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Software - The Great Software Debate: Who Owns an idea
{Forbes cover story}

 Protection of intellectual property rights may have gone too far when
 creators of computer languages can claim that they own them.  It is
 almost as if someone could copyright the alphabet.

    Can Las Vegas sue Atlantic City?

   By Kathleen K. Wiegner and John Heins
   It was a small item at the Constitutional Convention, thrown in at the
 suggestion of James Madison of Virginia and Charles Pinckney of South Carolina.
 Among the briefly enumerated powers of Congress was one to grant limited
 monopolies to inventors and authors. In 1790 Congress enacted the world's
 first comprehensive patent and copyright laws. Little noticed at the time,
 that enactment was a landmark.
   England had already created a law of patents built around custom rather than
 formal statute. And it had issued copyrights, originally as a mechanism for
 censorship. But it was the Americans who saw in these forms of property a
 natural fit with a free enterprise society. Said Thomas Jefferson, an inventor
 and the first administrator of the American patent system, "The issue of
 patents for new discoveries has given a spring to invention beyond my
 conception."
   Thus did our founding fathers encourage the Edisons, McCormicks and Bells,
 songwriters, movie actors and computer programmers. Could they have imagined
 that entertainment would one day become one of the country's largest export
 industries? That intellectual property rights would come so far that Woody
 Allen could successfully claim a legal right not only to his name and his face
 but even to his very nerdish charm?
   From this same instinct to protect the fruits of invention came the
 protection for computer software, currently one of the jewels in our economy,
 with U.S. companies controlling 60% of a $55 billion world market. But this
 system of intellectual property, which has created so much wealth, is now
 straining. Some of the country's best-known computer and software makers have
 become embroiled in a tangle of lawsuits. Depending on the outcome, the cases
 could drastically slow the rate of innovation that has kept U.S. companies
 well ahead of foreign competitors.
   Ashton-Tate Co., Lotus Development Corp. and others, developers of software
 used on millions of computers, want exclusive rights not just to the way a
 computer accomplishes a certain task but also to the task itself. They want to
 own not just the insides of a computer program but its "look and feel." Its
 reminiscent of that recent court case in which Woody Allen stopped a clothing
 store from advertising itself with an Allen-like character. Says Phillipe
 Kahn, chairman of Borland International, which makes software products that
 compete with those of Lotus and Ashton-Tate: "It's as if Las Vegas were suing
 Atlantic City for copying its look and feel."
   Who is answering this basic question of software ownership? Judges who don't
 necessarily know much about the technology whose future they are determining.
 They are stumbling from one hard case to another, making bad law around an
 already obsolete 1980 software copyright act and around court precedents going
 back to the 18th century.
   At stake is not just the profit margin of a Lotus or an Ashton-Tate but also
 the billions of dollars of their customers' money sunk into learning computer
 languages. here we mean "language" in the very broad sense of whatever enables
 computer users to communicate with machines: the commands in Lotus' 1-2-3
 spreadsheet package, the trash can pictured on an Apple Macintosh (which, when
 selected, causes a file to be discarded), the plus sign in a scientific
 program.
   Computer languages are as essential to man-machine communication as human
 languages are to man-man communication. Without them, users would have to
 speak to their machines in the 1s and 0s spoken by the chips inside. The
 computer industry as we know it would not exist. Can you imagine having to
 type in several thousand 0s and 1s, in exactly the right order, to get your
 computer to print a letter?
   The earliest software was thrown in free by computer makers to buyers of
 their systems. But nowadays software itself is a big business. Lotus
 Development netted $59 million on sales last year of $469 million, mostly of
 its 1-2-3 spreadsheet program. For the year ended in January, mainly from
 sales of its dBase products, Ashton-Tate earned an estimated $48 million on
 sales of $310 million.
   Now the language makers are attempting to protect their competitive
 positions in the courthouse. Ashton-Tate is suing rival Fox Software, Inc.,
 which makes products that can understand the command words of dBase. Lotus is
 suing two small software houses for selling imitations of its Lotus 1-2-3
 language. Apple Computer, Inc., is suing both Microsoft Corp. and
 Hewlett-Packard Co., saying the companies illegally appropriated the "look and
 feel" of Apple's Macintosh computer screens. These companies are saying, in
 effect, that once you've learned how to add a new record to a dBase address
 file, or how to sort a list in 1-2-3, or how to trash a file on a Macintosh,
 you can't apply that knowledge to a rival product.
   What's wrong with that? Shouldn't the creator of a new kind of software own
 it? Sure, but the question is how much can be owned. To use the gambling
 analogy, should Atlantic City be prevented from opening casinos if Las Vegas
 got there first?
   Unfortunately, the situation is much more complicated than that.
   One of the things that make computers valuable is the portability of
 computer knowledge and computer programs. Lotus' 1-23- borrows from the first
 spreadsheet program, VisiCalc, and both Apple's Macintosh interface and
 Ashton-Tate's dBase language have their origins elsewhere. "It's important for
 languages to be public property," says John Backus, the IBM researcher who led
 the development of Fortran, the standard programming language for scientific
 applications, in 1957. "If you want to get something done, you don't want to
 have 50 different languages."
   Imagine the confusion when the developer of the first modern typewriter
 patented the placement of the keys, so that succeeding typewriter makers had
 to change the order of the keys to avoid infringement. That way, if you
 learned typing on one keyboard, you had to relearn to use a different
 keyboard. That's comparable to what Ashton-Tate, Lotus and Apple are trying to
 do.
   Four million copies of 1-2-3 have been sold, for at least $300 apiece. That
 billion-dollar investment, however, pales beside the human capital invested in
 learning how to work a spreadsheet using the Lotus language. There are some 7
 million 1-2-3 users worldwide, and Berkeley, Calif,-based software consultant
 Judd Robins estimates that it costs - very roughly - $1,000 (including both
 direct costs and lost time from other work while training) to train someone in
 1-2-3 to get a minimum level of proficiency. Two million copies of dBase have
 been sold for an average price of $420; some 5 million users have learned the
 language.
   Then there is the time and money that companies spend developing customer
 applications around dBase and 1-2-3. A company might spend millions of dollars
 creating programs consisting of computer commands written in the dBase
 language. Nolan, Norton & Co., a technology consulting unit of accounting firm
 Peat Marwick, did some arithmetic on these costs. It found that about 70% of
 the $18,000 total annual cost of running a single business personal computer
 is in technical support, training and internal software development. Add it
 all up and you get big trouble for users if the copyright hardliners win their
 cases.
   Fox Software's FoxBase isn't a copy of dBase by a long stretch. In its Dec.
 12 issue, InfoWorld published benchmark comparisons of several database
 products. It said the dBase III Plus, the version in widest use, took 87
 minutes to sort 100,000 records of a test file, while FoxBase+ took 24
 minutes. The new, improved, dBase IV was somewhat better than its older
 sister, at 60 minutes. Not surprising that Ashton-Tate wants to outlaw the
 24-minute version.
   So, how much power should the creator of a new language have? Users, of
