V. Reverse Engineering Of Software

In Whelan v. Jaslow {FN85: 797 F.2d 1222, 230 USPQ 481 (3d Cir. 1986)} and Computer Associates v. Altai, {FN86: 982 F.2d 693, 23 USPQ2d 1241 (2d Cir. 1992)} both of the alleged infringers had access to the original source code through a prior business relationship, and used that as the basis of a competing product. But the holdings in those cases also provide guidance on what can be copied from an existing computer program without infringing its copyright, something very important when you are trying to write a program similar to one already in the market.

In most instances, the creators of a competing product have not had access to the source code for the original product. Instead, they have studied how the original product operates in order to develop their product. This is particularly true when the competing product must duplicate the file formats or other external features of the original product, and information about those file formats or features is not provided by the developer of the original product.

The key decisions on the legality of reverse engineering have dealt with disassembly: taking the publicly-available object code and attempting to reconstruct the original source code to learn how the program works. They also involved the interface between a video game console and the game cartridges that run on it. This is not surprising, since video game console manufacturers attempt to lock out games from suppliers not paying them licensee fees.

V.A. The Federal Circuit’s Atari Decision

In Atari Games v. Nintendo, {FN87: 975 F.2d 832, 24 USPQ2d 1015 (Fed. Cir. 1992)} the Court of Appeals for the Federal Circuit heard the appeal because a portion of Atari’s suit alleged patent infringement, and the Federal Circuit hears all appeals of cases involving patent infringement. But when hearing a case with aspects outside its normal subject matter jurisdiction, the Federal Circuit tries to follow the law of the appeals court in which the district court is located. That court, the Ninth Circuit, had not yet ruled on copyright infringement and reverse engineering.

The Federal Circuit looked to the purpose of copyright protection, and how that would be frustrated if others could not somehow examine the protected expression to aid them in producing new works. In this regard, computer programs are different from all other copyrighted works, because even though a program may be published and widely distributed, looking at the program or even running it does not reveal the expression protected by copyright. The Federal Circuit, in a decision by Circuit Judge Rader, found:

The author does not acquire exclusive rights to a literary work in its entirety. Under the Act, society is free to exploit facts, ideas, processes, or methods of operation in a copyrighted work. To protect processes or methods of operation, a creator must look to patent laws. An author cannot acquire patent-like protection by putting an idea, process, or method of operation in an unintelligible format and asserting copyright infringement against those who try to understand that idea, process, or method of operation. The Copyright Act permits an individual in rightful possession of a copy of a work to undertake necessary efforts to understand the work’s ideas, processes, and methods of operation. This permission appears in the fair use exception to copyright exclusivity. Section 107 of the Copyright Act states that “fair use of a copyrighted work, including such use by reproduction in copies . . . for purposes such as criticism, comment, news reporting, teaching . . . scholarship or research” is not infringement. The legislative history of section 107 suggests that courts should adapt the fair use exception to accommodate new technological innovations.

Thus, the Act exempts from copyright protection reproductions for “criticism, comment . . . or research.” These activities permit public understanding and dissemination of the ideas, processes, and methods of operation in a work:

The copyright holder has a property interest in preventing others from reaping the fruits of his labor, not in preventing the authors and thinkers of the future from making use of, or building upon, his advances. The process of creation is often an incremental one, and advances building on past developments are far more common than radical new concepts. Where the infringement is small in relation to the new work created, the fair user is profiting largely from his own creative efforts rather than free-riding on another’s work. A prohibition on all copying whatsoever would stifle the free flow of ideas without serving any legitimate interest of the copyright holder.

