Amicus Curiae Brief — Fogerty v. Fantasy, Inc.

Supreme Court brief1994

Ask Donna

What actually matters in this document.

Text

aAppeaet a

Peres SACRE

ee ee ee ee

J + #. BS i ar

Ear + + ren i? we ey» ae

» a | ‘%

“fon wad tricks ~ & rT. =

a ore 7 .

Table of Contents

Table of Authorities .....................

Interest of Apple Computer, Inc. as Amicus Curiae . .

Summary of Argument....................

RE ee ee a

II.

THE NINTH CIRCUIT RULE IS WELL

ESTABLISHED WITH A LONG HISTORY AND

SHOULD BE PRESUMED TO HAVE

RECEIVED CONGRESSIONAL APPROVAL BY

ENACTMENT OF THE COPYRIGHT ACT OF

1976; IT ALSO SHOULD BE APPROVED AS

CONSISTENT WITH THE RULE ADOPTED BY

THIS COURT AND OTHER FEDERAL

COURTS IN INTERPRETING ESSENTIALLY

IDENTICAL STATUTORY PROVISIONS IN

OTHER FEDERAL LAWS .............

THE NEED OF THE NINTH CIRCUIT RULE IS

ESPECIALLY ACUTE IN SUITS TO ENFORCE

COPYRIGHTS PROTECTING COMPUTER

EE. Ns 66 ob ce sc eS oie saws

PETITIONER’S ARGUMENTS DO NOT

REFUTE OR IMPAIR THE REASONING

SUPPORTING THE NINTH CIRCUIT RULE .

Conclusion .......................

Table of Authorities

Cases: Page(s)

Aliotti v. R. Dakin & Co., 831 F.2d 898 (9th Cir.

MP 25

Alyeska Pipeline Serv. Co. v. Wilderness Soc Y,

421 U.S. 200 (1979)... oc ccc u eee 24

Apple Computer, Inc. v. Franklin Computer Corp..,

714 F.2d 1240 (3d Cir. 1983), cert. dismissed,

464 U.S. 1033 (1984) ................... 16, 28

Apple Computer, Inc. v. Mackintosh Computers

Lid., 28 D.L.R.4th 178 (Can. Fed. Ct. 1986) ...... 26

Apple Computer, Inc. v. Microsoft Corp..,

709 F. Supp. 925 (N.D. Cal. 1989)........... 2, 14

717 F. Supp. 1428 (N.D. Cal. 1989) ............ 2

759 F. Supp. 1444 (N.D. Cal. 1991) .......... 2, 14

779 F. Supp. 133 (N.D. Cal. 1991)........... 2, i$

799 F. Supp. 1006 (N.D. Cal. 1992) .......... 2, 15

Applied Innovations, Inc. v. Regents of the University

of Minnesota, 876 F.2d 626 (8th Cir. RAE 22

Breffort v. I Had a Ball Co., 271 F. Supp. 623

(S.D.N.Y. 1967)... 2.00 ne 20

Broderbund Software, Inc. v. Unison World, Inc..

648 F. Supp. 1127 (N.D. Cal. 1986) ............ 12

Bull HN Info. Sys., Inc. v. American Express

Bank Ltd., [1989-1990] Copyright L. Dec.

(CCH) { 26,555 (S.D.N.Y. 1990).............. 12

ill

Christiansburg Garment Co. v. EEOC.

EE passim

Cloth v. Hyman, 146 F. Supp. 185 (S.D.N.Y. 1956) .._ 10

Computer Assocs. Int'l v. Altai, Inc., 982 F.2d

ccc cece 14

Dae Han Video Prod. v. Dong San, Chun, 17

U.S.P.Q.2d (BNA) 1306 (E.D. Va. 1990)... ae

Dean v. Burrows, 732 F. Supp. 816 (E.D. Tenn.

EES Tor

Diamond v. Am-Law Publishing Corp., 745 F.2d

rk kt eke nee ll

Digital Communications Assocs. v. Softklone Distrib.

Corp., 659 F. Supp. 449 (N.D. Ga. 1987) _....... 12

Dolori Fabrics, Inc. v. The Limited. Inc.. 662

F. Supp. 1347 (S.D.N.Y. 1987) ............._._. 23

Donald Frederick Evans & Assocs. v. Continental

Homes, Inc., 785 F.2d 897 (11th Cir. a 7, 21

Educational Testing Serv. v. Miller, [1991-1992]

Fantasy, Inc. v. Fogerty, 984 F.2d 1524 (9th Cir.).

cert. granted, 113 S. Ct. 2992(1993) ........... 11

Flag Fables, Inc. v. Jean Ann's Country Flags &

Crafts, Inc., 753 F. Supp. 1007 (D. Mass. 1990) 7. 11. 21

Page(s)

Folio Impressions, Inc. v. Byer California,

Sor wae vom GO Cis. BORED . ww. ww cece 7, 11

Hartman v. Hallmark Cards, Inc. , 833 F.2d 117

Ce 6 4 or oot eee Oa 7, 21

Hensley v. Eckerhart, 461 U.S. 424 (1983) .......... 9

Herman & MacLean v. Huddleston, 459 U.S. 375

Chae ek eb bce eae ee Te ee 10

Homeward Bound, Inc. v. Hissom Memorial Ctr..

963 F.2d 1352 (10th Cir. 1992) ................ 8

Hughes v. Rowe, 449 U.S.5 (1980) .............. 8

In re Gelnovatch, 595 F.2d 32 (C.C.P.A. 1979)... .. 28

Independent Fed'n of Flight Attendants v. Zipes,

oo eee 9, 18, 19

Jobete Music Co. v. Massey, 788 F. Supp. 262

ND ae eter at 23

Johnson Controls, Inc. v. Phoenix Control Sys...

886 F.2d 1173 (9th Cir. 1989)... .......... 12, 25

Keene Corp. v. United States, 113 S. Ct.

BR Raper el at a a eS 10

Kepner-Tregoe, Inc. v. Carabio, 203 U.S.P.Q.

(BNA) 124 (E.D. Mich. 1979) ................ 23

Lieb v. Topstone Indus., Inc., 788 F.2d 151 (3d

SIE tate ig ed are Re en 22

Page(s)

Lindahl v. Office of Personnel Mgmt., 470 U.S.

EE li OE re ade Badd ooo 1]

Lotus Dev. Corp. v. Borland Int'l, Inc., 788 F.

Supp. 78 (D. Mass. 1992)................... 26

Manufacturers Technologies, Inc. v. Cams, Inc.,

706 F. Supp. 984 (D. Conn. 1989) ......... 12

Mazer v. Stein, 347 U.S. 201 (1954) ............. 25

McCulloch v. Albert E. Price, Inc., 823 F.2d

ee EE en lo bho oe ke me xc < 0 SE

Midway Mfg. Co. v. Artic Int’l, Inc., 704 F.2d

1009 (7th Cir.), cert. denied, 464 U.S. 823

die aa oe be ele A aS OR eo x « ce s 28

Motta v. Samuel Weiser, Inc., 633 F. Supp. 32

SN So's nid ale Salta sera ad be ok ea, 22

Nemeroff v. Abelson, 620 F.2d 339 (2d Cir.

SE irk arcs. oa Ve tek wie 4.0 We ea be. 6 eS. cas 9

Newman v. Piggie Park Enters., 390 U.S. 400

SE ib ho 664 046 ob vob eh ewe eheclans 19

Northcross v. Board of Educ., 412 U.S. 427

RE a ee, ee 4

Pearl Sys., Inc. v. Competition Elecs., Inc..

8 U.S.P.Q.2d (BNA) 1520 (S.D. Fla. 1988) 12

Pennsylvania v. Delaware Valley Citizens’ Council

for Clean Air, 483 U.S. 711 (1987)... . . 8

Page(s)

Pierce v. Underwood, 487 U.S. 552 (1988) ......... 10

Reader's Digest Ass'n v. Conservative Digest,

Inc., 821 F.2d 800 (D.C. Cir. 1987) .......... 7, 21

Rosciszewski v. Arete Assocs., Nos. 92-2122.

92-2390, 1993 WL 283213 (4th Cir. July 29, 1993)... 21

Roth v. Pritikin, 787 F.2d 54 (2d Cir. 1986) ...... 7,11

Roulo v. Russ Berrie & Co., 886 F.2d 931 (7th Cir.

1989), cert. denied, 493 U.S. 1075 (1990) .....__.. 22

Ruckelshaus v. Sierra Club, 463 U.S. 680 (1983) _ 8

Rural Tel. Serv. Co. v. Feist Publications

inc., 24 U.S.P.Q.2d (BNA) 1312 (D. Kan. 1992) .. 11. 21

SAS Inst., Inc. v. S&H Computer Sys., 605 F.

