PROTECTING COMPUTER SOFTWARE: AFTER APPLE COMPUTER,
INC. v. FRANKLIN COMPUTER CORP., 714 F.2d 1240 (3d Cir. 1983),
DOES COPYRIGHT PROVIDE THE BEST PROTECTION?
By Professor Andrew Beckerman-Rodau
Suffolk University Law School
120 Tremont Street
Boston, MA 02108
Copyright 1999 by Andrew Beckerman-Rodau
[Originally published in 57 Temple Law Quarterly 527 (1984)]
During the last two decades, the foundation of the United States economy has
shifted from primary dependence on labor-intensive, manufacturing industries to
dependence on the development of advanced technology. This shift has been
especially apparent in the field of computers. The development of computer
technology has required, and continues to require, tremendous capital
expenditures. As part of the efforts to protect these investments, there has
been a resurgence of interest in the field of intellectual property law.
Actions taken by all three branches of the federal government illustrate this
increased interest in intellectual property law. First, the United States
Supreme Court, which has rarely granted certiorari in patent cases, handed down
two significant decisions construing specific sections of the patent law within
the last few years.1 Second, Congress enacted a new copyright act,2
appointed a commission to study the problems of protecting software,3
amended the Copyright Act in accordance with the commission's recommendations,4
amended the patent law,5 and established the Court of Appeals for the Federal
Circuit with exclusive jurisdiction over patent appeals
from federal district courts.6 Third, President Reagan urged Congress to
modify the federal antitrust and intellectual property laws to improve the
competitiveness of American industries in international markets.7
Traditionally, patent law has been invoked to protect technological
innovations. While the electronic devices and circuits that comprise the
hardware of a computer are proper subject matter for patent protection, the
software8 that is utilized to operate a computer represents subject matter
at the periphery of patent law.9
The increasing importance of software as a basis for advances in computer
technology has necessitated the exploration of other areas of the law as
possible sources of protection. Although trade secret law has been the
traditional means of protecting software, the wide dissemination of many types
of software has greatly hampered the practicability of trade secret protection.
As a result, the use of trade secret law is being increasingly displaced by the
use of copyright law to protect software. Moreover, in light of the decision by
the Court of Appeals for the Third Circuit in Apple Computer, Inc. v. Franklin
Computer Corp.,10 which extended copyright protection to all forms of
software,11 copyright law may provide the best protection currently
available. This article will discuss the existing state of patent and trade
secret law with regard to computer software, analyze the Apple Computer
decision, and assess the 'copyrightability' of software.
I. PATENT LAW AND COMPUTER SOFTWARE
When computer technology was in its infancy, the United States Patent
and Trademark Office adhered to the view that all computer programs and
program-related inventions were unpatentable subject matter.12 This view,
however, was repudiated by a series of decisions from the United States Supreme
Court and the Court of Customs and Patent Appeals, which produced a seemingly
simple two-step analysis, applicable on an ad hoc basis, for determining
whether patentable subject matter existed.13
The two-step analysis, as originally articulated in In re Freeman,14
required the following: 1) The patent claim15 must first be evaluated to
determine if it directly or indirectly recited an algorithm which is defined as
a procedure for solving a given type of mathematical problem; 2) Then, if it
was found to relate to an algorithm, the claim was analyzed to determine
whether, in its entirety, the claim wholly preempted the use of that algorithm,
and was therefore unpatentable subject matter.16
The United States Supreme Court modified this approach with respect to the
patentability of computer software in Diamond v. Diehr.17 In Diehr, the
Court explicitly held that a computer-related invention was patentable subject
matter under the patent law.18 The invention concerned a method of
operating a press to mold and cure rubber.19 The claimed method
constantly measured the temperature in the mold, continually calculated an
optimum curing time with a mathematical formula contained in a computer
program, and opened the press when the program calculated during to be
complete.20 Justice Rehnquist, writing for the majority, concluded that 'a
claim drawn to subject matter otherwise statutory does not become nonstatutory
simply because it uses a mathematical formula, computer program or digital
computer.'21 Justice Rehnquist also reiterated the dictum of Chief Justice
Burger from an earlier case in which the Chief Justice espoused the broad
policy that 'courts should not read into the patent laws limitations and
conditions which the legislature has not expressed,'22 and that the
legislative history of the patent law 'informs us that Congress . . .
intended patentable subject matter to 'include anything under the sun that is
made by man."23 Accordingly, the majority opinion in Diehr clearly
demonstrates that the Court has taken an expansive view of what is patentable
In an attempt to clarify the elements delineating patentable and unpatentable
subject matter, the Court in Diehr stated that the claim in question must
initially be examined to ascertain whether it contained a mathematical
formula.24 Then it must be determined whether the claim sought patent
protection for that formula in the abstract, because such protection was not
available for a mathematical formula just as it was not available for a
scientific principle or a law of nature.25 The Court explained that
unpatentable subject matter cannot be converted to patentable subject matter
merely by limiting the use of the formula to a particular technological
environment or by adding insignificant post-solution activity.26 However,
the Court noted, that when a claim utilized a mathematical formula, not
otherwise patentable, in a structure or process which, when considered as a
whole, was performing a function protectable by patent law, then the claim
contained patentable subject matter.27 The Court concluded that the claims
in question protected an industrial process that was within the domain of
patentable subject matter, and therefore ruled that the claims were valid.28
Therefore, under Diehr, the patentability of a computer-related
invention hinges on whether the mathematical formula involved actually
interacts with another portion of the claimed invention to transform an
article to a different state. If the mathematical formula alone is the
embodiment of the claimed invention, then neither a preamble establishing a
useful environment, nor a mere post-solution activity performed with the
formula, can convert the formula into patentable subject matter.
After the Supreme Court's decision in Diehr, the Court of Customs and Patent
Appeals decided four cases during the summer of 1982 that all dealt with the
patentability of computer-related inventions: In re Tanner,29 In re
Abele,30 In re Pardo,31 and In re Meyer.32 In these cases, the
Court of Customs and Patent Appeals seized the opportunity to refine the two-
step analysis that was originally announced in Freeman,33 and modified in
These cases, taken as a group, refined the two-step analysis into its present
form.34 Under the present analysis, the claim in question must first be
evaluated to determine whether it clearly includes a mathematical algorithm in
the form of a mathematical formula or procedure for solving a mathematical
problem; second, if such a mathematical formula or procedure is included, then
the claim must be further analyzed to determine whether it includes only the
mathematical algorithm and is therefore unpatentable subject matter, or whether
it encompasses an application of the algorithm that includes statutory subject
matter and is therefore patentable. To prevent undermining the two-step
analysis by the inclusion of superfluous statutory subject matter in a claim
for an algorithm, the analysis requires the included statutory subject matter
to be something other than a field-of-use limitation or a nonessential post-
Despite the availability of a succinct test for determining whether computer
software or a computer-related invention is patentable subject matter,
predictability in separating patentable and unpatentable subject matter is very
difficult. A simple legal test is not easily applied to the highly complex area
of computer software, especially in view of the relevant sections of the patent
law which were enacted prior to the recent explosion of computer technology and
without being intended to deal with such technology.35
In addition to the difficulty of determining whether computer software
comes within the domain of the patent law, other problems exist with
utilizing the patent system for the protection of computer software. It is
generally expensive to obtain a patent.36 Also, the lengthy period of
time, typically several years,37 that is required to obtain a patent
seriously limits the usefulness of patent protection. Therefore, in the high
technology area of computers where the economic life of an innovation may be
only a few years, the invention's commercial life may have already expired when
a patent is granted. A final problem with patent protection of software is the
risk of an infringement suit to enforce the patent, which may result in a
judicial determination that the patent is invalid. In such a situation, the
owner of the invalid patent is left without protection and the public has
complete access to the invention. In view of the aforementioned problems, the
patent system, as it presently exists, is clearly not the best way to protect
innovative developments made in computer software.
II. MAINTAINING COMPUTER SOFTWARE AS A TRADE SECRET
Trade secret protection is applicable to computer software in
practically all jurisdictions38 and has been the most widely utilized
method of obtaining protection for software.39 Reliance on trade secret
protection has resulted from both the questionable applicability of patent and
copyright law to software, and from the high level of protection afforded
information that qualifies and is maintained as a trade secret.40
Although the common law definition of a trade secret varies among the states,
the Restatement of Torts provides a generally accepted definition:
"A trade secret may consist of any formula, pattern, device or compilation
of information which is used in one's business, and which gives him an
opportunity to obtain an advantage over competitors who do not know
or use it. . . . The subject matter of a trade secret must be secret . . . so
that, except by the use of improper means, there would be difficulty in
acquiring the information. An exact definition of a trade secret is not
possible. Some factors to be considered in determining whether given
information is one's trade secret are: (1) the extent to which the
information is known outside of his business; (2) the extent to which it is
known by employees and others involved in this business; (3) the extent of
measures taken by him to guard the secrecy of the information; (4) the value
of the information to him and his competitors; (5) the amount of effort or
money expended by him in developing the information; (6) the ease or
difficulty with which the information could be properly acquired or
duplicated by others."41
To qualify as a trade secret computer software must satisfy the factors
delineated above in the Restatement definition. The software must not be widely
known outside of the owner's business and the software must be information that
enhances the owner's business.42 Knowledge of the software should be
restricted to employees who require access to the software for legitimate
business reasons. Such employees should be subject to a secrecy agreement that
legally obligates them not to disclose the software. Further, the owner of the
software should take precautions, such as limiting access to the software to
only those subject to a secrecy agreement, to prevent other employees and
persons outside of the business from gaining access to the software.
