MESSAGE
DATE | 2006-06-10 |
FROM | Ruben Safir
|
SUBJECT | Subject: [NYLXS - HANGOUT] Fair Use Article from Noel that we never published
|
This is from the Fairuse list. In short, in the US, reverse engineering for interoperability has generally been held to be within the fair use rights of copyright law, but reverse engineering for cloning has been held to be prohibited under shrink-wrap licenses, at least in the federal court in Massachusetts. In between those two opinions is plenty of room for litigation, one of the growth industries of the 21st century.
From: owner-fairuse_at_mrbrklyn.com [mailto:owner-fairuse_at_mrbrklyn.com] On Behalf Of Ruben I Safir Sent: Sunday, August 17, 2003 5:24 PM To: fairuse_at_nylxs.com; hangout_at_nylxs.com Subject: [fairuse] EULA Law
(Copyright Noel Humphrey 2003)
End user license agreements or EULA's, are alive and well. Two recent cases have focused attention on the vigor and efficacy of non-negotiable statements of terms that govern access to copyrighted or patented works. The courts treated these statements as enforceable contracts.
In a reverse engineering case, the US Circuit Court of Appeals for the Federal Circuit published its decision in Bowers v. Baystate Technologies January 29, 2003, and the Supreme Court announced in June that it would not hear an appeal from the appeals court's decision. Citations and links appear in sidebar. In this case, the court enforced the EULA's terms to forbid reverse engineering.
The second decision, involving deep-linking by a competitor, reflects pre-trial motions in the long-running Tickets.Com. Ticketmaster Corp. v. Tickets.Com, Inc., case. Filed March 7, 2003, this decision upheld a web site operator's contract claims against a competitor that sent software robots or spiders to collect information from a site.
Taken together, these two decisions suggest that EULA's typically enjoy genuine viability in US law. These decisions erode fair use and freedom of access.
Bowers v. Baystate
Facts
Harold L. Bowers created a template to improve CAD software. Bowers filed a patent application in 1989, and patent No. 4,933,514 issued the next year. After a re-examination, a patent re-examination certificate issued in 1997. Bowers' software claims to place the CAD commands in a visual and logical order.
A man named George W. Ford III designed a software program to work with CAD software to ensure that a design complies with the geometric dimensioning and tolerancing requirements of a standard published by ANSI. In 1990, Bowers began to license his template and Ford's software in a single bundled product referred to as Designer's Toolkit.
Defendant Baystate Technologies also marketed software that enhanced the functionality of the Cadkey CAD program. Baystate did not want to establish a formal relationship with Bowers. In 1991, Baystate obtained a copy of Bowers' Designer Toolkit. A few months later, Baystate introduced its own version 3 of its Draft-Pak product, which incorporated features of Bowers' Designer Toolkit. Price competition followed.
Eventually Baystate bought the Cadkey company and eliminated Bowers from the network, effectively preventing Bowers from developing and marketing the Designer's Toolkit for the Cadkey program.
Baystate sued for a declaratory judgment that Baystate's program did not infringe Bowers' patent or that Bowers' patent was invalid or unenforceable. Bowers countersued for damages and infringement.
At a trial in federal court in Massachusetts, a jury determined that Baystate had breached its agreement with Bowers. The jury awarded Bowers several million dollars of damages. The district court judge reduced the award to $5,270,142. Both sides appealed.
The Issue
Bowers' shrink-wrap EULA was at issue. The EULA stated that the user was not permitted to reverse engineer the software. In other words, the EULA's language prohibited the user from translating from object code to source code. Bowers asserted that Baystate was not legally permitted to reverse engineer Bowers' software. Bowers argued this position, not because the reverse engineering resulted in a copyright violation, but instead because the reverse engineering violated the EULA between Bowers and Baystate.
Baystate insisted Bowers could not enforce its EULA against Baystate because the Copyright Act preempted the "no reverse engineering" limitation in the EULA. Generally, "preemption" means that a federal statute is so important or intended to be so comprehensive in its effects that its language overrides state law that restricts the federal statute. In this case, the argument was that the strength of the federal policy of allowing reverse engineering so overwhelmed that area of law that a state law element that inhibited the enforcement of the federal law's reach should not be enforced. State law ordinarily governs contract law.
The US Court of Appeals for the Federal Circuit heard the case because it has appellate jurisdiction for cases with patent claims.
