First Circuit 3/9/95 Decision in Lotus v. Borland


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Summary of First Circuit Decision

The U.S. Court of Appeals for the First Circuit released its long-awaited decision in Lotus Dev. Corp. v. Borland Int'l, Inc., No. 93-2214 (1st Cir. Mar. 9, 1995), reversing a series of district court decisions that had found Borland liable for copyright infringement.

The Decisions Below

U.S. District Judge Robert Keeton had found that Borland copied protected elements of the user interface of Lotus' 1-2-3 spreadsheet program when it included a Lotus-compatible menu system as an option in its Quattro Pro spreadsheet. The court had held that the menu command hierarchy -- the selection of menu items and their particular arrangement in an inverted tree structure -- was a protectible element of the program that Borland had infringed. In addition, the district court had held that Borland's "key reader" -- a program feature that enabled Quattro Pro to interpret and execute 1-2-3 macros -- was infringing because it employed a table that reproduced the entire 1-2-3 menu command hierarchy, with the first letter of each command substituted for the full command name.

Central Holding: Menu Command Hierarchy, and All Expression Therein, Is an Uncopyrightable "Method of Operation"

The Court of Appeals, reversed, holding that the menu command hierarchy was a "method of operation" that is excluded from copyright protection under 17 U.S.C.  102(b), because "[t]he Lotus menu command hierarchy provides the means by which users control and operate Lotus 1-2-3." Slip op. at 20. The court defined "`method of operation,' as that term is used in  102(b) . . . [as] the means by which a person operates something, whether it be a car, a food processor, or a computer." Id.

Even to the extent that the menu command hierarchy included expression, the court denied that expression any copyright protection: "Accepting the district court's finding that the Lotus developers made some expressive choices in choosing and arranging the Lotus command terms, we nonetheless hold that that expression is not copyrightable because it is part of Lotus 1-2-3's `method of operation.'" Id. at 23.

VCR Analogy

In support of its finding that the Lotus 1-2-3 command menu hierarchy was a "method of operation," the court likened it to the buttons on a VCR:

Users operate VCRs by pressing a series of buttons that are typically labelled "Record, Play, Reverse, Fast Forward, Pause, Stop/Eject." That the buttons are arranged and labeled does not make them a "literary work," nor does it make them an "expression" of the abstract "method of operating" a VCR via a set of labeled buttons. Instead, the buttons are themselves the "method of operating" the VCR.

. . . .

Just as one could not operate a buttonless VCR, it would be impossible to operate Lotus 1-2-3 without employing its menu command hierarchy. Thus the Lotus command terms are not equivalent to the labels on the VCR's buttons, but are instead equivalent to the buttons themselves. . . . Without the menu commands, there would be no way to "push" the Lotus buttons, as one could push unlabeled VCR buttons. . . . Lotus 1-2-3 depends for its operation on use of the precise command terms that make up the Lotus menu command hierarchy.

Id. at 24-25.

Recognizing that "[c]omputer programs, unlike VCRs, are copyrightable as `literary works,'" the court responded to its own rhetorical challenge by stating that "the arrangement of buttons on a VCR would not be copyrightable . . . because the buttons are an uncopyrightable `method of operation.' Similarly, the `buttons' of a computer program are also an uncopyrightable `method of operation.'" Id. at 26-27.

Compatibility Considerations

The court also found support for its holding in compatibility considerations:

Under Lotus's theory, if a user uses several different programs, her or she must learn how to perform the same operation in a different way for each program used. . . . We find this absurd. . . . We think that forcing the user to cause the computer to perform the same operation in a different way ignores Congress's direction in  102(b) that "methods of operation" are not copyrightable.

Id. at 27.

Altai Distinguished and Criticized

The court distinguished Computer Assocs. Int'l, Inc. v. Altai, Inc., 982 F.2d 693 (2d Cir. 1992). "The Second Circuit designed its Altai test to deal with the fact that computer programs, copyrighted as `literary works,' can be infringed by what is known as `nonliteral' copying, which is copying that is paraphrased or loosely paraphrased rather than word for word." Id. at 17. By contrast, in the case before it the First Circuit was "not confronted with alleged nonliteral copying of computer code. Rather, [it was] faced with Borland's deliberate, literal copying of the Lotus menu command hierarchy. Thus, [the court] must determine not whether nonliteral copying occurred in some amorphous sense, but whether the literal copying of the Lotus menu command hierarchy constitute[d] copyright infringement." Id. at 18.

The court found the Altai test "to be of little help in assessing whether the literal copying of a menu command hierarchy constitutes copyright infringement." Id. "In fact, we think that the Altai test in this context may actually be misleading because, in instructing courts to abstract the various levels, it seems to encourage them to find a base level that includes copyrightable subject matter that, if literally copied, would make the copier liable for copyright infringement." Slip op. at 18-19 (footnote omitted).