 course, want competitors to be allowed to innovate around a standard like
 1-2-3 or dBase. "If [software] protection becomes too all-encompassing," says
 Robert Martin, manager of executive support systems at Eaton Corp., the
 industrial equipment company, "there will be less incentive to continue to
 innovate." Users also would benefit from price competition between software
 originators and their rivals. "I don't know if users would have gone with
 Lotus 1-2-3 if they knew it would end up being something Lotus could monopoly
 price," says Ronald Evans, director of end-user computing at Nolan, Norton &
 Co., "but they did, and now they're stuck." Stuck? Lotus and other strict
 interpretationists see it differently. A legal monopoly is what a patent or
 copyright is all about. It's the reward for invention. Further, Ashton-Tate
 worries that look-and-feel protection is necessary to prevent foreign
 competitors from flooding the market with cheap copies of software programs.
   Courts, alas, have come to this debate with a very confused law of
 intellectual property that ill fits the computer age. "Managers are in the
 difficult position of having to run 21st-century businesses with guidance from
 a 19th-century legal system," complains Peter Marx, counsel for the
 Information Industry Association, a trade group.
   Traditionally, the patent system has protected "functional" works, the
 machines and processes that helped fuel the country's growth. Alexander Graham
 Bell's telephone, Thomas Edison's incandescent electric lamp and Henry Ford's
 transmission mechanism all received patents. Patents are powerful, since they
 rule out lookalike designs, even those independently arrived at. But the
 standards are high: The device must advance the "state of the art" to qualify.
 Moreover, the public filing means that, following the relatively short
 protection period of 17 years, other inventors have the opportunity to improve
 upon patented works.
   The copyright system has traditionally protected works with aesthetic value:
 music, literature and art. The protection is weaker: Generally, only
 substantial copies of a copyright work are illegal. Coverage lasts for the
 author's life plus 50 years (or, in the case of a work-for-hire, for 75 years
 from publication).
   If the two sets of rules are different, it is for a very good reason.
 Society is not harmed if Margaret Mitchell and her heirs own an exclusive on
 Gone with the Wind for 50 or 100 years. If it's overpriced or badly edited,
 you can always buy some other novel of love in a time of civil war, if that's
 what you need.
   It's a good thing, though, that the fellow who came up with the idea of
 putting a gasoline-powered engine on wheels couldn't stop Henry Ford. George
 Selden, the self-proclaimed "inventor" of the automobile, did get a very broad
 patent, but Ford defeated it in a long court battle. After that, an inventor
 such as Ford could still get a patent on a particular transmission, but
 couldn't prevent rivals from getting the same results with different
 arrangements of gears.
   Congress decided in 1980 that computer software was more like a novel than a
 transmission, even though it has elements of both. That's when the problems
 began.
   "What you have is copyright giving effective, long-term monopolies to
 functional subject matter that would not have qualified for patent
 protection," argues Stanford law professor Paul Goldstein, a leading expert on
 intellectual property.
   Consider Intel's long-running suit against Japan's NEC Corp., resolved only
 last month. Intel alleged that NEC copied "microcode" - computer instructions
 etched in silicon - from two of Intel's microprocessors. Was microcode, even
 though part of a silicon chip, a computer program protectible by copyright?
 The federal judge hearing the case said it was. But the judge also ruled that
 NEC did not infringe, since it claimed it developed its chips though legal
 reverse-engineering techniques.
   Or take Lotus' suit against Mosaic Software's Twin and Paperback Software
 International's VP-Planner. Lotus doesn't claim that either program copies
 1-2-3 code. Rather, the imitators have created, from scratch, software that
 duplicates the behavior of 1-2-3. Thus, having learned the 1-2-3 language, you
 can shift to one of the rival products with little adjustment.
   Think of it this way: You learned to drive a manual transmission Ford. Now
 Chevrolet comes out with a car with a manual transmission. Chevy didn't copy
 the gears. But it so engineered the thing that you can switch brands without
 learning to drive all over again. Ford sues.
   Apple Computer, in its suit against Microsoft and Hewlett-Packard, tries to
 take the concept of compatibility a bit further. Building on some innovations
 made years earlier by Xerox, Apple developed the snazzy Macintosh graphical
 interface. Instead of having to type in commands like "delete" or "store," a
 user points at screen pictures of a trash basket or a file folder. If Apple
 wins, competitors won't be able to utilize similar characters, which would
 make trouble for everyone who has invested any effort in learning this
 graphical language.
   Ashton-Tate goes further, claiming that the "screens, menus, file structure
 and dBase language" embodied in its products are "an integral part of the look
 and feel elements of dBase." On short, it wants to own not just the software
 that translates this language into machine instructions but the language
 itself.
   Naturally, Fox Software President David Fulton takes a different view. He
 contends that Ashton-Tate lured other companies into investing their efforts
 in programs that build on what Ashton-Tate started: compilers and interpreters
 (software that translates user words into machine instructions). Now that the
 personal computer world is hooked - Ashton-Tate has some 60% of the market for
 personal computer database software - Ashton-Tate wants to change the rules.
   Ashton-Tate President Edward Esber replies simply that companies like Lotus
 and Ashton-Tate are using lawsuits to replace innovation as a competitive
 weapon - or at least as a stopgap measure until they can get their new
 products into the marketplace. For example, Lotus' latest version of 1-2-3 is
 more than a year late. Ashton-Tate's new dBase IV, released late last year,
 was at least two years late and still has serious flaws.
   Where in all this arguing does the public interest lie? In encouraging
 innovation and creativity, of course. Too powerful protection of software can
 also foster plainly anticompetitive market practices. Nintendo, the Japanese
 electronics company, has captured a roughly 80% share of the market for
 videogame players. No one begrudges it that. But it may now be using
 intellectual property law to unfairly control the separate market for the
 replaceable game cartridges that go into the player. In court, Nintendo is
 arguing that Atari Games Corp., a rival cartridge manufacturer, violated its
 patent by reverse-engineering a chip that is necessary to make the game
 software play in a Nintendo player. Says Atari Games general counsel Dennis
 Wood, "It's like saying if I buy my car from Ford, I also have to buy my gas
 from Ford. That's ridiculous."
   The U.S. needs a powerful software industry, one that can continue to beat
 the Japanese and create export earnings (Overseas sales by U.S. software
 makers were some $11 billion in 1988, and are growing at better than 20% a
 year.) The system must reward innovators but promote a rapid evolution of
 their product lines.
   Is there a way to protect innovators without strangling further innovation?
 Congress could create a separate protection system for software, taking
 elements from both patent and copyright law. To foster innovation, such a
 system would specifically prevent copying of codes but permit imitation of
 results, including looks and feels and languages. That period of protection
 would be shorter, say ten years. In the quickly moving science of software,
 that would still leave the originator of a language with a valuable lead of
 several years over its rivals. It would, to fall back upon the automotive
 analogy, let inventors patent gear arrangements but not the idea of having a
 car with a stick shift.

