enforcing his copyright as to maintain a monopoly in the supply of necessary replacement parts for himself and his licensees.
The only authority now necessary to consider is the decision of this House in L.B. (Plastics) Ltd. v. Swish Products Ltd. That case was concerned with the design of a plastic knock-down drawer system. The dispute had these features in common with the present appeal: First, the subject matter was an object of purely functional and utilitarian value and devoid of any “appeal to the eye.” Second, the finding by the trial judge, in favour of the plaintiffs was firmly based on indirect copying of the relevant drawing by the defendants' use of one of the plaintiffs’ drawers as the model on which features of their own drawer were substantially based and this finding was affirmed by your Lordships’ House.
In the present case your Lordships have had the advantage of seeing the parties’ printed cases in the Swish case and also a very full note of the argument in that case of junior counsel for the defendants. These leave no doubt that the essential issue of principle which underlies the main contention advanced by Armstrong in the present appeal was raised and to some extent argued in the Swish case. The scope and range of the arguments there deployed were no doubt very much more limited than those of which you Lordships have now had the benefit. But it is impossible to say, as was somewhat faintly submitted by counsel for Armstrong in reply, that the Swish case was decided per incuriam. If it was rightly decided, it is fatal to Armstrong's main contention.
Recognising this, counsel for Armstrong boldly invited your Lordships to depart from it. But the line of authority to which the House gave its imprimatur in the Swish case has now been followed for more than 20 years and must have had a profound impact on many aspects of industrial practice. In these circumstances, even if a more persuasive argument for rejecting the principle which it applies could be derived from the language of the Act of 1956, I should think this clearly to be a case where it must be left to legislative action to make any change in the law that may be appropriate.
But I must add that I regard the present law as highly unsatisfactory in at least two respects. First, copyright protection for functional designs, as extended to articles of functional utility manufactured in accordance with those designs, would certainly seem to be capable of abuse as a means of obtaining many of the advantages conferred by patent monopoly while circumventing the many stringent conditions and safeguards to which patent protection is subject.
Second, whatever protection the industrial designer may need to safeguard the product of his skills against piracy, I find it difficult to suppose that a rational legislator, devising a comprehensive code ab initio for the protection of intellectual property, would deliberately include a provision for the recovery of conversion damages [all of the defendant's gains on infringing articles] in respect of industrial products which infringe the protection accorded to industrial designs. In the field of fine arts substantially the entire value of a copy accrues from the work of the original artist. This is surely the rationale of the provision for conversion damages for infringements of copyright. In the field of industrial design the designer contributes only a modest fraction of the value of the product. Thus, to award conversion damages for infringing industrial copies of a protected industrial design is irrationally generous to the designer and punitive of the infringer.
The alternative argument in support of the appeal has been mainly canvassed on the basis of an implied licence. This terminology is primarily derived from the cases concerned with the repair of articles which are subject to patent protection. Letters patent, on their face, always granted to the patentee the exclusive right “to make, use, exercise and vend” the invention. A literal application of this language would lead to the absurdity that a person who acquired the patented goods would infringe the patent if he used or resold them. To avoid this absurdity the courts had recourse to the doctrine of implied licence. In the field of repair it is clear that a person who acquires a patented article has an implied licence to keep it in repair, but must stop short of renewal.
In the leading judgment in the instant case in the Court of Appeal, Oliver, L.J., was prepared, it seems, to accept that the purchaser of a BL car might himself copy, or commission another to copy, the original exhaust pipe in order to provide replacements, but found it impossible to derive from this a conclusion on which Armstrong could found a defence. The relevant passage from his judgment reads:
I can see that there are strong arguments for saying that where a manufacturer sells to a purchaser an expensive piece of machinery containing parts which are inherently likely to wear out during the working life-time of the machine, he impliedly licenses the purchaser to procure, by copying if it is more advantageous to him, those subsidiary parts, even in a case where the manufacturer is itself willing to supply the parts at whatever it regards as an appropriate price.
If such a licence can be implied, there can be no reason for inhibiting the purchaser, when he orders one replacement, from having two or more made against future breakdown during the anticipated life of the machine. But even allowing that such manufacture might be within the implied licence, I find myself quite unable to see how that could constitute some sort of blanket licence from the vehicle manufacturer to any member of the public to copy and manufacture, for sale in the market generally and without specific order, equipment to be made available for purchasers or users of the vehicle manufacturer's products. The learned [trial] judge rejected the defendant's argument based on implied licence, and in my judgment he rightly rejected it.
Such a licence cannot rest on any contractual basis, and if it rests on anything, it can rest only upon some form of estoppel as between the manufacturer of the vehicle and the manufacturer of the spare part. I can see no support for such an estoppel merely from the public sale of the vehicle.
It seems to me that when one is considering machinery which is not the subject of any patent protection, it is unnecessary and may be misleading to introduce the concept of an implied licence. The owner of a car must be entitled to do whatever is necessary to keep it in running order and to effect whatever repairs may be necessary in the most economical way possible. To derive this entitlement from an implied licence granted by the original manufacturer seems to me quite artificial. It is a right inherent in the ownership of the car itself. To curtail or restrict the owner's right to repair in any way may diminish the value of the car. In the field of patent law it may be right to start from the patentee's express monopoly and see how far it is limited by exceptions. In the field of law applied to machinery which enjoys no patent protection, it seems to me appropriate to start from a consideration of the rights of the owner of the machinery and then to see how far the law will permit some conflicting legal claim to impinge upon those rights.
I can see no reason to doubt that any owner of a BL car might exercise his right to repair the car, whenever the exhaust pipe needs replacement, by producing an exact copy of the original pipe in his own workshop or by instructing the local blacksmith to do the same. But in practical terms, of course, if the owner's right to repair is limited to these activities in a world of mass-produced goods, it is quite valueless. What the owner needs, if his right to repair is to be of value to him, is the freedom to acquire a previously manufactured replacement exhaust system in an unrestricted market.
Here then we come to the heart of the issue, where there appears to be a clear conflict of legal rights, the car owner's right to repair on the one hand, the copyright owner's right, on the other hand, to use his copyright in such a way as to maintain a monopoly in the supply of spare parts. It may be a novel, but seems to me to be an unavoidable, issue for the law to decide which of the two rights should prevail over the other.
It is, I think, conceded that in certain situations resort to copyright to starve the market of necessary spare parts for a car would be legally unacceptable. As it is put in one of the written summaries of counsel's submissions which have been such a helpful feature of the presentation of counsel's arguments in this appeal:
The respondents recognise that the owner of a vehicle or other apparatus must be able and free to deal with that article as he or she so wishes and must be able to buy spare parts lawfully on the market for that article.
Thus, to take an extreme example, suppose a car manufacturer, to encourage early obsolescence, decided to discontinue his own supply of spare parts for every model five years after it ceased production and sought to enforce his copyright in spare parts drawings to stifle any alternative source of supply. I cannot believe that in those circumstances the law would be prepared to sustain the copyright claim, nor did I understand counsel for BL to argue seriously to the contrary.
It follows that the starting point for the resolution of the conflict of competing rights to which I have referred is to recognise that in some circumstances the enforcement of the manufacturer's copyright in spare parts drawings must yield to the maintenance of a supply of spare parts to sustain the owner's right to repair. This immediately poses a problem as to where, if at all, and if so by what criteria, the law can draw a line to discriminate between acceptable and unacceptable claims to enforce copyright, which restrict the market in spare parts available to car owners for the purpose of effecting necessary repairs.
The answer propounded to this problem on behalf of BL is two-fold. First, it is submitted that the problem has to be resolved by reference to other legislation directed to the control of anti-competitive practices, in particular the Fair Trading Act 1973, the Competition Act 1980, and the relevant provisions of the EEC Treaty. This answer is, to my mind, unacceptable, if only for the simple reason that to accept it would imply that, had the problem arisen before 1973, no answer could have been found to it in the combined operation of the Copyright Acts and the common law.
BL's second answer is that the criterion for the maintenance of a supply of spare parts sufficient to meet the demands of car owners for the purposes of repair is one of necessity and that, so long as the manufacturer and his licensees are maintaining an adequate supply at reasonable prices, and more particularly if the manufacturer is willing to offer licences to all who wish to take them on reasonable terms, there can be no such necessity as to justify the subordination of the right of the copyright owner in spare parts drawings to the interest of the car owner in a free market in parts available for repair.
This suggested answer to the problem seems to me both impracticable and unrealistic for two reasons. First, it would impose an impossible task on the court, whenever asked to decide whether a claim to copyright in spare parts drawings should be enforced, to have to determine without the aid of any defined criteria whether at the date of trial the manufacturer and his licensees were maintaining a supply on reasonable terms. Second, once the copyright owner had succeeded in his claim, he would be at liberty to vary his terms of trade to the detriment of owners of cars of his manufacture.