In addition to establishing the software as a trade secret, the owner of the
software must continuously undertake measures to maintain the secrecy of the
software.43 Employees must be reminded of what is and what is not a trade
secret, and the trade secret must be maintained as confidential information for
the benefit of the employer. The sale or use of software protected as a trade
secret by anyone other than the owner or the owner's employees must be subject
to an agreement of confidentiality.44 Finally, this agreement must clearly
indicate that the software is a trade secret that is not to be disclosed to
anyone not authorized by the agreement to have access to the software.
A great advantage of trade secret protection for computer software is
that the software may be maintained as a secret indefinitely, provided that the
requirements of a trade secret are continually satisfied.45 This
allows the software owner to enhance his or her position in a competitive
marketplace for as long as the software is maintained as proprietary
The virtually unlimited monopoly that trade secret protection provides to the
owner of qualified software includes certain inherent risks and problems. If
the proprietary software is accidentally or illegally disclosed, all protection
is lost.46 Typically, failure of the trade secret owner to be vigilant in
maintaining the software as proprietary information eventually leads to public
disclosure. If a trade secret is illegally obtained by industrial espionage,
disclosed by a former employee, or disclosed in breach of a confidential
agreement, and thereby enters the public domain, the information ceases to be
proprietary.47 In such cases, the party responsible for the illegal act
can be held liable to the original trade secret owner, but the rest of the
world is free to use the trade secret.48 Additionally, any person who
independently creates the same or similar software is free to use it without
the threat of recourse, since trade secret law only provides legal protection
against someone who illegally obtains the proprietary information. In other
words, if the proprietary software is independently developed and publicly
disclosed by someone else, trade secret rights are extinguished.49
An additional limitation of utilizing trade secret law to protect computer
software results from the difficulty of actually restricting access to
proprietary software to authorized users. Most contemporary computer systems
are directly accessible via ordinary telephone lines. Unauthorized users can
therefore enter and utilize a computer from a remote location through the use
of a small personal computer connected to a telephone.50
Advances in technology over the past few years have changed computers from
large and costly machines to small tabletop machines which are inexpensive
enough to be available to a large segment of the population for personal use.
The tremendous demand for these personal computers has created a vast and
extremely profitable market for software producers. This new market is
essentially a consumer market in which a large volume of programs are sold
through mail order businesses and retail stores.51 Trade secret law is an
ineffective method of protecting this type of market because trade secret
protection requires a limited and strictly controlled use of the
III. COMBINING TRADE SECRET AND COPYRIGHT LAW TO PROTECT
Another approach to computer software protection is the concurrent use of
trade secret and copyright law. This approach allows copyright law to provide
protection in the event that the proprietary software is publicly disclosed.
The weight of federal court decisions support the combined use of trade secret
law and copyright law to safeguard computer software in appropriate instances.53
However, at least one federal court has frowned upon such an approach.
The decision in which the court disapproved the combined use of trade
secret and copyright law, Videotronics, Inc. v. Bend Electronics,54 is
unclear and misleading and should not present a barrier to concurrent use of
the two bodies of law. In Videotronics, the court correctly held that trade
secret protection was unavailable for computer software that had been made
readily available to the public. In so holding, however, the court noted that
once the property interest in the software was covered by the Copyright Act of
1976, relief was unavailable under state trade secret law.55 Any
suggestion implicit in this statement that the Act preempted state trade secret
law is erroneous.56 Such a conclusion is buttressed by the
decision in Management Science America, Inc. v. Cyborg Systems, Inc.,57 in
which the court stated that the Act did not preempt state trade secret law.58
In Management Science, the plaintiff had licensed the use of its
computer software package for payroll processing to more than six hundred
customers59 and had permitted potential customers to view the system's documentation.
However, both the licensing of the system to a customer and the
disclosure to a potential buyer were subject to an explicit written
nondisclosure agreement in which the parties acknowledged that the information
was proprietary and disclosed in confidence.60 In order to provide
additional protection for the software in the event it was publicly disclosed,
the manuals and documentation that comprised the system included
statutory copyright notices. In an action against former employees for
allegedly utilizing the proprietary information contained in the software, the
court concluded that as a matter of law 'the mere act of affixing a copyright
notice does not preclude the claim of secrecy' under the Act.61
Similarly, the Court of Appeals for the Seventh Circuit has ruled that under
the Copyright Act of 1909,62 the placement of a copyright notice on a
computer manual does not automatically preclude trade secret protection.63
Additionally, in Warrington Associates v. Kellogg Citizens National Bank64
and Warrington Associates v. Real-Time Engineering Systems,65 two federal
district courts found that the defendants, who breached a nondisclosure
agreement by allegedly disclosing a confidential computer system manual which
contained a copyright notice, could be liable for both copyright infringement
under the 1976 Copyright Act and breach of the agreement under trade secret
The Seventh Circuit has recognized that copyright law seeks to protect 'the
form of a work,' while trade secret law seeks to protect 'contents or ideas in
a work.' Therefore, the Seventh Circuit reasoned, the two forms of protection
can exist simultaneously in the same material.67 In discussing the
interaction of the two forms of protection, one federal judge eloquently
"An analysis of the interest secured by copyright and trade secret law makes
plain that the claims are not 'equivalent' as intended by the Congress. It is
well-settled that copyright protection extends not to an idea itself, but
rather to the particular expression used by its author. In contrast, the
protection provided by the common law of trade secret misappropriation
extends to the very ideas of the author, subject, of course, to the
requirement that the idea has some originality and is as yet undisclosed or
disclosed only on the basis of confidentiality. The practical distinction
between the two interests is manifest. While disclosure of the expression
does not vitiate rights secured by copyright law, that same disclosure may
well strip the underlying idea of its confidentiality, and thus its status as
a trade secret. To a certain degree the two respective rights in intellectual
property interact. To the extent a work has been copyrighted and published,
the chances of unprivileged disclosure may increase. But the mere fact that
an expression is copyrighted does not, in and of itself, disclose the trade secret
or eliminate its mantel of confidentiality."68
The essential inquiry in a situation where proprietary information has
a copyright notice affixed to it is whether the information qualifies as a
trade secret by virtue of the measures taken to maintain it as a secret. If
such information is openly and unconditionally sold to the public, only
copyright law could be invoked to protect a property interest in the material.
Unconditional public sales negate any claim of secrecy and therefore eliminate
the use of trade secret law as a means of protection.
Despite any confusion that may exist regarding the coincident use of both
trade secret and copyright protection, such use is both proper and recommended
in appropriate cases. However, the utility of this approach will most likely be
limited to proprietary software which is licensed on a confidential basis to a
limited number of customers.69
IV. COPYRIGHT PROTECTION FOR SOFTWARE
The limitations of patent and trade secret law have resulted in reliance on
copyright law as the major source of protection for software. It is undisputed
that the 1976 Copyright Act, as amended by the Computer Software Act of 1980,
extends copyright protection to software.70 There has been dispute,
however, over the question whether this protection applies to all forms of
software.71 To clarify the nature of this dispute, a brief overview of the
general steps of creating a computer program is necessary.
A. Programming a Computer
After developing a clear understanding of a program's objective, the author
or 'programmer' writes a flowchart that illustrates the basic logic of the
program. This flowchart utilizes standard symbols and words to lay out the
basic logic and is readily understandable by anyone with minimal knowledge of
programming. The basic logic is then transferred into a high level computer
language such as FORTRAN, BASIC, COBOL, or SNOBOL. These languages consist of
english words, abbreviations, numbers, and mathematical symbols. The high level
language form of the program is fed into a computer where a special program
known as a compiler translates the high level language into assembly language
consisting of alphanumeric labels that represent particular steps or operations
to be performed. Alternatively, the computer program can be directly written in
assembly language and read into the computer.
Programs written in a high level language or an assembly language are known
as source programs or source code and are readily understandable by persons
skilled in the art of programming. Before a program is understandable to a
computer, an assembler program converts the assembly language into machine
language, also referred to as object code.72
A modern computer works digitally, meaning that it only recognizes
combinations of data (called bytes) in which each individual piece of data
(referred to as a bit) is represented by one of two states. These states are
commonly represented symbolically by a '0' or a '1'. Therefore, the machine
language form of the program consists entirely of combinations of bits which,
if written out by a programmer, would comprise clusters of '0's' and '1's.'
This form of a program can be directly understood only by an expert in machine
language who has painstakingly deciphered the combinations of '0's' and '1's.'73
All programs, regardless of the form in which they are expressed, can
be classified as applications programs or operating programs. The distinction
between the two types of programs is based on the function served by the
program. Typically, an applications program performs a specific task for the
user, such as performing calculations, tabulating data, or producing graphics.
In contrast, an operating program is usually an internal computer program which
actually runs the computer and the applications programs.