 [Accompanying the article are several photographs demonstrating look and feel
  issues. Here are the captions included with each pair of photographs - TT]

 Lotus eaters:
   The enormous popularity of Lotus Development's 1-2-3 has made its commands -
 sequences like WORKSHEET-FILE-SAVE - almost a lingua franca among spreadsheet
 users. But this language won't be franca for long, if Lotus wins pending
 copyright lawsuits against Mosaic Software and Paperback Software (USDC-Mass.,
 Nos. 87-0074-K and 87-0076-K). Both of these cloners have reverse-engineered
 the Lotus software, creating programs that respond to almost all of the Lotus
 commands and display spreadsheets almost the same way. Above, a Lotus screen
 is on the left, a Mosaic screen is on the right.

 Who has the facts?:
   You can't copyright a fact, such as the population of Tallahasee, but you
 can copyright the expression or compilation of facts, such as an almanac. The
 rule works passably well in a world of book publishing. It can't cope with the
 world of database publishing.
   One court held that Telerate could prevent another company from selling
 software that helps users manipulate securities price data provided by
 Telerate. Another ruled that Moody's could copy bond redemption listings
 published by a competitor.
   Independent effort to improve a database has traditionally been sufficient
 to avoid infringement claims. But in United Telephone Co. of Missouri v.
 Johnson Pub. Co., Inc. (855 F.2d 604, 8th Cir., 1988) the court ruled that the
 "expression" of United's Jefferson City White Pages (left) - alphabetically,
 with addresses and numbers - was protected. The case gives United control over
 the White Pages market in its area.

