Whelan v. Jaslow

Citation: Whelan Assocs., Inc. v. Jaslow Dental Lab., Inc., 609 F. Supp. 1307, 225 U.S.P.Q. (BNA) 156 (E.D. Pa. 1985)(full-text), aff’d, 797 F.2d 1222, 230 U.S.P.Q. (BNA) 481 (3d Cir. 1986)(full-text), cert. denied, 479 U.S. 1031 (1987).

Factual Background

Elaine Whelan, an employee of Strohl Systems, developed custom programs in EDL language for defendant’s IBM Series 1 computer system. The agreement provided that “all software developed by [Strohl] for your dental laboratory system [will] remain under our ownership.” Whelan later incorporated, obtained rights to the system from Strohl, and entered into an agreement with the defendant to market the programs.

Defendant Rand Jaslow unsuccessfully attempted to develop his own system for the IBM Series 1 using the BASIC programming language. Defendants terminated the marketing agreement with plaintiff, and, using a surreptitiously obtained copy of the EDL source code, adapted it (with expert help) for the IBM PC and marketed the adapted program under a similar name. Whelan sued for copyright infringement.

Note from Blue Sun - another view from one of the participants and witnesses in this case (the "expert help"). Rand Jaslow of Jaslow Laboratories attempted to create a computer version of the long-standing Jaslow business methodology and forms in BASIC on a PC. Lacking the programming skills to do that to his satisfaction, he hired Strohl Systems to produce a professional version. It was the Jaslow Laboratories that provided Strohl and particularly Elain Whelan with design specs that described their current manual system, right down to the forms they used and the sequence of procedures they followed to do business. Whelan did not create any new intellectual property or make any additions or enhancements, but merely coded a computer analog of the long-used Jaslow manual system and what she could see of the incomplete Jaslow attempt to program it. If anybody had a claim on prior ownership of the processes and "look and feel" of the system, it was Jaslow Labs, not Whelan. Strohl produced an unsatisfactory product on an inappropriate machine. Jaslow was looking to target the 90% of dental labs that couldn't afford to buy one of the several existing computer systems that cost more than $100,000 a seat and ran on large minicomputers. The IBM Series 1 was never designed as an application hosting computer (which is why they only officially made the EDX (Event-Driven Executive) operating system and the EDL (Event-Driven Language) available for the machine. It was designed for use as a front-end controller to larger mini or mainframe systems, as a communications controller, and as a shop-floor monitor and controller of automated manufacturing machinery - hence its design as "event-driven" as opposed to the PC running MS-DOS at that time, which was a procedurally programmed system. It turned out to be much more expensive than the target audience when the project was finished (this final cost was not disclosed to Mr. Jaslow until the end of Whelan's project). Secondly, Whelan and her staff had done a poor job, and the software was well short of commercial quality (her only other client was having similar problems with Strohl under her ownership). Jaslow was only ever to sell three systems, and had to refund the money to one of the three.

At that point, Jaslow decided to cut bait, hire an outside programming expert (myself) and start from scratch on the PC. Despite the claims above, I never saw a copy of the EDL source code (I didn't even know EDL existed when I was hired and wouldn't have been able to read it). I never had any reason to believe Jaslow had a copy of the code, and the last thing any professional would do is use code from a failed and defective system to create a new system. I testified to this during the trial. In addition, it was only Whelan's claim that Jaslow had surreptitiously obtained a copy of the EDL source code. and no supporting evidence supported her claim. I did the same thing Whelan did; I used the existing Jaslow manual system as my model and coded a brand new system without any reference to EDL source code. I never even saw the Whelan system running on a Series 1, and so, had no idea what the Whelan system looked like, only the original Jaslow system and its forms. I worked within the Jaslow lab, so I had the Jaslow technical employees as my business domain experts. I also introduced major new areas of functionality, like the ability to track technician productivity, which gave this system the ability to predict with great accuracy, when a crown or bridge would be delivered to the dentist. Every time a delivery from a lab is late, the dentist loses money from an appointment he has to cancel and reschedule, so this was a major advancement.