Majority Opinion
The court of appeals enforced the EULA that limited the reverse engineering. The court held that the Copyright Act does not "preempt or narrow the scope of Mr. Bowers' contract claim." The court said that the elements of the copyright claim and the contract claim were different, and, therefore, the Copyright Act is not intended to overpower these contract claims.
The court cited prominently the ProCD, Inc.v. Zeidenberg case for the proposition that federal copyright law does not preempt a shrink-wrap license. The Bowers court said Judge Easterbrook had said in that case that "mutual assent and consideration required by a contract claim render that claim qualitatively different from copyright infringement."
The Bowers court said that its holding did not disturb the famous Atari Games v. Nintendo case. In that decision, the court said that "reverse engineering object code to discern the unprotectable ideas in a computer program is a fair use." In that case, Atari obtained the software that it copied directly from the Copyright Office, not from Nintendo.
The Bowers court, in other words, viewed the EULA as indicating that Baystate had voluntarily and knowingly relinquished its fair use right to reverse engineer Bowers' software "by mutual consent and consideration."
The appeals court backed the jury's conclusion based on ample evidence that Baystate had reverse engineered Bowers' software, despite the EULA provision that forbade reverse engineering.
The majority opinion, of course, cannot be faulted for concluding that a contract claim and a copyright infringement claim have different elements. The weakness of the majority decision is that the court apparently viewed a shrink-wrap EULA as mutual, voluntary and knowing. If the court had had a different vision of a EULA, then the outcome might have been different, too.
Dissent
Circuit Judge Dyk wrote a dissent from the majority opinion in connection with the copyright analysis. He apparently had the shrink-wrap EULA in mind. The dissenting opinion said that the "majority's approach permits state law to eviscerate an important federal copyright policy reflected in the fair use defense, and the majority's logic threatens other federal copyright policies as well."
This case generated publicity, and Judge Dyk obviously was listening to comment from friends of the court. The three-judge panel had initially decided the case unanimously, but, after reconsideration, Judge Dyk dissented from the copyright portion of the majority decision. See, for example, the friend of the court brief from the Electronic Frontier Foundation at http://www.eff.org/IP/Emulation/20020918_baystate-amicus.pdf.
Judge Dyk concluded that the rule should be that "state law authorizing shrink-wrap licenses that prohibit reverse engineering is preempted." Judge Dyk acknowledged that the contract claim and the copyright claim are different, when you consider the elements of the claims, but said that the effect is the same because the contract is merely a limitation on protecting the work from unauthorized copying. Therefore, he said, the copyright law should preempt the contract claim. A state is not free to eliminate the fair use defense, Judge Dyk wrote.
Judge Dyk wrote that a freely negotiated EULA differs from a shrink-wrap EULA in this setting. If the court enforces a shrink-wrap EULA, Judge Dyk wrote, then the EULA is like a state law that would provide that a user could not copy a work that had a black dot in the corner of the page. Such a state law would give the owner of the work complete power over behavior that would otherwise constitute fair use. Enforcing this EULA enables state law to give the copyright holder "the ability to eliminate the fair use defense in each and every instance at its option." The majority opinion permits shrink-wrap agreements that are broader than the protection that comes from the Copyright Act, Judge Dyk wrote.
Judge Dyk relied on the copyright law decision in Vault Corp. v. Quaid Software, and the Supreme Court's patent law decision in Bonito Boats v. Thunder Craft Boats.
Judge Dyk distinguished the ProCD case on the grounds that the limitation that enforcement of the EULA provided was the difference in the charge between the fee for commercial use and the fee for non-commercial use. That is different, Judge Dyk said, from a restriction on copying. Copying is what the Copyright Act controls, whereas the Copyright Act does not address the rate of the fee.
The Supreme Court declined to hear an appeal in June 2003.
Ticketmaster
Facts
The Ticketmaster case is an extended commercial feud between on-line ticket purveyors. The case involves a practice known as "deep-linking" whereby Tickets.com hyperlinked directly into URL's within Ticketmaster's web site bypassing the opening pages that Ticketmaster wanted customers to see. Tickets.com sent "spiders" to Ticketmaster's web site to copy information about forthcoming events and URLs to which to direct Tickets.com customers. The spiders copied the Ticketmaster pages and then retained the information while discarding the intellectual property parts.