B. Copyrightability of Object Code
There is very little dispute regarding the extension of copyright protection
to the flowchart, high level language, or assembly language forms of expressing
applications software. However, confusion has existed as to whether machine
language, or object code, is a form of expression covered by the Copyright
Act.74 Additionally, the question has arisen whether operating programs in
any form are within the domain of the Copyright Act.75
The belief that object code is not copyrightable is based in part on the
confusion between object code and the medium used to store object code.76
Object code can be stored on magnetic tape, magnetic discs, or punched cards or
in a silicon chip77 such as a read only memory ('ROM'). The use of ROM's
has created the most confusion. A ROM is a small electronic device that
produces specific outputs in response to externally supplied data. These
outputs result in the execution of certain instructions within the computer.78
Most of the sections of the ROM are standard and are used in all ROM's.
However, the memory section of each ROM has a unique physical structure that is
defined by the object code that the ROM embodies.79 Therefore, the memory
section of a ROM can be viewed as a physical device that embodies software in
its object code or machine language form.
In Data Cash Systems v. JS&A Group,80 the Federal District Court for the
Northern District of Illinois found that the object code form of a computer
program stored in a ROM was not a copy of the program under the 1909 Copyright
Act because object code was not in a form that could be seen and read by
humans.81 The court also posited that the Copyright Act of 1976 covers
computer programs in flowchart, source, and assembly phases but not in their
object code phase.82 The court viewed the object code form of a program,
when stored in a ROM, as a mechanical device that was outside the scope
of the copyright law.83 On appeal, the Court of Appeals for the Seventh
Circuit affirmed the district court's decision without reaching the question
whether object code in a ROM was copyrightable.84 The denial of copyright
protection was affirmed simply on the basis of failure to satisfy the notice
requirements of the Copyright Act of 1909.85
The first appellate decision to consider the question whether a computer
program embodied in a ROM could be a copy of a copyrighted program is Williams
Electronics, Inc. v. Arctic International, Inc.86 In that case, the Court
of Appeals for the Third Circuit rejected the argument that a copy must be
directly understandable to a human being to be considered a copy under the
copyright act.87 In so doing, the court relied upon the wording of the
Copyright Act of 1976: 'A copy is defined to include a material object 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.'88 Based on this passage, the
court suggested, that the duplication of a copyrighted computer program fixed
in a ROM amounted to copyright infringement.89
In GCA Corp. v. Chance90 and Midway Manufacturing Co. v. Strohon,91
two federal district courts recognized that object code is simply a
mechanical transformation of a computer program and is therefore protectable
when it is copied from a copyrighted source program.92 The GCA Court
"Plaintiff's source code falls within the protection of copyright laws as a
work of authorship fixed in any tangible medium of expression from which it
can be perceived, reproduced or otherwise communicated . . .. Because the
object code is the encryption of the copyrighted source code, the two are to
be treated as one work; therefore copyright of the source code protects the
Although the courts agree that copyright law applies to computer software,
they disagree as to the scope of protection. This is especially true with
regard to copyright protection for object code.
C. Apple Computer v. Franklin Computer
The first appellate opinion to deal definitively with the copyrightability of
software is the Third Circuit's decision in Apple Computer, Inc. v. Franklin
Computer Corp.94 In Apple Computer, the defendant, Franklin, had allegedly
copied fourteen of Apple's copyrighted operating programs which were stored on
floppy discs and in ROM's.95 Franklin then allegedly incorporated these
duplicated programs into a personal computer on which virtually all software
designed for Apple's personal computer could be utilized.96 Apple brought
suit in the United States District Court for the Eastern District of
Pennsylvania alleging copyright infringement of its operating programs and
seeking a preliminary injunction to prevent the continued use of Apple's
operating programs by Franklin. The district court denied the preliminary
injunction, in part, because it determined that it was unclear whether the
Copyright Act of 1976 applied to operating systems or to object code.97
On appeal to the Court of Appeals for the Third Circuit, several issues
emerged. The court first considered whether a computer program expressed in
object code was copyrightable.98 The court held that a computer program in
source or object code is a literary work under the copyright law, and is
therefore protected from unauthorized copying.99
In rejecting Franklin's argument that object code is not copyrightable
because it is not designed to be read by a human, the court focused on section
102 of the Copyright Act of 1976.100 The court found that this section
defined copyrightable subject matter to include original works of authorship
fixed in any tangible medium of expression without regard to whether the
subject matter can be directly perceived by someone or understood only through
the aid of a machine. Relying on its earlier statements in Williams Electronics
and the legislative history of the Copyright Act,101 the court determined
that Congress included the language of section 102 to overrule an earlier
United States Supreme Court decision that established that forms of expression
not directly perceivable to humans fell outside of the copyright law.
102 Therefore, the fact that object code is not perceivable to humans is
In a single paragraph, the court also relied on Williams Electronics
in dismissing Franklin's argument that a computer program embedded in a ROM is
not copyrightable because a ROM is a utilitarian object or a machine part.103
The court viewed the embedding of object codes in a ROM as meeting the
statutory requirement of section 102 that copyrightable subject matter be fixed
in a tangible medium of expression.104
The court also examined the categories of 'works of authorship' enumerated in
the copyright law and concluded that the definition of 'literary works' was
clearly broad enough to include computer programs in any form.105 To
bolster its conclusion, the court of appeals observed that the Copyright Act
explicitly defined computer programs.106 The court further noted that the
Copyright Act set forth a special exception for copying computer programs for
certain purposes.107 Since Congress addressed exceptions for computer
programs in the Copyright Act, the court reasoned that computer software is
within the scope of the Act.108
The court further considered, as a matter of first impression, Franklin's
contention that copyright law could not protect operating system software.109
Franklin distinguished between applications programs, which it conceded
were copyrightable, and operating programs, which it argued were not
copyrightable.110 Franklin correctly cited Baker v. Selden111 and
section 102(b),112 which codified most of Baker, as precluding the
extension of copyright protection to ideas, procedures, processes, systems,
methods of operation, concepts, principles, or discoveries. However, Franklin's
argument that an operating system is per se unprotectable by copyright because
it is a process, system, or method of operation was misplaced. Baker
and section 102(b) established that copyright law does not protect the
underlying idea, but they do not preclude copyright protection for expression
of the idea. Thus, the court determined that the underlying idea of the
operating programs - which is the method or system employed by the programs for
carrying out the particular functions - is protectable, if at all, under patent
law rather than under copyright law. However, the court further found that the
form of expressing the ideas embodied in operating programs is protectable by
The Apple Computer court rejected any distinction between applications and
operating programs, reasoning that it was unable to discern a different status
for different types of software under the law. The court found support for its
view in the legislative history and in the definition of a 'computer program'
contained in section 101, which does not distinguish between different types of
Since copyright protection is limited to the form of expression of an
underlying idea, the Apple Computer court was also required to establish
guidelines to enable the district court on remand to distinguish between the
underlying idea and the form of expression of the idea contained in Apple's
software. In determining where to separate the underlying idea from the form of
expression, the court emphasized that a pragmatic line must be drawn to ensure
a balance between competition and protection of expressions of ideas.115
The court reasoned that since different expressions of the same idea can each
be protected by copyright, the idea and the expression of the idea merge when
the idea cannot be expressed in different ways. Therefore, when an idea cannot
be expressed in different ways, a copyright on the limited means of expression
would be tantamount to protection of the idea.116
The Apple Computer court announced a test for determining whether
software is a protectable form of an expression of an idea, or simply an idea
unprotectable under copyright law.117 Simply stated, the test asks whether
other programs can be written or created that perform the same function as the
program in question. If other programs are possible, then the program in
question is an expression of the idea and therefore copyrightable. However, if
other programs are not possible, then copyright protection is unavailable.118
The court applied the test, by way of example, to the 'Applesoft' operating
program which translates the source code version of programs designed to run on
an Apple Computer into object code.119 The court stressed that the
application of the test to this program should focus on the general function of
translating source code into object code, rather than the translation
of particular source code written for Apple's computer into object code for
Apple's computer. Accordingly, the court stated, if other programs could be
written or created that translate source code into object code, 'Applesoft' was
copyrightable as one form of expression of this translation function. Even if
'Applesoft' represented the only form of expression of an operating program
that would allow applications programs designed for Apple's computer to be run
on Franklin's computer, 'Applesoft' would still be copyrightable since the
underlying idea is the translation function of any source code into object
D. Copyright Law
To evaluate the disparity between the cases that limit copyright protection
to only certain forms of software121 and those cases that have found all
forms of software copyrightable,122 it is necessary to carefully examine
federal copyright law and its legislative history. The subject matter covered
by copyright law is described in section 102 of the Copyright Act. Section 102,
which initially requires an original work of authorship,123 lists seven
illustrative categories of authorship.124 It is clear that the 'literary
works' category, which includes works 'expressed in words, numbers, or other
verbal or numerical indicia,' encompasses software. Further, the legislative
history explicitly states that computer programs are 'literary works' under the
1976 Copyright Act,125 and that they were probably covered under the
previous Copyright Act.126
In addition to the passage of the Copyright Act of 1976, Congress established
the National Commission on New Technological Uses of Copyrighted Works
('CONTU').127 The purpose of CONTU was to study and make recommendations
for changes in the portions of the copyright law that concerned the
reproduction and use of copyrighted works and the creation of new works with
automatic systems capable of storing, processing, retrieving, and transferring
information. The Final Report128 of CONTU concluded that Congress intended
to include computer programs as copyrightable subject matter under the
Copyright Act of 1976.129 The Report also recommended the continuation of
protection for computer programs and the amendment of the Copyright Act of 1976
to clarify the intent to provide such protection.