Section 107 also requires examination of the nature of the work when determining if a reproduction is a fair use. When the nature of a work requires intermediate copying to understand the ideas and processes in a copyrighted work, that nature supports a fair use for intermediate copying. Thus, reverse engineering object code to discern the unprotectable ideas in a computer program is a fair use. {FN88: 975 F.2d at 842-843, 24 USPQ2d at 1022 (citations omitted)}

V.B. The Ninth Circuit’s Sega Decision

A little more than a month after the Federal Circuit issued its decision, the Ninth Circuit ruled in an almost-identical case, Sega v. Accolade. {FN89: 977 F.2d 1510, 24 USPQ2d 1561 (9th Cir. 1992)} Like the Federal Circuit, the Ninth Circuit found that the intermediate copying of the object code of a copyrighted computer program as necessary to disassemble the program to view its expression was a fair use under Section 107 of the copyright laws.

V.B.1. The First Fair Use Factor

Section 107 lists the four factors that must be considered in determining whether a particular use is a fair one: “(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.” The Ninth Circuit started by considering the first factor:

With respect to the first statutory factor, we observe initially that the fact that copying is for a commercial purpose weighs against a finding of fair use. However, the presumption of unfairness that arises in such cases can be rebutted by the characteristics of a particular commercial use. Further “ the commercial nature of a use is a matter of degree, not an absolute. . . .”

Sega argues that because Accolade copied its object code in order to produce a competing product, the Harper & Row presumption applies and precludes a finding of fair use. That analysis is far too simple and ignores a number of important considerations. We must consider other aspects of “the purpose and character of the use” as well. As we have noted, the use at issue was an intermediate one only and thus any commercial “exploitation” was indirect or derivative.

The declarations of Accolade’s employees indicate, and the district court found, that Accolade copied Sega’s software solely in order to discover the functional requirements for compatibility with the Genesis console – aspects of Sega’s programs that are not protected by copyright. With respect to the video game programs contained in Accolade’s game cartridges, there is no evidence in the record that Accolade sought to avoid performing its own creative work. Indeed, most of the games that Accolade released for use with the Genesis console were originally developed for other hardware systems. Moreover, with respect to the interface procedures for the Genesis console, Accolade did not seek to avoid paying a customarily charged fee for use of those procedures, nor did it simply copy Sega’s code; rather, it wrote its own procedures based on what it had learned through disassembly. Taken together, these facts indicate that although Accolade’s ultimate purpose was the release of Genesis-compatible games for sale, its direct purpose in copying Sega’s code, and thus its direct use of the copyrighted material, was simply to study the functional requirements for Genesis compatibility so that it could modify existing games and make them usable with the Genesis console. Moreover, as we discuss below, no other method of studying those requirements was available to Accolade. On these facts, we conclude that Accolade copied Sega’s code for a legitimate, essentially non-exploitative purpose, and that the commercial aspect of its use can best be described as of minimal significance.

We further note that we are free to consider the public benefit resulting from a particular use notwithstanding the fact that the alleged infringer may gain commercially. Public benefit need not be direct or tangible, but may arise because the challenged use serves a public interest. In the case before us, Accolade’s identification of the functional requirements for Genesis compatibility has led to an increase in the number of independently designed video game programs offered for use with the Genesis console. It is precisely this growth in creative expression, based on the dissemination of other creative works and the unprotected ideas contained in those works, that the Copyright Act was intended to promote . The fact that Genesis-compatible video games are not scholarly works, but works offered for sale on the market, does not alter our judgment in this regard. We conclude that given the purpose and character of Accolade’s use of Sega’s video game programs, the presumption of unfairness has been overcome and the first statutory factor weighs in favor of Accolade. {FN90: 977 F.2d at 1522-1523, 24 USPQ2d at 1569-1570 (citations omitted)}

V.B.2. The Second Fair Use Factor

Although the court next considered the fourth factor, because it felt that it was closely related to the first, we’ll consider the factors here in order:

The second statutory factor, the nature of the copyrighted work, reflects the fact that not all copyrighted works are entitled to the same level of protection. The protection established by the Copyright Act for original works of authorship does not extend to the ideas underlying a work or to the functional or factual aspects of the work. To the extent that a work is functional or factual, it may be copied, as may those expressive elements of the work that “must necessarily be used as incident to” expression of the underlying ideas, functional concepts, or facts. Works of fiction receive greater protection than works that have strong factual elements, such as historical or biographical works, or works that have strong functional elements, such as accounting textbooks. Works that are merely compilations of fact are copyrightable, but the copyright in such a work is “thin.”