These considerations drive me to the conclusion that there is no such half-way-house solution to the problem as has been urged upon us for BL. Either the court must allow the enforcement of the copyright claim to maintain a monopoly in the supply of spare parts for the copyright owner and his licensees, regardless of any adverse effect of the monopoly on car owners; or the right of car owners to a free market in spare parts necessary for economical repair should prevail and the court should accordingly decline to enforce copyright claims as against the manufacturer of spare parts intended exclusively, as are Armstrong's exhaust systems, to be available as replacement parts for cars in need of repair.
As I have already indicated, the first alternative would be unacceptable at one end of the spectrum of possible consequences. But, apart from this, there are sound reasons in principle why the second alternative should be preferred. By selling cars fitted with exhausts based on their copyright drawings BL have already enjoyed the primary benefit which their copyright protects. By selling those same cars BL have also created a large community of car owners who, quite independently of any contractual rights derived from BL, enjoy the inherent right as owners to repair their cars by replacing the exhaust whenever necessary in the most economical way possible.
To allow BL to enforce their copyright to maintain a monopoly for themselves and their licensees in the supply and replacement of exhausts is, to a greater or lesser extent, to detract from the owner's rights and, at least potentially, the value of their cars. There is an inconsistency between marketing cars and thereby creating whatever rights attach to their ownership on the one hand and acting to restrain the free exercise of those rights on the other. The law does not countenance such inconsistencies.
It may be a novel application of the principle to preclude a plaintiff from enforcing a statutory right to which he is prima facie entitled. But, as my noble and learned friend Lord Templeman demonstrates, the application of the principle to the relationship between the mass car manufacturer and those who at any time acquire cars of his manufacture is no more than an extension to a non-contractual relationship of the considerations which underlie the classical doctrine of the law that a grantor may not derogate from his grant.
Subject to two further grounds of objection canvassed on behalf of BL, which I have yet to consider, it seems to me within the capacity of the common law to adapt to changing social and economic conditions to counter the belated emergence of the car manufacturer's attempt to monopolise the spare parts market in reliance on copyright in technical drawings by invoking the necessity to safeguard the position of the car owner.
A recurrent theme in the argument for BL has been that they are not effectively claiming any true monopoly in exhaust pipes, since it is open to a rival manufacturer to take a BL car, throw away the original exhaust system, examine the features of the underside of the car, and design a new exhaust system suitable to be fitted to it. I find no substance in this argument for two reasons.
First, the evidence stops far short of establishing that a new system designed in the way suggested, which must take full account of the shape and configuration of the underside of the frame, various other parts located beneath it, and of the fixing points provided for the exhaust system, would, even if marginally different in shape from the original pipe, escape the charge of reproduction by copying of a substantial part of BL's drawings.
Secondly, we are concerned with economic reality, and, if the BL car owner is to enjoy the freedom to have his car repaired in the most economical way possible when the exhaust pipe needs replacing, that will undoubtedly only be achieved by straight copying.
I would allow the appeal.
Lord Templeman — My Lords, this appeal is the culmination of dispute between the appellants (“Armstrong”) and the respondents (“BL”) over the right to produce component parts required for the repair of a motor vehicle.
A car has an expectation of life of some 15 years subject to determination by careless driving. A car is a collection of hundreds of components all of which must fit together. From the time that a car is driven out of the factory gates until the day that it is consigned to the scrap heap, there is a risk that the car will be immobilised by the failure of a vital component part as a result of accident or wear and tear.
BL manufactures the Marina car. The exhaust pipes need replacement at intervals which vary from six months to two years. Armstrong manufacture replacement exhaust pipes for the Marina and in order to do so copy the shape and dimensions of the original. BL claim that the tentacles of copyright have now reached out to prevent Armstrong from manufacturing exhaust pipes for the Marina unless Armstrong pay such royalty as BL think fit to require. Armstrong decline to pay a royalty.
BL have obtained an injunction which effectively prevents Armstrong from manufacturing replacement exhaust pipes for the Marina. If this injunction was rightly granted it follows that any motorist who drives a BL car must buy his spare parts from BL at the prices fixed by BL or bear the burden of a royalty payable to BL for the privilege of buying his spare part from somebody else. The purchaser of a BL car sells his soul to the company store. The market for replacement parts for BL cars alone exceeds £800 million a year. This appeal has wide implications, because the injunction granted to BL creates or recognises a monopoly in replacement parts enjoyable not only by BL and by all vehicle manufacturers, but also by all manufacturers of mass produced machinery in respect of repairs.
In the course of designing the Marina and for the purpose of transmitting instructions for the production of the Marina, BL employed draughtsmen who made engineering drawings from instructions given to them by the design engineers and showing the shape and configuration of each part of the Marina. Those drawings include recognisable drawings of each of BL's exhaust and convey in figures and words and precise angles and dimensions and description necessary to enable the exhaust pipe to be manufactured and produced in conformity with the shape of the underside of the Marina.
Armstrong have never seen BL's engineering drawings and do not copy them directly. To provide a replacement exhaust pipe Armstrong have taken a BL exhaust pipe and copied it so that the replacement will also fit the shape of the underside of the car. Armstrong's exhaust pipe is a direct copy of BL's exhaust pipe and an indirect copy of BL's engineering drawing.
BL directly reproduce BL's engineering drawing of an exhaust pipe in a material form by converting the two-dimensional drawing into a three-dimensional exhaust pipe in the course of manufacturing the Marina. Armstrong indirectly reproduce BL's engineering drawing by copying the original exhaust pipe of the Marina for the purpose of providing a replacement exhaust pipe.
Armstrong's defence to the charge that they breach BL's copyright in the engineering drawing when Armstrong make a replacement exhaust pipe is two-fold. Armstrong say that copyright does not extend to the direct reproduction of a functional article such as an exhaust pipe which is not protected by patent law and is not a registered design. Secondly, and alternatively, Armstrong say that BL cannot rely on their copyright to prevent the repair of a car supplied by BL and requiring the inevitable replacement of a component part.
In argument BL conceded that there were many component parts, such as windscreens, which it was not possible to make without copying the original. In practical terms, Armstrong must either copy or go out of business.
In the second place, BL deny that they are claiming a monopoly in the reproduction of BL's exhaust pipe. Anyone is free to copy BL's exhaust pipe because BL are prepared to license the reproduction of BL's exhaust pipe on payment of a royalty described as modest. The driver of a Marina will suffer no inconvenience, because he will be able to obtain a replacement exhaust pipe as required either from BL or from BL's licensees. But a monopoly remains a monopoly even if it be benevolently administered and an established monopoly will not necessarily be administered with benevolence. In practice BL are claiming a monopoly and a similar monopoly can be claimed by other manufacturers for their models. The same monopoly could be invoked by the manufacture of any article which requires replacement parts from time to time.
In the course of the present appeal some argument was understandably devoted to a justification of the monopoly claimed by BL. It was urged that BL are entitled to charge a royalty for licensing the production of component parts so as to spread the burden of the expenditure by BL on the research and development of the Marina; that a royalty charged by BL on replacement parts enables BL to reduce the price of their cars; that unless BL have a monopoly there will be no obligation on BL or on any other manufacturer of replacement parts to ensure that such parts are available for motorists throughout the lives of their vehicles; that without BL's monopoly there will be cheap imports from the Far East and the safety standards and quality of replacement parts cannot be safeguarded. The advantage to BL of being able to supply spare parts for Ford and other vehicles in the absence of monopoly was not explored.
Armstrong sought to counteract these arguments by extolling the virtues of competition and by asserting that the interests of the public are not to be safeguarded by monopolists.
For my part, I agree with the submissions made on behalf of Armstrong that Parliament did not intend the protection afforded by copyright to a drawing should be capable of exploitation so as to prevent the reproduction of a functional object depicted in a drawing. But there is a good deal of legislative and judicial history to be considered.
Section 1(5) of the Statute of Monopolies 1623 (21 Jac. I, c. 3) contains an emphatic declaration that all monopolies “for the sole buying, selling, making, working or using of anything within this realm ... are altogether contrary to the laws of this realm, and so are and shall be utterly void and of none effect.”
To this declaration there was, however, a proviso in section 6 whereby the declaration against monopolies hall not extend to any letters patents and grants of privilege for the term of 14 years or under, hereafter to be made of the sole working or making of any manner of new manufactures within this realm, to the true and first inventor and inventors of such manufactures...so as also they be not contrary to the law, nor mischievous to the state, by raising prices of commodities at home, or hurt of trade, or generally inconvenient.”
The decision of this House in L.B. (Plastics) Ltd. v. Swish Products Ltd. shows clearly that as the law now stands the first argument put forward by Armstrong, namely, that copyright does not apply to prevent the indirect copying of drawings of functional articles, cannot be sustained. That argument was raised, though in an oblique form, in Swish and was disposed of by Lord Hailsham of St. Marylebone, at p. 631:
The argument was that although it be conceded that the appellants’ draughtsman's drawings were copyright artistic works within section 3, the information acquired by preliminary work going into the drawing was not, and that what was copyright was simply the particular sketch by the particular draughtsman, which was not reproduced in the three-dimensional product. It would follow of course that a three-dimensional moulding of the present sort could not easily infringe the copyright in a drawing of this sort at all and that a two-dimensional drawing would not do so if drawn as a different sketch. The advantage claimed for counsel's argument is that it reduces the danger of the consequences of the overlap between the law relating to registered design and patent and that relating to copyright which has long given trouble to lawyers and legislators. But we must take copyright law as we find it.