Upon completion of CONTU's Final Report, Congress adopted the majority
portion of the report130 and passed the Computer Software Act of 1980.
131 This Act amended the copyright law by adding a definition of 'computer
program'132 to section 101. Additionally, section 117 of the Copyright Act
was completely rewritten to establish a special exception under which
reproductions and adaptations of computer programs do not constitute
infringement under certain circumstances.133 Although the Copyright Act
does not explicitly state that software is copyrightable, the existence of this
exception makes it clear by negative implication, that the Act, as amended,
extends protection to computer programs as works of authorship.
Once it has been initially established that a computer program is an
original work of authorship, section 102 requires the work to be fixed in a
tangible medium of expression. The operative words 'fixed in a tangible medium
of expression' are defined to include any material object that permits the work
of authorship to be perceived or communicated with or without the aid of a
machine or device for more than a transitory duration.134 Under
this definition, an original computer program written on paper or contained on
computer punch cards135 would be copyrightable because it is fixed in a
tangible medium. It therefore can be argued that object code embedded in a ROM
is copyrightable because the ROM represents a permanent and tangible medium of
expression for the embedded program.136 At least one court, however, has
said that a computer program can only be an original work of authorship fixed
in a tangible medium of expression where the program is expressed as a
flowchart, or in source code or assembly language.137 Thus, according to
the court, a computer program in object code is not copyrightable.138
This distinction between various equivalent forms of expression of a program
is inconsistent with section 106, which grants to the copyright owner the
exclusive right to make copies of, and prepare derivative works from, the
protected work.139 Section 106, read in conjunction with the relevant
definitions in section 101, clarifies that the right to make copies 'means the
right to produce a material object in which the work is duplicated,
transcribed, imitated, or simulated in a fixed form from which it can be
'perceived, reproduced, or otherwise communicated, either directly or with the
aid of a machine or device."140 Consequently, once copyrightable subject
matter is created and fixed in a tangible medium of expression such as a book,
computer punch cards, or microfilm, the material cannot be freely used simply
by converting it to an equivalent form that is merely a copy of the original
work of authorship.141
Another argument that has been asserted against copyright protection for
certain programs, such as operating programs, is that they are a process,
system or method of operation that is barred from copyright protection by
section 102(b).142 This argument represents a misunderstanding of
a fundamental limitation of the copyright law. Section 102(b) merely restates
the general principle of law that copyright protection does not extend to the
underlying idea of the work of authorship.143 In the context of computer
programs, this principle means that the expression utilized by the programmer
is the copyrightable aspect of the program and that the actual processes or
methods employed by the program are not covered by the copyright law.144
The fact that a computer program represents or embodies a method is irrelevant
because only the form of expressing the method and not the method itself is
within the domain of the copyright law.
The argument that a ROM is really a machine part, or a utilitarian
object, and therefore not copyrightable has also been raised.145 This view
represents an additional misunderstanding of the copyright law. The
classification of a ROM as a machine part or utilitarian object is of no
importance because a ROM is merely a device that embodies copyrightable subject
matter. Copyright protection does not extend to, or restrict the use of, ROM's
any more than a valid copyright on a book restricts the use of books.146
At some point, at least theoretically, the idea and expression of the idea
may merge so that a copyright on the expression protects the underlying idea.
147 One leading authority, however, believes that such a merger is not
actually possible, reasoning that no system or method can be performed with a
single form of expression.148 This reasoning is especially
applicable to software, which can take many different forms and still produce
the same result.149
The potential merger of the form of expression and the underlying idea is one
of the reasons for the distinction that has been made between applications and
operating programs in discussions regarding copyright protection. It has been
argued that the number of ways available to express an operating program for a
particular computer is very limited, and that therefore a copyright on a
particular form of expressing an operating program monopolizes the underlying
idea of the program.150 The purpose or underlying idea of an operating
program is to control a microprocessor,151 which in turn operates a
computer. However, different operating programs can be used to control the
various microprocessors that are available today,152 and therefore a
copyright on an operating program does not monopolize the underlying idea of
The Apple Computer court recognized the theoretical possibility of a merger
of the expression and the idea when it declined to find operating programs per
se copyrightable. Instead, the Apple Computer court took the approach that
operating programs would be copyrightable unless the underlying idea of the
program could not be expressed in more than one way.153 While allowing an
operating program to be copyrightable, this approach recognizes that it is
theoretically possible for the form of expression to merge into the
The copyright law therefore provides protection for all forms of software
that are original works of authorship manifested in a tangible medium of
expression. This protection is available for programs expressed in source code
or object code. Furthermore, it extends to both applications and operating
programs even where they are contained in a ROM. Copyright protection, however,
never extends to the underlying idea embodied in the copyrighted software, or
to the medium or device used to express the software.
E. Policy Considerations
The tremendous importance of computer technology as a major part of
our economy makes it imperative that society encourage the development
and disclosure of technological advances--including the creation of new
software. One method of encouraging development and subsequent public
disclosure is to grant some form of limited protection to software
originators.154 In this way, the programmer can reap commercial benefits
in return for increasing the public's knowledge.155 In order to effect
this underlying policy of securing knowledge for the public, copyright
protection should cover all forms of software--including operating programs and
object code in a ROM.156 Failure to extend copyright protection to
operating programs or object code stored in a ROM would render copyright
protection for software worthless because the public would be able to freely
copy and utilize operating and applications programs in their object code form
without reserving any valuable or useful rights to the software creator.
Copyright law provides the best currently available means of
encouraging software development and public disclosure because such protection
is easily obtained at a minimal cost. Once software, which is an original work
of authorship, is fixed in a tangible medium,158 copyright protection
exists automatically.159 The copyright owner must then simply display a
proper copyright notice on the tangible medium to notify the public of the
copyright.160 Although the law requires payment of a small fee and the
deposit of the copyrighted material in the Library of Congress in order to
register a copyright, failure to perfect registration will not affect rights in
the copyrighted material.161
The minimal expense and speed with which copyright protection is attained is
very advantageous. First, the avoidance of an administrative proceeding to
obtain rights in software prevents waste of a significant portion of the short
commercial life of software.162 Copyright law also allows numerous
independent programmers, who would be unable to afford costly forms of
protection, such as provided by the patent law, to obtain protection.163
The ease with which copyright protection is obtained is accompanied by a
corresponding reduction in the extent of protection. Trade secret and patent
protection, which grant absolute monopolies,164 require significant
expenditures of time and effort. Rather than an absolute monopoly, copyright
law merely protects the form of expression of software but not the idea or
method underlying the computer program. Once copyrighted software is made
available to the public, anyone is free to make use of the idea that the
software embodies. Therefore, the copyright law provides easily obtainable and
sufficiently valuable protection to encourage software development and
concurrently limits the extent of the copyright owner's protection in order to
insure that the public gains significant freedom to utilize the teachings of
The tremendous growth of computer technology and the resulting need for
software has magnified the importance of intellectual property law for
protecting computer software.165 Patent law provides a questionable means
of protecting software because the procedure for obtaining a patent is
expensive and time-consuming, and the applicability of patent law to software
remains unclear. While trade secrecy was once the chief means of protecting
software, the mass marketing of multiple copies of computer programs--
especially for the personal computer market--has rendered trade secret law an
ineffective mechanism for protecting most software. The Copyright Act
of 1976, as amended by the Computer Software Act of 1980, is now the chief
vehicle for protecting software.
Although the importance of protecting software is undisputed166 and
despite the applicability of copyright law to software,167 judicial
application of copyright law has been both ambiguous and conflicting.168
Some courts have found copyright protection available for software only where
such software is embodied in a particular form and in a particular tangible
medium.169 As a result, a program that has been written in source code
will be protected by copyright, while the translation of that program to object
code will not enjoy copyright protection. Confusion between the protected form
of expression and the medium of expression has resulted in the argument that a
protected program can be freely used once it is embedded in a ROM. Furthermore,
confusion between the form of expression and the underlying idea of the program
allowed the novel argument to be raised in Apple Computer that applications
software, but not operating software, was within the domain of copyright law.
The judicial distinctions among types of software, forms of expression
of software, and different mediums containing the software were eliminated by
the Apple Computer court. The court categorically affirmed that software is
protectable under copyright law. The only limitation that the court expressed
was that operating system software would not be protectable if it could be
shown that the function of the operating software could be accomplished by only
one form of expression of the software.171
The Apple Computer decision represents both the majority view and the correct
view of the treatment of software under copyright law. It therefore seems clear
that the copyright law will be the major source of protection of software once
the extent of protection is increased by the elimination of artificially imposed
distinctions between the types of software and their forms of expression.
1. See Diamond v. Diehr, 450 U.S. 175, 187 (1981) (process for curing
rubber that included use of a computer held patentable); Diamond v.
