Strategies for Litigating Computer Software Copyright Claims

LitigationMag_Fall07reprint:LITMAG_Fall07 11/12/07 3:54 PM Page 54

by Richard A. Halloran and Kimberly A. Demarchi

If a client came to you and told you that his novel had been puter software, these lines are easily blurred. Under the patent stolen and published under the name of another person, the laws, a computer program is patentable if it is novel and accom - path to litigating your case would be fairly evident. You plishes a function that has some practical application. would take your client’s book, along with any drafts, notes , or Patentability lies in the function accomplished by the software other evidence of when she wrote it and compare it to the rather than the elegance of how the programmers expressed book published by the alleged thief. You would look for line- that functionality in the software. Copyright protection, in con - by-line copying and for copying of the narrative themes and trast, extends only to the programmers’ original, creative characters. If the book was published in another language, expression and not to the functionality imparted by the soft - you would hire a translator to compare your client’s version ware. This distinction can be a fine line when dealing with to the published work to find any similarities indicating copy - computer software because software, unlike other creative ing. Your lifelong familiarity with printed fiction as well as works such as literature or music, typically serves a functional nonfiction would make litigating the case straightforward for purpose. That functionality, however, is not protected by the you and for the jury. Copyright Act. The processes and algorithms embodied in the Computer software is a different matter altogether. software might be patentable, but they cannot be copyrighted. Although governed by the same provisions in the Copyright Copyright law protects only the expression used to accomplish Act as other literary works, copyright cases involving com - the functionality, not the underlying functionality itself. E.g. , puter software present special challenges. Unlike copyright Apple Computer, Inc. v. Microsoft Corp. , 35 F.3d 1435 (9th Cir. cases involving works we are familiar with—say a book, a 1994). song, or a painting, where we as litigators start with at least a Trade secrets law, in turn, differs from both patent and copy - superficial familiarity of the medium upon which we can right laws . Trade secrets protection turns not on the creativity begin our assessment of the case and preparation of our liti - or functionality of the information for which protection is gation strategy—software cases often present the challenge sought but rather on whether the information is valuable to a of how to litigate the unfamiliar. company because it is not known to its competitors. Impor - An initial hurdle for the litigator facing a software copyright tantly, a computer program can be eligible for patent, copy - infringement case is to understand the precise rights at issue. right, and trade secrets protection, although the protection Software cases often involve rights that fall within the realm of afforded by each of these different areas of law is unique and different laws, including patent law, copyright law, and trade specific. secrets law, among others. Differentiating among these laws This article focuses on the rights afforded by the copyright and their corresponding rights and protections is essential. laws. Under the Copyright Act, a “computer program” is Generally speaking, patent law protects inventions, copy - defined as “a set of statements or instructions to be used right law protects creative expression, and trade secrets law directly or indirectly in a computer in order to bring about a protects confidential business information. As applied to com - certain result.” 17 U.S.C. § 101. By its terms, the Copyright Act extends to the literal set of instructions used to create the pro - Richard A. Halloran and Kimberly A. Demarchi practice with Lewis & Roca gram. In addition, protection can extend to nonliteral compo - LLP in Phoenix, Arizona. nents of the computer program such as its structure and

Published in Litigation Magazine, Volume 34, Number 1, Fall 2007. © 2007 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. LitigationMag_Fall07reprint:LITMAG_Fall07 11/12/07 3:54 PM Page 55