I turn, therefore, to the alternative submission on behalf of Armstrong. It is said that BL, by choosing to manufacture a car by reference to engineering drawings and by marketing the car as a means of transport which can only be kept in running order by repairs which involve indirect reproduction of those engineering drawings, cannot assert their copyright so as to prevent repairs being carried out. A vendor cannot deprive a purchaser of the right to repair.
This submission, unlike the first submission, has not been the subject of legislation, is not contrary to settled practice, but on the contrary is supported by favourable indications in analogous authorities.
We were not referred to any legislation which affects the submission based on the right to repair. As to the practice, the claim to extend copyright to prevent the replacement of exhaust systems by way of repair has been pioneered by BL. Mass production of vehicles and other machinery began about the turn of the century and was extensively practised by Ford shortly after the First World War. A demand for spare parts came into existence not later than the day when the first Model-T Ford broke down on the highway. Since that day there has been established a network of manufacturers of spare parts offering facilities to motorists for the replacement of exhaust pipes and systems and windscreens and other components. BL, themselves, formerly copied and supplied replacement component parts for cars of rival manufacturers, but now only make parts for the cars of other manufacturers if BL consider they can do so without copying. I am not clear how BL avoid copying or whether their activities have been challenged.
It is not surprising that some component manufacturers complied with BL's demands for a licensing agreement. TI and Armstrong have chosen to resist and the cost of these present proceedings must, I apprehend, exceed £1 million. Ford have asserted copyright in their replacement parts and have adopted a policy of not granting any licences to manufacture or sell, thus asserting a monopoly which has been stigmatised by the Monopolies and Mergers Commission as an anticompetitive practice which tends to keep prices up. No doubt if BL are successful in these proceedings, every manufacturer, whether of motor vehicles or other articles, will be careful to make and preserve production or engineering drawings and will either require all component replacement parts to be purchased from the original manufacturer or from licensees who pay royalties to the original manufacturer.
As between landlord and tenant and as between the vendor and purchaser of land, the law has long recognised that “a grantor having given a thing with one hand is not to take away the means of enjoying it with the other.” In Browne v. Flower,  1 Ch. 219, Parker, J., said:
The implications usually explained by the maxim that no one can derogate from his own grant do not stop short with easements. Under certain circumstances there will be implied on the part of the grantor or lessor obligations which restrict the user of the land retained by him further than can be explained by the implication of any easement known to the law. Thus, if the grant or demise be made for a particular purpose, the grantor or lessor comes under an obligation not to use the land retained by him in such a way as to render the land granted or demised unfit or materially less fit for the particular purpose for which the grant or demise was made.
I see no reason why the principle that a grantor will not be allowed to derogate from his grant by using property retained by him in such a way as to render property granted by him unfit or materially unfit for the purpose for which the grant was made should not apply to the sale of a car. In relation to land, the principle has been said to apply “beyond cases in which the purpose of the grant is frustrated to cases in which that purpose can still be achieved albeit at a greater expense or with less convenience.”
The principle applied to a motor car manufactured in accordance with engineering drawings and sold with components which are bound to fail during the life of the car prohibits the copyright owner of the drawings from exercising his copyright powers in such a way as to prevent the car from functioning unless the owner of the car buys replacement parts from the copyright owner or his licensee.
BL own the car and the copyright in a drawing of an exhaust pipe fitted to the car. BL sell the car and retain the copyright. The exercise by BL of their copyright in the drawing will render the car unfit for the purpose for which the car is held. BL cannot exercise their copyright so as to prevent the car being repaired by replacement of the exhaust pipe.
In the course of the present proceedings Oliver, L.J., said in the Court of Appeal:
It is unnecessary to decide the point, but I can see that there are strong arguments for saying that, where a manufacturer sells to a purchaser an expensive piece of machinery containing parts which are inherently likely to wear out during the working lifetime of the machine, he impliedly licenses the purchaser to procure, by copying if it is more advantageous to him, those subsidiary parts, even in a case where the manufacturer is itself willing to supply the parts at whatever it regards as an appropriate price. If such a licence can be implied, there can be no reason for inhibiting the purchaser, when he orders one replacement, from having two or more made against future breakdown during the anticipated life of the machine. But even allowing that such manufacture might be within the implied licence, I find myself quite unable to see how that could constitute some sort of blanket licence from the vehicle manufacturer to any member of the public to copy and manufacture, for sale in the market generally and without specific order, equipment to be made available for purchasers or users of the vehicle manufacturer's products.
For my part, I base the right to repair on the principle of non-derogation from grant rather than implied licence, and I see no difficulty in concluding that suppliers such as Armstrong may take exhaust pipes to be supplied to those cars of BL which require to be repaired by the replacement of exhaust pipes. Every owner of a car has the right to repair it. That right would be useless if suppliers of spare parts were not entitled to anticipate the need for repair. The right cannot, in my view, be withheld by the manufacturer of the car by contract with the first purchaser and cannot be withheld from any subsequent owner. It was suggested on behalf of BL that any such right would only be effective against the manufacturer of the car and not against a sub-contractor who manufactured parts for the car and was allowed by BL to retain copyright in the engineering drawings. In my view, the same principle applies to a sub-contractor, because he knows that he is manufacturing a part of a car to be sold to a purchaser who will need to keep the car in repair. It was also suggested on behalf of BL that if a patentee of a component part, such as a carburetor can prevent the installation of a replacement carburetor which infringes his patent, it follows that a copyright owner can prevent the installation of a replacement exhaust pipe which indirectly reproduces and infringes the drawing of an exhaust pipe.
BL market and sell a car as a form of transport which requires an exhaust pipe in order to function. BL are not selling exhaust pipes. The car sold by BL can only be kept in repair by the replacement of the exhaust pipe which is not the subject of a patent. In these circumstances, in my opinion, BL are not entitled to assert the copyright in their drawing of an exhaust pipe in order to defeat the right of the purchaser to repair his car. The exploitation of copyright law for purposes which were not intended has gone far enough. I see no reason to confer on a manufacturer the right in effect to dictate the terms on which an article sold by him is to be kept in repair and working order. Both the Court of Appeal and Foster, J., might have been prepared to come to the same conclusion, but balked at extending the rights of an owner of a car to keep it in repair to a manufacturer who makes parts solely for repair. I see no difficulty in such an extension; otherwise, the right to repair would be useless.
For these reasons I would allow the appeal.
Lord Griffiths — My Lords, the importance of this appeal to manufacturing industry has been stressed in your Lordships’ speeches and needs no further emphasis from me. British Leyland claim that, through their copyright in the mechanical drawings or blueprints of the exhaust pipe of a Marina motor car, they are able to prevent any other manufacturer from copying the shape of that exhaust pipe without their permission. The validity of this claim depends in the first place upon the true construction of the Copyright Act 1956, under which BL claim copyright.
But what is the extent of the protection given by that copyright? Section 3(5) of the Act provides that the mechanical drawing may not be reproduced in any material form without the licence of the owner of the copyright. It is well established that reproduced means copied. Therefore, no one without BL's permission may copy the mechanical drawings by tracing them, photographing them, or using them to make an identical drawing. Furthermore, no one without BL's permission may use the drawing in order to make the exhaust pipe because section 48(1) provides that reproduction includes a version produced by converting the drawing into a three-dimensional form, so if the drawing is used in order to produce the exhaust pipe the copyright in the drawing is infringed.
Armstrong have not infringed BL's copyright in any of these ways. Armstrong never saw BL's mechanical drawings and in any ordinary usage of the word “copy” they never copied the drawings. Armstrong made copies of the Marina exhaust pipe by copying the exhaust pipe itself through a process known as reverse engineering. Armstrong thus made no use of the product of the draughtsman's skill and labour, namely, the mechanical drawings. But they did, of course, help themselves to the product of the skills of BL's engineering designers that had resulted in the original shape of the prototype exhaust pipe.
BL claim that in such circumstances “reproducing” or “copying” should be construed as bearing the extended meaning of “indirect copying.” BL submit that if there exists a causal link between the artistic work and the three-dimensional copy there has been indirect copying of the artistic work and thus an infringement of copyright. As I shall show, there is a formidable body of authority to support this submission and I am satisfied that the Court of Appeal had no alternative but to hold that there had been indirect copying in this case that infringed the copyright in the drawings.
However, I am equally satisfied that it was not the intention of Parliament to bestow upon a manufacturer through the draughtsman in his drawing office protection for a purely functional object that could not be obtained through either patent or design copyright legislation.
BL could not have obtained patent protection for the exhaust pipe, for it is neither new nor did it require any inventive step to produce it. Nor could they have obtained design copyright protection as Parliament had made clear that design copyright was not to extend to protect objects such as exhaust pipes.