Supp. 816 (M.D. Tenn. 1985) ........... 12

Sassower v. Field, 973 F.2d 75 (2d Cir. 1992).

cert. denied, 113 S. Ct. 1879 (1993) .......... 9

Sega Enters. Lid. v. Accolade, Inc., 977 F.2d

SI ED «oo ss o's os occ beac. 14

Sherry Mfg. Co. v. Towel King, 822 F.2d 1031

NI oe ele ed ok 21

United States v. Hamilton, 583 F.2d 448 (9th

PP “elsews acetyl ou ed. se... us c. 26

United States v. Ryan, 284 U.S. 167 (1931) 10

Vil

Page(s)

Video Views, Inc. v. Studio 21, Lid., 925 F.2d 1010

(7th Cir.), cert. denied, 112 S. Ct. 181 (1991) .... 7.19

Warner Bros. v. Dae Rim Trading, Inc., 877 F.2d

a a 22

Whelan Assocs. v. Jaslow Dental Lab., Inc.,

609 F. Supp. 1325 (E.D. Pa. 1985), aff'd, 797

F.2d 1222 (3d Cir. 1986), cert. denied, 479

DT Sa 2 cate es Oe ole ee 10, 12, 23

Statutes :

1 Stat. 124 (Act of May 31,1790) .............. 26

15 U.S.C. § 78i(e) (Securities Exchange Act of 1934) _.. 9

15 U.S.C. § 2618 (Toxic Substances Control Act) ..... s

16 U.S.C. § 1540 (Endangered Species Act of 1973) ... 8

17 U.S.C. § 101 (Copyright Act of 1976) .......... 13

17 U.S.C. § 116 (Copyright Act of 1909) ......._... 10

17 U.S.C. § 502 (Copyright Act of 1976) .......... 20

17 U.S.C. § 503 (Copyright Act of 1976) .......... 20

17 U.S.C. § 504 (Copyright Act of 1976) .......... 20

17 U.S.C. § 505 (Copyright Act of 1976) ....._.. 2.4, 7

29 U.S.C. § 794a(b) (Rehabilitation Act of 1973) __._. . 9

Vili

Page(s)

30 U.S.C. § 1270 (Surface Mining Control and

Reclamation Act of 1977) .................... sy

30 U.S.C. § 1427 (Deep Seabed Hard Mineral

I 6d ok 85 Wik Dak in oes oe eu een bs

33 U.S.C. § 1365 (Clean Water Act).............. x

33 U.S.C. § 1415 (Marine Protection, Research.

and Sanctuaries Act of 1972) .................. x

33 U.S.C. § 1515 (Deepwater Port Act)............ 8

42 U.S.C. § 300j-8 (Safe Drinking Water Act)........ ®

42 U.S.C. § 1988 (Civil Rights Act of 1964) ......... x

42 U.S.C. § 2000(e)-5(k) (Civil Rights Act of 1964) . 8, 1]

42 U.S.C. § 3613(c)(2) (Fair Housing Act) .......... 9

42 U.S.C. § 4911 (Noise Control Act)..........._.. x

42 U.S.C. § 6305 (Energy Policy and

RR Oe ees x

42 U.S.C. § 7604(d) (Clean Air Act Amendments

ere a ate eR ta.

42 U.S.C. § 7607(f) (Clean Air Act Amendments

ae 4, eee baa S81 ee ee ee &

42 U.S.C. § 8435 (Powerplant and Industrial

ES Gs, ara oo es . 8

42 U.S.C. § 9124 (Ocean Thermal Energy

I GD IIs x 6c oc oo hc ob ccceweeck «

43 U.S.C. § 1349 (Outer Continental Shelf

Lands Act Amendment of 1978) ................ ~

Legislative Authorities:

Ralph S. Brown, Jr. et al., The Operation of

the Damage Provisions of the Copyright Law:

An Exploratory Study, Study No. 23, Subcomm.

on Patents, Trademarks, and Copyrights of the

Senate Comm. on the Judiciary, 86th Cong..,

2d Sess. 59 (Comm. Print 1960)............. 9, 10

H.R. Rep. No. 1476, 94th Cong., 2d Sess. 51,

54, reprinted in 1976 U.S.C.C.A.N. 5659 ........ 13

National Commission on New Technological Uses of

Copyrighted Works, Final Report (July 31, 1978) .. 13, 14

Report of the Register of Copyrights on the

General Revision of the U.S. Copyright Law,

87th Cong., Ist Sess. 109 (H. Judiciary

ee 9, 10

William S. Strauss, The Damage Provisions of

the Copyright Law, Study No. 22, 86th Cong.,

2d Sess. 1 (Comm. Print 1960) ................ 9

Page(s)

Other Authorities:

1 Richard L. Bernacchi et al., Bernacchi on

Computer Law § 3.11.4 (1992)................ 12

Frederick P. Brooks, Jr., The Mythical Man-Month

DAS Ae Te Rae eae eee ese ce 26

Anthony L. Clapes et al., Silicon Epics and

Binary Bards: Determining the Proper Scope of

34 UCLA L. Rev. 1493 (1987) ............... 12

Anthony L. Clapes, Software, Copyright, and

I ets ce ees ere 2 a) 12

Anthony L. Clapes, Softwars--The Legal Battles for

Control of the Global Software Industry (1993) ...... 13

Alan Deutschman, Bill Gates’ Next Challenge,

WOME, Ws GI, TE neice ccc ce en ccuee 13

William H. Gates, Insurance for the Industry's

Future, N.Y. Times, Sept. 25,1983 ............ 17

William H. Gates, Letter to the Editor,

InfoWorld, Aug. 16, 1993 .................. 16

Morton D. Goldberg & John F. Burleigh, Copyright

Protection for Computer Programs: Is the Sky

Falling?, 17 AIPLA Q.J. 294 (1989) ............ 13

Patricia Keefe, Survey of Software Firms Taps

Industry's Hot Buttons, ComputerWorld, Nov.

OY es) o bn see ew bee ea ee eee 18

Page(s)

William F. Patry, Latman’s The Copyright Law

CE ee re ee 25

PC Software Market Booming, Standard & Poor's

Industry Surv.: Computers Basic Analysis,

ee Eb pp ee es we aes se bk ees 18

Thomas D. Rowe, Jr., The Legal Theory of

Attorney Fee Shifting: A Critical Overview,

ee 19, 20, 24

F.M. Scherer, /nnovation and Growth:

Schumpeterian Perspectives (1984) ............. 18

Michael D. Scott, Computer Law § 3.78 (1989) ...... 12

Ben Shneiderman, Software Psychology (1980) ....... 26

V. Siber, Remarks to the Annenberg Foundation,

ag ee ee Pk wae ea ae ae 0 16

1 The Supreme Court Practice R. 3(3) (Eng. 1992) .... 24

U.S. Department of Commerce, 1987 Census of

Service Industries, Table 3a, at US-19 (Nov. 1989) ... 16

WIPO Guide to the Berne Convention 2-1 (1978) ..... 26

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1993

No. 92-1750

JOHN C. FOGERTY,

Petitioner,

Vv.

FANTASY, INC.,

Respondent.

On Writ of Certiorari to the United States

Court of Appeals for the Ninth Circuit

BRIEF AMICUS CURIAE OF APPLE COMPUTER, INC.

IN SUPPORT OF RESPONDENT

This amicus curiae brief is submitted in support of

Respondent. Written consent to file this amicus brief was

obtained from both parties and placed on file with the Clerk.

INTEREST OF APPLE COMPUTER, INC.

. AS AMICUS CURIAE

Apple Computer, Inc. is the plaintiff in an action for

infringement of the Apple copyrighted audiovisual works that

constitute the graphical user interface of Apple’s Macintosh

computers, Apple Computer, Inc. v. Microsoft Corp. & Hewlett-

Packard Co., No. C 88 20149 VRW (N.D. Cal. filed Mar. 17.

1988). After a series of rulings on court-invited motions,' the

parties, “recogniz[ing] that, in light of the prior rulings . . . it

would be in the best interest of judicial economy and efficiency

to obtain an early review of those rulings on appeal rather than

proceeding to trial," stipulated to the entry of a final summary

judgment in favor of defendants so that Apple "may notice and

prosecute an appeal therefrom." [May 23, 1993 Stipulation

11 1, 2.)

Defendants subsequently moved for an award of attorneys’

fees and costs under 17 U.S.C. § 505. The motions were denied

by the district court on the basis of the governing authorities,

including the ruling of the court of appeals under review here.

In so-ruling, the court commented that:

The Court recalls very well the action was initiated

in a context of copyright law concerning computers that

was dramatically different from that which exists now,

five years later.

