Introduction

Volume 3, Spring Issue, 1990 NEC v. INTEL : BREAKING NEW GROUND IN THE LAW OF COPYRIGHT Jorge Contreras,* Laura Handley,* and Terrence Yang* INTRODUCTION The status of copyright protection for computer programs has long been in a state of confusion. In NEC Corp. v. Intel Corp., 1 the U.S. Dis- trict Court for the Northern District of California shed some light on three previously unresolved issues in this murky and continually evolv- ing area of copyright. The court ruled that: (1) microcode embedded in certain Intel microprocessors constituted copyrightable material; (2) reverse engineering of the microcode did not infringe the microcode copyright; and (3)independent "clean room" development of similar microcode was persuasive evidence of non-infringement. The execution of a computer program within a computer involves a number of different, operational levels. 2 An applications programmer may write a program to'solve a problem in a high-level.problem-oriented language containing familiar words, variables, and operators. Examples of high-level languages include BASIC, C, FORTRAN, COBOL, and Pascal. However, high-level languages cannot be implemented as such by a computer, which is controlled by the operation of digital circuits. Before instructions can be executed, a program must undergo a series of transformations that enable it-to operate the computer's digital circuitry. The first step in this transformation may involve translation of the program by a compiler into an assembly-level program. Assembly languages generally reflect the internal organization and operation of the computer more than higher-level languages do, but are still incapable of directly controlling the computer. The assembly-level program is then translated into long strings of binary numbers known as machine language, or object code, which is in turn manipulated by the computer's microcode. The microcode is a body of binary instructions that breaks higher-level instructions down to * Harvard Law School Class of 1991. The authors wish to thank Douglas Derwin of Skjerven, Morrill, MacPherson, Franklin & Friel for providing valuable assistance. 1. No. C-84-20799, slip op. (N.D. Cal. 1989) (1989 WL 67434). An earlier decision was vacated when the District Judge recused himself after it was shown that he held shares of Intel stock. NEC Corp. v. Intel Corp., 645 F. Supp. 590 (N.D. Cal. 1986), vacated sub nom. NEC Corp. v. U.S. Dist. forN. Dist. Cal., 835 F.2d 1546 (9th Cir. 1988). 2. For a discussion of contemporary multilevel machines, see A. TANNENBAUM, STRUCTUREDCOMPUTER ORGANIZATION (2d ed. 1984). 210 Harvard Journal of Law & Technology [Vol. 3 the fundamental series of signals necessary to control the computer's circuits. Digital circuits, which are activated by high or low voltages, respond to the ones and zeros of the microcode. These microcode instructions move data in specific memory registers as dictated by the object code program. Each microprocessor has its own set of microcode instructions kept in an area of memory called the "control store. ''3 Unlike high-level languageinstructions,which are written anew for each applications program, microcode instructions reside permanently or semi-permanently within the microprocessor. Although each line of microcode generally comprises nothing more than a string of thirty-two zeros and ones, microcode designers often represent microcode functions using notation resembling assembly language notation (and called Micro Assembly Language or "MAL"). 4 Therefore, microcode designers, cla!ming an analogy to higher-level programs, have registered their microprograms as "computer programs" with the Copyright Office. I. NEC v. INTEL A. Facts The dispute in NEC v. Intel concerned NEC's alleged infringement of Intel's 8086 and 8088 microprocessor copyrights. On April 28, 1976, NEC entered into a patent cross-license agreement with Intel.5 The license entitled either company to ',make, use or sell" products based on the other's semiconductor patents. In 1979, NEC began to produce and sell Intel's 8086/88 series microprocessors. 6 While it manufactured the Intel chips, NEC used the 8086/88 designs to create a set of its own Intel-compatible microprocessors, the NEC V20 and V30 microprocessors. Such "hardware copying" was implicitly allowed under the license. However, a software engineer at NEC (Hiroaki Kaneko) involved in developing the V20 and V30 microprograms studied not only the 3. Id. at 126--34. The Intel microcode was stored in Read-Only Memory ("ROM") on the 8086 and 8088 microprocessors. NEC's Supplementedand Annotated Findings of Fact and Conclusions of Law (Copyrightability, Infringement, License, and Misuse) at 11, NEC v. Intel (No. C-84-20799) [hereinafterNEC Findings of Fact]. 4. For example, the microcode instruction needed to add a number stored in register A to a number stored in the accumulator register ("AC") and to store the result in AC might be 1000 0000 0001 0001 0001 0010 0000 0000 or, in MAL, AC = A + AC. See A. TANNENBAUM,supra note 2, at 142-43. 