Impact of Apple vs. Franklin Decision

By Rob Hassett

Casey Gilson, P.C.

Six Concourse Parkway, Suite 2200

Atlanta, GA 30328

(770) 512-0300


Background and Summary

This article first appeared in the December 5, 1983 issue of Computer World and addressed the decision of the U.S. Court of Appeals for the Third Circuit regarding the Apple Computer v. Franklin Computer Corporation lawsuit. This was a very important case both to copyright law in general and to the evolution of the computer industry. (3 Pages)

On August 30, 1983 the U.S. Court of Appeals for the 3rd Circuit filed an opinion deciding that operating system computer programs contained only within computer hardware (in this case on chips) can be the subject of copyright.

According to the opinion, engineers at Franklin Computer Corp. copied operating system programs developed and used by Apple Computer, Inc. so that programs designed for the Apple II computer could also be run on the Franklin Ace computer. Apple Computer filed suit claiming copyright infringement. Apple Computer requested that the trial judge bar Franklin from using, copying or selling those programs until the trial of the case, an understandable request inasmuch as the final trial could be delayed for years.

In deciding whether to grant a request of this type, the courts generally consider two factors. First, is the moving party likely to prevail on the merits of the case at the trial? Second, what are the relative harms that will occur to each of the parties if the motion is granted, as opposed to if the motion is denied?

Four-Front Attack

In addition to the usual legal arguments on procedure, Franklin’s attorneys argued that the programs, or portions of the programs, were not protectable under the copyright laws anyway. They launched a four-front attack.

First, they argued that at least a portion of the programs were written in machine language, more an engineering than a written phenomenon. Since copyright laws apply to expressions, not engineering phenomena, the programs were not subject to copyright.

Second, some of the programs were contained on a read-only memory (ROM), which was only a three-dimensional device rather than in a written code that could be protectable under copyright laws.

Third, the operating system programs constituted ideas as opposed to mere expressions, copyright laws not being applicable to ideas.

Franklin’s attorneys also argued the “big guy, little guy” point that Franklin might be out of business if the motion were granted. If the motion were denied, Apple Computer would suffer, at the most, only the loss of some sales.

The trial court had denied Apple Computer’s motion. It reasoned that it was unclear at the juncture that the copyright laws applied. It bought the “big guy, little guy” argument that the harm to Apple Computer of denying the motion was greatly outweighed by the harm to Franklin of granting the motion. The stage was thus set for the appeal by Apple Computer.

Reversed the Ruling

The 3rd Circuit Court of Appeals reversed the ruling of the trial judge and sent the case back down for further determinations. The Court of Appeals held that:  Programs in machine language were copyrightable.

Whether programs were contained on a ROM chip or anywhere else made no difference.

The court also said that where properly “copyrighted material was concededly copied,” the balancing of harm tests normally applied in the determination of whether to grant a preliminary injunction was inapplicable: So much for the “little guy” whose actions were taken with wide open eyes. The Court of Appeals left two questions open for further determination by the trial judge.

First, the Court of Appeals restated the doctrine that it is only the expression of ideas, and not the idea themselves, that can be copyrighted. The court went on to adopt the rule that if an idea may be expressed in only one way, the idea and expression are said to be the same thing and, in that situation, even the expression may not be copyrighted.

Subject of Debate

The question of what is an idea has long been the subject of debate; but the Court of Appeals went on to say that the general function of translating source code into object code qualifies as an idea. The court cautioned that even though the function of translating such code in general was an idea, the function of translating any particular programs, such as Apple-compatible software, was not covered by this noncopyrightability rule if translation of other non-Apple-compatible software could be accomplished by different expressions.

Second, the court left it to the trial judge to decide whether Apple Computer had properly complied with the statutory formalities pertaining to copyright registration.

Although Apple Computer has overcome major obstacles in the lawsuit, it would, for the following reasons, be premature to say that Franklin has lost the case at the trial level:

It may be determined that one or more of the most important operating programs were governed by the idea-expression merger doctrine and are, therefore, not copyrightable.

It may be determined that various copyright registrations procedures were not followed.

It should be noted that if Franklin does lose the lawsuit, but survives the damages awarded, Franklin can be positioned to develop its own programs to obtain Apple Computer compatibility.

Not Copied

Indications are that the operating systems for the other major compatible systems were not copied. This decision would, therefore, be unlikely to affect companies manufacturing most of the other compatibles. There is a question of how well the “non-copy” compatibles work.

If Apple Computer ultimately prevails, what effect, if any, will this decision have on purchasers of the Franklin Ace? Will these people be considered to be infringers of the Apple Computer operating system? Are these systems subject to seizure?

Every case must be considered on its own facts. However, the copyright laws bar copying or publishing materials without permission of the owner, not the use of them. The few appellate courts that have decided the issue have held that wrongfully copied materials in the possession of subsequent purchasers are not subject to seizure for copyright infringement, with limited exceptions related to imported copies. Note that the use of application software generally requires that the application software be copied onto RAM which would seem to arguably make users of application software liable for infringement.

Regardless of the ultimate outcome of this case, the opinion will presently discourage any producer or intended producer of compatibles from copying operating system programs. In most cases, the risk will far outweigh the development cost savings.

The above information is provided for general educational purposes and not as legal advice. Laws in areas in which we practice change continually and also vary from jurisdiction to jurisdiction. Therefore no visitor to our site should rely on any of the articles provided for legal advice, but should always consult their own attorney regarding legal matters.

The information above is provided for general educational purposes and not as legal advice. Laws in areas in which we practice change continually and also vary from jurisdiction to jurisdiction. Therefore no visitor to our site should rely on any of the articles provided for legal advice, but should always consult their own attorney regarding legal matters.       

 © 1983 Rob Hassett, Atlanta, Georgia. All Rights Reserved.

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About Rob Hassett

Rob Hassett is an attorney in technology, entertainment and corporate law with Hassett Law Group/Business Law Partners in Atlanta, GA. He is a co-author of a leading volume on internet and interactive media law and has taught many classes in the professional education program at Georgia Tech.

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