When the action was begun the [Whelan] case, the

Broberbund case, various others, Suggested a very

, The reported decisions on the various motions filed in the case are at

709 F. Supp. 925 (N.D. Cal. 1989); 717 F. Supp. 1428 (N.D. Cal. 1989):

759 F. Supp. 1444 (N.D. Cal. 1991); 779 F. Supp. 133 (N.D. Cal. 1991); 799

F. Supp. 1006 (N.D. Cal. 1992).

broad-ranging and muscular interpretation of copyright

protection as it applies to certain computer software.

As time has gone on and other cases have come

forward, the legal environment has changed. . . . [T Jhe

current environment is a different one from that which

existed five years ago when the action was initiated.

. . . am convinced without any question that, in the

context of the highly uncertain environment in which

computers were regarded in the law with regard to

most certainly not in bad faith. It was a considered and

thoughtful effort on the part of Apple to protect its

copyrights and protect very valuable intellectual

property, and that’s a very, very long way in my view

from anything that approaches bad faith.

Nor do I consider that the case was at any time

prosecuted in bad faith.

July 30, 1993 Tr. of Proceedings 34-36. However, the court

made it clear that:

In the event that the Supreme Court’s decision in

Fogerty results in a modification of the Ninth Circuit’s

rule and attorney fees are recoverable without a showing

of bad faith, the Court will entertain at an appropriate

time any motion that the parties may wish to bring to

recover fees.

July 30, 1993 Tr. of Proceedings 37. Accordingly, Apple has

an acute interest in the outcome of the appeal in this case.

4 o

Furthermore, Apple is a leading innovator in the fields of

computer programming, computer graphics and animation and,

more recently, media integraticn-{the creation of multimedia

products combining sound, video and animation artistries). The

legal protection of its creative works against misappropriation by

copiers is essential to the maintenance of its business. Apple

therefore has an abiding interest in pursuing, on an objectively

reasonable basis, infringement claims against the copiers who

seek to trade on the creative efforts of its employees, undeterred

by the risk of payment of a defendant’s attorneys’ fees if the case

is lost. It has a need to know with reasonable predictability that,

so long as it acts reasonably, it can enforce its copyrights

without the risk of bearing the extraordinary cost of both its own

and the defendant’s attorneys’ fees.

Summary of Argument

The Ninth Circuit rule that directs the exercise of discretion

under 17 U.S.C. § 505 to require denial of an attorneys’ fee

award against a losing plaintiff unless it appears that the action

was frivolous or brought in bad faith (hereinafter referred to as

“the Ninth Circuit rule") has a long history, with presumed

congressional approval by enactment of the 1976 Copyright Act.

That is the rule adopted by this Court and other federal courts in

interpreting substantially identical statutory provisions relating to

the enforcement of other federal laws. The rationale supporting

that rule--essentially to avoid deterring a copyright holder from

pursuing a justifiable infringement claim and thus to encourage

the creation of original copyrightable works--is sound.

The wisdom of the rule is especially evident with respect to

Suits to enforce copyrights protecting computer software. The

copying of computer code is easily disguised, making the

copying hard to discover and substantial similarity difficult to

demonstrate. Moreover, notwithstanding the congressional

directive that computer programs be protected as "literary

works" under the Copyright Act, resistance to that directive has

recently led to major revisions by some courts of the traditional

judicial approaches to adjudicating copyright infringement issues.

As illustrated in the Apple case, diminished protection has been

decreed even for such highly creative works as the audiovisual

works constituting computer graphical user interfaces. To add

to what the Apple trial judge described as that "highly uncertain

environment” the risk of a double expense for attorneys’ fees if

the case is lost cannot but deter the bringing of meritorious

claims and, eventually, adversely affect investment in innovative

creative works and the companies that produce them.

The creation of computer software is a highly individualized

endeavor. The software industry is composed in the main of

thousands of individuals and start-up companies employing only

a few individuals and possessing extremely limited resources.

The protection of their creative works obviously is essential to

their existence. There can be little doubt that the added risk of

being saddled with the payment of a defendant’s attorneys’ fees

in addition to its own attorneys’ fees would deter the bringing of

many meritorious suits by such entrepreneurs and would result

in a retrenchment in the number of software start-up enterprises.

None of the arguments presented on behalf of petitioner

Fogerty refutes the logic of that reasoning.

Categorizing the cases applying the Ninth Circuit rule as

employing a “dual” or “double” standard does not impair that

logic. This_case does not require consideration of the

appropriate circumstances for the denial of an attorneys’ fee

award against a losing defendant, but, if it did, the different

considerations disfavoring a copyright violator obviously provide

warrant for a freer award of attorneys’ fees to a winning

plaintiff.

In any event, contrary to the argument urged on behalf of

Fogerty, there does not appear to be any meaningful basis in

American copyright history or precedent for the radical adoption

of the British rule, awarding counsel fees as a matter of course

to the prevailing party.

The cases that have not adopted the Ninth Circuit rule have

nevertheless taken into account, in the case of a prevailing

defendant, whether the action was a reasonable assertion of a

colorable claim (together with other circumstances bearing on the

relative positions of the parties). Moreover, those cases (and

cases applying the Ninth Circuit approach as well) have not

automatically awarded fees to a prevailing plaintiff and instead

have denied awards against losing defendants who were innocent

infringers or otherwise not blameworthy.

Nor does the Hewlett-Packard claim that a prevailing

defendant "deserve[s]" an award because its opposition "serves

the public interest" bear scrutiny. First, the rewards of winning

an infringement case to a defendant who has emulated a

commercially successful innovative work created by others are

likely to be so great that defendants need no additional incentive

in those cases to litigate to the nth degree. Second, the record

shows that defendants so motivated have the means to utilize the

litigation process to their economic advantage whether they

eventually win or lose. Third, there are a great variety of ways

in which a defendant may prevail that render not the slightest

service to the public interest. Indeed, it is not unheard of that a

defendant may prevail in the district court by rulings that require

reversal on appeal. As appears below, all of the foregoing is

illustrated in the Apple case.

Additionally, the Ninth Circuit rule preserves the incentive

of an attorneys’ fees penalty against a plaintiff who has brought

an unfounded suit or proceeded in bad faith. The early

settlement of well founded suits should not be viewed as

necessarily opposed to the “public interest.”

Argument

I. THE NINTH CIRCUIT RULE IS WELL

ESTABLISHED WITH A LONG HISTORY AND SHOULD

BE PRESUMED TO HAVE RECEIVED CONGRESSIONAL

APPROVAL BY ENACTMENT OF THE COPYRIGHT ACT

OF 1976; IT ALSO SHOULD BE APPROVED AS

CONSISTENT WITH THE RULE ADOPTED BY THIS

COURT AND OTHER FEDERAL COURTS IN

INTERPRETING ESSENTIALLY IDENTICAL

STATUTORY PROVISIONS IN OTHER FEDERAL LAWS.

The Ninth Circuit rule has long been the settled rule

governing the award of attorneys’ fees under 17 U.S.C. § 505

against a losing plaintiff in the Second and Seventh Circuits as

well as in the Ninth Circuit and, in fact, is the rule adopted in

the majority of courts that have ruled on the question.’ It also

is the rule adopted by this Court and other federal courts in

interpreting essentially identical statutory provisions relating to

> E.g., Folio Impressions, Inc. v. Byer California, 937 F.2d 759, 767

(2d Cir. 1991); Video Views, inc. v. Studio 21, Lid., 925 F.2d 1010, 1022 (7th

Cir.), cert. denied, 112 S. Ct. 181 (1991); Roth v. Pritikin, 787 F.2d $4. $7

(2d Cir. 1986).

> See, e.g., Reader's Digest Ass'n v. Conservative Digest, Inc., 821

F.2d 800, 809 (D.C. Cir. 1987); Flag Fables, Inc. v. Jean Ann’s Country

Flags & Crafts, Inc., 753 F. Supp. 1007, 1017 (D. Mass. 1990): of. Hartman

v. Hallmark Cards, Inc., 833 F.2d 117, 122-23 (8th Cir. 1987): Donald

Frederick Evans & Assocs. v. Continental Homes, Inc., 785 F.2d 897. 916-17

(11th Cir. 1986).

the enforcement of other federal laws.‘ It thus is entitled to

. Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 422 (1978) ("a

plaintiff should not be assessed his opponent's attorney's fees unless a court

finds that his claim was frivolous, unreasonable, or groundless, or that the

plaintiff continued to litigate after it clearly became so”) (applying § 706(k) of

Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000(e)-5S(k) (“the

court, im its discretion, may allow the prevailing party ... a reasonable

attorney's fee as part of the costs”)); Hughes v. Rowe, 449 U.S. 5, 14 (1980)

(“[t)he plaintiff's action must be meritless in the sense that it is groundless or

without foundation. The fact that a plaintiff may ultimately lose his case is not

in itself a sufficient justification for the assessment of fees”) (applying the Civil

Rights Act of 1964, 42 U.S.C. § 1988 (“the court, in its discretion, may allow

the prevailing party . . . a reasonable attorney's fee as part of the costs”)):

Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air, 483 US.