If BL had made the exhaust pipe without producing a mechanical drawing either by directly copying their prototype exhaust pipe or by embodying the instructions to make the exhaust pipe in literary or numerate form, as opposed to being contained in a mechanical drawing, it is conceded that there would be nothing to prevent Armstrong copying the exhaust pipe by reverse engineering. But because BL have made it from an instruction in the form of a mechanical drawing it is said they have a monopoly in the shape of their exhaust pipe. I can see no sensible reason for such a distinction and it is another reason why I am convinced that it was never intended by Parliament.
But manufacturers and their lawyers have recently managed to persuade the courts to extend the protection of artistic copyright to protect the shapes of various types of purely functional objects. They have in effect achieved copyright in an exhaust pipe. This bizarre result is the consequence of the courts construing “reproducing” in section 3(5) as including “indirect copying” in circumstances where it is not necessary to do so to achieve the purpose of the Act, which is to protect the commercial value of the artist's work and labour, and not to grant a monopoly to a manufacturer. To construe copying as including “indirect copying” is to give an unnatural and extended meaning to the word “copying.” It is justifiable to do so if it is necessary to achieve the purpose of the Act, but it is not justifiable to do so to achieve a result which is manifestly not the purpose of the Act. This is what has happened in recent years and I must examine how it has come about.
...I, of course, accept that these cases are authority for the proposition that indirect copying of a purely functional object is an infringement of the copyright in the mechanical drawings, and as the Swish case is a decision of this House it bound the Court of Appeal in the present case. However, nowhere in these cases can I find any consideration given to the reasons why indirect copying was originally introduced by the judges to extend the natural meaning of reproduce or copy or whether such reasons justify the extended meaning where the mechanical drawing is of a functional object and its only purpose is to provide an instruction for the production of the object. It appears that the courts have assumed that indirect copying must apply wherever there is a causal link between a drawing and the object it depicts unless copyright is denied to the drawing by the terms of section 9(8) of the Act.
But what is the purpose to be served by deeming indirect copying to be a breach of copyright in a drawing or blueprint of a purely functional object? The purpose of such a drawing is not to use artistic skill to produce an object of attraction to the public. The draughtsman applies his skill and labour in order to produce a drawing from which the object it depicts can be manufactured. It is in effect an instruction to those in the machine room who have to make the object.
Suppose for the moment we are dealing with an independent draughtsman who accepts a commission to produce blueprints of a prototype engine so that the designers of the engine may commence manufacture. I can see that the skill and labour of the draughtsman should be protected by preventing direct copying of the blueprints or using them to make the engine, for if that were allowed it would steal from him the value of his work.
But the draughtsman in such circumstances is not applying his skill and labour to create an original article from which he may justly expect to reap a reward when it is sold to the public. The draughtsman's skill is merely the conduit by which the designer's ideas are communicated to the constructional engineers on the shop floor. In such circumstances, to construe reproducing as including indirect copying is to transfer the protection of artistic copyright from the draughtsman to the manufacturer, which is not the purpose of artistic copyright.
The courts have, however, so construed the Act in recent years. I am satisfied they have done so because they have applied indirect copying wherever there exists a causal link between the mechanical drawing and the product without considering the purpose that this achieves. I believe this to have been a false step and to have brought about a result never intended by Parliament.
I appreciate, of course, that many design drawings in industry may serve a dual purpose in that the designer employs or is employed to use his skills to produce an object which is in itself attractive and that such a design drawing may also serve the purpose of an instruction to the craftsman or machinist who is to produce the object. No doubt, this applies in the jewelry trade and also in the fashion trade. The work and labour of such designers applied to producing objects attractive in themselves is as worthy of the protection of indirect copying as the work of the artist who paints a picture. Nothing I say is intended to cast doubt upon the justification for extending the protection of indirect copying to such cases.
Where, however, the draughtsman has produced a drawing or a blueprint of a purely functional object, the construction of reproducing in section 3(5) should not be extended to include “indirect copying” but should be limited to its natural meaning of direct copying. This construction will achieve the true purpose of Parliament by giving the protection of artistic copyright to preserve the commercial value of his work and labour and at the same time honour the intention of Parliament, expressed through the Design Copyright Act 1949, that protection should not be extended to manufacturers for purely functional objects devoid of eye appeal.
But would your Lordships be justified in departing from the construction of the Act as it has been applied in recent years and as it was undoubtedly applied by this House in the Swish case? I am very conscious of the fact that I am but a tyro in this field of law, but I have had the benefit of wide ranging instruction over a period of many days of learned arguments that have covered the entire history of the evolution of artistic and design copyright. At the end of the day I am convinced that the courts have taken a wrong turning and misconstrued Parliament's intentions. The error is of recent origin in the history of copyright and I believe that now, after the benefit of far wider ranging argument on the true scope of artistic copyright than has hitherto been addressed to your Lordships’ House, it would be right to correct it. I consider this to be one of those rare cases in which your Lordships are justified in departing from a previous decision of this House.
I would, therefore, hold that “reproducing” in section 3(5) should not be given the extended meaning of “indirect copying” in cases in which the drawing or blueprint is of a purely functional object. In such cases the scope of artistic copyright should be limited to the natural meaning of the words, namely direct copying including using the drawing to make the object it depicts. Applying this definition I would hold that Armstrong have not infringed the copyright in the mechanical drawings by copying the exhaust pipe without seeing or receiving any assistance from the drawings and for this reason I would allow this appeal.
I must also admit that I am emboldened to depart from the recent cases because of my misgivings about the alternative solution to the problem presented by this case which is favoured by others of your Lordships, namely the creation of a spare parts exception to the law of copyright.
If I had been persuaded that on its true construction the Copyright Act 1956 extended the protection of indirect copying to all mechanical drawings and blueprints I should find the greatest difficulty in refusing to enforce that protection simply because it might, in some circumstances, make it more difficult or expensive for the owner of a machine to obtain a spare part.
Whenever Parliament grants a right in the nature of a monopoly, and copyright is such a right, it inevitably interferes in some respects with the freedoms of the public that would exist apart from the monopoly. If a manufacturer has obtained a patent that protects a part of a motor car, let us say the carburetor, it is well established that although the owner of the car may repair the carburetor without infringing the rights of the owner of the patent he is not at liberty to go so far as to have the carburetor replaced by copying it.
The same principle would apply to part of a motor car for which the manufacturer had obtained a design copyright, let us say the mascot. It could be repaired but it could not be replaced by copying it without the licence of the manufacturer.
If, as I must for the purpose of this argument, I assume that Parliament has, through copyright, given a monopolistic right to the manufacturer in the shape of his spare parts, upon what principle is the court free to refuse to enforce that right given by Parliament to the manufacturer? It is said that the manufacturer would be derogating from his grant if he enforced his copyright against another manufacturer because it would interfere with the right of the user of the car to have it repaired. The interference is said to flow from the fact that the spare parts market might be smaller if spare parts could only be produced with the licence of the original manufacturer. This is obviously a possibility, but it applies equally to patented items, and is an obvious consequence of the grant of a right of a monopoly.
It seems to me highly improbable that a motor car manufacturer would exploit his copyright either to starve the spare parts market or to increase the fair price for his spare parts. I can think of nothing more damaging to his prospects of selling the car in the first place. However, if it did prove that the right Parliament had given was being abused, it is, I think, for Parliament to correct the abuse and not for the courts to refuse to enforce a right that Parliament has given, particularly when it is quite obvious that the exercise of the right must impinge, to some extent, upon the rights of others.
One way in which Parliament could guard against possible abuse in the spare parts market would be to make provision for compulsory licensing as is done in the case of patents and design copyright. The fact that Parliament has not done so is, of course, yet another reason that convinces me that it never intended copyright to be used to protect the spare parts market.
No case has been cited to your Lordships in which the courts have refused to enforce a statutory right because it impinged on other freedoms, yet the examples of such a state of affairs must be legion. I regret that I feel unable to follow your Lordships down this untrodden path.
I agree with Oliver, L.J., that on the assumption that copyright protects the exhaust pipe there is no principle of law on which it would be right to refuse BL relief against Armstrong.
However, as I have said, I would allow this appeal on other grounds.
1. Lord Bridge said (referring to and quoting the decisions below):
The learned [trial] judge rejected the defendant's argument based on implied license, and in my judgment he rightly rejected it. Such a license cannot rest on any contractual basis, and if it rests on anything, it can rest only upon some form of estoppel as between the manufacturer of the vehicle and the manufacturer of the spare part. I [the Court of Appeal judge] can see no support for such an estoppel merely from the public sale of the vehicle.
It seems to me [Lord Bridge] that when one is considering machinery which is not the subject of any patent protection, it is unnecessary and may be misleading to introduce the concept of an implied license. The owner of a car must be entitled to do whatever is necessary to keep it in running order and to effect whatever repairs may be necessary in the most economical way possible. To derive this entitlement from an implied license granted by the original manufacturer seems to me quite artificial. It is a right inherent in the ownership of the car itself.