Tickets.com asked the court to dismiss the claims. Ticketmaster made three separate legal arguments. First, Ticketmaster asserted that the court should enforce the terms of use set forth at the Ticketmaster homepage as a contract that governs a web user's access to Ticketmaster's site. Second, Ticketmaster asserted that the spiders constituted an actionable "trespass to chattels" because they come onto Ticketmaster servers in an unwelcome way. Third, Ticketmaster asserted that the spiders violated Ticketmaster's copyrighted works by copying the contents of Ticketmaster's site.
The Contract Cause of Action
Ticketmaster's site's home page contained a notice to the effect that a person who goes into the site beyond the home page accepts certain conditions. Among those conditions was a statement that information obtained from the site was for personal use, not commercial use.
Tickets.com executives were familiar with the Ticketmaster sites' rules. In fact, a Tickets.com letter to Ticketmaster tried to reject specifically the notice's terms. The court considered whether the spiders that crawled the Ticketmaster site created a binding contract in the situation where the Tickets.com executives knew Ticketmasters' terms. In other words, this was not a case where the web site user was not familiar with the EULA terms. The court had no reason to investigate the prominence of the notice, because the parties agreed that the notice was prominent and because the Tickets.com executives did know the terms.
Judge Hupp, a senior district court judge for the Central District of California, wrote that he "would prefer a rule that required an unmistakable assent to the conditions easily provided by clicking on an icon which says 'I agree' or the equivalent. Such a rule would provide certainty in trial and make it clear that the user had called to his attention the conditions he or she accepted when using the web site. However, the law has not developed in this way."
Instead, Judge Hupp wrote, "The principle has long been established that no particular form of words is necessary to indicate assent-the offeror may specify that a certain action in connection with his offer is deemed acceptance, and ripens into a contract when the action is taken." The court cited such examples as a cruise ship ticket with a venue provision printed on the back, limitations on liability printed on the back of a bill of lading, an air waybill or an airplane ticket, shrink-wrap cases, and terms on the back of a parking lot ticket. See sidebar.
The court found that "a contract can be formed by proceeding into the interior web pages after knowledge?of the conditions accepted in doing so." The case involving a commercial visitor is different from a consumer case, such as the Specht v. Netscape case (see sidebar), where the contract terms are not known to the site's user and are not plainly visible.
Tickets.com had moved to have Ticketmaster's claims dismissed by the judge on the grounds that Ticketmaster had no valid legal claim. The judge reluctantly agreed with Ticketmaster that the contract claim could not be dismissed.
The Trespass to Chattels Claim
On the other hand, the judge did dismiss the "trespass to chattels" tort claim. He wrote that "mere use of a spider to enter a publicly available web site to gather information, without more, is insufficient to fulfill the harm requirement for trespass to chattels."
Other courts, such as the court in the Register.com case, upheld the trespass to chattels tort theory where "spider" software visits the plaintiff's website regularly for commercial ends. Here, the court found that there was not enough interference with Ticketmaster's site to justify a tort claim. Judge Hupp wrote, "unless there is actual dispossession of the chattel for a substantial time (not present here), the elements of the tort have not been made out. Since the spider does not cause physical injury to the chattel, thee must be some evidence that the use or utility of the computer (or computer network) being 'spiderized' is adversely affected by the use of the spider."
After Judge Hupp published his opinion, California's Supreme Court in Intel Corp. v. Hamidi threw out the trespass to chattels claim. That decision emphasized that a plaintiff with a "trespass to chattels" claim must show a genuine injury to succeed.
The Copyright Claim
Ticketmaster also claimed Tickets.com's spiders wrongfully copied Ticketmaster intellectual property. Judge Hupp decided that the brief period of the copying was protected by "fair use." The Tickets.com computers discarded all the Ticketmaster propriety expression after "10 to 15 seconds" while retaining the information. Copyright protects expression, rather than information. The court analogized this pattern to reverse engineering that required a temporary copy of the protected work in order to have access to the unprotected, publicly available, factual information. Ticketmaster intellectual property did not appear to the public. Tickets.com was merely collecting information and not exploiting Ticketmaster's "creative labors." The court said facts, such as the existence of an event, its date and time and its ticket prices "are not subject to copyright."
Likewise, the court said that a URL is not protected by copyright, because it is "simply an address, open to the public."
