Apple v. Franklin

Citation: Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240, 219 U.S.P.Q. (BNA) 113 (3d Cir. 1983)(full-text), cert. dism., 464 U.S. 1033 (1984).

Factual Background

Apple created proprietary software that would only run on Apple computers (Apple II). Franklin developed a computer (ACE 100) to rival Apple which would run Apple applications and its Operating System. In creating a computer compatible with Apple II, Franklin's software resembled Apple's to a large degree. The National Commission on New Technological Uses of Copyright Works ("CONTU") had not resolved whether Object Code (code translated from "higher" human readable programming languages to a "lower" machine readable language) was to be categorized as a process/idea (not protected by copyright), or as a literary work (protectable). There was no clear consensus on how to describe the technology employed by microcomputers (545 F.Supp. 812, 817).

The 14 works in suit were based in Object Code, stored in Read Only Memory (ROM).

Trial Court Proceedings

Plaintiff's (Apple) preliminary injunction for infringement of copyright against Defendant (Franklin Computers) was denied because they failed to show:

1. A reasonable probability of success on the merits;
2. Irreparable injury to the plaintiff that exceeds any injury to the enjoined defendant;
3. The improbability of harm to other interested persons; and,
4. A public interest that would be furthered.

The standard was set forth in Delaware River Port Authority v. Transamerican Trailer Transport, Inc. The court relied on factors one and two. Apple had failed to show likelihood to succeed on the merits because many of the issue of whether Object Code in the form of ROM was copyrightable subject matter had not been resolved by CONTU. Franklin's size was largely its salvation, the court found that the harm of granting a preliminary injunction to Franklin would likely bankrupt the company, and also due to its size it never posed any substantive threat to Apple, and thereby failed prong two of the test.

Appellate Court Proceedings

The Court of Appeals found "abuse" in the lower court and overruled the denial of injunction as an erroneous application of law.

Beyond the technical jargon, the Court's task was simplified as it relied on CONTU's 1980 Amendment to 17 U.S.C. sec. 117 redefining the scope of copyrighted works to include all software. This plainly rejected Defendant's contention that Application and Operating System software were distinct in terms of copyright.

The Court rejected the claim that under Baker v. Seldin, that Franklin's code was not copyrightable because the idea was sufficiently merged with the expression. Franklin claimed that 14 programs could not have been written in any other functional way which did not infringe Apple's specific manifestation, but Apple found other software engineers which had accomplished such a feat. Furthermore, Apple had proof that Franklin directly copied the code (as evidenced by the word "Applesoft" found in Franklin's code).

This Court held that: (1) computer program, whether in object code or source code, is “literary work” and is protected from unauthorized copying, whether from its object or source code version; (2) computer program on object code embedded in ROM chip is appropriate subject of copyright; (3) computer operating system programs are not per se precluded from copyright; and (4) even without presumption of irreparable harm generally applied in copyright infringement actions, jeopardy to copyright holder's investment and competitive position caused by competitor's wholesale copying of many of copyright holder's key operating programs would satisfy requirement of irreparable harm needed to support preliminary injunction.

Lastly, the Court reasoned that irreparable harm must be presumed in a Copyright case.

Therefore, this court reversed and remanded to the lower court.

Notes

Some of the 14 works at issue did not have a registered copyright, the lower court was to address those issues on remand.

Since the basis of granting the preliminary injunction is based on the infringement of the ROM code as a manifestation of a literary work, the court may have held the other way if Franklin would have spent the time to write original code which held the same functionality.

If two programmers wrote in different high level programming languages, and when compiled (translated) the object code was identical because that is the most efficient way the computer would read it, would this be an infringement?