711, 713 n.1 (1987) ("in awarding attorney's fees . . . the courts should follow

the principles and case law governing the award of such fees under 42 U.S.C.

§ 1988") (applying the Clean Air Act Amendments of 1970, 42 U.S.C.

§ 7604(¢) (“The Court, in issuing any final order in any action brought

pursuant to subsection (a) of this section, may award costs of litigation

(including reasonable attorney and expert witness fees) to any party, whenever

the court determines such award is appropriate”)); Ruckelshaus v. Sierra Club,

463 U.S. 680, 682 n.1 (1983) ("the interpretation of ‘appropriate’ in {the

Clean Air Act Amendments of 1970 fee provision] controls the construction of”

seventeen federal environmental laws) (applying the Clean Air Act

Amendments of 1970, 42 U.S.C. § 7607(f) (“the court . . . may award costs

of Itigation (including reasonable attorney and expert witnesses fees) whenever

it determines that such an award is appropriate”) and a series of similarly

worded environmental laws (Toxic Substances Control Act, 15 U.S.C. § 2618:

Endangered Species Act of 1973, 16 U.S.C. § 1540; Surface Mining Control

and Reclamation Act of 1977, 30 U.S.C. § 1270; Deep Seabed Hard Mineral

Resources Act, 30 U.S.C. § 1427; Clean Water Act, 33 U.S.C. § 1365:

Marine Protection, Research, and Sanctuaries Act of 1972, 33 U.S.C. § 1415:

Deepwater Port Act, 33 U.S.C. § 1515; Safe Drinking Water Act, 42 U.S.C.

§ 300)j-8; Noise Control Act, 42 U.S.C. § 4911; Emergy Policy and

Conservation Act, 42 U.S.C. § 6305; Powerplant and Industrial Fuel Use Aci.

42 U.S.C. § 8435; Ocean Thermal Energy Conversion Act of 1980, 42 U.S.C.

§ 9124; Outer Continental Shelf Lands Act Amendment of 1978, 43 U.S.C.

§ 1349)); Homeward Bound, Inc. v. Hissom Memorial Ctr.. 63 F.2d 1352.

1354 n.1 (10th Cir. 1992) (“[t}he language of [§ 794a(b)} i identical to the

Civil Rights Attorney's Fees Awards Act of 1976, 42 U.S.C. § 1988.

Accordingly, the standards for awarding fees under § 1988 are applicable to

respect not only as the majority view but also under the principle

that use of similar language to that used in other fee-shifting

Statutes should be taken as “‘a strong indication’” that the

Statutes "‘are to be interpreted alike.’”®

Moreover, it deserves special note that the statutory

provision providing for fee-shifting was among the provisions of

the Copyright Act of 1909 that were the focus of specific

attention in the studies leading to enactment of the present

that was revised (making costs discretionary instead of

fee awards under § 794a(b)") (applying the Rehabilitation Act of 1973, 29

U.S.C. § 794a(b) (“In any action or proceeding . . . the court, in its discretion.

may allow the prevailing party . . . a reasonable attorney's fee as part of the

costs")); Sassower v. Field, 973 F.2d 75, 79 (2d Cir. 1992) (section 3613(c)(2)

“permits an award of fees to prevailing defendants only upon a showing that

the suit is ‘frivolous, unreasonable, or without foundation’”) (applying the Fair

Housing Act, 42 U.S.C. § 3613(c)(2) (“the court . . . , in its discretion, may

allow the prevailing party, other than the United States, a reasonable attorney's

fee and costs")), cert. denied, 113 S. Ct. 1879 (1993); Nemeroff v. Abelson,

620 F.2d 339, 350 (2d Cir. 1980) (“the minimum standard for an award of fees

... IS that set forth in Christiansburg Garment") (applying the Securities

Exchange Act of 1934, 15 U.S.C. § 78i(e) (“the court may, in its discretion,

- - . assess reasonable costs, including reasonable attorney's fees, against either

party litigant”).

* Independent Fed'n of Flight Anendants v. Zipes, 491 U.S. 754, 758

n.2 (1989); accord, e.g., Hensley v. Eckerhart, 461 U.S. 424, 433 n.7 (1983):

Northcross v. Board of Educ., 412 U.S. 427, 428 (1973).

* — See Report of the Register of Copyrights on the General Revision of

the U.S. Copyright Law, 87th Cong., ist Sess. 109 (H. Judiciary Comm. Print

1961) (“the Register’s Report"); Ralph S. Brown, Jr. et al., The Operation of

the Damage Provisions of the Copyright Law: An Exploratory Study, Study

No. 23, Subcomm. on Patents, Trademarks, and Copyrights of the Senate

Comm. on the Judiciary, 86th Cong., 2d Sess. 59 (Comm. Print 1960) ("the

Brown Report”); William S. Strauss, The Damage Provisions of the Copyright

Law, Study No. 22, 86th Cong., 2d Sess. | (Comm. Print 1960).

mandatory, conforming to the discretionary award of attorneys’

fees).’ At that time, it was well established that a winning

defendant usually was not awarded fees unless the action was

“synthetic, capricious or otherwise unreasonable,"* and that was

the rule cited in congressional reports.’ In the circumstances,

it is reasonable to presume, as a matter of statutory construction

and under the principle of stare decisis, that Congress approved

of the Ninth Circuit rule as it was explained to Congress. "°

” See Whelan Assocs. v. Jaslow Dental Lab., Inc., 609 F. Supp. 1325,

1329 (E.D. Pa. 1985), aff'd, 797 F.2d 1222 (3d Cir. 1986), cert. denied, 479

U.S. 1031 (1987), explaining that the Copyright Act of 1976 changed the

award of “full costs” to be discretionary rather than mandatory, as it had been

im the 1909 Act, 17 U.S.C. § 116.

. See, ¢.g., Cloth v. Hyman, 146 F. Supp. 185, 193 (S.D.N.Y. 1956),

reciting the prior “extensive judicial exposition” of the statute.

* The Brown Report specifically noted [at 85] that “courts do not

usually make an allowance [for fees] at all if an unsuccessful plainuff's claim

was not ‘synthetic, capricious or otherwise unreasonable,’ or if the losing

defendant raised real issues of fact or law” (quoting Cloth v. Hyman, 146 F.

Supp. 185, 193 (S.D.N.Y. 1956)). The Register’s Report [at 109] explained:

The discretionary power of the courts to require the losing party to

Pay ‘a reasonable attorney's fee’ is intended to discourage unfounded

Suits and frivolous defenses. The courts have generally denied

awards of attorney's fees where the losing party had solid grounds

for litigating his claim or defense. This discretionary power of the

courts is generally regarded as salutary, and we concur in this view.

(applying “the presumption that Congress was aware of these earlier judicial

interpretations and, in effect, adopted them"); Pierce v. Underwood, 487 US.

552, 567 (1988) (when “Congress reenacted a statute that had in fact been

given a consistent judicial interpretation . . . [sJuch a reenactment, of course.

generally includes the settled judicial interpretation"); Herman & MacLean v.

Huddleston, 459 U.S. 375, 384-86 (1983) (where Congress “enact{s] the ‘most

substantial and significant revision of this country’s Federal securities laws,’”

its decision to leave some provisions intact was clear evidence of an intent to

adopt the construction given those provisions by the courts); United States v.

Il. THE NEED OF THE NINTH CIRCUIT RULE IS

ESPECIALLY ACUTE IN SUITS TO ENFORCE

COPYRIGHTS PROTECTING COMPUTER SOFTWARE.

The rationale of the Ninth Circuit rule, as explained by the

court of appeals below, is “to avoid chilling a copyright holder’s

incentive to sue on colorable claims, and thereby to give full

effect to the broad protection for copyrights intended by the

(9th Cir.), cert. granted, 113 S. Ct. 2992 (1993).'"' The

soundness of the rule is especially evident in suits to enforce

copyrights protecting computer software.

The copying of a computer program is relatively easy to

disguise. Thus, it is often difficult to ascertain, and even more

difficult to prove, the extent to which a program has been

Ryan, 284 U.S. 167, 174-75 (1931) (tax law reenacted without substantial

change “must be considered to have adopted the consistent interpretation” given

the prior law); cf. Lindahl v. Office of Personnel Mgmt., 470 U.S. 768, 782

(1985) (“the legislative history . . . demonstrates that Congress was indeed well

aware” of the prior judicia) interpretation).