Ticketmaster also argued that the deep-linking created an unauthorized public display of Ticketmaster events pages. This display occurred when a Tickets.com's site's user clicks on the link to the Ticketmaster page. Judge Hupp determined that the facts do not fit the facts of those cases where the court stopped framing. Tickets.com's method did not mislead users about the owner of the page where the user was sent.
The court dismissed the copyright claims from the action.
Conclusion
These two cases show that sophisticated US courts tend to enforce as contracts non-negotiated statements of rights in the software area of law, just as these courts do in other consumer and commercial settings. Software users ignore shrink-wrap licenses at their peril. In today's legal climate, courts do not generally perceive "fair use" as enough to overcome the terms of purported licenses.
*************************** Noel D. Humphreys is Counsel to the law firm Connell Foley LLP, Roseland, NJ. He may be reached at nhumphreys_at_connellfoley.com.
*************************** Side Bar for Bowers v. Baystate Technologies Federal District Court: 112 F. Supp.2d 185 (D. Mass. 2000) Federal Circuit Court of Appeals for the Federal Circuit: 320 F.3d 1317 (CAFC 2003), 2003 WL 262300; (online at http://laws.lp.findlaw.com/getcase/fed/case/011108v2&exact=1). Court of Appeals for the Federal Circuit, January 29, 2003 http://laws.findlaw.com/fed/011108v2.html http://www.ll.georgetown.edu/federal/judicial/fed/opinions/01opinions/01-1108o.html prior opinion: 302 F.3d 1334, 2002 U,S.App. LEXIS 17184, 64 U.S.P.Q.2d (BNA) 1065, Cop. L. Rep. (CCH) P28,479 (August 20,2002): http://www.law.upenn.edu/fac/pwagner/patents/2003sp/downloads/bowers_v_baystate_2002.pdf Appellate court friend of the court briefs and comments: http://www.acm.org/usacm/Briefs/bowersVbaystatebrie.htm http://www.info-commons.org/blog/archives/000035.html http://www.ll.georgetown.edu/aallwash/briefs.html http://jurist.law.pitt.edu/amicus/bowers_v_baystate_rehearing.pdf United State Supreme Court denied certiorari, June 16, 2003: 123 S.Ct. 2588(mem), 71 USLW3709, 71 USLW 3770, 71 USLW 3774 (online at http://supreme.lp.findlaw.com/supreme_court/orders/2002/061603pzor.html) IEEE Supreme Court Amicus brief http://www.ieeeusa.org/forum/policy/2003/Baystate060203.html http://www.ieeeusa.org/forum/policy/2003/baystate%20amicus%20brief.pdf Commentary: http://www.techlawjournal.com/topstories/2003/20030616.asp http://rrcs-se-24-73-162-58.biz.rr.com/bowers/certreply.pdf http://www.techlawjournal.com/topstories/2003/20030616.asp http://mail.gnu.org/archive/html/dmca-activists/2002-10/msg00075.html http://www.sethf.com/infothought/blog/archives/000173.html http://www.infoworld.com/article/02/09/13/020916opgripe_1.html http://www.idg.com.sg/idgwww.nsf/0/3145265E7140D30D48256D520023F052?OpenDocument http://www.infoworld.com/article/03/06/26/HNreverseengineering_1.html?development http://www.andrewspub.com/rptr_desc.asp?pub=SLB http://www.ieeeusa.org/releases/2003/060403pr.html http://gateway.library.uiuc.edu/administration/scholarly_communication_issues_29.htm http://chronicle.com/free/2002/10/2002102501t.htm
IEEE links page http://rrcs-se-24-73-162-58.biz.rr.com/bowers/#reference
Side Bar for Ticketmaster: Federal District Court: CV 997654, 2003 U.S. Dist. LEXIS 6483, 2003 WL 21406289, Copy.L.Rep (CCH)�28,607(CDCal. 2003) http://www.haledorr.com/pdf/ticketmaster.pdf
Deep-linking commentary http://www.workz.com/cgi-bin/gt/tpl_page.html,template=1&content=1371&nav1=1& http://www.nwsltr.com/article-deeplink.shtml http://www.gigalaw.com/articles/2000-all/kubiszyn-2000-05b-all.html 2000 Ticketmaster case comment: http://www.computerworld.com/news/2000/story/0,11280,43732,00.html http://www.wired.com/news/politics/0,1283,35306,00.html http://linuxtoday.com/news/2000040700904NW http://www.internetnews.com/ec-news/article.php/4_438011 http://www.computeruser.com/news/00/08/16/news8.html
Statutory exclusive rights under the Copyright Act: http://www4.law.cornell.edu/uscode/17/106.html
The Statutory Fair Use Factors: http://www4.law.cornell.edu/uscode/17/107.html
Sidebar for ProCD, Inc.v. Zeidenberg: 86 F.3d 1447, 39 USPQ2d 1161 (7th Cir., 1996) http://www.ca7.uscourts.gov/op3.fwx?yr=96&num=1139&Submit1=Request+Opinion.
