Related Practices

• Intellectual Property

How is it that the first company to actively commercialize arguably the most important computer development in history seemingly struggles to maintain its competitive position today? Although Apple Computer Company was first to make the graphical user interface (GUI) for personal computers widely available to the public, it has watched Microsoft Corporation become the provider of the “Windows” operating system for over three-quarters of the world’s computers.

Their divergent fortunes have been attributed by many to Apple’s ill-fated business decisions combined with Microsoft’s ability to capitalize on its nifty little agreement with IBM to become the sole operating system provider for IBMPCs. However, this does not tell the complete story. Apple arguably made one of the biggest mistakes in business and technological history by failing to obtain or enforce a patent on its first GUI product, “Lisa Desktop.” Reflecting a strategy of many U.S. software companies, Apple decided to rely solely on copyright protection, apparently believing it would be sufficient to protect Apple’s economic investment and competitive position for this technological breakthrough. As we now appreciate, Apple could not have been more wrong.

The simple fact is that patents always have been and always will be the best form of legal protection for technological innovation, regardless of its form. The purpose of the Copyright Law is to encourage artistic creativity and expression. In contrast, the purpose of the Patent Law is to encourage technological advancement. These differing purposes have resulted in different legal regimes in which the standards for obtaining protection—and for enforcing the ultimate reach of that protection— are completely different. However, due to (i) the overly simplistic notion that a computer program is “written” (i.e., lines of program code are memorialized in human language), and (ii) some Supreme Court decisions which were misinterpreted as casting doubt on the patentability of computer programs (a doubt since resolved in favor of patentability), the Copyright Law became established as the legal protection of choice in the software industry.

Copyrights are relatively cheap and easy to get—the copyright owner files a registration form and pays a fee. No formal “examination” of technical content occurs. In contrast, for a patent, technical features of the computer program are evaluated by a trained examiner. Because it often takes a substantial amount of time, effort and money, requires disclosure to the public (including competitors), and provides protection for only 20 years versus 75 years for a copyright, the question arises: Why pursue a patent?

The answer lies no further than the conflict between Apple and Microsoft. In Apple Computer Inc. v. Microsoft Corp., Apple had sought and obtained copyright protection for its “Lisa Desktop” and “Macintosh Finder” GUI products. When Microsoft developed a competing GUI product (Microsoft Windows 1.0) in the late ’80s, Apple negotiated a license agreement to allow Windows 1.0 and follow-on products based upon the GUI concept to be produced and sublicensed by Microsoft. When Microsoft released Windows 2.03 and 3.0, Apple asserted that the license had been violated, sued for copyright infringement— and lost. The court held the broad GUI concept to be unprotectable under copyright law and found that what was protectible under copyright (i.e., Apple’s unique selection and arrangement of the features appearing on the desktop screen) was only infringed if the accused product was “virtually identical” in displaying its corresponding features. Because Microsoft Windows 2.03 and 3.0 were not identical, they were not guilty of infringing Apple’s copyright. In short, the court issued a prophetic statement when it ruled that “Apple cannot get patent-like protection for the idea of a graphical user interface [under the copyright law].”

This ruling recognized the fundamental distinction between copyright and patent laws. Because patents are intended to protect technological advances, the scope of protection is commensurate with the significance of the advance— the more revolutionary the advance, the broader the protection. It is the concept which has value and can be protected. Conversely, copyright protection is intended to protect the content of reproducible artistic expression; thus, it is the content which has value and which may be protected, not the broad ideas behind that content. For this reason, computer software is in many cases more appropriately protected by a patent—the content (i.e., the particulars of how the program is written or of how it looks on the screen when in operation) is often not as valuable as the concept (i.e., the program’s functionality).

Copyrights cannot protect against reverse engineering or independent development of a competing software product—patents can. In fact, copyright protection can only be guaranteed for a software product where the competitor copies the written code line by line or produces an identical screen display. Patents are free from these limitations because of the nature of the protection provided. As long as the competitor’s product legally falls within a valid patent claim, the patent will be infringed, no matter what changes the competitor may have made to design around the patented product. Further, a patent provides the power to protect the programming structure of the product, its functionality, or a combination of the two—allowing the decision on the scope of protection to be based on those aspects of the product which provide the most value in the marketplace.

The most common reasons for pursuing copyrights over patents for software products are a patent’s disclosure requirements, shorter term of protection, and cost. None are as large a concern as they might seem. First, the patent disclosure requirements are flexible enough to permit description of the product without disclosure of each line of code, thus avoiding details necessary to copy the patented product. Further, because a patent protects against reverse engineering, disclosure of some or all of the code will not help competitors if they cannot avoid the patent’s claims. Second, although a patent’s term of protection is shorter, its scope of protection is broader. This alone will often justify acceptance of the shorter term. Properly written, a patent can provide broad enough protection to encompass follow-on products, and continuation patents can be obtained for new advances. Finally, one need only look at Apple to determine that cost should not be an impediment to seeking patent protection for a valuable product. If Apple had decided to invest $10,000 to $20,000 in a patent on its “Lisa Desktop” GUI instead of relying on a copyright, it may have prevented Microsoft from obtaining the dominant position in the world’s software market, as a patent provides the power to completely prevent an infringer from making, using and/or selling the infringing product or process.

The benefits of patents are even more apparent in light of recent events involving “business methods” patents. Due to recent court decisions, the scope (and thus the effectiveness and ultimate value) of software-related patents has increased by removing some obstacles that used to limit such protection. Now a “business method,” not necessarily tied to the software product which implements it, can be protected. With the vast range of business services available over the internet, all now protectible through “business method” patents, this has tremendous ramifications for the software industry. Again one need look no further than one of the most successful companies in the internet world, Amazon.com, to see how effective such a patent can be. It obtained a patent for a method of using a single mouse click to complete a business transaction (the so-called “one click” patent). When Barnes&Noble.com attempted to emulate this “one click” concept, Amazon.com sued. Barnes&Noble.com ceased its use of the “one click” technology, leaving Amazon.com as the unchallenged user of that technology in the internet marketplace.

In the fast-changing, increasingly competitive software market, the benefits of patent protection cannot be ignored. You really do get what you pay for.