'' See also Roth v. Pritikin, 787 F.2d 54, 57 (2d Cir. 1986); Diamond

v. Am-Law Publishing Corp., 745 F.2d 142, 148 (2d Cir. 1984): Folio

Impressions, Inc. v. Byer California, 937 F.2d 759, 767 (2d Cir. 1991); Rural

Tel. Serv. Co. v. Feist Publications Inc., 24 U.S.P.Q.2d (BNA) 1312, 1313

(D. Kan. 1992); Flag Fables, Inc. v. Jean Ann's Country Flags & Crafts, Inc..

753 F. Supp. 1007, 1017 (D. Mass. 1990); cf. Christiansburg Garment Co. v.

EEOC, 434 U.S. 412, 422 (1978) (interpreting § 706(k) of Title VII of the

Civil Rights Act of 1964 and explaining that “[t]o take the further step of

assessing attorney's fees against plaintiffs simply because they do not finally

prevail would substantially add to the risks inhering in most litigation and

would undercut the efforts of Congress to promote the vigorous enforcement

of the provisions of Title VII").

copied.'"? It is primarily for that reason that the parties in

interest have debated whether copyright protection should be

limited to the literal copying of computer code or instead extend

to protection of the structure, sequencing and organization of a

program, such as was accorded to the plaintiff's program in

Whelan Assocs. v. Jaslow Dental Lab., Inc., 797 F.2d 1222 (3d

Cir. 1986), cert. denied, 479 U.S. 1031 (1987)."

2 See 1 Richard L. Bernacchi et al., Bernacchi on Computer Law

§ 3.11.4, at 3-78 to -79 (1992) ("A competent programmer can, with a

minimum amount of time and effort, make a copy of a program look, at least

on the surface, completely unlike the original simply by changing such things

as labels and variable names, without making any substantive changes at all to

the logic, design, or structure of the original program. This is clearly the kind

of taking advantage of another's work that the copyright laws are designed to

protect against, and yet the required showing to prove infringement may be

very difficult to make"); see also Anthony L. Clapes et al., Silicon Epics and

Binary Bards: Determining the Proper Scope of Copyright Protection for

Computer Programs, 34 UCLA L. Rev. 1493, 1577-78 (1987); Michael D.

Scott, Computer Law § 3.78, at 3-76 to -77 (1989).

3 Whelan was cited with approval in Bull HN Info. Sys., Inc. v.

American Express Bank Lid., [1989-1990] Copyright L. Dec. (CCH) 4 26,555,

at 23,279 (S.D.N.Y. 1990); Pearl Sys., Inc. v. Competition Elecs., Inc., 8

U.S.P.Q.2d (BNA) 1520, 1524-25 (S.D. Fla. 1988); Digital Communications

Assocs. v. Softklone Distrib. Corp., 659 F. Supp. 449, 454-55 (N.D. Ga.

1987): and Broderbund Software, Inc. v. Unison World, Inc., 648 F. Supp.

1127, 1133 (N.D. Cal. 1986). See also Johnson Controls, Inc. v. Phoenix

Control Sys., 886 F.2d 1173, 1175 (9th Cir. 1989) (approving proof of an

infringement by reference to the nonliteral components of a program, including

its "structure, sequence and organization”); Manufacturers Technologies, Inc.

v. Cams, Inc., 706 F. Supp. 984, 994, 996 (D. Conn. 1989) (sequencing and

flow of plaintiff's screen displays constituted copyrightable expression); SAS

Inst., Inc. v. S&H Computer Sys., 605 F. Supp. 816, 830 (M.D. Tenn. 1985)

(copying of the organization and structure as well as specific lines of code).

In general, see Anthony L. Clapes, Software, Copyright, and Competition,

ch. 10, at 94-109 (1989). ‘

Acting in accordance with the directive by Congress in the

Software Copyright Act of 1980 to treat computer programs as

"literary works,"'* a number of courts have conscientiously

applied traditional copyright principles in computer program

cases.’ However, the emergence of software as a major

component of the computer industry has impressed everyone--not

least the opportunists that saw that the quickest, easiest road to

enormous wealth was to emulate as closely as the law would

allow the most commercially successful innovative works

developed by others'*--and the debate that preceded the 1980

enactment'’ has been renewed with vigor.'* Those who favor

‘* Pub. L. No. 96-517, § 10(a), 94 Stat. 3028 (1980) (codified as

amended at 17 U.S.C. § 101) (including a computer program within the

2d Sess. 51, 54, reprinted in 1976 U.S.C.C.A.N. 5659.

The Act defines a “computer program” as “a set of statements or

_ Instructions to be used directly or indirectly in a computer in order to bring

about a certain result.” 17 U.S.C. § 101. Literary works are defined as

“works, other than audiovisual works, expressed in words, numbers, or other

verbal or numerical symbols or indicia, regardless of the nature of the materia!

objects, such as books, periodicals, manuscripts, phonorecords, film, tapes,

disks, or cards, in which they are embodied.” /d.

'S See Morton D. Goldberg & John F. Burleigh, Copyright Protection

for Computer Programs: is the Sky Falling?, 17 AIPLA Q.J. 294, 296 (1989).

‘© In 1984, the Chairman of Microsoft Corporation, incorporated in

1981, predicted that “the industry's new standard for operating systems would

be Microsoft's Windows . . . aimed at giving PC screens the friendly look of

the Apple Macintosh." Alan Deutschman, Bill Gates’ Next Challenge,

Fortune, Dec. 28, 1992, at 30, 31. The cited article reports Microsoft's

market value at the time--nine years after the introduction of Windows 1.0 (in

1985) and five years after introduction of Windows 2.03 (in 1987)--at $25

billion. Id.

"The congressional action followed the recommendations of the

congressionally established National Commission on New Technological Uses

of Copyrighted Works (CONTU) in a Final Report transmitted to the President

revision of the law have gained some judges as adherents who

have questioned the wisdom of protecting computer programs as

“literary works" and decreed major revisions of the traditional

judicial approaches to adjudicating copyright infringement

issues.'? The effect of the legal chaos may be seen in

microcosm in the different opinions over time by the trial judge

in the Apple case.” Thus, there-has been added to the inherent

on July 31, 1978, after three years of deliberations. A dissent by

Commissioner John Hersey contended that copyright protection for a computer

program was inappropriate (and perhaps unconstitutional) because, in its usable

form, a computer program was “a machine-control element, a mechanical

device,” analogous to a cam controlling a drill. CONTU Report at 27-29. The

majority of the Commission answered that “[p}Jrograms should no more be

considered machine parts than videotapes should be considered parts of

projectors or phonorecords parts of sound reproduction equipment” and “(t}hat

the words of a program are used ultimately in the implementation of a process

should in no way affect their copyrightability.” Jd. at 21.

‘8 See, in general, Anthony L. Clapes, Softwars--The Legal Battles for

Control of the Global Software Industry (1993), describing the conflicts

between the interests of “innovators” and “copiers.”

‘9 See, e.g., Computer Assocs. Int'l v. Altai, Inc., 982 F.2d 693, 712

(2d Cir. 1992); Sega Enters. Lid. v. Accolade, Inc., 977 F.2d 1510, 1527 (9th

Cir. 1992) (affording the video game programs involved in that case "a lower

degree of protection than more traditional literary works").

20 Apple’s complaint alleges that the graphical user interfaces of

Microsoft's Windows 2.03 and 3.0 and Hewlett-Packard’s New Wave products

are unauthorized derivative works of Apple’s copyrighted audiovisual works,

exceeding the scope of a 1985 license to Microsoft relating to Windows

Version 1.0 (of which Hewlett-Packard also claimed the benefit). It was

recognized that Apple’s unique user interface was one of Apple's most valuable

assets and was principally responsible for the phenomenal success of the

Macintosh computer, which became famous throughout the world for its

“distinctive user friendly” interface. 709 F. Supp. at 926; 759 F. Supp. at

1447. In the 1985 license, Microsoft acknowledged that “the visual displays

in [Microsoft Windows 1.0] ‘are derivative works of the visual displays

generated by Apple’s Lisa {«n earlier Apple computer} and Macintosh graphic

user interface programs.’” See 709 F. Supp. at 927.

difficulty of protecting software against willful misappropriation

the risk of what the Apple trial judge described as a "highly

uncertain [legal] environment."

This Court has noted that "the course of litigation is rarely

predictable,” that "seldom can a prospective plaintiff be sure of

ultimate success,” and that "[t]o take the further step of assessing

attorney’s fees against plaintiffs simply because they do not

finally prevail would substantially add to the risks inhering in

most litigation and would undercut the efforts of Congress to

promote the vigorous enforcement of the provisions of Title

VII." Christiansburg Garment, 434 U.S. at 422. The current

turmoil concerning the protection of computer programs (and

even computer audiovisual works) provides an_ instructive

example of that perceptive insight.