organization.And protection can also extend to any audiovisual underlying creative work. When you purchase software at displays generated by the program, even if the underlying your local office supply store, what you get is just a copy of instructions used to create the displays are not themselves the object code , not the underlying source code . The object copyrightable. code, unlike the source code, does not reveal the creative One of the most fundamental tasks for the litigator is to iden - expression of the program’s author. Although object code can tify the particular elements of expression embodied in, and be “decompiled” from its 0s and 1s into a high-level program - generated by, the computer program for which copyright pro - ming language, the resulting code can be expected to differ tection is sought, and then ascertain for each element whether quite dramatically from the source code written by the pro - it is copyrightable. Differentiating the protectable elements gram’s author. Consequently, by distributing only the object from the unprotectable is difficult and will often be one of the code while retaining the source code as a trade secret, a soft - decisive points of contention in the lawsuit. One threshold ware author can make and sell many copies of her protected approach is to assess whether the functionality performed by work without ever revealing the contents of her creative the software is capable of being expressed in multiple ways . expression to potential infringers. The idea is that , if the source code used to perform a function Because of the ability to distribute object code without can be written in multiple ways, copyright should protect the revealing the program’s source code, whether to register a expression chosen by the programmer to accomplish the func - copyright in that software becomes a strategic choice. In tion. Conversely, if technological or other constraints limit the order to register a copyright in any work of expression, the number of ways to express the functionality, or if the expres - sion arises from the use of common ideas or their logical expressions, the instructions used by the programmer may not be subject to copyright protection . Written agreements are Computers are binary, that is, they can only “understand” 0s and 1s. People, on the other hand, cannot easily make sense of a prudent measure to the 0s and 1s executed by a computer. This apparent disconnect avoid surprises about was long ago resolved through the creation of programming languages. Today, most programmers write computer pro - who owns what. grams in what are known as high-level programming languages such as Java, C, Basic, Fortran, and Cobol. Programming lan - guages allow programmers to create software using text-based author must complete an application describing the work and instructions that can be easily understood by other program - the circumstances of its creation and must deposit copies of mers. Computer code written in a programming language is the work with the Library of Congress. 17 U.S.C. §§ 407 - known as “source code.” 409. Once the work is deposited with the library, it becomes Programs written in source code are then converted, typi - a public record that can be accessed by anyone. The deposit cally through the process known as compiling , into the 0s and rules provide special protections for computer code, includ - 1s that can be executed by a computer. The resulting machine- ing allowing deposit of excerpts of the source code in lieu of executable code is known as “object code.” the entire program—generally the first and last 25 pages of Source code and object code are viewed under the copyright the source code, or the entire source code if the program is 50 laws as two representations of the same computer program. pages or fewer . 37 C.F.R. § 202.20(c)(vii). Nevertheless, Copyright protection extends to the computer program and many programmers fear even a limited disclosure of their encompasses both the source code and the object code. source code so much that they resist registering copyrights in If the software at issue is in fact copyrightable, the copyright their source code until necessary for purposes of litigation. holder must consider the appropriate measures to protect her The Copyright Office also allows deposit of the object code creation. The exclusive rights of the author/programmer under in lieu of the source code, but this option comes with a con - the Copyright Act vest the moment the software is created, siderable price: The registration is given no presumption of because it is the act of creating an original work that gives rise validity because the deposit of object code does not allow the to copyright ownership. 17 U.S.C. § 201(a). Those exclusive Copyright Office to determine whether the registered work rights includ e the right to copy what has been created as well contains copyrightable material. See id .; see also Syntek as the right to create modified, amended, or translated ver - Semiconductor Co., Ltd. v. Microchip Technology Inc ., 307 sions of the original creation—what are called “derivative F.3d 775, 779-80 (9th Cir. 2002). Of course, if the copyright works.” 17 U.S.C. §§ 101, 106. The owner can also license author chooses to postpone registration of the copyright, she the software to others and even transfer her rights (in whole may still protect her source code as a trade secret and may or part) through a written instrument. Registration of a copy - take other steps to protect her interests , such as the use of right is not necessary to give the author any of these rights. nondisclosure agreements. Identifying the author of the copy - Registration of the copyright, however, is required for liti - right material may not be as simple as it seems. Computer gation and is a prerequisite for recovery of certain remedies. software is often the product of multiple programmers. Main - 17 U.S.C. §§ 411, 412. Registration of the computer source taining ownership over the work therefore requires particular code also creates a presumption of validity of the copyright in care. Without an agreement to the contrary, the Copyright Act the software . Nonetheless, copyright registration is some - provides that software created by employees acting in the thing of a mixed bag for the software author. course and scope of their employment is owned by the Software is unusual among the types of creative works that employer, whereas the copyright in software created by inde - may be copyrighted in that it can be (and usually is) distrib - pendent contractors is owned by the independent contractors uted for use by others without revealing the content of the unless they have agreed in writing that the software is a “work