Chakrabarty, 447 U.S. 303, 309 (1980) (live, human-made micro-organism held
2. The Copyright Act of 1976, Pub. L. No. 94-553, 90 Stat. 2541, (codified
at 17 U.S.C. sections 101-702 (1982)). The Act became effective on January 1,
3. National Commission on New Technological Uses of Copyrighted Works, Pub.
L. No. 93-573, 88 Stat. 1873 (1974) (codified at 17 U.S.C. section 701 note
(1982)) hereinafter cited as CONTU. CONTU published a final report which is
reproduced in its original form in Final Report of the National Commission
on New Technological Uses of Copyrighted Works, 3 COMPUTER L.J. 53 (1981-1982)
hereinafter cited as Final Report.
4. Computer Software Act, Pub. L. No. 96-517, sections 10(a)-10(b), 94 Stat.
3015, 3028 (1980) (codified as amended at 17 U.S.C. sections 101, 117 (1982)).
5. See, e.g., Pub. L. No. 97-247, 96 Stat. 317 (1982) (codified in
scattered sections of 35 U.S.C.); Pub. L. No. 96-517, 94 Stat. 3015
(1980) (codified in scattered sections of 35 U.S.C.). See also 37 C.F.R. sections
1.1-1.570 (1983) (revised regulations of the Patent and Trademark Office).
6. See Federal Courts Improvement Act of 1982, s 101, Pub. L. No. 97-164,
96 Stat. 25 (1982) (codified at 28 U.S.C. section 1 note (1982)). The United
States Court of Appeals for the Federal Circuit replaced the United States
Court of Customs and Patent Appeals and assumed appellate jurisdiction of
7. See Legislation: President proposes antitrust reforms in attempt to
promote innovation, 26 PAT. TRADEMARK & COPYRIGHT J. (BNA) No. 646, at 445
(Sept. 15, 1983); see also National Productivity and Innovation Act of 1983,
id. at 456-62 (President Reagan's proposed modification of the antitrust and
intellectual property laws).
8. 'A 'computer program' also known as software is a set of statements or
instructions used directly or indirectly in a computer in order to bring about
a certain result.' 17 U.S.C. section 101 (1982).
9. The patent law limits patentable subject matter to 'any new and useful
process, machine, manufacture or composition of matter, or any new and useful
improvement thereof.' 35 U.S.C. section 101 (1982).
10. 714 F.2d 1240 (3d Cir. 1983), cert. denied, 104 S.Ct. 690 (1984).
11. The Third Circuit specifically held that the copyright statute provided
protection for computer programs. Id. at 1248. The parties subsequently reached
an out-of-court settlement under which Franklin agreed to pay Apple 2.5 million
dollars and to install its own operating systems in Franklin computers.
Copyright, Settlement, 27 PAT. TRADEMARK & COPYRIGHT J. (BNA) NO. 662, at 228
(Jan. 12, 1984).
12. See In re Freeman, 573 F.2d 1237, 1244 (C.C.P.A. 1978) (Patent and
Trademark Office erroneously concluded that system of typesetting alphanumeric
information with computer-based control system was unpatentable).
13. The following cases should be examined to understand the evolution of the
test: In re Freeman, 573 F.2d 1237, 1245 (C.C.P.A. 1978) (first statement of
two-step analysis); In re Bradley, 600 F.2d 807, 813 (C.C.P.A. 1979)
(expressly applied Freeman two-step analysis), aff'd. per curiam by an
equally divided Court sub nom., Diamond v. Bradley, 450 U.S. 381
(1981) (mem.); Diamond v. Diehr, 450 U.S. 175, 187 (1981) (computer-related
invention patentable provided protection not being sought solely for
mathematical formula alone); In re Taner, 681 F.2d 787, 790 (C.C.P.A. 1982)
(method that relies on algorithm is patentable provided it does not preempt use
of algorithm); In re Abele, 684 F.2d 902, 907 (C.C.P.A. 1982) (second step
of analysis requires claim to be viewed without mathematical algorithm to see
if patentable subject matter remains); In re Pardo, 684 F.2d 912, 915
(C.C.P.A. 1982) (use of word 'algorithm' merely to describe process in question
is insufficient basis for holding that process is not statutorily protected);
In re Meyer, 688 F.2d 789, 795-96 (C.C.P.A. 1982) (mathematical algorithm
indicates presence of scientific principle, law of nature, idea, or mental
process which are unpatenable if not applied to patentable subject matter).
14. 573 F.2d at 1245.
15. A 'claim' is a required statement at the end of a patent that
specifically defines the metes and bounds of the invention that is granted
patent protection. 35 U.S.C. section 112 (1982).
16. 573 F.2d at 1245.
17. 450 U.S. 175 (1981). See supra note 12 and accompanying text for a
discussion of other Supreme Court decisions addressing the patentability of
18. 450 U.S. at 187.
19. Id. at 177.
20. Id. at 187.
22. Id. at 182 (quoting Diamond v. Chakrabarty, 447 U.S. 303, 308
23. 450 U.S. at 182 (quoting Diamond v. Chakrabarty, 447 U.S. 303, 309
24. 450 U.S. at 119.
26. Id. at 191-92.
27. Id. at 192.
28. Id. at 192-93.
29. 681 F.2d 787 (C.C.P.A. 1982).
30. 684 F.2d 902 (C.C.P.A. 1982).
31. 684 F.2d 912 (C.C.P.A. 1982).
32. 688 F.2d 789 (C.C.P.A. 1982). For further discussion of these four
decisions, see supra note 13.
33. See supra notes 13-15 and accompanying text for discussion of Freeman and
the two-step analysis.
34. Now that the Court of Appeals for the Federal Circuit, which is the
successor of the Court of Customs and Patent Appeals, has been granted
exclusive jurisdiction over patent appeals, see supra note 6, the above two-
step analysis for determining patentability of computer-related inventions
represents the current state of the law in all the federal circuits. See, e.g.,
South Corp. v. United States, 690 F.2d 1368, 1371 (Fed. Cir. 1982) (Court of
Appeals for the Federal Circuit adopted all prior decisions of Court of Customs
and Patent Appeal's as binding precedent on new court).
35. See 35 U.S.C. sections 101-103 (1982) (establishing requirements for
36. See Bender, Computer Software Licensing, 1983 PROTECTING TRADE SECRETS
405, 424 n.1, in which the author notes that the cost of obtaining a patent can
be as high as $100,000.
37. The interim between filing a patent application and the issuance of a
patent is almost 3 years. Id. at 424. In the area of 'Electronic Component
Systems and Devices,' the actual filing date of the oldest new patent
application awaiting action is August 25, 1980. See 1035 Off.Gaz.Pat. Office
7 (1983). Despite modernization of the Patent and Trademark Office and
resulting increases in efficiency, Donald J. Quigg, Deputy Commissioner of
Patents and Trademarks, has indicated that the goal of the office is to
achieve, by 1987, an 18-month pendency period for applications. Conference
Reviews; PTO Rule Changes, 26 PAT. TRADEMARK & COPYRIGHT J. (BNA)
NO. 649, at 507 (Oct. 6, 1983).
38. Cybertek Computer Prods., Inc. v. Whitfield, 203 U.S.P.Q. 1020 (Cal.
Super. Ct. 1977). See generally J & K Computer Syss., Inc. v. Parrish, 642
P.2d 732, 735 (Utah 1982) (trade secret protection is appropriate for computer
programs intended to be kept confidential).
39. 1 R. MILGRIM, TRADE SECRETS section 2.06A5c, at 2-72.20 (1984); Bender,
Trade Secret Protection of Software, 38 GEO.WASH.L.REV. 909 (1969-1970).
40. Although trade secret law, which consists of state common law augmented
by state statutes, is the antithesis of the patent law, the Supreme Court has
held that state trade secret law is not preempted by the patent law. Kewanee
Oil Co. v. Bicron, 416 U.S. 470, 484 (1974) (trade secret law and patent law
can never conflict).
41. RESTATEMENT OF TORTS section 757 comment b (1939). See R. Milgrim, supra note
35, section 2.01, at 2 n.2 for a detailed listing of cases relying on the Restatement
definition. See also Forest Labs., Inc. v. Pillsbury Co., 452 F.2d 621, 624
(7th Cir. 1971) and Abbott Labs. v. Norse Chemical Corp., 33 Wis.2d 445,
463-64, 147 N.W.2d 529, 538-39 (1967), in which the courts stated that the
factors listed in the Restatement definition were to be examined when
determining whether information was a trade secret.
42. Grogan, Decompilation and Disassembly: Undoing Software Protection, 1 THE
COMPUTER LAW. 1, 2 (Feb. 1984).
43. Gilburne, The Proprietary Rights Pyramid: An Integrated Approach to
Copyright and Trade Secret Protection for Software, 1 THE COMPUTER LAW. 1, 3
45. See Aktiebolaget Bofors v. United States, 194 F.2d 145, 147 (D.C. Cir.
1951) (property right in unpatented trade secret exists as long as owner does
not disclose secret).
46. D. REMER, LEGAL CARE FOR YOUR SOFTWARE 20 (1982).
47. Id. at 143.
48. Id. See also E. I. du Pont de Nemours & Co. v. Christopher, 431 F.2d
1012, 1016 (5th Cir. 1970) (one who discloses or uses another's trade secret
obtained improperly or in breach of confidence is liable in tort to trade
49. D. REMER, supra note 46, at 20. But cf. 35 U.S.C. sections 154, 271
(1982) (patent prevents anyone from utilizing, manufacturing, or selling
protected invention for 17 years, regardless of whether the invention was
copied or independently created).