 The karate kids:
   An idea cannot be copyrighted, but the expression of an idea can. In 1986
 videogame maker Data East USA, Inc., charged that the copyright on its popular
 karate championship game (left) had been infringed by a karate game from rival
 Epyx Inc. (right). A lower court ruled that Epyx had copied the "look and
 feel" of the Data East game. An appellate court later ruled otherwise (Data
 East v. Epyx, 862 F.2d 204, 9th Cir., 1988). That court said that a certain
 amount of similarity was inevitable between games, given that both show
 karate. After all, the video designer can't copyright a jump kick.

 Electronic "forms":
   In Baker v. Selden (101 U.S. 841, 1880) the Supreme Court ruled that a book
 consisting of blank bookkeeping forms and an explanatory introduction was
 copyrightable, but the forms themselves were not. Relying on this precedent,
 SoftKlone Distributing copied four screens from a competing software product
 in designing a program that helps computers communicate via a modem. These
 screens, SoftKlone thought, were electronic forms and therefore not
 copyrightable. The company that created the original package, called
 Crosstalk, sued over one screen (left). A court ruled that the copyright for a
 whole program did not necessarily protect that program's screen displays. But
 it ruled in favor of Crosstalk (right) because its originator had filed a
 separate textual copyright on the screen in question (DCA v. SoftKlone, 659
 F.Supp 449, NDGA, 1987). Precedential value: considerable, in favor of
 creators who want an exclusive on the "look and feel" of their software.
 Practical value to the Crosstalk market: none. In four hours, SoftKlone
 changed the offending screen. Both brands of software are still being sold.

 Iconology:
   Apple popularized an easy-to-use way to get a computer program to file,
 store, print and the like that relies on "icons" like trash baskets and file
 folders (left). Users would be thrilled to have such symbols standardized. But
 when Hewlett-Packard (right) and Microsoft adopted similar screen formats,
 Apple sued (USDC-S.D. Calid., No. C 88 20149). Both defendants have
 countersued, charging Apple is using the lawsuit to block their own
 innovations.

 Computer talk:
   The program excerpted at right contains 39,700 lines of code. It was written
 for use with Ashton-Tate's dBase III Plus. That is, dBase comprehends commands
 like DO and STORE and ENDIF. The customer purchased several copies of dBase
 from Ashton-Tate, then spent more money to get the competing FoxBase+ from Fox
 Software. Why? The program runs much faster in FoxBase.

Return-Path: <@hp4nl.nluug.nl:jv@mhres>
X-From: Multihouse, Gouda, The Netherlands
X-Committed-To: X/Open compliant software and products
To: [e-mail]
Subject: X/Open and the Apple lawsuit
Date: Thu, 8 Jun 89 13:22:50 MET (+0200)
From: Johan Vromans <[e-mail]>

Richard, for your interest:

In X/Open there is a discussion going on on the topic of graphical
user interfaces. Users, ISVs and Vendors want a common GUI with a
common Look&Feel, but they hesitate because of the Apple lawsuit.

Yesterday - on a meeting of the X/Open Independent Software Vendors
Advisory Council in Brussels - I have been talking to some X/Open
representatives to ask them if X/Open could play a (more active) role
in the Apple lawsuit. They said they couldn't.

However, they stated that:
 "X/Open has commissioned a summary of the status of the lawsuits
  between Apple and Microsoft and Hewlett-Packard. This suggests that
  any work by X/Open in the area of Look and Feel must be reviewed
  carefully because of the potential impact of any resolution other
  than total victory for HP and Microsoft."

Moreover, the ISV Council decided that any GUI and Look&Feel adopted
by X/Open must legally clean.

Regards,

    Johan
--
Johan Vromans             [e-mail] via european backbone (mcvax)
Multihouse Automatisering bv        uucp: ..!{mcvax,hp4nl}!mh.nl!jv
Doesburgweg 7                      phone: [phone]
2803 PL Gouda - The Netherlands                fax: [phone]

One can easily imagine UI patents forcing programmers to adopt
inconsistent UIs.  When their software is used in critical
applications, it could have similarly disastrous consequences.

Key portion:

    But Beran said Baric was not confused by the lights, but rather by
a steering mechanism that allows for minor course corrections.
    The steering mechanism must be turned in the opposite direction of
the intended course -- the reverse of how most such devices operate,
Beran said.

