May 27, 2014
On May 9, 2014, the Court of Appeals for the Federal Circuit issued an opinion in Oracle America, Inc. v. Google Inc., holding that copyright protection can extend to the overall structure, sequence, and organization of software. This opinion overturned the district court decision discussed in our previous IP Alert regarding this case.
Oracle sued Google for copyright and patent infringement and asserted that Google’s Android operating system infringed Oracle’s software patents and copyrights in the application programming interfaces (API packages). On the copyright claims, Oracle alleged that Google’s Android smartphone included 37 infringing API packages that were copied from the Java platform relating to mobile devices.
Each API package consists of both “declaring source code” and “implementing source code.” The court explained that “declaring code,” sometimes referred to as the “declarations” or “headers,” includes the expressions used by programmers to command the computer to execute additional code. This additional code, known as the “implementing code,” provides step-by-step instructions for carrying out a specified function.
Google wrote its own implementing source code, but copied 7,000 lines of declaring source code from Oracle’s API packages verbatim. This declaring source code formed the structure, sequence, and organization of Oracle’s allegedly infringing API packages.
The district judge in the Northern District of California concluded that the declaring code was not copyrightable for three reasons. First, the court stated, there was only one way to write the declaring code, and, therefore, a copyright doctrine known as the “merger doctrine” barred copyrightability. The merger doctrine is an exception to the idea/expression dichotomy in copyright law by providing that when there are only a limited number of ways to express an idea, the idea effectively “merges” with its expression and the expression itself becomes unprotectable. Second, the declaring code only included short phrases and names, which the court believed were per se not copyrightable.
Third, Oracle argued that the declaring code was creative, original, and resembled a “taxonomy” (which is generally eligible for copyright protection under a Seventh Circuit case, American Dental Association v. Delta Dental Plans Association). Although the district court agreed, the district court nonetheless found that the API packages were a “system or method of operation” pursuant to section 102(b) of the Copyright Act and, therefore, could not be copyrighted. Section 102(b) of the Copyright Act codifies the idea/dichotomy distinction, noting “copyright protection for an original work of authorship [does not] extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.” In effect, the district court treated sections 102(a) and (b) as creating a two-step copyrightability analysis, where copyright protection for an original work could be circumscribed if the work has a functional component.
On appeal, the Federal Circuit disagreed with the district court’s analysis. Applying Ninth Circuit law, the Federal Circuit found that the declaring code and the structure, sequence, and organization of the Java API packages were copyrightable.
The court began its analysis by distinguishing between “literal” and “non-literal” elements of a computer program. Literal elements include such things as source code and object code, while non-literal elements include such things as the sequence, structure, organization, and user interface. Oracle claimed a copyright in the declaring source code that Google copied (literal elements of its API packages) and also claimed copyright in the structure, sequence, and organization of the Java API packages (non-literal elements). The court analyzed these issues separately.
As to the literal elements, the court found that the merger doctrine (explained above) cannot bar copyright protection unless Oracle had only a single way or limited number of ways to write the code. The district court had concluded that the names of the Java methods, classes, interfaces, and packages could have been written differently; thus the merger doctrine was inapplicable. The court concluded that the “short phrases” reasoning of the district court likewise was inapplicable because the individual lines of declaring code (i.e., the short phrases) taken together constituted an original combination of elements, and that Oracle exercised creativity in the selection and arrangement of these declarations.
In assessing the non-literal elements, the Federal Circuit applied the “abstraction-filtration-comparison” test originally formulated by the Second Circuit and adopted by several other circuits, including the Ninth Circuit. This test requires a court to (1) break down the program into its constituent structural parts; (2) sift out the nonprotectable material such as ideas and necessarily incidental expression; and (3) compare the remaining creative expression with the allegedly infringing software program. Notably, there is some disagreement among the circuits regarding whether the filtration step relates to the question of copyrightability or to infringement. Applying Ninth Circuit law, the Federal Circuit determined that the issues of originality (part of the filtration analysis) related to the question of copyrightability, but that the questions of merger and scenes a faire (additional filtration analyses) are affirmative defenses and were not relevant to the question of copyrightability, according to Ninth Circuit case law.