50. See Beware: Hackers at Play, NEWSWEEK, Sept. 5, 1983, at 42-48.
51. Grogan, supra note 42, at 3. See also Note, Copyright Protection of
Computer Program Object Code, 96 HARV.L.REV. 1723, 1723 (1983) (programs now
widely distributed over-the-counter to consumers as result of ubiquity of
52. Final Report, supra note 3, at 69-70 (trade secret protection
dissolves upon disclosure). Miles R. Gilburne stated at the American Patent Law
Association meeting held in Palm Springs, California in February 1984 that,
because of the explosion of software distribution channels, copyright law and
not trade secret law was currently the appropriate way to protect software.
American Pat. Law Ass'n.; 1984 Mid-Winter Conf. Summary, 27 PAT. TRADEMARK &
COPYRIGHT J. (BNA) No. 669, at 421 (March, 1, 1984). Although it is conceivable
that as a condition of sale all retail purchasers would agree to keep the
contents of software secret, and thereby preserve trade secret protection, it
is unlikely that the mechanics of such a scheme could work. It seems improbable
that a court would allow the law of trade secrets to apply in a case where
there was an attempt to simultaneously maintain information as proprietary,
while also disclosing it to the public. See Videotronics, Inc. v. Bend Elecs.,
564 F.Supp. 1471, 1475 (D. Nev. 1983) (public disclosure of trade secret
destroys basis of trade secret protection). But see Management Science Am.,
Inc. v. Cyborg Sys., Inc., 6 Computer L.Serv.Rep. (Callaghan) 921, 922 n.1
(N.D. Ill. 1978) (disclosure of software, subject to a confidential agreement,
to more than 1,300 customers did not destroy proprietary nature of the
53. See, e.g., Technicon Medical Information Syss. v. Green Bay Packaging,
Inc., 687 F.2d 1032 (7th Cir. 1982); Warrington Assocs. v. Real-Time Eng.
Syss., 522 F.Supp. 367 (N.D. Ill. 1981); Warrington Assocs. v. Kellogg
Citizens Nat'l Bank, 215 U.S.P.Q. (BNA) 375 (E.D. Wis. 1981); Management
Science Am., Inc. v. Cyborg Syss., Inc., 6 Computer L.Serv.Rep. (Callaghan)
921 (N.D. Ill. 1978). But see Videotronics, Inc. v. Bend Elecs.; 564 F.Supp.
1471, 1476 (D. Nev. 1983) (court suggests copyright law preempted state trade
secret law with regard to computer programs).
54. 564 F.Supp. 1471 (D. Nev. 1983).
55. Id. at 1477.
56. The suggestion that federal copyright law preempted state trade secret
law may have been based on the court's failure to differentiate between a
property interest in the form of expression (which can be protected by
copyright), and a property interest in the underlying idea (which can be
protected by patent or trade secret law). It is possible that the court's
statement may have referred only to protection for the form of expression,
since the court had already found state trade secret protection unavailable.
Id. at 1475-76. Read in this light, the court's conclusion is correct
because state law cannot protect the form of expression when the federal
copyright law is applicable. However, in the absence of such an interpretation,
the statement reveals the court's misconstruction of the relationship between
the two bodies of law. The Copyright Act of 1976 clearly preempts and abolishes
all common law equivalents to rights covered by the Act and applicable to works
within the scope of the Act. 17 U.S.C. section 301 (1982). The purpose of section 301 was to
eliminate the previous system under the Copyright Act of 1909. Under that
system, the common law protected work prior to its publication and the
Copyright Act of 1909 protected the work subsequent to publication. See H.R.
REP. NO. 1476, 94th Cong., 2d Sess. 129, reprinted in 1976 U.S. CODE CONG. &
AD. NEWS 5659, 5745 hereinafter cited as H.R. REP.. However, under the
Copyright Act of 1976, copyright protection arises automatically in a covered
work once it is fixed in a tangible medium. Id. Section 301(b) of the 1976 Act
makes it clear that states are free to control rights that are not within the
domain of, or equivalent to, rights under federal copyright law. Therefore,
state statutes and the common law, which both protect ideas, are not in
conflict with federal copyright law because federal copyright protection is
limited to the form of expression of an idea, rather than the underlying idea
itself. See H.R. REP., supra, at 130-31, reprinted in 1976 U.S. CODE CONG. &
AD. NEWS 5659, 5745-47. See also Mazer v. Stein, 347 U.S. 201, 217 (1954);
Eden Toys, Inc. v. Marshall Field & Co., 675 F.2d 498, 500 (2d Cir. 1982);
Miller v. Universal City Studios, Inc., 650 F.2d 1365, 1368 & n.1 (5th Cir.
1981); Gero v. Seven-Up Co., 535 F.Supp. 212, 216 (E.D.N.Y.), aff'd, 714
F.2d 113 (2d Cir. 1982); Atari, Inc. v. Amusements World, Inc., 547 F.Supp.
222, 228 (D. Md. 1981); Midway Mfg. Co. v. Dirkschneider, 543 F.Supp. 466,
480 (D. Neb. 1981); Dr. Pepper Co. v. Sambo's Restaurants, Inc., 517 F.Supp.
1202, 1207 (N.D. Tex. 1981). It should be noted that state trade secret law is
actually equivalent to the federal patent law. Warrington Assoc. v. Real-Time
Eng. Syss., Inc., 522 F.Supp. 367, 369 (N.D. Ill. 1981) (trade secret law and
federal patent law are congruent). Therefore, it can be more logically argued
that the patent law, rather than the copyright law, preempted state trade secret
law. It is well-established, however, that patent and trade secret law coexists.
Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974); Pitney Bowes, Inc. v.
Mestre, 701 F.2d 1365, 1371 (11th Cir.), cert. denied, 104 S.Ct. 239 (1983).
57. 6 Computer L.Serv.Rep. (Callaghan) 921 (N.D. Ill. 1978).
58. Id. at 926 n.4.
59. Id. at 922. Furthermore, a subsystem of the software package was licensed
to more than 1,300 customers. Id.
60. Id. at 922-23.
61. Id. at 924.
62. 17 U.S.C. sections 101-810 (1982).
63. Technicon Medical Syss., Inc. v. Green Bay Packaging, Inc., 687 F.2d
1032, 1038 (7th Cir. 1982), cert. denied, 103 S.Ct. 732 (1983).
64. 1981-1983 COPYRIGHT L. DEC. (CCH) P25,345 (E.D. Wis. 1981).
65. 522 F.Supp. 367 (N.D. Ill. 1981).
66. Kellogg, 1981-1983 Copyright L. DEC. (CCH) P25,345, at 16,941;
Real Time, 522 F.Supp. at 368.
67. Technicon Medical Syss., Inc. v. Green Bay Packaging, Inc., 687 F.2d
1032, 1038 (7th Cir. 1982), cert. denied, 103 S.Ct. 732 (1983).
68. Warrington Assoc. v. Real-Time Eng. Syss., 522 F.Supp. 367, 368 (N.D.
Ill. 1981) (citations omitted).
69. See, e.g., Management Science Am., Inc. v. Cyborg Syss., Inc., 6 Computer
L.Serv.Rep. (Callaghan) 921 (N.D. Ill. 1978) (limited number of proprietary
software manuals licensed under a confidential nondisclosure agreement also had
copyright notices affixed to them).
70. See, e.g., Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d
1240 (3d Cir. 1983); Williams Elecs., Inc. v. Arctic Int'l Inc., 685 F.2d
870 (3d Cir. 1982); Hubco Data Prods. v. Management Assistance, Inc., 219
U.S.P.Q. (BNA) 450 (D. Idaho 1983); Midway Mfg. Co. v. Strohon, 564 F.Supp.
741 (N.D. Ill.), aff'd, 704 F.2d 1009 (7th Cir.), cert. denied, 104 S.Ct.
90 (1983); Apple Computer, Inc. v. Formula Int'l, Inc., 562 F.Supp. 775
(C.D. Cal. 1983), aff'd, 725 F.2d 521 (9th Cir. 1984); Midway Mfg. Co. v.
Arctic Int'l, Inc., 547 F.Supp. 999 (N.D. Ill. 1982), aff'd, 704 F.2d
1009 (7th Cir. 1983); GCA Corp. v. Chance, 217 U.S.P.Q. (BNA) 718 (N.D. Cal.
1982); Tandy Corp. v. Personal Micro Computers, Inc., 524 F.Supp. 171 (N.D.
Cal. 1981); Data Cash Syss., Inc. v. JS&A Group, Inc., 480 F.Supp. 1063
(N.D. Ill. 1979), aff'd, 628 F.2d 1038 (7th Cir. 1980); Synercom Technology,
Inc. v. University Computing Co., 462 F.Supp. 1003 (N.D. Tex. 1978). See
also Final Report, supra note 3, at 54 (recommendation to extend copyright
protection to software).
71. See Data Cash Syss., Inc. v. JS&A Group, Inc., 480 F.Supp. 1063, 1067-
68 n.4 (N.D. Ill. 1979) ('the 1976 Act applies to computer programs in their
flowchart, source, and assembly phases but not in their object phase'), aff'd,
628 F.2d 1038 (7th Cir. 1980); In re Data Gen. Corp. Antitrust Litig.,
529 F.Supp. 801, 816 (N.D. Cal. 1981) (copyright law does not necessarily
prevent others from copying material embodiment of a program); In re Data Gen.