    MIAMI (UPI) -- The officer in charge of a Yugoslavian cargo ship at
the time it ran aground off the Florida coast got confused and turned
the ship the wrong way, grounding it in an environmentally sensitive
coral reef, the ship's captain testified Monday.
    ``I think he made an error. I think he was confused,'' Capt.
Zdravko Beran told Coast Guard investigators on the first day of
testimony before a board of inquiry. ``He told me that (navigational)
light was dead ahead and then he wanted to turn a few degrees to the
port (left).''
    Instead, the officer, Zvonko Baric, turned the ship to the right,
or starboard, causing it to run aground on sensitive coral in the Fort
Jefferson National Monument, Beran said.
    Beran's testimony appeared to support the claims of U.S. government
lawyers, who filed a $9 million lawsuit Monday against the owners of the
ship charging that the crew was careless and negligent.
    The suit said the ship's navigational devices were defective and
that the crew ``failed to take due account of wind, weather and
current'' when the ship ran aground Oct. 30 in the Dry Tortugas, 70
miles west of Key West.
    Coast Guard investigators convened the formal board of inquiry
Monday to determine the cause of the accident in the sensitive reef,
home to a wealth of marine life.
    Florida Marine Patrol Officer Gordon Sharp testified that he was
told Baric mistook one navigational light for another, causing the ship
to miss an intended course through Rebecca Channel.
    ``I took that as a reasonable explanation of what happened,'' Sharp
said.
    The crew of the Mavro Vetranic intended to steer the ship 1.8 miles
to the east of Pulaski light, but the ship ran aground a half-mile west
of the 49-foot navigational tower, Coast Guard Lt. Cmdr. Paul Von Protz
said.
    But Beran said Baric was not confused by the lights, but rather by
a steering mechanism that allows for minor course corrections.
    The steering mechanism must be turned in the opposite direction of
the intended course -- the reverse of how most such devices operate,
Beran said.
    Coast Guard investigators are expected to call Baric to testify
when the board reconvenes Tuesday.
    The lawsuit filed in U.S. District Court in Miami names as
defendants the ship, its owner, Atlantska Plovidba, which is based in
the Adriatic city of Dubrovnik, and Beran.
    The lawsuit said the reef was well known and charted and that those
in charge of the ship ``were careless, incompetent and inattentive to
their duties.''
    Federal officials seized the ship at 2 a.m. Sunday to make sure
that any award damages that result from the suit are paid by the ship's
owners, said Diane Cossin, a spokeswoman for U.S. Attorney Dexter
Lehtinen.
    But a lawyer for the company said his client was negotiating with
the Justice Department to reclaim the ship, either by posting a bond or
a letter of undertaking, which he said is similar to a letter of credit.
    The vessel was refloated off the reef late Thursday after it was
emptied of about half of the 390 tons of fuel it was carrying. The
475-foot ship arrived in Miami Saturday.
    State officials estimate that the grounding damaged up to three
acres of live coral reef in the Dry Tortugas. Federal officials have
said that the reef is within the protected monument, which is 65 miles
west of Key West and covers 64,000 acres.
    The grounding did not produce a spill. The vessel was carrying
15,730 tons of phosphate, 120,000 gallons of fuel oil and 23,000 gallons
of diesel fuel.
    Asked how future such accidents could be avoided, Beran said the
federal officials could require ships to go around rather than through
the national monument.

Xerox Suit Claims Apple Stole Pioneering Machintosh Software Design
By MARY McGRATH
Associated Press Writer

    SAN FRANCISCO (AP) - Xerox Corp. sued Apple Computer on Thursday
for allegedly pirating an imaginative software graphics display
that Apple used to create the Macintosh, which revoluntionized
desktop software standards.
    The suit in federal court, the first of its kind ever filed by
Xerox, claims the software for Apple's now-defunct Lisa computer
and Macintosh Finder, both copyrighted in 1987, were derived from
two Xerox programs: Smalltalk, developed in the mid-1970s, and
Star, copyrighted in 1981.
    The suit said then-Apple President Steven Jobs saw a
demonstration of Smalltalk at Xerox's Palo Alto Research Center in
1979, and that he and other Apple employees were ``very impressed
with the unique and revolutionary user-friendly design.'' Jobs was
ousted from Apple in 1985 and founded Next Inc., which makes
computer workstations.
    Apple was granted a license in June 1981 to participate with
Xerox in a project to implement Smalltalk into a hardware system to
be developed by Apple, the suit said. It said a ``substantial
amount'' of Smalltalk was adopted by Apple into Lisa and the
Macintosh Finder software used with the Macintosh computer.
    Thomas C. Abbott, a spokesman for Stamford, Conn.-based Xerox,
said the civil suit was filed in U.S. District Court after efforts
beginning a week ago to reach an agreement were rebuffed by Apple.
    ``We sought a settlement with Apple and we resorted to these
legal means only when it became absolutely necessary,'' said
Abbott. He said Xerox waited to approach Apple until copyright laws
regarding software were clarified by the courts.
    Officials of Apple, based in Cupertino, did not immediately
return telephone calls seeking comment.
    Lisa, first published in 1983, was identified in its 1987
copyright registration as being an original work of Apple, and
Macintosh as a derivative work of Lisa, the suit said. Neither was
identified as a derivative of the Xerox products, it said.
    The suit, which asks for a jury trial, said the Star program
``is widely recognized in the computer industry as being the first
to introduce fanciful desktop workstation graphics to allow the
user to interact with the computer,'' a development that took Xerox
``millions of dollars and years of creative effort.''
    The suit says the Apple employees saw Star at its inaugural
trade show, in Houston in June 1981, and copied substantial
portions into Lisa and the Macintosh Finder, including the design
and appearance of the main application windows, dialogue boxes and
menu, and some of the exact icons, or symbols, used in the program.
    It also said Apple gained unauthorized access by hiring several
Xerox employees in the late 1970s and early 1980s, including Star
software developers.
    Xerox seeks court orders invalidating Apple's Lisa and Macintosh
Finder copyright registrations, and declaring that Xerox is the
sole owner of material common to its products and Apple's products.
    The suit claims unfair competition under both state and federal
laws, claiming $25 million in damages under each law plus punitive
damages under state law in an unspecified amount. It also seeks at
least $100 million from Apple for unjust enrichment from licenses
and royalties for its products.
    Macintosh graphics revolutioned desktop computer design by
replacing complicated word codes with simple symbols, vastly
streamlining the way users ranging from schoolchildren to office
workers select programs, issue commands and perform other functions.
    Xerox's suit is remarkably similar to one filed by Apple. Apple
sued Microsoft and Hewlett-Packard Co. in the same court in March
1988, claiming infringement of Lisa and the Macintosh Finder, among
other works, and claiming both were original to Apple.
    Apple claimed that Microsoft's Windows 2.03 and a
Hewlett-Packard program called NewWave, which is based on it, too
closely resemble the ``look'' of screen displays on the Macintosh.
    A federal judge in July issued a tentative ruling that greatly
narrowed Apple's suit by deciding the items covered in a 1985
licensing agreement between Apple and Microsoft could not be used
as evidence against Microsoft's and HP's versions of the products.
    Analysts have said the case is crucial to industry developments
in the 1990s.
    AP-NR-12-14-89 2143EST

