By BOB DRUMMOND
c.1996 Bloomberg Business News
WASHINGTON -- Borland International Inc. won a victory over rival
Lotus Development Corp. Tuesday as the Supreme Court said justices had
deadlocked in a potential landmark case about copyright protection for
computer software programs.
The 4-4 tie upholds a federal appeals court decision in Lotus's
copyright infringement lawsuit. The Supreme Court, by failing to
decide the issues definitively itself, left unsettled a broader
question of whether user-friendly command systems in a computer
software program are eligible for protection under federal copyright
laws.
Major computer and software companies are sharply divided over whether
copyright protection for software command systems would promote
innovation and ease of use in the industry, or stifle competition by
giving exclusive rights to a handful of leading companies.
The tie vote at the high court leaves undisturbed the decision of a
Boston-based federal appeals court, which said Lotus could not claim
copyright protection for the system of commands that tell computer
users how to perform different functions in Lotus's ``1-2-3''
spreadsheet program. Lotus had charged Borland with pirating its
commands for use in a competing program.
The appeals court ruling, however, serves as a binding precedent only
on lower federal courts within its jurisdiction, in four New England
states and Puerto Rico. A definitive Supreme Court vote would have
cleared up the question for the rest of the country.
``It is disappointing that the Supreme Court did not provide more
guidance to the industry on these critical copyright issues,'' Lotus
said in a statement. ``We filed the suit because we believed our
position was consistent with federal copyright law and prior case
law.''
While Borland also would have preferred a definitive decision by the
high court, the company's lawyer, Gary Reback, said the outcome still
represented a major victory.
``A decision giving a bright line nationwide would have been
preferable, but considering the other alternative, we're very
grateful,'' Reback said. ``We would have had a vastly different
software industry if the Supreme Court had gone the other way... The
broadest implications are that the four guys who stuck with us
prevented Lotus from wrecking the software industry.''
Reback said the issues are important enough that they almost certainly
will resurface at the Supreme Court in another case.
``I expect the question to be revisited,'' he said.
Borland spokesman Steve Grady said the company was ``extremely
pleased'' to end the long court fight. ``This is really a victory not
only for Borland but for computer users and software developers
worldwide.''
The nine-member court reached a 4-4 tie because Justice John Paul
Stevens didn't participate in consideration of the dispute. The high
court did not release information about which justices were on either
side of the vote. Lawyers who have argued at the high court said
Stevens has stepped aside in some earlier disputes involving IBM,
raising the possibility that he might have investments that could be
affected by cases involving the computer giant. Stevens, stranded in
Florida by the blizzard that buried the Washington area last week,
missed last week's oral arguments in the case.
During the Jan. 8 arguments, the justices seemed to struggle in search
of a legal rule to define the differences between software that
performs a particular function -- and is eligible for copyright
protection -- and commands that tell the computer to perform those
functions. The Boston-based appeals court had held those commands were
functional tools, not creative works that qualify for a copyright.
In the dispute, Lotus and its allies said some of the most creative
and competitive work in the software business today involves efforts
to create so-called ``user interfaces'' that are easy to use and
understand. Unless their creators can rely on copyright laws to keep
competitors from pirating user-friendly command systems, Lotus said,
companies will be reluctant to spend millions on development of new
programs.
Borland and its supporters, including most of the country's software
developers, countered that granting a copyright for software commands
would be like giving one company exclusive rights to the QWERTY
arrangement on a typewriter keyboard.
Borland said Lotus's appeal was a bid to concentrate market power
among a few dominant companies. Granting copyright protection for
software commands, Borland said, would force computer users to learn
new commands for each program they buy and make it almost impossible
to create software programs that work together.
The dispute began in June 1990, when Lotus went to court, complaining
that Borland's Quattro and Quattro Pro spreadsheet programs illegally
copied the arrangement of menus that Lotus had developed for user
commands in its ``1-2-3'' accounting program.
Borland's product included a so-called ``1-2-3 emulation'' mode that
let buyers use the program by giving the same commands they use in
Lotus's software, letting customers switch without the need to learn a
new system.
The case's concrete stakes for spreadsheet competition between the two
firms had dwindled during more than five years of courtroom wrangling:
Microsoft Corp.'s Excel software has surpassed Lotus's 1-2-3 as the
market leader, and Borland has sold the Quattro Pro program that was
the target of the complaint.
The case marked the Supreme Court's first review of copyright
protection for computer software.
The case is Lotus Development Corp. v. Borland International Inc.,
94-2003.