Thus, the trial judge (Foster, J.), an intermediate appellate judge (Oliver, L.J.), and Lord Bridge all reject the concept of applied license as applied to these exhaust pipes. They say that a car manufacturer gives no implied license to ultimate purchasers to replace worn out exhaust pipes (or tires or spark plugs, either, on the same principle). Do you agree with the learned array of English jurists? What is an implied license? Is it implied in fact or in law? What difference would that make here?
2. What about the “some form of estoppel”? What sort of estoppel? Promissory? In pais? What are the elements of the appropriate sort of estoppel? Are they present? Would you say that the manufacturer of the spare part changed its position or otherwise acted in detrimental reliance on the conduct of the car manufacturer? If not, then what is the basis of the estoppel?
Why must there be “some form of estoppel as between the manufacturer of the vehicle and the manufacturer of the spare part”? What about one between the manufacturer of the vehicle and the ultimate purchaser?
But if there were such a form of manufacturer–user estoppel, what would that have to do with the intermeddling spare parts manufacturer?
3. How is the right to repair an exhaust pipe “inherent in the ownership of” (property in) the car itself? Do I always have an inherent right to repair my property?
I have a skunk works on my country estate. Greedy developers build a suburb next to me, and sell tract houses to commuters. Can I keep my skunk works in repair?
I have a tower on a hill on my estate, too. It gives me a very picturesque view of the countryside (now, unfortunately, marred by nearby tract houses). Also, unfortunately, my tower is frequently struck by lightning. (The developers clear cut all of the trees, which used to attract the lightning, but now my tower has become the only outstanding object in the vicinity.) When that happens, pieces of my tower fall onto the nearby tract houses, sometimes damaging the wretched commuters’ shrubbery, lawn furniture, pet dogs and cats, and children. Can I maintain, repair, and preserve my tower?
What is the difference (or differences) between an inherent property right and a right created by an estoppel or implied license?
4. Lord Bridge went on to observe, in closing:
There is an inconsistency between marketing cars and thereby creating whatever rights attach to their ownership on the one hand and acting to restrain the free exercise of those rights on the other. The law does not countenance such inconsistencies.
Is that an empirical observation? A normative remark? Suppose that I sell you some coin-operated video game equipment, which has no practical use except as part of a coin-operated video game machine — as would be found in a game arcade or similar place, where members of the public pay coins to play the game. Would the law countenance my selling you the equipment and, by invocation of copyright law, withholding from you the right to use it in arcades and similar places? Compare Red Baron-Franklin Park, Inc. v. Taito Corp., 883 F.2d 275 (4th Cir. 1989), cert. denied, 110 S. Ct. 869 (1990), with 17 U.S.C. § 109(e)(now subject to “sunset”), as amended by Pub. L. 101–650 (1990).
5. Consider Judge Learned Hand's lecture to counsel for the accused infringer, in Reiss v. National Quotation Bureau, 276 F. 717 (S.D.N.Y. 1921), about how we must interpret the copyright statute and Article I, § 8, cl. 8 in terms of the general practices of civilized peoples in similar fields. Would the Swish doctrine be illustrative of Judge Learned Hand's prescription?
6. Lord Templeman said that when non-derogation is involved, in contrast to implied license, “The right cannot be withheld by the manufacturer of the car by contract with the first purchaser and cannot be withheld from any subsequent owner.”
Why cannot the right be withheld? Does it have something to do with the nature of property? Would such a conveyance of the title in a chattel be akin to a fee tail in the female line? To an equitable servitude on a chattel? to a perpetuity?
If this has to do with the nature of property, why does Lord Templeman later in the same paragraph dispose of the case of the parts sub–contractor “because he knows that he is manufacturing a part of a car to a purchaser who will need to keep the car in repair”?
What difference does it make to property, whose nature is in rem, what somebody knows? Would Lord Templeman want the outcome of the case to be different if the sub-contractor does not know anything — if he is bona fide ignorant?
Suppose that Leyland buys light bulbs, fuses, and screws on the open market, perhaps via normal distribution channels, or on special order, but through a broker or agent. Suppose that the manufacturers of these products know nothing of to whom their goods go. Is it all right for intermeddlers like Armstrong to infringe the manufacturers’ copyrights?
Which prevails, inherent rights of car-property owners, or inherent rights of intellectual property owners? Which property rights are more inherent?
7. Compare the property purchaser's non-derogation right with the computer program owner's right under 17 U.S.C. § 117.
Suppose that I sell you a computer program and you want to improve its performance by making some changes in it. I then assert against you my rights under § 106(2) to be the only preparer of derivative works based on my copyrighted computer program.
Would the outcome be same under § 117 of the United States Copyright Act and under the non-derogation doctrine? What if the program I sell you is buggy and you want to debug it? Any difference in the applicability of the non-derogation doctrine?
8. Does British Leyland signal a firm rejection of the doctrine of L.B. Plastics v. Swish? Have the Brits recognized that it is a disaster (at least, outside the realm of comic strips) to consider three-dimensional objects depicted in copyright-protected two-dimensional drawings to be within the reproduction right? Will Swish be confined to its facts? Will the doctrine against derogation from grants swallow it up? Or does the non-derogation doctrine of the Leyland case depend on the special circumstances in which the case arose or perhaps the constituency of the House of Lords at the time? See Canon K.K. v. Green Cartridge Co. in the window framed below. (To enlarge the window for greater readability, right click on the window area.) This was the last copyright decision of the Privy Council before the handover of Hong Kong to China.
9. What if a computer program becomes obsolescent Does its owner, or the owner of a product in which it is embedded, have a right of “repair” to bring the program back up to date? Does it derogate from the owner’s property right if she cannot keep the program up to date with developments that impair its utility (say, changes in hydrocarbon emission standards in the case of a computer-driven ignition- or emission-control system)? See the Mars case in the window framed below.
1980 Amendment to 17 U.S.C. § 101
Definition of “computer program”
A “computer program” is a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result.
Extended Notes on 1980 Amendment
1. What is a “computer”? The term is not defined in the copyright statute.
Is a computer a large box with moving parts inside it, such as disk drives, and with ports on the back to which cables are connected? Is a program written for execution in a programmed microprocessor chip (no box, no disk drive, no ports and cables) within the statutory definition?
2. What is a “certain result”? What if the result is uncertain? For example, the output of a computer program for generating the product of two prime numbers, randomly selected on the basis of such environmental parameters as room temperature, barometric pressure, pollen count, and time of day.
Can you improve the statute's definition?
Critique this definition:
“Computer program” means a set of statements or instructions for transforming a first set of digital signals to a second set of digital signals in accordance with a predetermined scheme, in a machine, or for transforming a machine from a first state to a second state.
3. What the 1980 amendment accomplished was uncertain for several years. Initially, a few decisions interpreted the statute as not applying to object code (machine language) embodiments, such as copied read–only memory (ROM) chips and floppy disks. See, e.g., Data Cash Sys., Inc. v. JS&A Group, Inc., 480 F. Supp. 1063 (N.D. Ill. 1979), aff'd on other grounds, 628 F.2d 1038 (7th Cir. 1980) (suggesting that ROMmed object code is not a “writing). Other perceived problems were that chips and disks were utilitarian objects and therefore not the subject matter of copyright (as contrasted with patents), that they operated a machine rather than communicated information to human readers of them, and that they were not copies of copyrighted source code versions of the computer programs involved.
Two decisions involving copying of Apple computers and their software were influential in reversing the tide. Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240 (3d Cir. 1983), cert. dism'd by stip., 464 U.S. 1033 (1984), and Apple Computer, Inc., v. Formula International, Inc., 725 F.2d 521 (9th Cir. 1984). They upheld the protectability of object code embodiments of computer programs and rejected the supposed requirement that a candidate for work of authorship status must communicate a message to human readers or perceivers. A powerful argument advanced in the Franklin case was that the words “used ... indirectly” in the statute had to mean something. Since only instructions already in object code (machine language) could be used directly in a computer, the statute must intend to cover them. The Franklin and Formula decisions both expressly rejected the argument (accepted by the district court in the Franklin case) that copyright was limited to works “designed to be ‘read’ by a human reader.” These decisions also rejected the contention that operating system software, as distinguished from application software, was excluded by § 102(b) and Baker v. Selden.
Franklin also stated a proposition, long afterwards influential in computer–related copyright law, that if an idea could be expressed in several ways the various expressions did not merge with the idea and were copyright–protectable. This passage from the opinion is illustrative of the line of argument:
If other programs can be written or created which perform the same function as an Apple's operating system program, then that program is an expression of the idea and hence copyrightable....
Franklin claims that whether or not the programs can be rewritten, there are a limited “number of ways to arrange operating systems to enable a computer to run the vast body of Apple-compatible software.” This claim has no pertinence to either the idea/ expression dichotomy or merger. The idea which may merge with the expression, thus making the copyright unavailable, is the idea which is the subject of the expression. The idea of one of the operating system programs is, for example, how to translate source code into object code. If other methods of expressing that idea are not foreclosed as a practical matter, then there is no merger. Franklin may wish to achieve total compatibility with independently developed application programs written for the Apple II, but that is a commercial and competitive objective which does not enter into the somewhat metaphysical issue of whether particular ideas and expressions have merged.
