COPYRIGHT LAW FOR SOFTWARE STILL UNCLEAR Litigation will affect company profits and the way consumers operate computers


SAN JOSE, Calif.-- For years, personal computer software developers and publishers have been eager for the federal courts to clarify just how far they can go in copying the look and feel of each other's programs.

But in the wake of a federal judge's decision last month to throw out most of Apple Computer Inc.'s copyright claims against Microsoft Corp., experts say the issue is no closer to resolution. With only one significant case still poised to set new ground rules, some experts fear the industry may require several more years and more lawsuits before programmers will know which aspects of a program they can copy -- and which ones they can protect.

Hanging in the balance for software developers: the potential for huge profits while keeping competitors at bay.

For computer users, the way the courts rule may represent the difference between having a huge selection of inexpensive software that operates in much the same way, or having fewer, more expensive choices that have vastly different modes of operation.

"I don't think we've had too much litigation on this, although most people in business probably think any litigation is too much," said Thomas Lemberg, general counsel of Lotus Development Corp. in Cambridge, Mass. Lotus' copyright suit against Borland International Inc. is being watched closely.

Copyrights historically have protected artistic works such as books, songs, movies and maps. No one may, without permission, copy the work or make a derivative work that's too closely patterned after the original.

Companies already are certain that they can't legally copy the coded instructions that make up another company's program. Software "clones" have been struck down in one federal court, in a suit where Lotus forced Paperback Software to stop selling a program whose functions, appearance and operation exactly copied that of the 1-2-3 spreadsheet.

But it is far less clear how legal it is to create a program that merely mimics the behavior of another. And that is what a series of high-profile lawsuits brought by some of the computer industry's best-known corporations sought to resolve. Proponents said the suits were aimed at protecting innovation; opponents said they would stifle it.

But no one debated the immense value of having such protection for software, a fact strikingly illustrated by Apple Computer's lawsuit against Microsoft Corp. and Hewlett-Packard Co. The case, once considered a possible precedent-setter, was eviscerated in April by U.S. District Judge Vaughn Walker.

When Apple filed its lawsuit in 1988, its Macintosh models were significantly more expensive than comparable IBM-compatible personal computers. Apple, which spends tens of millions of dollars a year on research and development, enjoyed one of the largest profit margins in the computer industry, and justified it by comparing the Macintosh's easy-to-use interface to the maddeningly cryptic DOS.

But Microsoft's Windows program, which adds a similar interface to DOS, directly threatened Apple's key competitive feature -- and its profit margins. Apple claimed that Microsoft had no right to create an interface based on years of Apple's work. And even though it was not an exact copy of the Macintosh, Apple claimed that Windows misappropriated the "look and feel" of its product.

Even before Judge Walker's decision to throw out most of Apple's claims, the financial importance of the case to Apple had evaporated. Last year, Apple abandoned its high profit margin strategy for a low-price model that has increased its market share by seven points even while Windows enjoys huge success.

For the rest of the industry, however, even Apple's apparent loss offers little guidance as to how copyright law applies to programs. Judge Walker dismissed many of Apple's claims on the basis that they were covered by a license Apple granted to Microsoft in 1985, or because they weren't original works of Apple, which itself patterned much of the Macintosh interface after work done in the 1970s at Xerox Corp.'s Palo Alto Research Center.

Most eyes in the industry are now trained on the lawsuit filed in 1990 by Lotus against Scotts Valley, Calif.-based Borland International.

Borland makes a pair of spreadsheet programs called Quattro and Quattro Pro, which in most respects are very different from Lotus' flagship 1-2-3 spreadsheet program. But in an effort to make its program more palatable to users familiar with 1-2-3, Borland also incorporated in them, as one of several command options, the menu and command structure of 1-2-3.

Lotus sued, saying that was an infringement of its copyrights on 1-2-3. The Boston judge hearing the case has denied requests to grant a summary judgment, meaning a trial is likely.

"That [case] goes to the heart of the issue. It will have a much greater impact on our industry," said Ken Wasch, executive director of the Software Publishers Association in Washington.

Some experts said that judges simply have decided that software isn't so different from other artistic works. Many preliminary rulings in software copyright cases have been drawn from cases 60 or 70 years old, long before computers existed.

In any case, the copyright fever of a few years ago is dying down, with many companies instead turning to an increasingly cooperative patent office to protect their valuable assets.

Patents, different from copyrights, protect inventions like the transistor or the computer chip for 17 years in exchange for the inventor disclosing how the invention works.

"I think [the courts] have gotten a lot more sophisticated about this issue and a lot of the hysteria is gone," said Susan Nycum, an intellectual property lawyer in Palo Alto, Calif., and past president of the Computer Law Association. "Patents are ready, willing and able to address the issues and copyright now goes back to where it belongs."

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