for hire” owned by the party paying them to write it. 17 copies of the software that can be found on any media (e.g., U.S.C. § 201(b) ; Community for Creative Non-Violence v. CDs, floppy disks, flash drives) should also be forensically Reid , 490 U.S. 730, 742-43 (1989) . inspected by experts for information about the circumstances in Ownership is often at issue in litigation. Written agreements which the software was written, revised, or copied. Metadata is are a prudent measure to avoid surprises about who owns what especially critical evidence in the software copyright case. and to pin down the employment status of contributing authors. Examination of the computers used to create the software at Written agreements are especially crucial if contract program - issue, and their storage media, can reveal creation dates, modi - mers are involved in the creation of the software, in which case fication dates, and the contents of different iterations of the agreements should be in place that specify what ownership, if software. any, the programmers will obtain in the software they create . Another source of useful information is provided by “ver - Written agreements are also important when hiring another sion control systems” that are commonly used by programmers company to write custom software . The agreements should to track changes made to software both during its initial devel - make clear whether your client will acquire a license, an exclu - opment phase and later during revisions and updates. These sive license, or ownership of the custom code being created for systems, which are akin to the document management pro - it. Of course, the hiring company should ensure that the com - grams that many lawyers use to store and share documents pany writing the software has agreements in place with its own within their firms, provide valuable information including programmers to ensure that the company, rather than the pro - dates, identities of programmers, and copies of prior versions grammers, owns and can assign the rights in the software. of the software. The lawyer faced with litigating a software copyright case Given the importance of this electronic evidence to proving should be conscious of software-related issues from the outset. your case, you should consult with your client at the earliest Before any confidential source code is produced, a confiden - possible opportunity about preserving and assembling its own tiality order should be in place to protect the client’s valuable electronic evidence, send timely and detailed preservation let - trade secrets. Often, such confidentiality orders restrict review ters to the other side, and carefully craft discovery requests to of the produced source code to only trial counsel and independ - obtain that key information. ent experts. E.g. , Brown Bag Software v. Symantec Corp. , 960 In a software case, like any copyright case, the plaintiff bears F.2d 1465 (9th Cir. 1992) (restricting in-house counsel from the burden of proving (1) valid ownership of a copyright, and reviewing trade secret information produced in discovery). (2) infringement of that copyright. Given the complexities of Before jumping into a restrictive confidentiality order, how - many software copyright cases, especially if ownership is hotly ever, consider the ramifications. Often you can obtain tremen - contested, it often makes sense to bifurcate these issues, with dous benefit by having someone who is familiar with your ownership adjudicated first, then infringement and damages. client’s software, such as your client’s chief programmer, ana - For plaintiffs, bifurcation puts the focus on the issue that lyze the opposing party’s software for similarities. The trade - often has the most emotional importance to them : confirmation off, of course, is that for this to happen, you will have to agree of ownership of the software. The downside is that bifurcation to reciprocal analysis of your client’s software by her adver - tends to increase the length of the case, although success in sary—something to which your client will likely be loathe to phase one often leads to a favorable settlement of all or most agree. And disclosure of your client’s source code to her aspects of the case . adversary could destroy trade secrets protection over her soft - For defendants, bifurcation affords a means to defer, and ware. Our suggestion is that you consider this decision care - potentially avoid, discovery into their own business activities, fully. The quick decision is typically to prevent all party finances, customers, and licensees. Bifurcation also prolongs representatives from examining the other side’s software, but the case, an effect that often benefits the defendant. Some our experience is that at some point in the case you will really downsides are that if the defendant loses on ownership, the set - want your client’s assistance to analyze the key copyright tlement value of the case is likely to increase significantly, the issues of substantial similarity and protectable expression .You verdict could prove devastating in the marketplace long before should balance that possibility against the need to protect your the case reaches final judgment, and the loss could embolden client’s own secrets. the plaintiff to assert additional claims such as claims for con - The new federal electronic discovery rules have raised the tributory or vicarious infringement. prominence of e-discovery in almost every case. But elec - For the court, bifurcation allows for a simpler and shorter trial tronic discovery takes on additional importance in the soft - in phase one. If the defendants prevail on ownership, then phase ware copyright case. In other types of civil litigation, two (at least on the plaintiff’s copyright claims) is moot . And if electronic evidence is one of many types of evidence that the plaintiff prevails in phase one, chances are there will be a set - might reveal relevant information about the parties’ claims and tlement rather than a phase two trial. defenses, even though the claims themselves do not require Because of the technical nature of a software copyright case, that evidence be in an electronic form. In the software copy - early retention and use of experts is essential. If your litigation right case, the claims are usually focused on creation and own - team does not include lawyers who themselves are conversant ership of electronic information, and the key evidence in the in software (and even if it does) , you would be well advised to case is almost certain to be in electronic form. consult a software expert about what kind of information you Perhaps the most basic evidence in a software case will be should be seeking in discovery, and in what form. Examination the parties’ respective source codes. You will need to obtain the of computer hardware used in the creation and modification of source code to the software at issue in electronic form because the software will also require you to engage a computer foren - that is really the only form useful for thorough expert analysis. sics expert with the necessary technical skills. Once the infor - Additionally, the computers on which the software was writ - mation begins to roll in, someone with expertise in computer ten, the computers on which it has been stored, and electronic software can help you to analyze what you have and what it