There can be little doubt that defendants’ later products were “strikingly

similar” to the Macintosh interface. Hewlett-Packard advertisements quoted

from various industry views emphasizing “the strong resemblance [of Hewlett~

Packard's NewWave] to the Macintosh desktop interface." (Emphasis supplied)

Among many similar observations by others, an early (1987) Microsoft review

of the Hewlett-Packard New Wave graphical user interface (sent to Microsoft's

“upper management executives") found that “the look and feel of the

[NewWave] user interface is strikingly similar [to the Macintosh Finder].”

(Emphasis supplied)

The trial judge originally recognized that defendants’ arguments attacking

Apple's copyrights “would, in effect, preclude copyright protection for all

pictorial works, which, if dissected, would be composed of a limited number

of geometric shapes.” Order of July 25, 1991 at 4. He also originally held

that, “[bjecause there ought to be copyright protection for an innovative

melding of elements from preexisting works, elements which have been deemed

‘unprotectible’ should not be eliminated prior to the. substantial similarity of

expression analysis.” 779 F. Supp. at 135-36. Nevertheless, after “filtering

out" the individual discrete graphic design “elements” of the Macintosh

interface in the manner taught in Computer Associates [799 F. Supp. 1006] and

making other restrictive rulings, he ruled that the only protection available to

Apple's work was limited to at most protection against “virtually identical”

copying.

The importance of that insight in the computer software

industry cannot be overestimated. Of the estimated 50,000

companies in the computer industry in 1991,”' it seems safe to

assume that most of those that still exist, and most of the

companies organized since 1991, are engaged in the production

of software” and that all but a few of today’s software

companies are relatively young start-up companies employing

only a few individuals and otherwise enjoying extremely limited

resources. One recently reported survey shows that the typical

software firm employs six people and generates approximately

$560,000 in annual revenues.” All software companies are

heavily dependent on the protection available for their

copyrighted works. As explained by Microsoft’s Chairman in an

essay written after the rendering of the decision in Apple

Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240 (3d

Cir. 1983) (holding that Apple’s operating system programs

expressed only in object code and embedded in a read only

memory (ROM) semiconductor device were protectable under the

desire to achieve compatibility with application programs written

for Apple’s computer), cert. dismissed, 464 U.S. 1033 (1984):

[The ruling] may have saved the future of the United

States computer software industry... .

2} -Y. Siber, Remarks to the Annenberg Foundation, May 21, 1991, at

2 The 1987 Census of Service Industries showed 39,701 establishments

engaged in “[clomputer programming, data processing, and other computer

related services” of which 21,594 were engaged in “[c]omputer programming,

prepackaged software, and integrated systems design.” U.S. Department of

Commerce. 1987 Census of Service Industries, Table 3a, at US-19 (Nov.

1989).

2 William H. Gates, Letter to the Editor, InfoWorld, Aug. 16, 1993,

at 44.

The software industry is one of the nation’s fastest-

growing and most important leadership industries. The

primary reason that the United States continues to

dominate the computer business is because it has

consistently been at the forefront of software innovation.

In many ways, the future of the computer industry will

be governed by software development.

And without the copyright protection,

ee and growth in the software industry would

Jou is only fair for companies that invest millions

of dollars in product research and development to

receive some return when they have a best-selling

product.

Imagine the disincentive to software development if

after months of work another company could come along

and copy your work and market it under its own

name. ... Without legal restraints on such copying,

companies like Apple could not afford t

state-of-the-art. ene

Smaller companies are especially reliant on court enforcement of

their copyrights.~ The imposition of any substantial added

24 . .

William H. Gates, Insurance for the Industry's Future, N.Y. Times

Sept. 25, 1983, § 3, at 2.

** It appears from The Recorder (the i

tt official newspaper for the United

States District Court for the Northern District of California) that there were 69

— cases filed in the San Francisco office of the Northern District of

rH from January 1992 to August 1993. Putting aside the 10 cases in

which Broadcast Music, Inc. was suing a restaurant or bar for jukebox

risk--and certainly the added risk of being required to pay a

defendant’s attorneys’ fees in addition to its own attorneys’ fees--

that would make such suits more difficult, problematical or

costly no doubt would adversely threaten the viability of those

smaller companies and eventually contract their number and the

investment capital and talent available for participation in the

inherently risky business of creating innovative software.”

Such a result would undercut in the most direct way the

advancement of "‘the large objectives’” of the Copyright Act

[Zipes, 491 U.S. at 758-59] and should not be contemplated

absent a clear and compelling overriding congressional order.”’

III. PETITIONER’S ARGUMENTS DO NOT REFUTE

OR IMPAIR THE REASONING SUPPORTING THE

NINTH CIRCUIT RULE.

Much of the argument presented on behalf of petitioner

consists of a pejorative suggestion that a “dual” or “double”

performance of music protected by copyrights held by members of BMI, all but

16 (roughly 75 percent) appeared to be cases in which the plaintiffs were either

individuals (17 cases) or small corporations with 20 or fewer employees and

less than $2 million in annual sales revenues (26 cases). Of the 8 cases that

could be identified as involving copyrights of computer programs, 6 of the

plaintiffs were either individuals or small corporations with fewer than 20

employees and less than $500,000 in annual sales revenue.

software companies are small; if they don’t worry about being profitable, they

won't be here next year.” Patricia Keefe, Survey of Software Firms Taps

Industry's Hot Buttons, ComputerWorld, Nov. 12, 1990, at 117 (quoting Frank

Ingari, a Vice-President of Lotus Development Corp.).

7 It also is of interest that many believe that “[g]enerally smaller

companies are the most innovative.” PC Software Market Booming, Standard

& Poor's Industry Surv.: Computers Basic Analysis, Dec. 31, 1992, at C-107;

cf. F.M. Scherer, Innovation and Growth: Schumpeterian Perspectives 237

(1984).

—_——

rather than an “evenhanded” standard for treating with prevailing

defendants as compared with prevailing plaintiffs is per force

unjustified. However, analysis of the underlying considerations

and "‘the large objectives’” of the congressional enactment

demonstrates that whatever different treatment may be found in

different cases emanates from the different situations of a willful

objectively reasonable when brought and prosecuted in good

faith. As this Court explained in Zipes, 491 U.S. at 762 (an

innocent intervenor not liable for the attorneys’ fees of an

original party), “[ojur cases have emphasized the crucial

connection between liability for violation of federal law and

liability for attorney’s fees under federal fee-shifting statutes" --

sharply differentiating the situation of a prevailing plaintiff and

a prevailing defendant, citing, inter alia, Christiansburg

Garment, 434 U.S. at 418, Newman v. Piggie Park Enters. , 390

U.S. 400, 402 (1968), and other cases applying the Newman

standard. See also Video Views, Inc. v. Studio 21, Ltd., 925

F.2d 1010, 1022 (7th Cir.), cert. denied, 112 S. Ct. 181 (1991);

cof. Thomas D. Rowe, Jr., The Legal Theory of Attorney Fee

Shifting: A Critical Overview, 1982 Duke L.J. 651 (examining

different rationale for different results in different situations,

suggesting that a plaintiff may be awarded fees to make him

whole while a defendant may be awarded fees only to protect

him from burdensome litigation having no legal or factual

basis).“ Particularly differentiating the cases of a successful

3 As Professor Rowe observes:

[A] superior claim or defense on the merits does not automatically

translate into superior equity on fees.

Id. at 655.

[T]he persuasive reason for making a successful plaintiff whole is

that he suffered a legal wrong appropriately remediable by

compensation. Our system does not regard bringing (or, for that

it may be noted that Congress has provided a variety of remedies

to a successful plaintiff with a view to making the plaintiff whole

and preventing further infringement;* Congress might have,

but did not, provide any direction to suggest that a poovelling

defendant was to be compensated or protected similarly.”

In any event, there is not any reason nor precedential

warrant for adoption of an automatic award rule such as

advocated on behalf of petitioner.

matter, defending) a losing case--without more--as the infliction of a

legal wrong.

Id. at 659. See also Breffort v. | Had a Ball Co., 271 F. Supp. 623, 627

(S.D.N.Y. 1967) (“The purpose of an award of counsel fees to a plaintiff is to

deter copyright infringement. In the case of a prevailing defendant, however,

prevention of ‘infringement is obviously not a factor; and if an award 1s to be

made at all, it reprsents a penalty imposed upon the plainuff for institution of

a baseless, frivolous, or unreasonable suit, or one instituted in bad faith”)

(citation omitted).

% 17U.S.C. §§ 502 (“Injunctions”); 503 (“Impounding and disposition

of infringing articles"); 504 ("Damages and profits”).

* — &. Christiansburg Garment, 434 U.S. at 418-19:

[A] moment's reflection reveals that there are at least two strong

equitable considerations counseling an attorney's fee award to a

prevailing Title VII plaintiff that are wholly absent in the case of a

prevailing Title VII defendant.