San Francisco Chronicle
Friday, December 15, 1989

By John Eckhouse
Chronicle Staff Writer

  Xerox Corp. yesterday filed a $150 million lawsuit against Apple
Computer, claiming the technology that has helped the Cupertino based
company sell millions of its Macintosh personal computers was unlawfully
obtained from Xerox.

  An Apple spokeswoman immediately called the case ``without merit.'' But
it hits the company at a time its sales -- and stock price -- have been
sliding.

  Apple has never denied borrowing technology for its Lisa and macintosh
computers from work originally done at Xerox for its ill-fated Star
personal computer.  Apple co-founder Steve Jobs was so enamored of the
Star's ease of use that he hired away several researchers who had worked
on the product at Xerox's Palo Alto Research Center.

  Industry insiders assumed that Jobs had licensed the Star technology,
but both Apple and Xerox said yesterday that was not true.  Jobs declined
to comment yesterday.

  ``Existing ideas have been incorporated into the Macintosh audiovisual
displays, but they were ideas we used to create our own unique expression
and on which we have copyright protection,'' said Apple spokeswoman
Carleen LeVasseur.

  She said she did not believe Xerox had copyright protection for its
Star technology.

  A Xerox spokesman disputed that claim.  He said Apple's use of portions
of the Star's graphic user interface violated Xerox copyrights.

  Xerox asked the court to order the U.S. Copyright Office to cancel
Apple's copyright registrations on grounds of fraud.  The lawsuit charges
Apple unjustly licensed the technology to other companies and collected
more than $100 million in royalty and license fees.

  Apple has been aggressive in defending its Macintosh technology.  It
currently is in the middle of a lawsuit in which it charged industry
heavyweights Hewlett-Packard and Microsoft with copyright infringement.

  One of HP's defenses in that suit has been to assert that Apple has no
copyright on the technology.

  ``We said there was no originality, it was created by someone else at
Xerox,'' said Ronald Laurie, a Menlo Park attorney on the HP defense team
in the case.

  Xerox introduced the Star computer and copyrighted its technology in
1981.  Apple did not introduce similar technology unveiling the Lisa
computer in 1983 and the Macintosh in 1984.

  Xerox did not decide to aggressively protect its technology -- which
includes the now-common hand-help pointing device known as a ``mouse''
and screen displays that make it easy to select programs and issue
commands -- until this year.

  ``There are a number of reasons for that,'' said Xerox spokesman Thomas
Abbott in Stamford, Conn.  The main reason for the delay was the recent
change and clarification in intellectual property laws, he said.

  Since the beginning of the year, Xerox has approached many large
computer companies and demanded they pay a license fee.  Abbott would not
identify the companies, but so far both Sun Microsystems and Metaphor
Computer Systems, both in Mountain View, have agreed to pay fees to Xerox.

  Xerox contacted Apple about a week ago.  Apple advised Xerox yesterday
it had nothing further to discuss ``so we filed suit,'' Abbott said.

  ``The Xerox complaint seems to confuse the difference between the ideas
and the expressions,'' said LeVasseur of Apple.  ``Copyright protects
expressions, but not ideas.  Our ideas have come from a number of sources
in the industry, but ideas cannot be copyrighted, only the expression of
those ideas and we have only copyright registration for those.''

  While Apple has wanted to closely guard its user interface technology
by granting few license, Xerox has indicated it will make its technology
widely available for a reasonable fee to whomever wants it.

        SAN FRANCISCO -- A federal judge has thrown out nearly all of
Xerox Corp.'s $150 million suit against Apple Computer over rights
to the personal-computer industry's most crucial software
technology.
[...]
       The dismissed counts include Xerox's contention that Apple
fraudulently obtained copyrights on the visual displays and
easy-to-use system of commands found on its Lisa and Macintosh
computers.
[...]
       Walker also threw out Xerox's contention that Apple was guilty
of unfair competition. Xerox had alleged that Apple wrongfully
received at least $100 million and caused at least $50 million in
damages to Xerox's business.
       The ruling still allows Xerox to seek a judgment affirming its
copyrights on technology that comes with its Star computer.
       Xerox has noted that such technology can also be found in
Apple's Macintosh or Lisa computers, and that potential Xerox
customers fear lawsuits from Apple.
[...]
       He said that Xerox intends to appeal the ruling as soon as the
one remaining count is settled.