Several of these points have figured in subsequent case law. One is the approach to the issue of whether there are many or only a few ways of expressing the idea of the computer program. First, the court adopts the principle that there is just one idea.
Second, the court then defines the idea of the program at such a generic and highly abstract level that vast numbers of possibilities exist. Thus, the court said the idea of the computer program is “how to translate source code into object code.” It was not translating Basic into machine language that a 6502 microprocessor chip could execute — the most material thing when trying to sell to the target market here — people already owning application programs for 6502s. Hence, the relevant market of expressions for the court's definition of the idea included, among other things, compilers and interpreters for translating FORTRAN into Z80 object code, for translating COBOL into 8086 object code, and so on. That was a big universe. Does it make any difference, for idea-expression purposes, whether someone owning an Apple equipped with a 6502 chip has any interest in translating COBOL into 8086 (IBM PC) object code?
Another principle, echoed in the district court opinion reversed in the Lotus-Borland case, was that compatibility considerations do “not enter into” the legal analysis. By implication, the interests of users in not having to invest in new software libraries or in learning how to use new programs do not enter into the analysis.
In any event, since the two Apple decisions in the early to mid 1980s, it has been accepted that ROMs and floppy disks are “copies” of computer programs for copyright infringement purposes.
NEC Corp. v. Intel Corp.
United States District Court
10 U.S.P.Q.2d 1177 (N.D. Cal. 1989)
[NEC sought a declaration that lntel's copyrights on the microcodes in Intel's 8086 and 8088 microprocessor chips were invalid and/or not infringed by the microcode of NEC's V20 chip. Intel counterclaimed for infringement of its copyrights on those microcodes. This portion of the court's opinion is directed to whether microcode is protectable under the copyright laws.]
A microcode consists of a series of instructions [stored in a ROM section of a microprocessor chip] that tell a microprocessor which of its thousands of transistors to actuate in order to perform the tasks directed by the microinstruction set. As such, it comes squarely within the definition of a “computer program,” which Congress added to the Copyright Act in 1980, namely, “a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result.”
A computer program, even though articulated in object code, is afforded copyright protection as a “literary work” under § 101, which includes works “expressed in words, numbers, or other verbal or numerical symbols or indicia, regardless of the nature of the material objects...in which they are embodied.” For a particular literary work to be copyrightable, two requirements must be satisfied: the work must be “fixed in any tangible medium of expression,” and it must be “original”. See 17 U.S.C. § 102(a). It is undisputed that Intel's microcode is fixed in a tangible medium of expression. However, NEC challenges the originality of Intel's microcode, and urges two other bases for denying copyright protection. Originality
NEC contends that many of Intel's microsequences are not copyrightable because they consist only of a few obvious steps and thus lack the originality required for copyright protection. NEC refers to Mr. Nimmer's comment that “illustrative of the requirement of minimal creativity are those cases which deny copyright protection to fragmentary words or phrases, non-creative variations of musical compositions and to forms of expression dictated solely by functional considerations.” An example of such type of case is Alberto-Culver Co. v. Andrea Dumon, Inc., 466 F.2d 705, 711 (7th Cir. 1972), in which the court held that the phrase “most personal sort of deodorant” was not entitled to copyright protection. NEC seeks to have such a ruling applied to several of the microsequences in the Intel microcode that are very short and involve only a few steps.
It well may be that, considered alone, several of the microsequences in Intel's microcode consist of “forms of expression directed solely by functional considerations” lacking even “minimal creativity.” But these examples are only small segments of the copyrighted microcode. As Intel points out, any copyrighted work, be it a poem, novel or computer program, can be chopped into parts that could be said to have very few creative steps.
However, for purposes of copyrightability, “Originality means only that the work owes its origin to the author, i.e., is independently created, and not copied from other works, and that the work contains a modicum of originality, i.e., “exceeds that required for a fragmentary work or short phrase.” The Intel microcode fully meets this test. There is no evidence that Intel's microcode was other than an independent effort and, overall, Intel's microcode exceeds the required modicum of originality.
Microcode As Part of the Computer
As stated above, the Copyright Act defines a computer program as “a set of statements or instructions to be used in a computer.” NEC contends that Intel's microcode is a defining element of the computer itself. According to NEC, Intel's microcode does not come within the definition of a computer program because it cannot be used in a computer and also be a defining part of the computer.
But, as stated at the outset, Intel's microcode is within the statutory definition of a “computer program,” and NEC's semi-semantical argument runs counter to the authority cited by Intel: “There is nothing in any of the statutory terms which suggest a different result [concerning copyrightability] for different types of computer programs based upon the function they serve within the machine.” Apple Computer, Inc. v. Franklin Computer Corp.
Idea v. Expression
It is an axiom of copyright law that only the expression of an idea is copyrightable, not the idea, itself. This doctrine was announced in Baker v. Selden, and a substantial portion has been codified in 17 U.S.C. § 102(b). Stemming from Baker v. Selden is the related doctrine of “merger.” When the “idea” and its “expression” are inseparable, copying the “expression” will not be barred, since protecting the “expression” would confer a monopoly of the “idea” upon the copyright owner free of the conditions and limitations posed by the patent law.
It seems to me that, as a matter of practicality, the issue of a limited number of ways to express an idea is relevant to infringement, but should not be the basis for denying the initial copyright. The Register of Copyrights will not know about the presence or absence of constraints that limit ways to express an idea. The burden of showing such constraints should be left to the alleged infringer. Accordingly, in the absence of Ninth Circuit authority to the contrary, it is concluded that the relationship between “idea” and “expression” will not be considered on the issue of copyrightability, but will be deferred to the discussion of infringement.
It is the view of this court that NEC's above mentioned objections to the copyrightability of Intel's microcode are not persuasive. On the contrary, the statutory references discussed at the outset of this section on copyrightability, and particularly the specific definitions of “computer program” that Congress enacted in 1980, “reflect Congress’ receptivity to new technology and its desire to encourage, through the copyright laws, continued imagination and creativity in computer programming.” Apple Computer, Inc. v. Franklin Computer Corp. In light of the foregoing, it is concluded that Intel's microcode was a proper subject for copyright protection and that the copyright registrations contained thereon were initially valid.
1. Microprocessor chips are capable of executing a set of so-called “macroinstructions,” which in the aggregate comprise an “instruction set.” A chip macroinstruction is an assembly language expression such as MOV (a,b), which might mean “Move the contents of Register A to Register B. See IEEE Standard Dictionary of Electrical and Electronic Terms 513 (3d ed. 1984).
A chip's instruction set is the repertory of instructions that a microprocessor chip can execute. More generally, the IEEE Standard Dictionary of Electrical and Electronic Terms 445 (3d ed. 1984) defines “instruction set” as “[t]he set of instructions of a computer, of a programming language, or of the programming languages in a programming system.”
An instruction set implicitly defines vocabulary, syntax, and meaning for the instructions that it comprises. Related documentation explicitly defines such vocabulary, syntax, and meaning. The instruction set for the 8086 microprocessor defines the 8086 assembly language. For a more complete technical discussion, see D. Siewiorek, C. Bell & A. Newell, Computer Structures 13-14 (1982).
2. Different microprocessor chips, such as the Intel 8086 and Motorola 6800, have different instruction sets. A company wishing to compete by selling a fungible substitute for another company's microprocessor chip must design its own microprocessor chip to carry out the same instruction set as the other company's chip.
3. Microinstructions are steps which carry out a macroinstruction. The move instruction, for example, may be executed within the processing unit of a microprocessor by from five to ten steps (microinstructions). The machine language and assembly code associated with microinstructions is known as microcode. (The term microcode has a more general meaning, as well, and microcode was first devised many years ago for use in mainframe computers.)
Copyright in Layouts of Semiconductor Chips
The layout of a semiconductor chip product (integrated circuit chip) may be analogized to the floorplan of a house. Different portions of the chip serve different functions, as kitchens, bedrooms, and garages do in houses. Functional requirements dictate some parts of the layout — for example, the garage must be placed adjacent to the driveway and the driveway must lead to the street.
Conventional chip manufacturing technology involves a process known as photolithography, in which chip layout patterns are engraved or otherwise manufactured on a silicon (or other semiconductor) wafer. The patterns are imposed, layer by layer, for many chips at a time, side by side, as many stamps are printed at a time on a postage sheet. Photolithography is performed with photomasks, which resemble stencils or printing plates on which the chip layout is fixed.
Part of the design process involves encoding the “floorplans” or masks into numerical form and storing the information on database tapes (also referred to as pattern-generation tapes). In effect, a database tape stores the X-Y coordinates of every relevant point in the pattern depicted on a photomask. The technology for this process would permit the encoding of any pictorial information as well. Thus, the Mona Lisa could, in principle, be represented in numerical form in a database tape. Indeed, a digital videotape is similar in principle to such a database tape.