Computer programs pose unique problems for the application of the “idea/expression distinction” that determines the extent of copyright protection. To the extent that there are many possible ways of accomplishing a given task or fulfilling a particular market demand, the programmer’s choice of program structure and design may be highly creative and idiosyncratic. However, computer programs are, in essence, utilitarian articles – articles that accomplish tasks. As such, they contain many logical, structural, and visual display elements that are dictated by the function to be performed, by considerations of efficiency, or by external factors such as compatibility requirements and industry demands. In some circumstances, even the exact set of commands used by the programmer is deemed functional rather than creative for purposes of copyright. “ When specific instructions, even though previously copyrighted, are the only and essential means of accomplishing a given task, their later use by another will not amount to infringement.”

Because of the hybrid nature of computer programs, there is no settled standard for identifying what is protected expression and what is unprotected idea in a case involving the alleged infringement of a copyright in computer software. We are in wholehearted agreement with the Second Circuit’s recent observation that “thus far, many of the decisions in this area reflect the courts’ attempt to fit the proverbial square peg in a round hole.” In 1986, the Third Circuit attempted to resolve the dilemma by suggesting that the idea or function of a computer program is the idea of the program as a whole, and “everything that is not necessary to that purpose or function is part of the expression of that idea.” The Whelan rule, however, has been widely – and soundly – criticized as simplistic and overbroad. In reality, “a computer program’s ultimate function or purpose is the composite result of interacting subroutines. Since each subroutine is itself a program, and thus, may be said to have its own ‘idea,’ Whelan’s general formulation . . . is descriptively inadequate.” For example, the computer program at issue in the case before us, a video game program, contains at least two such subroutines – the subroutine that allows the user to interact with the video game and the subroutine that allows the game cartridge to interact with the console. Under a test that breaks down a computer program into its component subroutines and sub-subroutines and then identifies the idea or core functional element of each, such as the test recently adopted by the Second Circuit in Altai, many aspects of the program are not protected by copyright. In our view, in light of the essentially utilitarian nature of computer programs, the Second Circuit’s approach is an appropriate one.

Sega argues that even if many elements of its video game programs are properly characterized as functional and therefore not protected by copyright, Accolade copied protected expression. Sega is correct. The record makes clear that disassembly is wholesale copying. Because computer programs are also unique among copyrighted works in the form in which they are distributed for public use, however, Sega’s observation does not bring us much closer to a resolution of the dispute.

The unprotected aspects of most functional works are readily accessible to the human eye. The systems described in accounting textbooks or the basic structural concepts embodied in architectural plans, to give two examples, can be easily copied without also copying any of the protected, expressive aspects of the original works. Computer programs, however, are typically distributed for public use in object code form, embedded in a silicon chip or on a floppy disk. For that reason, humans often cannot gain access to the unprotected ideas and functional concepts contained in object code without disassembling that code – i.e., making copies. {FN91: 977 F.2d at 1524-1525, 24 USPQ2d at 1571-1572 (citations omitted)}

V.B.3. The Third and Fourth Fair Use Factors

The court had this to say about the third factor:

Accolade disassembled entire programs written by Sega. Accordingly, the third factor weighs against Accolade. The fact that an entire work was copied does not, however, preclude a finding of fair use. In fact, where the ultimate (as opposed to direct) use is as limited as it was here, the factor is of very little weight. {FN92: 977 F.2d at 1526-1527, 24 USPQ2d at 1573 (citations omitted)}

And finally, the fourth factor:

As applied, the fourth statutory factor, effect on the potential market for the copyrighted work, bears a close relationship to the “purpose and character” inquiry in that it, too, accommodates the distinction between the copying of works in order to make independent creative expression possible and the simple exploitation of another’s creative efforts. We must, of course, inquire whether, if the challenged use should become widespread, it would adversely affect the potential market for the copyrighted work, by diminishing potential sales, interfering with marketability, or usurping the market. If the copying resulted in the latter effect, all other considerations might be irrelevant. The Harper & Row Court found a use that effectively usurped the market for the copyrighted work by supplanting that work to be dispositive. However, the same consequences do not and could not attach to a use which simply enables the copier to enter the market for works of the same type as the copied work.

Unlike the defendant in Harper & Row, which printed excerpts from President Ford’s memoirs verbatim with the stated purpose of “scooping” a Time magazine review of the book, Accolade did not attempt to “scoop” Sega’s release of any particular game or games, but sought only to become a legitimate competitor in the field of Genesis-compatible video games. Within that market, it is the characteristics of the game program as experienced by the user that determine the program’s commercial success. As we have noted, there is nothing in the record that suggests that Accolade copied any of those elements.

By facilitating the entry of a new competitor, the first lawful one that is not a Sega licensee, Accolade’s disassembly of Sega’s software undoubtedly “affected” the market for Genesis-compatible games in an indirect fashion. We note, however, that while no consumer except the most avid devotee of President Ford’s regime might be expected to buy more than one version of the President’s memoirs, video game users typically purchase more than one game. There is no basis for assuming that Accolade’s “Ishido” has significantly affected the market for Sega’s “Altered Beast”, since a consumer might easily purchase both; nor does it seem unlikely that a consumer particularly interested in sports might purchase both Accolade’s “Mike Ditka Power Football” and Sega’s “Joe Montana Football”, particularly if the games are, as Accolade contends, not substantially similar. In any event, an attempt to monopolize the market by making it impossible for others to compete runs counter to the statutory purpose of promoting creative expression and cannot constitute a strong equitable basis for resisting the invocation of the fair use doctrine. Thus, we conclude that the fourth statutory factor weighs in Accolade’s, not Sega’s, favor, notwithstanding the minor economic loss Sega may suffer. {FN93: 977 F.2d at 1523-1524, 24 USPQ2d at 1570-1571 (citations omitted)}

V.B.4. Summarizing The Four Factors

The Ninth Circuit summarized its analysis of the four factors and found that they weighed in Accolade’s favor:

In summary, careful analysis of the purpose and characteristics of Accolade’s use of Sega’s video game programs, the nature of the computer programs involved, and the nature of the market for video game cartridges yields the conclusion that the first, second, and fourth statutory fair use factors weigh in favor of Accolade, while only the third weighs in favor of Sega, and even then only slightly. Accordingly, Accolade clearly has by far the better case on the fair use issue. {FN94: 977 F.2d at 1527, 24 USPQ2d at 1573}

The court concluded:

The record clearly establishes that disassembly of the object code in Sega’s video game cartridges was necessary in order to understand the functional requirements for Genesis compatibility. The interface procedures for the Genesis console are distributed for public use only in object code form, and are not visible to the user during operation of the video game program. Because object code cannot be read by humans, it must be disassembled, either by hand or by machine. Disassembly of object code necessarily entails copying. Those facts dictate our analysis of the second statutory fair use factor. If disassembly of copyrighted object code is per se an unfair use, the owner of the copyright gains a de facto monopoly over the functional aspects of his work: aspects that were expressly denied copyright protection by Congress. In order to enjoy a lawful monopoly over the idea or functional principle underlying a work, the creator of the work must satisfy the more stringent standards imposed by the patent laws. Sega does not hold a patent on the Genesis console.

Because Sega’s video game programs contain unprotected aspects that cannot be examined without copying, we afford them a lower degree of protection than more traditional literary works. In light of all the considerations discussed above, we conclude that the second statutory factor also weighs in favor of Accolade. . . .