>From: [e-mail] (Dennis Godfrey)
Newsgroups: misc.legal,comp.software-eng,comp.sys.mac.programmer,rec.games.programmer
Subject: Software Copyright Law
Keywords: European Community, copyright, reverse engineering
Date: 5 Apr 90 00:23:27 GMT
Organization: Control-C Software, Beaverton, OR

I am posting this message on behalf of a good friend without access
to the net.  I will see that all responses reach him.

Hey there out in Netland, something very strange seems to be going on in
Eurpoe as far as new copyright law for software is concerned.  I just
came back from talking to software developers in a few of the European
Community countries and I think you Netters might be interested in what is
being proposed.

Here's the low-down on the proposals in the so-called, EC Copyright
Directive (due to be passed into law in each of the EC member countries
in time for 1992 when the trade barriers come down):

1.    Copyright protection might be extended to include interface
    specifications and access protocols.  I don't mean visual
    interfaces either, but actual function call, parameter block,
    file format interfaces and so on.

2.    Any type of reverse engineering of someone else's object code
    will only be permitted if you get a specific written license
    from the someone else.  Reverse engineering in this context
    means such things as using a disassembler to try and figure out
    what their object code does, taking memory dumps, single
    stepping through code, monitoring comms. lines and so on.

IMHO these proposals are at best misguided and unrealistic and at worst
have a rather sinister blue hand guiding them.  Lawyers from IBM, DEC
and Apple are suggesting that unless they do the above, the European
Community will be writting a charter for software piracy.  They also
think that "with the push of a button" you can "decompile"
(or meaningfully disassemble) a program and get a close approximation
of the original source code including interface specifications, data
structures and other high level stuff.  I know, I know, IT CAN"T BE
DONE (at least not from the object code from any optimizing compiler
I have ever seen).  They figure that disassembly/decompilation is
unnecessary seeing as how programmers can read the object code directly
- as in read the hex/octal without a disassembler!!

My question to you, fellow Netters, is what do YOU think of these
proposals?  Do you think it makes sense that any and all software/
software and software/hardware interfaces (other than person/machine
interfaces) should be protected?  Would you be able to develop new
products if you were barred from using someone else's interface
specifications, file formats, access protocols?  Do you think all of
those friendly major players in the industry really would license us
all to use their interfaces, file formats etc.?  On reasonable terms?
Quickly?

Can you do your software development job if you were barred from doing
any kind of reverse analysis (including disassembly) on someone else's
code?  (Can you all read machine code directly without using a
disassembler??)  Could you imagine having to write to each vendor whose
code you might have to disassemble and ask for WRITTEN license to do it?
Could you imagine not being able to disassemble someone else's code to
figure out their interfaces, access protocols, or even their bugs that
you have to work around or be compatible with?

Many of the folks I have spoken to don't take this stuff seriously
("Who do those guys think they are?" "They can't do that!" etc.)  Don't
kill the messenger -- but they ARE serious and they CAN change the law in
Europe.  In fact, some 287 directives affecting European laws are now
being passed in the hope of making Europe more like a single "federal"
state.  Europe stands to become the second largest software market in
the world.

My concern is that if the Europeans do this, a) we can't sell our software
to Europe ('cos we'll get sued to a standstill) and b) there's a good
chance dominant players in the industry will try and get Congress to change
the law here.

I've posted this to several newsgroups in an effort to get a good
cross-section of opinion so apologies if you have already read this
in another group.

Please email me directly at ...!tektronix!sequent!toontown!dennis
and I'll summarize if appropriate.  BTW, fell free to flame at me
about this situation if it burns you up as much as some of the folk
I have spoken with (how often do you hear that invitation, eh?).
IMHO this is serious enough to warrant getting the word out in the
software community before the situation gets out of hand.  If you
want more info or feel the urge to write to someone (congressman,
European Comissioners etc.)  email me and I'll give you some names
and address.

Dennis Godfrey

...!tektronix!sequent!toontown!dennis

Computer Currents article 3/27/90

       Bricklin & Kapor Testify on Software Protection

  Daniel Bricklin and Mitch Kapor, the designers of VisiCalc and Lotus
1-2-3, respectively, testified before a House of Representatives
subcommittee recently that software protection regulations should not be
overly restrictive.

  While both felt that the property rights of publishers and developers
must be protected, they agreed that this protection should not be of a
nature that turns the industry into a legal battleground.  Kapor told
the committee, "Litigation is becoming a business tactic, not a
product of last resort.  Software should not be an industry driven by
litigation."  He added that over-protection of software "is just as
pernicious as underprotection in its stifling effects on innovation."

  The position of both witnesses was that it is actual program code
and not the underlying ideas that should be protected.  Kapor was
quoted as saying, "I would only call my lawyer if we found that these
competitors had not just copied the idea but the actual lines of code
underlying it."

  Kapor's former company, Lotus Development Corporation, has sued
Paperback Software and Mosaic Software, charging that their
spreadsheet products resemble 1-2-3 to such an extent that they
violate a vested "look-and-feel" right of Lotus.  Similarly,
Bricklin's ex-company, Software Arts, has sued Lotus Development,
claiming that the company illegally utilized VisiCalc's appearance and
method of operation during its development of the highly successful
1-2-3.  Briclin, no longer associated with Sofwtare Arts, has
disassociated himself from the suit.