means. Retention of an expert may also be necessary to ade - methods. Consequently, the expert must personally examine the quately investigate whether your client has the claims (or parties’ software, usually by using the search results as an index defenses) necessary to proceed with the dispute. of sorts to focus the expert on the portions of the software to Use of nontestifying consultants is also recommended. Given examine personally. Although time consuming and expensive, most lawyers’ lack of sophistication regarding computer soft - this personal examination is indispensable to buttress the ware, a consulting expert is a particularly valuable source of expert’s conclusions if the case goes to trial. advice on what to obtain and analyze in discovery and may be And of course, when it is time to present evidence or argu - more involved in the litigation planning process than you gener - ment to the court, having the benefit of independent or client ally want a testifying expert to be, given the effect of the expert experts will assist in translating the technical aspects of the case disclosure rules on materials that would otherwise be subject to into a format that is user friendly for people without a technical work-product protections. A consulting expert can also be use - background. This will be essential at all stages of the case. ful to conduct analysis from which your testifying expert should Judges quite rightly rely on counsel to educate them on the be insulated, such as a defendant’s initial analysis to determine issues and governing law. Unless the judge to whom your case the extent of potential liability for copying. The testifying expert is assigned has a strong technical background, you will also can repeat favorable analysis conducted by the consulting need to be prepared and able to explain the technical issues asso - expert and can conduct other useful analysis (such as perform - ciated with all of your requests for relief. For example, if you are ing the inspection of the opposing party’s computer). embroiled in a discovery dispute with opposing counsel who has You should not discount your client’s own expertise in this produced the software as object code or in a format different regard . Particularly where you represent a programmer or a from the source code’s native programming language, your abil - ity to compel production of the source code will depend on your ability to explain to the judge why source code is necessary for a complete analysis of the software. Verbatim searches should By the time the case goes to trial, you have become techni - cally savvy regarding the parties’ software and the primary tech - be combined with other nological issues at stake. The problem you now face is that the judge and jury will understand little of what you and the wit - types of copy-detection nesses are prepared to talk about. Simplifying your presentation comparisons. to make sense of the issues for the judge and jury can be far more difficult than you might expect. When presenting evidence and argument regarding the mer - company with on-staff programmers, those individuals can pro - its of the case, you must put forth your position in a manner that vide useful insight into the process of writing computer soft - is accessible to those who do not themselves write or understand ware and likely sources of useful information. And if not computer software. One strategy that is particularly useful is to precluded by a confidentiality order, they may also be able to remember that computer software, no matter how complicated review software produced in the case and provide helpful analy - or sophisticated its functionality, is just a set of instructions writ - sis of it. ten in a foreign language. Those two concepts—instructions and Expert copyright analysis of the parties’ software generally foreign language—are well within our everyday experience and requires computer comparisons of the parties’ respective source have the effect of demystifying the technical nature of the soft - codes to determine areas of potential similarity. Many different ware. Everyone—lawyers, judge, and jury—has tried to give algorithms and programs exist for performing this analysis. The instructions, whether teaching a child to tie his shoes, writing most common and basic type of comparison is to search for ver - out a recipe, or giving travel directions. And everyone is at least batim matches of portions of text between the parties’ source familiar with the idea that there are other languages in which codes. There are many programs that can automatically com - those instructions could be expressed, even if they do not speak pare the parties’ source codes for verbatim matches. This type of those other languages. You do not have to understand what the comparison works well if there has been verbatim copying. instructions are or be able to write them yourself in order to However, given the ease with which an infringer can try to cover comprehend that one set of instructions is substantially similar his tracks by changing variable names and programmers’ com - to another. Preparing witnesses, developing demonstrative ments, or even converting the code to a different programming exhibits, and organizing your case with such commonsense language, an analysis limited to verbatim copying will likely analogies in mind will enhance your ability to convey the facts miss much infringement. Consequently, verbatim searches to the judge or jury. should be combined with other types of copy-detection com - Also, do not underestimate the persuasive power of techno - parisons for a complete analysis, such as a “structure match - logical competence. Not only do you have an ethical duty to ing ” search that analyzes the programming structures in the attain (or associate) the degree of skill necessary to comprehend parties’ software. Although some common structure is likely and present the evidence in your case, but the lawyer who can between different software simply as a result of commonly work directly with the technological evidence gains credibility used programming practices, significant amounts of match - with the court and jury. Approaching the witness , obtaining ing structure indicate copying. from him a disc of software in evidence , and having that witness Computer software is often voluminous, and copy-detection testify about what you display on the courtroom computer search results are therefore often voluminous as well. And the screen when you put the disc in your laptop is far more com - search results usually contain false positives, including reports pelling than simply asking the witness to testify about software of matches that are explainable by such things as the require - from a paper printout (or worse, no evidence at all). If you are ments of a programming language or standard programming comfortable with the necessary technology, you get better evi -