5. See NEC Findings of Fact, supra note 3, at 3. 6. Id. at 4. Spring, 1990] NEC v. Intel 211 licensed hardware designs, but also the disassembled and listed 7 Intel 8086/88 microcode, s The resulting V20/30 microcode bore a number of similarities to the Intel code. Both sets of microcode used the same "patch" to overcome a hardware "bug, ''9 both used the same memory registers in the same order in their RESET sequences, t° and both handled internal errors in the same idiosyncratic way. H The presence of these and other similarities in the two microcodes prompted Intel to charge NEC with violation of its 8086/88 microcode copyrights. NEC brought suit seeking a declaratory judgment that the Intel microcode was either invalid or not infringed by NEC. Intel counterclaimed, alleging copyright infringement. B. Copyrightability, Notice, and Forfeiture In an opinion delivered by Senior District Judge Gray, the court first found that Intel's microcode was proper subject matter for copyright protection. The court interpreted the microcode as "a series of instructions," bringing it under the definition of "computer program" estab- lished, by the Copyright Act Revision of 1980.12 Thus, the microcode could merit copyright protection as a literary work. The court then found that the Intel microcode satisfied the two requirements for copyrightability of a literary work: that the micrecode be fixed in a tangible medium of expression and that it contain at least a modicum of creativity, t3 In the next section of the opinion, however, the court found that Intel had forfeited its initially valid copyrights by failing to place copyright notification on the distributed chips, t4 Collectively, NEC and other 7. Disassemblyis the process of translating low-level machine language code into a higher-level form. Listing is the process of displayingsuch code in a mediumreadable by a human, such as a paper printoutor computerdisplay. 8. NEC v. lntel, slip op. at 24. This method of product development,whereby employ- ees of one companydetermine how anothercompany's product works in order to develop a compatible product of their own, is called "reverse engineering." See C. SHERMAN, H. SANDISON,M. GUREN. COMPUTERSOFTWARE PROTECTION LAW, 206-14 (1989) [hereinafter C. SHERMAN]. 9. NEC v. lntel, slip op. at 25. 10. /d. at 28. 11. ld. at 33. 12. See 17 U.S.C. § 101 (1988). 13. NEC v. lntel, slip op. at 3. See 17 U.S.C. § 102 (a) (1988). 14. The relevant portion of 17 U.S.C. § 401(a) was amended by the Berne Convention ImplementationAct of 1988 to read: "a notice of copyright ... may be placed on publicly distributed copies." Berne ConventionImplementation Act of 1988, Pub. L. No. 100-568, § 7(a), 102 Stat. 2853, 2857 (1988) (emphasis added). The Berne convention,ratified in the United states on March 19, 1989, eliminatednotice requirementsfor copyrighted material. Judge Gray, writing in 1989, did not mention the pending Berne Amendmentsto the 212 Harvard Journal of Law & Technology [Vol. 3 manufacturers of the 8086 and 8088 neglected to mark nearly three million of the twenty eight million distributed microprocessors (representing 10.6% of the total chips produced). Although Intel marked all of the chips it manufactured, the court determined that its failure to add notice to the chips made by NEC and others demonstrated a lack of concern for the copyrights. Thus, the court found that Intel had forfeited its once- valid copyrights.15 C. Infringement The court went on to find that NEC's actions did not constitute infringement of the Intel microcode copyrights, independent of their validity or forfeiture. The court divided its infringement analysis into four parts: substantial similarity, copying, constraints, and idea versus expression. First, emphasizing the importance of "not... los[ing] sight of the forest for the trees, ''L6 the court determined that the V20/30 microcode "as a whole" was not substantially similar to the Intel 8086/88 microcode. 17 Although some of the shorter NEC microroutines (seg- ments of microcode) were quite similar to their Intel counterparts, those microroutines involved "simple, straightforward operations in which close similarity in approach [was] not surprising. ''18 Further, none of the ninety microroutines were identical to the Intel version, and many were substantially different. Thus, the V20/30 microcode would not be recog- nized by an "ordinary observer" as having been taken from the 8086/88 microcode. Judge Gray found this conclusion nearly dispositive of the infringement issue.19 Second, the court determined that none of the NEC microroutines had been directly copied from Intel's microcode. Intel identified several compelling similarities between its microcode and the V20/30 microcode, and argued that these similarities constituted evidence of "slavish copying." The court, however, proposed two rationales for not viewing copyright act.

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