Other Program Elements Distinguished

The court also sought to distinguish the menu command hierarchies to which its holding applies from other aspects of the program:

The Lotus menu command hierarchy is different from the Lotus long prompts, for the long prompts are not necessary to the operation of the program; users could operate Lotus 1-2-3 even if there were no long prompts. The Lotus menu command hierarchy is also different from the Lotus screen displays, for users need not "use" any expressive aspects of the screen displays in order to operate Lotus 1-2-3; because the way the screens look has little bearing on how users control the program, the screen displays are not part of Lotus 1-2-3's "method of operation." The Lotus menu command hierarchy is also different from the underlying computer code, because while code is necessary for the program to work, its precise formulation is not.

Id. at 21-22 (footnotes omitted).

Conflict in the Circuits

The court acknowledged that its holding is in direct conflict with the Tenth Circuit's holding in Autoskill, Inc. v. National Educ. Support Sys., Inc., 994 F.2d 1476 (10th Cir.), cert. denied, 114 S. Ct. 307 (1993), creating an explicit split in the circuits -- and a possible opening for Supreme Court review. Id. at 29-30.

PETITION FOR SUPREME COURT REVIEW

Lotus Development Corp. filed a petition for a writ of certiorari with the United States Supreme Court on June 7, 1995 (No. 94-2003). The Information Technology Industry Council (ITI) and Intellectual Property Owners (IPO), two Washington, DC-based trade groups, filed amicus briefs supporting Lotus' petition. It's expected that the Court will reach a decision on the petition during the summer recess and issue its order granting or denying cert. (i.e., agreeing or declining to hear the case) when it reconvenes on Monday, October 2, 1995.

SUPREME COURT AGREES TO HEAR CASE

The Supreme Court granted Lotus' petition for certiorari on September 27, 1995. The Court ordered a slightly accelerated briefing schedule as follows:

 94-2003   LOTUS DEVELOPMENT CORP. V. BORLAND INTL., INC.

                The motion of Intellectual Property Owners for
           leave to file a brief as amicus curiae is granted. The
           motion of Information Technology Industry Council for
           leave to file a brief as amicus curiae is granted. The
           petition for a writ of certiorari is granted. The brief
           of petitioner is to be filed with the Clerk and served
           upon opposing counsel on or before 3 p.m., Thursday,
           November 9, 1995. The brief of respondent is to be filed
           with the Clerk and served upon opposing counsel on or
           before 3 p.m., Friday, December 8, 1995. A reply brief,
           if any, is to be filed with the Clerk and served upon
           opposing counsel on or before 3 p.m., Thursday, December
           28, 1995. Rule 29.2 does not apply. Justice Stevens took
           no part in the consideration or decision of these
           motions and this petition.

On November 9, in addition to Lotus' brief, two briefs amicus curiae were filed. Digital Equipment Corporation, The Gates Rubber Company, Intel Corporation and Xerox Corporation filed a brief supporting Lotus. The American Intellectual Property Law Association (AIPLA), an association primarily of intellectual property lawyers, filed a brief supporting neither party, but taking issue with the First Circuit's copyright analysis.

Supreme Court Affirms by Tie Vote

On January 16 -- one week after oral argument took place during the blizzard of 1996 -- the Supreme Court issued the following decision affirming the judgment in the First Circuit:

SUPREME COURT OF THE UNITED STATES
--------
No. 94-2003
--------
LOTUS DEVELOPMENT CORPORATION, PETI-
TIONER v. BORLAND INTERNATIONAL, INC.
on writ of certiorari to the united states court
of appeals for the first circuit
[January 16, 1996]

  Per Curiam.
  The judgment of the United States Court of Appeals
for the First Circuit is affirmed by an equally divided
Court.

  Justice Stevens took no part in the consideration or
decision of this case.

It is not the Supreme Court's practice to issue opinions in cases where the vote is tied.

Lotus Petitions Supreme Court for Rehearing

On February 12, 1996, Lotus filed a Petition for Rehearing in the Supreme Court pursuant to Supreme Court Rule 44.1, noting that rehearing petitions have been granted in the past where the Court's prior decision was by an equally divided Court. Lotus' rehearing petition stressed the fact that issues of infringement, as distinguished from copyrightability, were not before the Court. Lotus contended that many of the arguments proffered by Borland and its amici related to the question of what kinds of conduct constitute infringement, rather than to the issue of copyrightability that was before the Court.

Lotus' Petition for Rehearing is Denied

The Supreme Court denied Lotus' Petition for Rehearing on March 4, 1996.

Disclaimer:    This summary is for the convenience of the reader only. It is not legal advice and may not be relied upon for any purpose.

Although I have attempted not to color the summary with my personal opinions, I feel obliged to disclose to the reader that, during my prior employment in a private law firm, I was an author of several briefs amicus curiae filed in support of Lotus at various stages of the litigation.

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Copyright 1996 Jesse M. Feder. All rights reserved.

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