Apple Computer, Inc v. Franklin Computer Corporation

Facts

P manufactures and markets personal computers (microcomputers), related peripheral equipment such as disk drives (peripherals), and computer programs (software). One of the by-products of P's success is the independent development by third parties of numerous computer programs which are designed to run on the Apple II computer. D manufactures and sells the ACE 100 personal computer. The ACE 100 was designed to be 'Apple compatible,' so that peripheral equipment and software developed for use with the Apple II computer could be used in conjunction with the ACE 100. There are three levels of computer language in which computer programs may be written. High-level language, such as the commonly used BASIC or FORTRAN, uses English words and symbols and is relatively easy to learn and understand. A lower-level language is assembly language, which consists of alphanumeric labels. Statements in high-level language, and apparently also statements in assembly language, are referred to as written in 'source code.' The third, or lowest level computer language, is machine language, a binary language using two symbols, 0 and 1, to indicate an open or closed switch (e.g., '01101001' means, to add two numbers and save the result). Statements in machine language are referred to as written in 'object code.' CPUs use only object code. Programs written in source code can be converted by a 'compiler' program into object code for use by the computer. Programs are generally distributed only in their object code version stored on a memory device. A ROM or Read Only Memory is permanent memory device consisting of a semi-conductor 'chip' that is masked during production to contain custom object code. The ACE 100 contains EPROMS or Erasable Programmable Read Only Memory which stores data just like a ROM but EPROMs can be erased with UV light and reprogrammed with new data. Computer programs are categorized by function as either application programs or operating system programs. Application programs usually perform a specific task for the computer user, such as word processing, checkbook balancing, or playing a game. Operating system programs manage the internal functions of the computer or facilitate the use of application programs. All fourteen computer programs at issue in this suit are operating system programs. P sued D alleging copyright infringement, patent infringement, unfair competition, and misappropriation. D claimed that the programs contained no copyrightable subject matter and counterclaimed for declaratory judgment that the copyright registrations were invalid and unenforceable, and sought affirmative relief on the basis of P's alleged misuse. D moved to dismiss eleven of the fourteen copyright infringement counts on the ground that Apple failed to comply with the procedural requirements for suit. P moved for a preliminary injunction to restrain D. P produced evidence that programs sold by D were virtually identical to those covered by the fourteen P copyrights. The variations that did exist were minor, consisting of deletions of references to Apple or its copyright notice. James Huston, a P systems programmer testified that D failed to delete his name, which he had embedded in one program (Master Create), and the word 'Applesoft', which was embedded in another (DOS 3.3), and also appeared on the Franklin master disk. D did not dispute that it copied the programs because the use of the identical signals was necessary in order to ensure 100% compatibility with application programs created to run on the Apple computer. D admitted that he never attempted to rewrite the Autostart ROM and conceded that some of the works in suit (i.e. Copy, Copy A, Master Create, and Hello) probably could have been rewritten but D made no effort. P introduced evidence that D could have rewritten programs, including the Autostart ROM program, and that there are in existence operating programs written by third parties which are compatible with Apple II. D simply claimed that D's operating system programs are not capable of copyright protection. The court denied the motion for a preliminary injunction. The court held P had not made the requisite showing of likelihood of success on the merits because it 'concluded that there is some doubt as to the copyrightability of the programs described in this litigation.' Running throughout the district court opinion is the suggestion that programs in object code and ROMs may not be copyrightable. P appealed. 

Issues

Rule of Law

Holding and Decision

Legal Analysis

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