We conclude that where disassembly is the only way to gain access to the ideas and functional elements embodied in a copyrighted computer program and where there is a legitimate reason for seeking such access, disassembly is a fair use of the copyrighted work, as a matter of law. Our conclusion does not, of course, insulate Accolade from a claim of copyright infringement with respect to its finished products. Sega has reserved the right to raise such a claim, and it may do so on remand. {FN95: 977 F.2d at 1526-1528, 24 USPQ2d at 1572-1574 (citations omitted)}

V.C. Revising Sega in Sony v. Connectix

The Ninth Circuit had a chance to revisit reverse engineering in Sony v. Connectix, {FN96: 203 F.3d 596, 53 USPQ2d 1705 (9th Cir. 2000)} where again the issue was whether intermediate copying was infringement or fair use, even if many intermediate copies are made.

Sony contends that Connectix’s reverse engineering of the Sony BIOS should be considered unnecessary on the rationale that Connectix’s decision to observe the Sony BIOS in an emulated environment required Connectix to make more intermediate copies of the Sony BIOS than if Connectix had performed a complete disassembly of the program. Under this logic, at least some of the intermediate copies were not necessary within the meaning of Sega. This construction stretches Sega too far. The “necessity” we addressed in Sega was the necessity of the method, i.e., disassembly, not the necessity of the number of times that method was applied. In any event, the interpretation advanced by Sony would be a poor criterion for fair use. Most of the intermediate copies of the Sony BIOS were made by Connectix engineers when they booted up their computers and the Sony BIOS was copied into RAM. But if Connectix engineers had left their computers turned on throughout the period during which they were observing the Sony BIOS in an emulated environment, they would have made far fewer intermediate copies of the Sony BIOS (perhaps as few as one per computer). Even if we were inclined to supervise the engineering solutions of software companies in minute detail, and we are not, our application of the copyright law would not turn on such a distinction. Such a rule could be easily manipulated. More important, the rule urged by Sony would require that a software engineer, faced with two engineering solutions that each require intermediate copying of protected and unprotected material, often follow the least efficient solution. (In cases in which the solution that required the fewest number of intermediate copies was also the most efficient, an engineer would pursue it, presumably, without our urging.) This is precisely the kind of “wasted effort that the proscription against the copyright of ideas and facts . . . [is] designed to prevent.” Such an approach would erect an artificial hurdle in the way of the public’s access to the ideas contained within copyrighted software programs. These are “aspects that were expressly denied copyright protection by Congress.” We decline to erect such a barrier in this case. If Sony wishes to obtain a lawful monopoly on the functional concepts in its software, it must satisfy the more stringent standards of the patent laws. {FN97: 203 F.3d at 605, 53 USPQ2d at 1711-1712 (citations omitted)}

It is clear that, at least in the Ninth Circuit, legitimate reverse engineering to learn how to interoperate with another computer program is a fair use. Congress appears to agree. In the Digital Millennium Copyright Act, as part of the anticircumvention provisions added as Section 1201 of the Copyright Act, Congress specifically recognized reverse engineering needed for interoperability as an exception to the anticircumvention rules:

A person who has lawfully obtained the right to use a copy of a computer program may circumvent a technological measure that effectively controls access to a particular portion of that program for the sole purpose of identifying and analyzing those elements of the program that are necessary to achieve interoperability of an independently created computer program with other programs, and that have not previously been readily available to the person engaging in the circumvention, to the extent any such acts of identification and analysis do not constitute infringement under this title. {FN98: 17 U.S.C. §1201(f)}

In its Committee Report explaining the Digital Millennium Copyright Act, the Senate Committee on the Judiciary specifically cited Sega v. Accolade and indicated: “The purpose of this section is to foster competition and innovation in the computer and software industry.” {FN99: Sen. Rep. No. 105-190 at 12}

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