This new system was much more successful than Whelan's and sold well in the industry. Remember, in those days, only implementation was copyrightable, and not ideas - and the ideas and manual implementation were in place under Rand Jaslow's father long before Rand was old enough to begin working at the lab.

The trial lasted three days and Jaslow brought in a number of eminent experts, from Computer Science professors at Penn to the designer of one of the most populare C++ language compilers. They ALL testified that they had examined both Whelan's code and ours and found no instance where our code used or benefited from Whelan's EDL code. Given the architectural differences between the Series 1 and the PC, it would be counter-productive to try to adapt the Whelan code anyway, because of the dramatic differences in hardware architecture and languages between the two machines. It would be like trying to adapt a toaster to function as a food processor. Whelan brought no witnesses who would claim any similarity in the two code bases, and, in fact, her own vice-president, testifying for her side, testified under cross-examination that she had back-dated documents to help make her case.

The judge in the case was considered a very knowledgeable judge, but was totally computer illiterate, and so, after three days of highly technical courtroom testimony, he motioned the two attorneys to the bench and said, "I still don't understand the difference between source code and object code." At that point, the attorneys realized that he really had not comprehended a thing that was testified to .

In the end, his decision was based on several fringe matters. First, the forms on both systems looked similar (because they were both modeled from the Jaslow manual forms - neither Whelan nor I had created new forms). Second, the customer master and detail database files in both systems were named CUSTMAST and CUSTDTL - as was common in thousands of systems (I had even used the same names throughout school for COBOL programs, as did most of the other students). Third, he ruled that the two systems' instruction manuals were similar, but he failed to understand that this was not because our manual was copied from Whelan's, but because both were explaining essentially the pre-existing Jaslow process, with the only major change being the systems were run on computers instead of paper. The only thing Elaine Whelan had going for her was her ability to cry on command as she sat on the witness stand and accused us of stealing her livelihood - which made quite an impression on the judge. Her vice-president confided in me after the trial that she had a reputation for being able to turn on the tears whenever needed. Ms. Whelan was losing her only other significant client (I think it was TV Guide), and apparently saw this case as a way to recoup some of her losses.

Jaslow appealed the case, with the appeal financed by a group of the nation's top software development companies, who all recognized this was bad law and, as the initial precedent, was a threat to the whole industry. The only company that declined to help finance the appeal was Lotus 1-2-3, which was eyeing the decision as a precedent to sue Paperback Software over a Lotus look-alike program. The case wended its way up through appellate courts until it was submitted to the Supreme Court. The Supreme Court, fearful of carving a precedent in stone in such a new, young industry that had unique elements, turned down the request and said they wanted to see more cases litigated at lower levels before they felt they would have enough of a picture of this new world to make any ruling.

Ironically, to my knowledge, though Jaslow was enjoined from selling what was then considered by the National Association of Dental Laboratories as, by far, the best system on the market (their own president bought it). Whelan was never able to sell another one of her defective Series 1 systems.

District Court Proceedings

The court held that (1) although Jaslow explained to Whelan how a dental lab worked, he was not a co-author of the program; Whelan alone was the author of both the source and object code; (2) Jaslow’s use of the EDL source code to develop a competitive product, even thought not a literal translation, it was a copyright infringement:

The idea of a computerized system to control the operations of a dental lab is not subject to copyright. The particular expression of the idea created and fixed in the plaintiff’s IBM-Series 1 Dentalab system, however, is copyrightable, and the evidence demonstrates that defendants actually did copy that expression in writing the source and object codes for their IBM-PC Dentcom system.

The evidence establishes that it would be very difficult if not impossible to literally translate a program written in EDL to a program written in BASIC. The evidence makes clear that transferring or converting from one computer language to another is not comparable to translating a book written in English to French. At least, it would be a very inefficient method of copying a program to attempt to work solely from the source code and literally translate it from EDL to BASIC. As I understand the evidence, in order to copy a program written in EDL for use in a computer that operates on a source code written in BASIC, one would study the method and manner that a computer receives, assembles, calculates, holds, retrieves and communicates data. This requires a study of the manner in which the information flows sequentially from one function to another. Once this is fully understood, one may copy this exact manner of operation for use in a computer that responds to commands written in a different source code language.