Corp. Antitrust Litig., 490 F.Supp. 1089, 1113 (N.D. Cal. 1980) (copyright
notices on software protect underlying source program but not object program).
Compare Stern, Another Look at Copyright Protection of Software: Did the 1980
Act Do Anything for Object Code?, 3 COMPUTER L.J. 1, 1 (1981) (object code
not copyrightable) with Note, Copyright Protection of Computer Program Object
Code, 96 HARV.L.REV. 1723, 1732 (1983) (object code copyrightable).
72. E.g., Apple Computer, Inc. v. Franklin Computer Corp., 545 F.Supp.
812, 821, 822 (E.D. Pa. 1982) (programs are sometimes written directly in
object code), rev'd on other grounds, 714 F.2d 1240 (3d Cir. 1983), cert.
denied, 104 S.Ct. 690 (1984).
73. Prior to the invention of source languages, programmers had to write
directly in object code. Schmidt, Legal Proprietary Interest in Computer
Programs: The American Experience, 21 JURIMETRICS J. 345, 352 (1981).
74. See supra note 71 for a survey of the case law and commentary addressing
the copyrightability of object code.
75. Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240, 1252
(3d Cir. 1983).
76. Section 202 of the 1976 Copyright Act distinguishes between copyright in
the work of authorship and the material object which embodies the work. As
pointed out by the Act's legislative history: 'The principle restated in
section 202 is a fundamental and important one: that copyright ownership and
ownership of a material object in which the copyrighted work is embodied are
entirely separate things.' H.R. REP., supra note 56, at 124, reprinted in 1976
U.S. CODE CONG. & AD. NEWS 5659, 5739.
77. See Final Report, supra note 3, at 87.
78. See Williams Elecs., Inc. v. Arctic Int'l, Inc., 685 F.2d 870, 872 (3d
Cir. 1982); Apple Computer, Inc. v. Formula Int'l, Inc., 562 F.Supp. 775,
778 (C.D. Cal. 1983), aff'd, 725 F.2d 521 (9th Cir. 1984).
79. Apple Computer, Inc. v. Franklin Computer Corp., 545 F.Supp. 812, 813
(E.D. Pa. 1982), aff'd, 714 F.2d 1240 (3d Cir. 1983), cert. denied, 104
S.Ct. 690 (1984); G. McWHORTER, UNDERSTANDING DIGITAL ELECTRONICS G-9
80. 480 F.Supp. 1063 (N.D. Ill. 1979), aff'd, 628 F.2d 1038 (7th Cir.
81. 480 F.Supp. at 1069.
82. Id. at 1067 n.4. See also In re Data Gen. Antitrust Litig., 529
F.Supp. 801, 816 (N.D. Cal. 1981), which involved a series of antitrust actions
challenging the legality of tying licensing of software to the sale of computer
hardware, whereby the court suggested that a copyright notice on software
protects the underlying source code but not the object code.
83. 480 F.Supp. at 1069.
84. Data Cash Sys. v. JS&A Group, Inc., 628 F.2d 1038 (7th Cir. 1980).
85. 17 U.S.C. section 101-810 (1982).
86. 685 F.2d 870 (3d Cir. 1982).
87. Id. at 877.
88. Id. (quoting 17 U.S.C. s 101 (1976)).
89. 685 F.2d at 877.
90. 217 U.S.P.Q. (BNA) 718 (N.D. Cal. 1982).
91. 564 F.Supp. 741 (N.D. Ill. 1983).
92. Id. at 750-51; GCA Corp., 217 U.S.P.Q. (BNA) at 720.
93. 217 U.S.P.Q. (BNA) at 720 (citations omitted).
94. 714 F.2d 1240 (3d Cir. 1983). See supra note 10 for a brief account of
the subsequent history of Apple Computer.
95. See Apple Computer, 545 F.Supp. 812, 813, 815 (E.D. Pa. 1982).
96. Id. at 814-15.
97. Id. at 825.
98. 714 F.2d at 1246.
99. Id. at 1249; The Apple Computer court carefully examined sections 101 and
102 of the Copyright Act of 1976, section 117 which was amended in 1980, the
legislative history of the Act, and the final report of CONTU before reaching
its conclusion. Id. at 1247-49. The court also reviewed its earlier decision
in Williams Elecs. in which the Third Circuit found software to be
copyrightable under the Act as amended in 1980. Id. at 1247.
100. 17 U.S.C. section 102 (1982).
101. H.R. REP., supra note 56, at 129, reprinted in 1976 U.S. CODE CONG. &
AD. NEWS 5659, 5759.
102. 714 F.2d at 1248 (section 102 overruled White-Smith Music Publishing
Co. v. Apollo Co., 209 U.S. 1 (1908)).
103. 714 F.2d at 1249.
105. Id. at 1248.
106. Id. at 1247-48 (citing 17 U.S.C. section 101 (1982)).
107. 714 F.2d at 1248 (citing 17 U.S.C. section 117 (1982)).
108. 714 F.2d at 1249.
109. Id. at 1250. Although the Apple Computer court was the first United
States court of appeals to consider a distinction between operating and
applications programs, at least one district court had already considered this
question. In Apple Computer, Inc. v. Formula Int'l Inc., 562 F.Supp. 775,
780 (N.D. Cal. 1983), aff'd, 725 F.2d 521 (9th Cir. 1984), the district
court found that all types of software were copyrightable, and that no
distinction existed between operating programs that controlled computer
operations and other types of programs. See also Tandy Corp. v. Personal Micro
Computers, Inc., 524 F.Supp. 171, 174-75 (N.D. Cal. 1981) (operating program
in a ROM that translated input information from computer operator into machine
language was within scope of 1976 Copyright Act).
110. 714 F.2d at 1249.
111. 101 U.S. 99 (1879).
112. 17 U.S.C. section 102(b) (1982).
113. 714 F.2d at 1252.
115. Id. at 1253.
119. See id. See also Apple Computer, 545 F.Supp. at 815.
120. 714 F.2d at 1253.
121. See supra note 65 for a survey of the cases that limit copyright
protection to certain forms of software.
122. See Apple Computer, 714 F.2d at 1249; Apple Computer, Inc. v. Formula
Int'l, Inc., 562 F.Supp. 775, 783 (C.D. Cal. 1983), aff'd, 725 F.2d 521
(9th Cir. 1984). See also Hubco Data Prods. v. Management Assistance Inc.,
219 U.S.P.Q. (BNA) 450 (D. Idaho 1983); Midway Mfg. Co. v. Strohon, 564
F.Supp. 741, 750 (N.D. Ill.), cert. denied, 104 S.Ct. 90 (1983); Midway Mfg.
Co. v. Arctic Int'l, Inc., 547 F.Supp. 999, 1012 (N.D. Ill. 1982), aff'd,
704 F.2d 1009 (7th Cir. 1983); GCA Corp. v. Chance, 217 U.S.P.Q. (BNA)
718, 720 (N.D. Cal. 1982); Tandy Corp. v. Personal Micro Computers, Inc.,
524 F.Supp. 171, 173 (N.D. Cal. 1981); Synercom Technology, Inc. v.
University Computing Co., 462 F.Supp. 1003, 1015 (N.D. Tex. 1978).
123. Exceptional creativity or originality is not required; 'a modicum of
creativity may suffice.' Universal Athletic Sales Co. v. Salkeld, 511 F.2d
904, 908 (3d Cir. 1974), cert. denied, 423 U.S. 863 (1975).
124. Both section 101 and the legislative history of the Act, see H.R. REP., supra
note 56, at 53, reprinted in 1976 U.S. CODE CONG. & AD. NEWS 5659, 5666, make
it clear that the seven categories in section 102 are only illustrative. The seven
categories are: (1) literary works; (2) musical works; (3) dramatic works; (4)
pantomimes and choreographic works; (5) pictorial, graphic, and sculptural
works; (6) motion pictures and other audiovisual works; and (7) sound
recordings. 17 U.S.C. section 102(a).
125. See H.R. REP., supra note 56, at 54, reprinted in 1976 U.S. CODE CONG. &
AD. NEWS 5659, 5667. See generally Copyright Office Regulations, 37 C.F.R. section
201.20(g) (1983) (regarding copyright notices on machine-readable copies);
id. section 202.20(c)(2)(VII) (regarding deposit of machine-readable work for
registration purposes). These regulations imply that computer programs are
covered by the 1976 Copyright Act.
126. See H.R. REP., supra note 56, at 51, reprinted in 1976 U.S. CODE CONG. &
AD. NEWS 5659, 5664.
127. Pub. L. No. 93-573, 88 Stat. 1873 (1974) (codified at 17 U.S.C. section
701 note (1982)).
128. Final Report, supra note 3. See also 1 M. NIMMER, NIMMER ON
COPYRIGHTS section 2.04(c), at 2-42 to 2-43 & n.21 (1983) (discussion of
Final Report of CONTU).
129. See Final Report, supra note 3, at 55.
130. See M. NIMMER, supra note 128 section 2.04C, at 2-42 to 2-43 n.21.
But see Final Report, supra note 3, at 86 (dissenting opinion of Commissioner
Hersey arguing against copyrightability of computer programs).