Sidebar for the Atari Games v. Nintendo reverse engineering case: 975 F.2d 832, 24 USPQ2d 1015 (CAFC 1992) http://cyber.law.harvard.edu/openlaw/DVD/cases/atarivnintendo.html
Sidebar for Vault Corp. v. Quaid Software 847 F2d 255 (5th Cir., 1988) (found online at http://cyber.law.harvard.edu/openlaw/DVD/cases/Vault_v_Quaid.html) Sidebar for the Supreme Court's decision in Bonito Boats v. Thunder Craft Boats, 489 US 141 (1989) (found online at http://www.law.uconn.edu/homes/swilf/ip/cases/bonito.html).
Sidebar for the shrink-wrap cases Judge Hupp cited Register.com v. Verio: 126 F.Supp2d 238 (SDNY, 2000) (The order may be found at http://www.kentlaw.edu/legalaspects/preventing_access/register.com%20v.%20verio.htmor http://www.icann.org/registrars/register.com-verio/order-08dec00.htm) and
Judge Hupp also cited Pollstar v. Gigmania: 170 F. Supp. 2d 974; 2000 U.S. Dist. LEXIS 21035; Copy. L. Rep. (CCH) �28,329; 45 U.C.C. Rep. Serv. 2d (Callaghan) 46 (EDCA, 2000) (The decision may be found at http://euro.ecom.cmu.edu/program/courses/tcr840/2003/pollstar.htm).
Judge Hupp also cited Specht v. Netscape: 306 F.3d 17, 48 UCC Rep.Serv.2d 761 (2d Cir. 2002), The lower court opinion was reported at 150 F.Supp2d 585 (SDNY 2001). http://www.kentlaw.edu/legalaspects/digital_signatures/Contracting/readings/specht_v_netscape.pdf
Sidebar for Intel Corp. v. Hamidi: 30 Cal.4th 1342, 71 P.3d 296, 1 Cal.Rptr.3d 32, 20 IER Cases 65, 3 Cal. Daily Op. Serv. 5711, 2003 Daily Journal D.A.R. 7181, Cal., Jun 30, 2003 Available online at http://www.haledorr.com/pdf/intel_hamidi.pdf.
-- __________________________ Brooklyn Linux Solutions __________________________ DRM is THEFT - We are the STAKEHOLDERS http://fairuse.nylxs.com
http://www.mrbrklyn.com - Consulting http://www.inns.net <-- Happy Clients http://www.nylxs.com - Leadership Development in Free Software http://www2.mrbrklyn.com/resources - Unpublished Archive or stories and articles from around the net http://www2.mrbrklyn.com/downtown.html - See the New Downtown Brooklyn....
1-718-382-0585 To stop the messages from coming see http://www2.mrbrklyn.com/appl/fairuse/gone.html ____________________________ New Yorkers for Fair Use - because it's either fair use or useless....
-- __________________________ Brooklyn Linux Solutions
So many immigrant groups have swept through our town that Brooklyn, like Atlantis, reaches mythological proportions in the mind of the world - RI Safir 1998
DRM is THEFT - We are the STAKEHOLDERS - RI Safir 2002 http://fairuse.nylxs.com
"Yeah - I write Free Software...so SUE ME"
"The tremendous problem we face is that we are becoming sharecroppers to our own cultural heritage -- we need the ability to participate in our own society."
http://www.mrbrklyn.com - Consulting http://www.inns.net <-- Happy Clients http://www.nylxs.com - Leadership Development in Free Software http://www2.mrbrklyn.com/resources - Unpublished Archive or stories and articles from around the net http://www2.mrbrklyn.com/downtown.html - See the New Downtown Brooklyn....
|
|