The court awarded damages for copyright infringement of $42,000 for two sales of the Series 1 system after the marketing agreement ended and $101,269 for 23 sales of the IBM PC software.

Appellate Court Proceedings

The Third Circuit upheld the trial court's finding of copyright infringement based upon the defendant's copying of the "structure, sequence and organization" of plaintiff's software. While recognizing that copyright protection does not extend to the "idea" or functionality of the program, the court found that similarities in the file structures, screen outputs and certain subroutines, while not comprising a majority of the total number of lines of code in defendant's software, were similarities in "expression," and therefore constituted copyright infringement.

New note: the common functionality, file structures, screen outputs (forms) and even algorithms in subroutines were similar not because they were copied from Whelan's code, but because both Whelan and Jaslow used the same original model - the original Jaslow manual system. Whelan did not contribute ANYTHING to the system that wasn't already in the functionality of the original manual system. If you write a system to calculate wage taxes, you are going to essentially duplicate the algorithms used in every other system on the market, since there is basically one "best current practice" to implement this. The work-flow will be virtually identical, and since function dictates everything else, the structure, sequence and organization will, of necessity be virtually identical. Since all of the data in the manual system and both computer systems was identical, and the relationships were the same, the likelihood of coming out with radically different file structures is negligible - the same is true of the screens, which merely reproduced Jaslow's manual forms. You might as well sue Chrysler because Ford thought about the idea and arrangement of gas, brake, and clutch pedal first.

In so finding, the court set forth a test for determining the line between unprotectable ideas and the protectable expression of those ideas which test favors finding protectable expression:

[T]he line between idea and expression may be drawn with reference to the end sought to be achieved by the work in question. In other words, the purpose or function of a utilitarian work would be the work's idea, and everything that is not necessary to that purpose or function would be part of the expression of the idea.

Note by Blue Sun: This is bad law based on total ignorance of the environment in which the systems existed, since copyright law at that time ONLY protected an explicit expression, and not the idea - and they created an artificial distinction that created a totally new definition of expression, just for this case. As one IP attorney explained it to me, you can not scan Ansel Adams' famous picture of the Maroon Bells mountains near Aspen, Colorado - that is a compyrighted IMPLEMENTATION. However, you are free to purchase the same type of camera and film, to stand on the same spot, and to wait for the same or similar lighting conditions and cloud patterns and snap your own shot. You have not used Adams' copyrighted implementation (his own photograph), but his IDEA, even down to the finest detail, which is not copyright protected.

In applying the above rule, the appellate court quoted from the District Court record:

Different computer systems may functionally serve similar purposes without being copies of each other. There is evidence in the record that there are other software programs for the business management of dental laboratories in competition with plaintiff's program. There is no contention that any of them infringe although they may incorporate many of the ideas and functions.

Note by Blue Sun: The appellate court failed to take into consideration that these were NOT two independent systems that just "happened" to have similarities, but were both modeled from the same original Jaslow intellectual property. It's like two photographers shooting the same model instead of two similar ones - the similarities are going to be much closer, but still not a violation of copyright. If anybody owned the intellectual property involved, it was not Whelan, but Jaslow, whose pre-existing system she merely tried to implement (not particularly competently) on a computer. It was simply a clone of Jaslow's system, whith no value added except that it let dental technicians fill out their forms on an electronic box, instead of using paper and pencil. It was a misapplication of copyright concepts based on a misunderstanding of the technology and the original circumstances. From that day to this, I have heard expert Intellectual Property attorneys cite Whelan v. Jaslow as the single worst decision in all of computer-based intellectual property law. They were in total agreement that this decision was very harmful to a newly emerging technology. I have yet to hear any knowledgeable IP expert agree with the decision.

No wonder the Supreme Court didn't want to touch it.

References

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