131. Pub. L. No. 96-517, sections 10(a), 10(b), 94 Stat. 3015, 3028
(1980) (codified as amended at 17 U.S.C. sections 101, 117 (1982)).
132. See supra note 8 for the statutory definition of 'computer program.'
133. Section 117 essentially allows duplication or adaptation of a computer
program during the actual utilization of the program. 17 U.S.C. section 117
(1982). This is an essential exception because when a program stored on a
floppy disc, for example, is used by a computer, the machine must first copy
the program from the disc into the computer's memory. Absent section 117, such
copying would infringe a copyright on the program stored on a disc.
134. 17 U.S.C. sections 101, 102 (1982).
135. See H.R. REP., supra note 56, at 53, reprinted in 1976 U.S. CODE CONG. &
AD. NEWS 5659, 5666.
136. White-Smith Publishing Co. v. Apollo Co., 209 U.S. 1 (1908), supports
the argument that object code in a ROM is not copyrightable subject matter
because the code is not directly perceivable to anyone. Nevertheless, the
statutory language in section 102, which allows the work of authorship to be
communicated 'with the aid of a machine or device,' effectively overruled the
White-Smith decision. See H.R. REP., supra note 56, at 52, reprinted in 1976
U.S. CODE CONG. & AD. NEWS 5659, 5665 (legislative history clearly supports
view that section 102 abrogates White-Smith).
137. Data Cash Syss., Inc. v. JS&A Group, Inc., 480 F.Supp. 1063, 1066-67
n.4 (N.D. Ill. 1979), aff'd, 628 F.2d 1038 (7th Cir. 1980).
139. Section 106 grants to the copyright owner the exclusive rights of
reproduction, adaptation, publication, performance and display. 17 U.S.C. section
140. See H.R. REP., supra note 56, at 61, reprinted in 1976 U.S. CODE CONG. &
AD. NEWS 5659, 5675.
141. 2 M. NIMMER, supra note 128, section 8.01B, at 8-13. For instance, when an
author publishes a book in hardcover the copyright law cannot be avoided by
making a literal translation of the novel into a foreign language and then
putting it on microfilm. Likewise, the analogous translation of source code
into object code which is then permanently stored in a ROM does not avoid
copyright protection granted for the source code.
142. Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240, 1251
(3d Cir. 1983).
143. See Mazer v. Stein, 347 U.S. 201, 217 (1954); Eden Toys, Inc. v.
Marshall Field & Co., 675 F.2d 498, 500 (2d Cir. 1982); Miller v. Universal
City Studios, Inc., 650 F.2d 1365, 1368 & n.1 (5th Cir. 1981); Gero v.
Seven-Up Co., 535 F.Supp. 212, 216 (E.D.N.Y.), aff'd, 714 F.2d 113 (2d
Cir. 1982); Atari, Inc. v. Amusements World, Inc., 547 F.Supp. 222, 228 (D.
Md. 1981); Midway Mfg. Co. v. Dirkschneider, 543 F.Supp. 466, 479 (D. Neb.
1981); Dr. Pepper Co. v. Sambo's Restaurants, Inc., 517 F.Supp. 1202, 1207
(N.D. Tex. 1981).
144. See H.R. REP., supra note 56, at 57, reprinted in 1976 U.S. CODE CONG. &
AD. NEWS 5659, 5670.
145. Compare Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d
1240, 1249 (3d Cir. 1983) (computer program in object code embedded in a ROM is
copyrightable) with Data Cash Syss., Inc. v. JS&A Group, Inc., 480 F.Supp.
1063, 1066 n.4 (N.D. Ill. 1979) (computer program in object form in a ROM is
mechanical device and therefore not copyrightable under the 1976 Copyright
Act), aff'd, 628 F.2d 1038 (7th Cir. 1980).
146. See Midway Mfg. Co. v. Arctic Int'l Co., 547 F.Supp. 999, 1009 (N.D.
Ill. 1982), aff'd, 704 F.2d 1009 (7th Cir. 1983). In affirming the lower
court's decision in Midway, the Court of Appeals for the Seventh Circuit
stated: 'Recording images and sounds in circuit boards does not destroy their
copyrightability any more than does recording them on rolls of celluloid
film.' 704 F.2d at 1012. Furthermore, even though a ROM contains a memory
with a particular physical structure that may not be copyrightable without
infringing the computer program embedded in the ROM, this limited monopoly is
no greater than the monopoly created in the particular shape of the grooves in
a record which represents an embodiment of a copyrighted work.
147. The test announced in Apple Computer requires a showing that the
underlying idea cannot be expressed in more than one way before the idea and
expression of the idea will be considered as merged. 714 F.2d at 1253.
148. See M. NIMMER, supra note 128, section 2.18C2, at 2-202.
149. Stern Elecs., Inc. v. Kaufman, 669 F.2d 825, 855 (2d Cir. 1982).
150. Apple Computer, 714 F.2d at 1253.
151. A microprocessor is an integrated circuit that includes a ROM and is the
heart of a computer. It can be programmed with stored instructions to perform a
wide variety of functions.
152. The Microcomputer Software Market: An Overview, COMPUTER SERVS.
MONTHLY, NOV. 1982, at 1-8.
153. 714 F.2d at 1253. The Apple Computer test--under which a defendant
must show that only one way exists to write an operating program for a
particular computer--gives a defendant an opportunity to show that copyright
protection is not available due to a merger of idea and expression. See supra
text accompanying notes 119 & 120 for the Apple Computer court's application of
154. See Final Report, supra note 3, at 75-78; Gates, Software and the
Apple-Franklin Decision, Insurance for the Industry's Future, N.Y. TIMES, Sept.
25, 1983, section 3 (Business), at 2, col. 2.
155. The idea of granting a limited monopoly in return for the disclosure of
scientific and literary achievements is the basis of U.S. CONST. art. I, section 8,
cl. 8, which provides the authority for Congress to enact both the patent and
156. Note, Copyright Protection of Computer Program Object Code, 96
HARV.L.REV. 1723, 1739 (1983). Copyright Protection balances the author's
rights against the interests of the general public. See White-Smith Music
Publishing Co. v. Apollo Co., 209 U.S. 1, 19 (1908) (Holmes, J.,
157. Midway Mfg. Co. v. Strohon, 564 F.Supp. 741, 751 (N.D. Ill.), cert.
denied, 104 S.Ct. 90 (1983). Note, Copyright Protection of Computer Program
Object Code, 96 HARV.L.REV. 1723, 1740 (1983). See also Note, Copyright
Protection for Computer Programs in Read Only Memory Chips, 11 HOFSTRA
L.REV. 329 (1982), in which the commentator states, 'without adequate
protection, the economic incentive to produce new programs could disappear' and
therefore 'to provide adequate protection for proprietary software and
firmware, the law must be able to protect more than just direct copying.'
Id. at 332, 361.
158. Software becomes fixed in a tangible medium of expression when, for
example, the software is written down, printed out, stored on a disc or on
magnetic tape, or embedded in a ROM.
159. 17 U.S.C. section 301(a) (1982); H.R. REP., supra note 56, at 129,
reprinted in 1976 U.S. CODE CONG. & AD. NEWS 5659, 5745.
160. See 17 U.S.C. section 401 (1982) and Copyright Office Regulations, 37
C.F.R. section 201.20 (1983), which deal with the requirements for copyright notices.
161. 17 U.S.C. section 407 (1982). Registration, however, must be made prior to
bringing a copyright infringement suit. Id. section 411.
162. Schmidt, Legal Proprietary Interests in Computer Programs: The
American Experience, 21 JURIMETRICS J. 345, 375 (1981). Under the patent
system, rights are only obtained after several years of proceedings before Office.
See supra note 37 and accompanying text for a 4, col. 1 (Copyright Office data
shows discussion of the time required to obtain a patent.
163. See Brieff, Computer Boom Leads to Copyright Emphasis, LEGAL TIMES, Dec.
6, 1982, at 4, col. 1 (Copyright Office data shows that 40% of registered
programs are written by individuals or very small businesses). See supra note
36 for discussion of the cost of obtaining a patent.
164. Trade secret law provides monopoly for as long as the proprietary
information is not publicly disclosed. The patent law provides a monopoly for
17 years for utility patents. 35 U.S.C. section 154 (1982).
165. The importance of the need to protect software is exemplified by a bill
introduced in the House of Representatives on May 19, 1983, which would
'strengthen the laws against computer program and data base piracy and
counterfeiting.' H.R. 6420, 97th Cong., 2d Sess. (1982).
166. See Gates, supra note 154 (all software must be protected to provide an
incentive for development of new software). See also Borden, Endorsing A
Computer Monopoly, N.Y. TIMES, Sept. 25, 1983, section 3 (Business), at 2, col. 2, in
which the author, chief executive of Franklin Computer Corp., writes that
copyright protection of software is proper, but that such protection should not
extend to an operating system program that is an integral part of the computer.
167. For discussion of the cases affording copyright protection to computer
software, see supra note 64 and accompanying text.
168. See supra notes 71 & 80-93 and accompanying text for a survey of cases
applying copyright law to software.
169. See supra note 71 for a survey of cases limiting the scope of copyright
protection for software.
170. 174 F.2d at 1250.
171. Id. at 1253.
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