These facts about chip manufacture, together with widespread semiconductor industry concern about “chip piracy,” led to efforts in the late 1970s and early 1980s to utilize copyright law as a means of protecting proprietary rights in chip layouts. One approach was to assert pictorial-work copyrights in the photomasks for chips and in the layouts themselves. A second approach was to assert literary-work copyrights in the numerical data compiled in the database tapes. The difficulties with each approach were manifold.
In 1984, Congress responded to the industry's concern over chip piracy, and to a general consensus that approaches to chip protection based on existing copyright law were doomed to failure, by enacting the Semiconductor Chip Protection Act of 1984 (SCPA), 17 U.S.C. §§ 901-914. The legislative history of the SCPA expressly rules out duplicative-copyright law protection for chip layouts. The Senate and House floor statements said (130 Cong. Rec. S12919 and E4433):
[A]s to these chips [manufactured after July 1, 1983], the Act will replace copyright protection. Similarly, the privileges created by this Act, such as the reverse engineering right, may not be restricted by reference to the narrower privileges that obtain under copyright, such as fair use.
The legislative history of this bill includes repeated assurances that mask work protection in no way erodes copyright protection for subject matter such as computer programs or data bases, even if that subject matter is embodied in a semiconductor chip. The converse is also true; assertions of copyright in mask works masquerading as copyright subject matter should not be permitted to detract from the integrity and exclusivity of the protection scheme created by this Act.
MAI Systems Corp. v. Peak Computer, Inc.
United States Court of Appeals for the Ninth Circuit
991 F.2d 511 (9th Cir. 1993), cert. dism'd, 114 S. Ct. 671 (1994)
Brunettiti, Circuit Judge
Peak Computer, Inc. and two of its employees appeal the district court's order issuing a preliminary injunction pending trial as well as the district court's order issuing a permanent injunction following the grant of partial summary judgment.
MAI Systems Corp., until recently, manufactured computers and designed software to run those computers. The company continues to service its computers and the software necessary to operate the computers. MAI software includes operating system software, which is necessary to run any other program on the computer.
Peak Computer, Inc. is a company organized in 1990 that maintains computer systems for its clients. Peak maintains MAI computers for more than 100 clients in Southern California. This accounts for 50–70% of Peak's business.
Peak's service of MAI computers includes routine maintenance and emergency repairs. Malfunctions often are related to the failure of circuit boards inside the computers, and it may be necessary for a Peak technician to operate the computer and its operating system software in order to service the machine.
In August 1991, Eric Francis left his job as customer service manager at MAI and joined Peak. Three other MAI employees joined Peak a short time later. Some businesses that had been using MAI to service their computers switched to Peak after learning of Francis's move.
The district court granted summary judgment in favor of MAI on its claims of copyright infringement and issued a permanent injunction against Peak on these claims. The alleged copyright violations include: (1) Peak's running of MAI software licensed to Peak customers; (2) Peak's use of unlicensed software at its headquarters; and (3) Peak's loaning of MAI computers and software to its customers. Each of these alleged violations must be considered separately.
Peak's running MAI software licensed to Peak customers
MAI software licenses allow MAI customers to use the software for their own internal information processing. This allowed use necessarily includes the loading of the software into the computer's random access memory (“RAM”) by a MAI customer. However, MAI software licenses do not allow for the use or copying of MAI software by third parties such as Peak. Therefore, any “copying” done by Peak is “beyond the scope” of the license.
Peak vigorously disputes the district court's conclusion that a “copying” occurred under the Copyright Act. The Copyright Act defines “copies” as “material objects, other than phonorecords, in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.” 17 U.S.C. § 101.
The Copyright Act then explains:
A work is “fixed” in a tangible medium of expression when its embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration. [Id.]
The district court's grant of summary judgment on MAI's claims of copyright infringement reflects its conclusion that a “copying” for purposes of copyright law occurs when a computer program is transferred from a permanent storage device to a computer's RAM. This conclusion is consistent with its finding, in granting the preliminary injunction, that:
the loading of copyrighted computer software from a storage medium (hard disk, floppy disk, or read only memory) into the memory of a central processing unit ("CPU") causes a copy to be made. In the absence of ownership of the copyright or express permission by license, such acts constitute copyright infringement.
We find that this conclusion is supported by the record and by the law.
Peak concedes that in maintaining its customer's computers, it uses MAI operating software “to the extent that the repair and maintenance process necessarily involves turning on the computer to make sure it is functional and thereby running the operating system.” It is also uncontroverted that when the computer is turned on the operating system is loaded into the computer's RAM. As part of diagnosing a computer problem at the customer site, the Peak technician runs the computer's operating system software, allowing the technician to view the systems error log, which is part of the operating system, thereby enabling the technician to diagnose the problem.
Peak argues that this loading of copyrighted software does not constitute a copyright violation because the “copy” created in RAM is not “fixed.” However, by showing that Peak loads the software into the RAM and is then able to view the system error log and diagnose the problem with the computer, MAI has adequately shown that the representation created in the RAM is “sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration.”
After reviewing the record, we find no specific facts (and Peak points to none) which indicate that the copy created in the RAM is not fixed. While Peak argues this issue in its pleadings, mere argument does not establish a genuine issue of material fact to defeat summary judgment. A party opposing a properly supported motion for summary judgment may not rest upon the mere allegations or denials in pleadings, but “must set forth specific facts showing that there is a genuine issue for trial.”
The law also supports the conclusion that Peak's loading of copyrighted software into RAM creates a “copy” of that software in violation of the Copyright Act. In Apple Computer, Inc. v. Formula Int'l, Inc., 594 F. Supp. 617, 621 (C.D. Cal. 1984), the district court held that the copying of copyrighted software onto silicon chips and subsequent sale of those chips is not protected by § 117 of the Copyright Act. One of the grounds for finding that § 117 did not apply was the court's conclusion that the permanent copying of the software onto the silicon chips was not an “essential step” in the utilization of the software, because the software could be used through RAM without making a permanent copy. The court stated:
RAM can be simply defined as a computer component in which data and computer programs can be temporarily recorded. Thus, the purchaser of [software] desiring to utilize all of the programs on the diskette could arrange to copy [the software] into RAM. This would only be a temporary fixation. It is a property of RAM that when the computer is turned off, the copy of the program recorded in RAM is lost.*
While we recognize that this language is not dispositive, it supports the view that the copy made in RAM is "fixed" and qualifies as a copy under the Copyright Act.
* The current § 117 was enacted by Congress in 1980. This Act adopted the recommendations contained in the Final Report of the National Commission on New Technological Uses of Copyrighted Works ("CONTU") (1978). The new § 117 reflects the CONTU's conclusion that: "Because the placement of a work into a computer is the preparation of a copy, the law should provide that persons in rightful possession of copies of programs be able to use them freely without fear of exposure to copyright liability."
We have found no case which specifically holds that the copying of software into RAM creates a “copy” under the Copyright Act. However, it is generally accepted that the loading of software into a computer constitutes the creation of a copy under the Copyright Act. See, e.g., Vault Corp. v. Quaid Software Ltd., 847 F.2d 255, 260 (5th Cir. 1988) (“the act of loading a program from a medium of storage into a computer's memory creates a copy of the program”); 2 Nimmer on Copyright, § 8.08 at 8-105 (1983) (“inputting a computer program entails the preparation of a copy”); Report of CONTU at 13 (1978) (“the placement of a work into a computer is the preparation of a copy”).
We recognize that these authorities are somewhat troubling since they do not specify that a copy is created regardless of whether the software is loaded into the RAM, the hard disk or the read only memory (“ROM”). However, since we find that the copy created in the RAM can be “perceived, reproduced, or otherwise communicated,” we hold that the loading of software into the RAM creates a copy.
We affirm the district court's grant of summary judgment as well as the permanent injunction as it relates to this issue.
1. Explain how the passage quoted from Apple v. Formula supports the Ninth Circuit's present ruling. Does the fact that when you turn off the power whatever is in RAM vanishes make the vanished material, before it vanished, more a fixed copy or less a fixed copy? What did the court conclude about that here?
2. Explain how the MAI ruling comports with the statutory definition of “fixed.” How did the Ninth Circuit decide that the embodiment of the computer program in RAM was “for a period of time of more than transitory duration”? Did it?