dence from your own witnesses and in cross-examination , and your comfort with the technical subject matter goes a long way to establish your credibility with the judge and jury and makes them more comfortable in deciding the issues . Do not forget the importance of themes and narratives in the presentation of your case. Just because the subject matter is highly technical and an expert is almost certainly required does not mean that you must depart from accessible, common themes in presenting your case. Copyright is still a very human story— someone who worked hard to create something unique should be able to use what she made and be proud of it. Themes of theft, deception, and dishonesty are common in copyright cases and make even highly technical subject matter more accessible to the judge and jury. The Copyright Act allows the court, once liability is deter - mined, to “award a reasonable attorney’s fee to the prevailing party as part of the costs.” 17 U.S.C. § 505. Fees are awardable

Themes of theft, deception, and dishonesty are common in copyright cases.

to the prevailing party, whether it is plaintiff or defendant. Whether to award fees is left to the court’s discretion. The fac - tors a court may consider when exercising its discretion include, but are not limited to, “frivolousness, motivation, objective unreasonableness (both in the factual and in the legal compo - nents of the case) and the need in particular circumstances to advance considerations of compensation and deterrence.” Fogerty v. Fantasy, Inc ., 510 U.S. 517, 534 n.19 (1994). Courts even allow fee awards to include costs and fees associated with the prosecution or defense of other claims, such as unfair com - petition and defamation, if those claims and the copyright claims involve a common core of facts or are based on related legal theories, and can include fees incurred in connection with interlocutory appeals. E.g. , Twentieth Century Fox Film Corp. v. Entertainment Distributing , 429 F.3d 86 9, 884 (9th Cir. 2005), cert. denied , 126 S. Ct. 2932 (2006). In a sense, the key lesson of our experience—and this arti - cle—is that litigating the software copyright case is just like lit - igating any other case. You will need to investigate the claims, assemble the evidence, and set forth your proof in a compelling, comprehensible manner. The fact that a case involves software just requires you to take the necessary steps to plan for and understand technical subject matter, just as you would in a case involving technical evidence of any other kind, be it medical, scientific, or statistical. The peculiar nature of software, partic - ularly its manifestation in both object and subject code , simply dictates some of the ways in which you will take the steps on that familiar path.