First, as emphasized so forcefully in-Piggie Park, the plaintff

is the chosen instrument of Congress to vindicate “a policy that

Congress considered of the highest priority.” 390 U.S., at 402.

Second, when a district court awards counsel fees to a prevailing

plaintiff, it is awarding them against a violator of federal law. As

the Court of Appeals clearly perceived, “these policy considerations

which support the award of fees to a prevailing plaintiff are not

present in the case of a prevailing defendant.” 550 F.2d at 951. A

successful defendant seeking counsel fees under § 706(k) must rely

on quite different equitable considerations.

Even those courts that have not explicitly adopted the Ninth

Circuit- rule nevertheless have considered, in the case of a

prevailing defendant, the blameworthiness of the losing plaintiff

and, among other factors bearing on the relative positions of the

parties, they have taken into account whether the action was a

reasonable assertion of a colorable claim.*!

See Rosciszewski v. Arete Assocs., Nos. 92-2122, 92-2390, 1993 WL

283213, at *8 (4th Cir. July 29, 1993) (district court should consider the

“motivation of the parties,” including “bad faith,” the “objective reasonableness

of the legal and factual positions advanced,” including “whether the positions

advanced by the parties were frivolous,” and the “‘need .. . to advance

considerations of compensation and deterrence’”; vacating award of fees to

prevailing defendants and remanding for findings under announced standard):

Hartman v. Hallmark Cards, Inc. , 833 F.2d 117, 123 (8th Cir. 1987) ("{uJnder

any of the standards that have been applied to the section 505 fee determina-

tion, the finding that (plaintiff's) claim was not baseless supports the district

court's determination not to award fees"); Sherry Mfg. Co. v. Towel King, 822

F.2d 1031, 1034 (11th Cir. 1987) (“the fact that a losing party has acted in

good faith or that his legal position had arguable merit will justify an exercise

of the district court's discretion in deciding not to award attorney's fees”:

vacating award of fees to prevailing defendant and remanding for articulation

of basis for award); Reader's Digest Ass'n v. Conservative Digest, Inc., 821

F.2d 800, 809 (D.C. Cir. 1987) (affirming denial of attorneys’ fees to

prevailing defendant because “although ultimately unsuccessful, [plaintiff s

claim] was not frivolous”); Donald Frederick Evans & Assocs. v. Continental

Homes, Inc., 785 F.2d 897, 916-17 (11th Cir. 1986) (affirming denial of fees

to prevailing defendant “where the plaintiff asserted colorable copyright claims

of the type which ‘section 505 is intended in part to encourage’”); Rural Tel.

Serv. Co. v. Feist Publications Inc., 24 U.S.P.Q.24 (BNA) 1312, 1313-14 (@.

only where the plaintiff's suit was frivolous, baseless, or prosecuted in bad

faith”; denying fees to prevailing defendant because, “while [plaintiff's]

dann tindiin de x ina ee

arguable merit”); Ss, Inc. v. Jean Ann's Country s

Inc., 753 F. Supp. 1007, 1017 (D. Mass. 1990) (a prevailing j= Aid

recover attorneys’ fees “only where plaintiff's suit was frivolous, baseless. or

prosecuted in bad faith"); Dean v. Burrows, 732 F. Supp. 816, 826-27 (E.D.

Tenn. 1989) (“awards to prevailing defendants are disfavored absent a frivolous

or bad-faith prosecution”; denying fees to prevailing defendants because “the

plaintiff [did not) pursue[} her prosecution of the [defendants] in bad faith: the

Also, those courts--and courts applying the Ninth Circuit rule

as well--have not automatically awarded fees even to a prevailing

plaintiff where the losing defendants were innocent infringers or

otherwise were not blameworthy. Illustratively, a Ninth Circuit

court stated:

[W]e do not believe Congress intended that the

prevailing plaintiff should be awarded attorney’s fees in

every case. Lieb v. Topstone Indus., Inc., 788 F.2d

151, 155-56 (3d Cir. 1986). Considerations which

justify the denial of fees may include (1) the presence of

a complex or novel issue of law that the defendant

litigates vigorously and in good faith, (2) the defendant's

Status as innocent, rather than willful or knowing,

infringer, (3) the plaintiff's prosecution of the case in

bad faith, and (4) the defendant’s good faith attempt to

avoid infringement. We do not intend by this recitation

to limit the factors to those mentioned above.

McCulloch v. Albert E. Price, Inc., 823 F.2d 316, 323 (9th Cir.

1987) (citations omitted).

action presented a genuine issue for the Court to resolve and was not,

therefore, frivolous”); Motta v. Samuel Weiser, Inc., 633 F. Supp. 32, 34 (D.

Me. 1980) (denying award of attorneys’ fees to prevailing defendant because

plaintiff had “succeeded in asserting a colorable, nonfrivolous claim and did

not act in bad faith in pursuing the action").

% See also Lieb; Roulo v. Russ Berrie & Co., 886 F.2d 931, 943 (7th

Cir. 1989) (award of fees to prevailing plaintiff is “inappropriate where the

infringement was not wilful”; affirming denial of fees to prevailing plaintiff),

cert. denied, 493 U.S. 1075 (1990); Warner Bros. v. Dae Rim Trading, Inc..,

877 F.2d 1120, 1127 (2d Cir. 1989) (plaintiffs were not entitled to fees where

“the defendants litigated in good faith against unreasonable demands for

damages and attorneys’ fees"); Applied Innovations, Inc. v. Regents of the

University of Minnesota, 876 F.2d 626, 638 (8th Cir. 1989) (“attorney's fees

should not be awarded to a prevailing plaintiff as a matter of course” ; affirming

denial of fees where “the litigation mvolved numerous complex or novel

Thus, both historical and current precedent serve to repudiate

the argument on behalf of Fogerty for adoption of a British-type

rule, awarding counsel fees as a matter of course to the

questions which defendant had litigated vigorously and in good faith"); Jobete

Music Co. v. Massey, 788 F. Supp. 262, 268 (M.D.N.C. 1992) ("The court

adopts the view that absent a showing of bad faith on the part of the defendant.

attorney's fees will not be awarded. The conduct of defendant was determined

not to be willful; hence, in the court's discretion, it denies the plaintiffs’

request for attorney's fees"); Educational Testing Serv. v. Miller, [1991-1992]

materials received by defendants had no copyright notice, and novel legal

issues were presented,” plaintiff was not “entitled to be awarded the special

costs and attorney's fees which may be awarded under the Copyright Act”);

Dae Han Video Prod. v. Dong San, Chun, 17 U.S.P.Q.2d (BNA) 1306, 1314

(E.D. Va. 1990) (four factors guide award of attorneys’ fees: °(1) the

presence of a complex or novel issue of law that the defendants litigate

vigorously and in good fait!i; (2) the defendants’ status as innocent infringers:

(3) the plaintiffs’ prosecution of the action in bad faith; and (4) the defendants’

good faith attempt to avoid infringement”; court denied attorneys’ fees to pre-

vailing plaintiff because the legal issue was “complex and litigated by the

defendants in good faith” and the defendants made “a good faith attempt to

avoid infringing on [plaintiff's] copyrights"); Dolori Fabrics, Inc. v. The

Limited, Inc., 662 F. Supp. 1347, 1357 (S.D.N.Y. 1987) (refusing to award

attorneys’ fees against an unintentional infringer, quoting the comment of

Professor ."immer that “‘an attorney's fee generally will be awarded only

where there is some element of moral blame against the losing party’”);

Whelan Assocs. v. Jaslow Dental Lab., Inc., 609 F. Supp. 1325, 1329-30

(E.D. Pa. 1985) (denying attorneys’ fees to prevailing plaintiff where

defendants, “relying in no small measure upon competent legal advice,

sincerely believed that they were legally entitled to take the actions which they

took"), aff'd, 797 F.2d 1222 (3d Cir. 1986), cert. denied, 479 U.S. 1031

(1987); Kepner-Tregoe, Inc. v. Carabio, 203 U.S.P.Q. (BNA) 124, 139 (E.D.

Mich. 1979) (quoting the comment of Professor Nimmer that “‘[a}n attorney's

fee . . . will be awarded only where there is some element of moral blame

against the losing party’"; court denied attorneys’ fees to prevailing plaintiff

because plaintiff's position was “highly technical,” the legal issue was

“complex and novel” and, “while there is perhaps some question as to the

blameworthiness of Defendants’ conduct, this does not tip the scales”).

prevailing party.’ Such a radical departure from the American

common law rule [see Alyeska Pipeline Serv. Co: v. Wilderness

Soc’y, 421 U.S. 240 (1975)] and the precedent of American

cases interpreting fee-shifting statutes would violate every

principle of stare decisis and statutory construction.

Nor does the Hewlett-Packard claim that a prevailing

defendant “deserve[s]" an award because its defeat of the

plaintiff's copyright claim may serve "the public interest" bear

scrutiny.