3. The Ninth Circuit's MAI decision has been enormously influential. It has been followed, uncritically, by other courts. E.g., Stenograph L.L.C. v. Bossard Associates, Inc., 144 F.3d 96, 101-02 (D.C. Cir. 1998); Advanced Computer Servs. v. MAI Systems Corp., 845 F.Supp. 356, 363 (E.D. Va. 1994). For an illustration of how far this has been going, see Tiffany Design, Inc. v. Reno-Tahoe Specialty, Inc., 55 F.Supp.2d 1113, (D. Nev. 1999), in which a photograph of the Las Vegas “Strip” was scanned to create a Bmp or Jpeg file, the file (apparently without disc drive storage) was manipulated in a computer RAM using graphics software, and portions of images of buildings on the Strip were inserted into the defendant's novelty items. The court found the scanning of the precursor images from which the (apparently non-infringing) final images were derived to be copying in violation of § 106(1), based on MAI:
The prevailing view therefore seems to be that the digitization or input of any copyrighted material, whether it be computer code or visual imagery, may support a finding of infringement notwithstanding only the briefest of existence in a computer's RAM. See Bruce A. Lehman, White House Information Infrastructure Task Force, Intellectual Property and the National Information Infrastructure 65 & n. 202 (1995)... This Court finds that defendant's scanning of the 1998 Image and input of this precursor image into its computer, in preparation for further graphic manipulation and insertion into its own works, constitutes an act of copyright infringement as a matter of law.
Id. at 1121. The court noted commentary warning that “finding liability for the creation of digitized ‘intermediate copies’ (i.e., the digitization of copyrighted images in order to manipulate or modify them) could potentially chill artistic expression.” See Jeanne English Sullivan, Copyright for Visual Art in the Digital Age: A Modern Adventure in Wonderland, 14 Cardozo Arts & Ent. L.J. 563, 586 (1996). But the court said that “such concerns must be counterbalanced by the need to protect preexisting original expression.” Id. at § 1122 & n.6.
Sullivan, supra, saw this implication in the MAI line of decisions:
[M]ultimedia art...could be infringing if any image briefly shown while morphing into another image, or transforming in response to the viewer's choices, is a copy of a copyrighted work. Scanning a representational work and then using a graphics program to render it abstract in order to change the composition or to add additional features may be an infringement, because the first step would involve the reproduction right.
More fundamentally, browsing and reading any Internet material involves downloading HTML code and Jpegs from the Net to RAM, so that the material can be displayed and read. That turns reading into copyright infringement, something not true for books. Downloading book content to your brain has never been held to be copyright infringement. See generally, Ralph S. Brown, Eligibility for Copyright Protection: A Search for Principled Standards, 70 Minn. L. Rev. 579, 588-89 (1985) (arguing that use of work, while part of patent right, is not generally recognized in copyright and is contrary to copyright law's overall assumptions). What are the policy implications if browsing involves infringement? See Jessica Littman, The Exclusive Right To Read, 29 Cardozo Arts & Ent. L.J. 29, 40 (1994). Are the implications intuitively acceptable? Will some other doctrine, such as implied license, cure the plague?
4. How long is a period of time of “more than transitory duration”? Is that a question of fact? Law? A mixture? Does it involve an issue of material fact for purposes of Rule 56? Did the Ninth Circuit in MAI think it did?
5. Compare the MAI ruling with the following remarks in the House Report on the 1976 Copyright Act (at p. 53):
[T]he definition of “fixation” would exclude from the concept purely evanescent or transient reproductions such as those projected briefly on a screen, shown electronically on a television or other cathode ray tube, or captured momentarily in the “memory” of a computer.
Apparently nobody brought this bit of legislative history to the attention of the Ninth Circuit, since the court does not refer to it in the opinion. What do you make of it, if anything?
6. If I sell you a TV set, do I give you an implied license to fix it? To have someone else repair it for you? To turn it on? To have your repair person turn it on to make repairs? Am I estopped from challenging your engaging in the foregoing uses of the TV set? Does my preventing you from repairing the TV set derogate from my grant to you of title to it?
Explain how and why software is different from TV sets for this purpose.
7. As you know, these days everything is chock full of programmed microprocessors or microcontrollers (microprocessors with some memory and other accessories on the same chip). Toasters, clock radios, VCRs, microwave ovens, laser printers, cars. Suppose that GM sells you a car (or Sony sells you a VCR). It has a label, and its documents have a notice, stating:
The computer software in the product is licensed, not sold, to you.
The software remains the property of the copyright owner, GM (or Sony).
You expressly are not authorized to allow anyone else but a member of your immediate family to use the software.
The car (or VCR) breaks down. When you find that GM (or Sony) charges what you consider to be too much to have it fixed, you take it to a neighborhood repair shop. Who are the copyright infringers here?
8. Is there a genuine conflict here between property rights of equipment purchasers and owners, on the one side, and those of copyright owners, on the other? How would you resolve the conflict, if there is one? What would Lord Templeman (British Leyland) say?
9. Why is the arrangement a “license” and not a sale? (If a sale had occurred, the user would have acquired an unqualified right to use — but not copy — the sold product.) Because MAI so denominates it? Is that determinative? How do you know whether a transaction denominated a license is a license or a sale? See, e.g., Straus v. Victor Talking Machine Co., 243 U.S. 490 (1917); Bobbs-Merrill Co. v. Straus, 210 U.S. 339 (1908); Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700, 24 U.S.P.Q.2d 1173 (Fed. Cir. 1992).
10. What is MAI's legal interest that the court protects here? How should a court decide whether to protect that interest? Is it property? Explain why a court should decide whether to protect MAI's interest on the basis of whether a “more than transitory” fixation has occurred. Describe the relationship between that “fact” and the interests and policies at stake here.
11. If we were writing on a fresh slate, just for computer programs, would there be a good reason why loading a computer program into RAM should be an act of infringement, if not expressly or impliedly licensed? Are there even times when the only person it makes sense to sue is the one that uses the software? Or perhaps the user's agent for doing something to the program (which may presuppose the option of suing the user to establish contributory infringement liability)?
Suppose that GM imports robots containing my pattern recognition software, and uses them to manufacture millions of cars. It is too late for me to get after the off–shore seller, who is judgment–proof or too hard to find. If that kind of use is not infringement, what is? See 35 U.S.C. § 271(g), which was enacted to address a comparable problem — products made abroad by processes patented in the United States, and then imported into the United States. See also Stern, The Bundle of Rights Suited to New Technology, 47 U. Pitt. L. Rev. 1229 (1986) (arguing for a use right for computer software).
12. Is the problem here (consider the matter from a policy standpoint, never mind doctrinal analysis) not that copyright law is making loading a computer program into RAM an act of infringement, but rather what MAI is accomplishing by this use of its copyright? That is, interfering with customers' and competitors' access to the computer repair and enhancement market?
Compare what the Ninth Circuit let MAI do with what happened to Kodak in Eastman Kodak Co. v. Image Technical Services, Inc., 504 U.S. 451 (1992). Is this just an antitrust problem? Or is it also a problem that fair use and other copyright doctrines should address? What is the difference in consequence? Go back to the notional robot software of note 11 and compare that with the repair issues of note 7. Can the doctrine of fair use distinguish between these two cases in an appropriate manner?
Are antitrust and copyright policies the same? Is one or the other policy more appropriate here or for software generally?
13. MAI is largely redundant when unauthorized copies are installed on hard disc or other permanent storage, since § 106(1) clearly registers such acts. MAI is important, however, when no permanent storage is made by a conveniently reached defendant or when an authorized permanent copy is used in a manner exceeding the scope of the authorization (i.e., in excess of some express license limitation). Most such cases have had a fact pattern like MAI's: an independent service organization (ISO) maintains, repairs, or enhances a computer system, in the course of which the ISO executes a computer program that the plaintiff installed on the customer's disc drive. See DSC Communications Corp. v. Pulse Communications, Inc., 170 F.3d 1354, 1362-63 (Fed. Cir. 1999) (holding that no copyright infringement occurred when products bought on open market without any use limitation loaded software into RAM, but copyright infringement occurred when products bought from plaintiff with license limitation loaded same software into RAM).
14. The ISOs took their grievances about the MAI line of caselaw to Congress. The Digital Millennium Copyright Act (“DMCA”), Pub. L. 105-304, 112 Stat. 2887 (1998), added new subsections (c) and (d) to 17 U.S.C. § 117. These provisions authorized the owner or lessee of a machine to make or authorize another (such as an ISO) to make a copy of a computer program if the copy was made by activating the machine in the course of maintaining or repairing it. Arguably, new § 117(c) assumes that MAI is correct in holding a loading into RAM to be a “copy” within the meaning of the Copyright Act, although § 117 says nothing about RAM or inherent permanence or impermanence of the loaded material. What does the DMCA do as to “the exclusive right to read” that concerned Professor Littman, per an earlier note?
15. The DMCA is an example of a patch or kludge. It is an ad hoc solution that does not address the underlying structural defect (or issue) in copyright law: an arguably irrational treatment of use when copyright is applied to computer programs and similar computer-related material. Instead, the DMCA just puts some duct tape over one of the holes that rusted through copyright law's chassis.
How would you fix the problem? Keep in mind the possible need for limiting principles and avoiding unintended consequences.
16. Consider Web caching. The DCMA added § 512 to the Copyright Act, excusing service providers from liability for caching, thus ending the debate over whether their use of caching was fair use. Others who cache, such as Google, are not covered by § 512. Or are they? And even if they aren't, is their caching nonetheless a fair use? See Field v. Google, Inc. (D. Nev. 2006).
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