The Federal Circuit found the abstraction-filtration-comparison test to be more nuanced than a bright line approach limiting copyright for anything performing a function. In its analysis, the district court relied upon Lotus Development Corp. v. Borland International, Inc., which found methods of operation to be means by which a user operates something and any words used to effectuate that operation to be unprotectable expression. The Federal Circuit, however, found the district court’s reliance on Lotus to be misguided and at odds with the abstraction-filtration-comparison analysis. The Lotus case was a First Circuit case that found a command hierarchy was not copyrightable because it was a method of operation under section 102(b), among other things. Although a software program’s elements may be characterized as methods of operation, these elements may contain expression that is copyright protectable. Further, it found classifying a work as a system does not preclude copyright protection. The court observed that the Ninth Circuit had not precisely addressed the issue, but still concluded that a set of commands in a software program may contain expression that is eligible for copyright protection. Because the structure, sequence, and organization of the API packages were found to be original and the declaring code could have been written and organized in numerous ways to achieve the same functions, the court concluded that the API packages were not barred from copyright protection just because they merely performed functions.
Google also raised the scenes a faire doctrine. This doctrine limits copyright protection by providing that copyright protection does not extend to elements that are standard, stock, common to a topic, or if they necessarily flow from a common theme or setting. The Federal Circuit opined that scenes a faire, like the merger doctrine discussed above, is an affirmative defense to infringement. As such, the court held that it was inappropriate to consider these issues at the outset when determining whether Oracle’s API packages were copyrightable. Google argued that two prior cases (Sega Enterprises v. Accolade, Inc. and Sony Computer Entertainment, Inc. v. Connectix, Corp.) created an interoperability exception to copyright law and that Google had an interest in having its program interoperable with other programs. The court rejected these arguments, reasoning that the relevant compatibility inquiry involves whether the copyright holder’s choices (not those of the infringers) were dictated by a need to ensure interoperability with other programs. Stated another way, when a court considers whether certain aspects of a software program are protected by copyright in light of extrinsic considerations (including compatibility requirements and computer hardware requirements), the relevant external factors are those available to the creator of the work, not the infringer. More fundamentally, the court further concluded that interoperability was a “fair use” affirmative defense and was not pertinent to the issue of copyrightability.
The Federal Circuit remanded the case to the district court with instructions to consider Google’s affirmative defenses, with specific guidance on the fair use defenses. The affirmative defense of fair use permits copying of a copyrighted work only for certain purposes such as criticism, comment, news reporting, teaching, scholarship, or research. Whether a use is fair is determined on a case-by-case basis after analyzing (1) the purpose and character of the use (i.e., whether it is commercial), (2) the nature of the copyrighted work, (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole, and (4) the effect of the use upon the value of the copyrighted work.
The fourth factor is considered the most important element of fair use and requires analysis of the extent of the market harm caused by the alleged infringer and whether the allegedly infringing conduct, if permitted to spread, would result in a substantial adverse impact on the potential market for the original. On remand, it appears that the district court is likely to examine issues of whether Google’s use is transformative (which is relevant to the first factor) and whether concerns of interoperability may render some use fair, especially with respect to certain core API packages.
Two other aspects of the court’s decision are noteworthy. First, at several points in the opinion, the court noted that a proper inquiry into copyrightability and the scope of protectable activity should focus on the time of creation, not the time of infringement. This extends to the merger doctrine, scenes a faire, and interoperability doctrines. Second, the court rejected Google’s policy-based arguments that copyright is not the correct legal instrument with which to protect the intellectual property rights of software developers. The court noted that software has been potentially eligible for both copyright and patent protection for at least two decades. The court referred to the 1954 Supreme Court decision Mazer v. Stein, which held “[n]either the Copyright Statute nor any other says that because a thing is patentable it may not be copyrighted.”
The Oracle decision is a significant case for developers and users of software. While nominally decided under Ninth Circuit law, the case is likely to be regarded as precedent in other circuits. The decision addresses several key aspects of copyright law, not only as applied to computer software, but also more generally as applied to issues involving merger, “short phrases,” interoperability, and scenes a faire.
For more information on this case, please contact Fitch Even partner Amanda Lowerre O’Donnell, the author of this alert.
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