As noted [see supra note 16], the rewards of winning an

infringement case to a defendant who has emulated a

commercially successful software product are likely to be

enormous, providing all the incentive that is needed to promote

the most vigorous defensive litigation.

Moreover, as a practical matter, the tactics available to a

determined defendant together with the inherent difficulties of

proving both copying and the amount of damages (even where

everyone knows that there have been lost sales and lost profits)

provide added incentive for a defendant to litigate to the bitter

end in the hope of prevailing. As illustrated in the Apple case

(commenced in March 1988 immediately after examination of

Hewlett-Packard’s NewWave product, described by Hewlett-

Packard upon its introduction as "visually similar to the

3} It may be noted that even the British rule is subject to a qualification

that a prevailing defendant may be denied fees where there is evidence that the

defendant brought about the litigation or did something calculated to occasion

unnecessary litigation and expense or did some wrongful act in the course of

the transaction of which the plaintiff complains. See 1 The Supreme Court

Practice R. 3(3), at 1043 (Eng. 1992); see also Rowe, supra p. 19, at 655, 679

(critically examining the rationale supporting a rule of “general indemnity” and

showing that “the case for English-style general indemnity has appeared

surprisingly weak”).

Macintosh [but with more features]"), litigation can be delayed

and a jury trial avoided for years during which time the

defendant can achieve such success and the plaintiff made to

suffer such decline that the defendant must be counted as the

economic winner whether it wins or loses in the courtroom.

Additionally, there obviously are a great variety of ways in

which a defendant may prevail in a way that benefits no one else

or renders no public service of any kind. Hewlett-Packard’s

prime example of defeating protection for “computer-related

works that are functional in nature" [Hewlett-Packard Br. at 3]

is, indeed, based on a false premise.

First, an original work is not deprived of copyright

protection because it may serve a “functional” purpose. As this

Court has stated, there is "nothing in the copyright statute to

support the argument that the intended use or use in industry of

an article eligible for copyright bars or invalidates its

registration. We do not read such a limitation into the copyright

law."* As summarily stated by a leading scholar, "Protection

for computer programs and data bases is not affected by the fact

that they may aid or implement utilitarian articles.”™

Illustratively, a work may be copyrightable even though it is a

control program;* or a toy stuffed animal;*’ or a map or chart

(explicitly protected by the earliest United States copyright law

* Mazer v. Stein, 347 U.S. 201, 218 (1954) (upholding copyrights in

semivitreous china statuettes of dancing figures used as bases for table lamps).

*% William F. Patry, Latman's The Copyright Law 38 n.94 (6th ed.

1986).

* Johnson Controls, Inc. v. Phoenix Control Sys., 886 F.2d 1173 (9th

Cir. 1989).

— Aliotti v. R. Dakin & Co., 83) F.2d 898 (9th Cir. 1987).

[Act of May 31, 1790, 1 Stat. 124]);** or even a plate.” It is

virtually universaiiy recognized that “the mere fact that

functional concerns were influential does not establish [the lack

of protectible] copyrightable expression."“ That is the rule in

all countries subscribing to the Berne Convention.“

Second, the Hewlett-Packard argument is profoundly

mistaken in suggesting that computer-related works are not

“artistic works." [Hewlett-Packard Br. at 5] The evidence to

the contrary is abundant. The testimony of those most

knowledgeable about programming is eloquent in describing the

artistic nature of the endeavor.*’ The contributions to computer

programming of individual imagination and literary programming

style are virtually undeniable.*’ The vital contribution of

% ~——- United States v. Hamilton, 583 F.2d 448 (9th Cir. 1978).

% ~~ McCulloch v. Albert E. Price, Inc., 823 F.2d 316 (9th Cir. 1987).

“Lotus Dev. Corp. v. Borland Int'l, Inc., 788 F. Supp. 78, 97 (D.

Mass. 1992).

*! See the WIPO Guide to the Berne Convention 2-| (1978), explaining

that a work produced “may be produced ... with a merely utilitarian or

commercial aim, without this making any difference in the protection it

enjoys.”

® See, e.g., Frederick P. Brooks, Jr., The Mythical Man-Month*7

(1982) ("The programmer, like the poet, works only slightly removed from

pure thought-stuff. He builds his castles in the air, from air, creating by

exertion of the imagination”); Ben Shneiderman, Software Psychology 2 (1980)

(describing programming as having the “excitement and agony” of composing

symphonies or writing novels, explaining that "[p)rogramming is an intensely

human experience whose esthetics canno. be imitated or appreciated by mere

machines"). .

® See, e.g., Apple Computer, Inc. v. Mackintosh Computers Lid., 28

D.L.R.4th 178, 184 (Can. Fed. Ct. 1986):

aesthetic sensory appeal in computer programming (especially in

the composition of graphical user interfaces) is manifest. It is

not without point that a Microsoft Senior Vice-President wrote

to the Windows 3.0 Program Manager recommending the Apple

visual interface as "aesthetically pleasing" and commenting that

"[tJhe Mac’s AEQ (Aesthetic Quotient) has always been hirer

[sic] than the Windows.’" The designers of the Macintosh

interface indeed have testified that they sought to make their

work “as artistically appealing and as integrated as possible."

Moreover, Hewlett-Packard’s argument that computer-related

works "must be judged under the very different standards of the

Patent Law" [Hewlett-Packard Br. at 3-4] is equally wrong.

Copyrights and patents afford different protection for different

creations: Whereas copyright protects the expression contained

in some form of communication against copying, patent law

protects inventions (including the novel process steps that a

computer program directs a computer to perform) against any

use thereof, precluding any infringing use of the novel idea

itself. As Chief Judge Markey has explained:

Confusion may be avoided if it be realized that what is

at issue [in a patent case] is not the “program,” i.e., the

There is no doubt that computer programs are highly

individualistic in nature and contain a form of expression personal to

the individual programmer. No two programmers would ever write

a program in exactly the same way (except perhaps in the case of the

most simple program). Even the same programmer, after writing a

program and leaving it for some time, would not write the program

the same way on a second occasion. The sequence of instructions

would most certainly be different. The possibility of two

programmers creating identical programs, without copying was

compared by the defendants’ expert witness to the likelihood of a

monkey sitting at a typewriter producing Shakespeare.

c——-"—

software, but the process steps which the software

directs the computer to perform.“

In the last analysis, it must be kept in mind that a computer

program or screen display is nothing but a communication,

precisely the kind of work traditionally protected by copyright.

Cf. Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d

1240, 1251 (3d Cir. 1983) ("the medium is not the message"),

cert. dismissed, 464 U.S. 1033 (1984).

Lastly, it bears reminder that, in explaining the rule in

Christiansburg Garment, 434 U.S. at 420-21, the Court

emphasized that the rule does protect a winning defendant

appropriately by providing for an award of attorneys’ fees where

it appears that “the plaintiff's action was frivolous, unreasonable,

or without foundation, even though not brought in subjective bad

faith." Thus, even if, as Hewlett-Packard claims, the Ninth

Circuit rule promotes early settlement, that can only (or at least

mainly) be so where it appears that the plaintiff's claim is

objectively meritorious. At a time when the federal courts are

already heavily burdened, it cannot be well contended that a rule

that encourages the early settlement of such meritorious claims

is undesirable.

Conclusion

For the foregoing reasons, the judgment of the court of

appeals should be affirmed.

“ In re Geinovatch, 595 F.2d 32, 44 (C.C.P.A. 1979) (Markey, C.J..

dissenting). See Midway Mfg. Co. v. Artic Int'l, Inc., 704 F.2d 1009, 1012

(7th Cir.) ("Plaintiff claims copyrights in audiovisual works--the distinctive set

of images and sounds stored in its circuit boards. It does not claim copyrights

in the design of those circuit boards, so it matters not that those designs may

be patentable"), cert. denied, 464 U.S. 823 (1983).

;

}

September 8, 1993

Respectfully submitted,

Jack E. Brown

Brown & Bain, P.A.

2901 North Central Avenue

Post Office Box 400

Phoenix, Arizona 85001-0400

(602) 351-8000

Counsel of Record for Amicus

Apple Computer, Inc.

Of Counsel:

Joel W. Nomkin

Charles A. Blanchard

Antonio T. Viera

Brown & Bain, P.A.

2901 North Central Avenue

Post Office Box 400

Phoenix, Arizona 85001-0400

(602) 351-8000

Chris R. Ottenweller

Brown & Bain

600 Hansen Way

Palo Alto, California 94306

(415) 856-9411

Edward B. Stead

Vice President and General Counsel

Elizabeth Birch

Senior Litigation Counsel

Apple Computer, Inc.

20525 Mariani Avenue MS-38I

Cupertino, California 95014

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.