  The sub-committee of the House Judiciary Committee is considering a
study released recently by the Congressional Office of Technology
Assessment which calls for better legal protection of U.S.
commercially develoiped software.  Bricklin said that "he felt our
appearance before teh committee was very useful.  The committee is
considering a revision of the laws governing the protection of
intellectual property and we felt that it should be aware of our
concerns."

                --Barbara E. McMullen
                 & John F. McMullen, Newsbytes


From: athena.mit.edu![e-mail]
Date: Fri, 4 May 90 01:37:08 -0400
To: [e-mail]
Subject: tetris

Point of info:

Spectrum Holobyte is going after 8 or so different Amiga PD Tetris clones,
claiming "look and feel."  I assume you guys cleared Xtetris with them,
but if not, I thought you'd be interested of knowing of this.

Rich Carreiro                                        Denizen of Hell
ARPA: [e-mail]                         Graduate Student
UUCP: ...!mit-eddie!mit-athena!rlcarr                      MIT
BITNET: [e-mail]                      Physics Department

Lotus Wins Copyright Infringement Suit
By DANA KENNEDY
Associated Press Writer

    BOSTON (AP) - A federal judge ruled Thursday that keyboard
commands and on-screen images produced by Lotus Development Corp.'s
popular 1-2-3 spreadsheat program are protected by copyright laws.
    Paperback Software International, which lost the case along with
subcontractor Stephenson Software Ltd., argued that the copyright
applies only to the inner-workings of the software.
    In his 115-page decision, U.S. District Judge Robert Keeton
wrote that ``the user interface of 1-2-3 is its most unique element
and is the aspect that has made 1-2-3 so popular. That defendants
went to such trouble to copy that element is a testament to its
substantiality.''
    Michael Burdick, Paperback vice president of sales and
marketing, declined to comment on specifics of the lengthy decision.
    ``If (the decision) is upheld in an appeal, it will have a
serious effect on the software business,'' Burdick said. The
company will appeal the decision to the 1st U.S. Circuit Court of
Appeals in Boston, he said.
    The attorney for Lotus praised the decision.
    ``In bringing this case we sought to protect the original
creative expression that is a very large part of what people value
in our product,'' said Tom Lemberg, vice president and general
counsel of Cambridge-based Lotus.
    During the non-jury trial, which began in early February, Lotus
product managers displayed three video screens to show the
similarities in commands among Paperback Software's VP-Planner and
Mosaic's Twin Classic program.
    Because the attorney representing Mosaic fell ill during the
trial, Keeton chose to concentrate only on Paperback Software as
the defendant. It was not immediately clear Thursday if the ruling
would also apply to Mosaic.
    Defense attorneys had argued that the Lotus commands represented
``instructions for a machine rather than the expression of an
idea.''
    AP-NR-06-28-90 2118EDT

Date: Mon, 25 Jun 90 21:29:26 PDT
From: Paul Rubin <[e-mail]>
To: pacbell!ames!ai.mit.edu!rms
Subject: Lotus enters software clone business

SF Chronicle business section (p. C12), 6/25/90.
Lotus has bought the rights to AlphaWorks, described as
a clone of Microsoft Works (an all-in-one office automation
program (text formatter/database/spreadsheet)).  They plan
to market it under the name LotusWorks.  It doesn't
say how closely the interface was copied.

type: NYT (Copyright 1990 The New York Times)
priority: Regular
date: 06-28-90 2121EDT
category: Financial
subject: BC LOTUS COPYRIGHT
title: COMPETITOR VIOLATED LOTUS 1-2-3 SOFTWARE COPYRIGHT, COURT HOLDS
author:  JOHN MARKOFF
text:

       Lotus Development Corp. gained a significant victory Thursday
when a federal judge in Boston ruled that its copyright had been
infringed by competitors whose software imitates the distinctive
appearance of Lotus's 1-2-3 spreadsheet program.
       The case, which Lotus brought against two of its small
challengers, Paperback Software International and Mosaic Software
Inc., in February 1987, had been closely watched by the computer
industry.
       Both Paperback and Mosaic sell $99 spreadsheet programs for IBM
and compatible personal computers that imitate both the appearance
and the command set of Lotus 1-2-3, the best-selling spreadsheet
program.
       The Lotus software lists for $495.
       The two cases were separated when the lawsuit originally went to
trial, and Thursday's ruling applied only to Paperback Software and
its Canadian development partner, Stephenson Software Ltd.
       Executives of Lotus, which is based in Cambridge, Mass., have
argued that the two smaller companies copied a Lotus format -- a
grid-like design on the computer screen -- as well as the sequence
of keystrokes used to manipulate information.
       The Lotus ruling continues a legal trend of the past decade that
has significantly broadened the notion of what constitutes
intellectual property protection for software.
       Originally, most of the industry felt that only the programmer's
underlying instructions were protected under copyright law.
       But beginning in the early 1980s, a series of lawsuits involving
the video screens of game programs extended protections to the
appearance of programs.
       Some industry executives contend that the Lotus case could
radically change the nature of software competition.
       Many in the industry fear that companies that are successful in
setting an ``industry standard'' might be able to use the case to
block newcomers, restricting innovation.
       Now it appears that the dividing line between imitation and
innovation may be clearer.

       (STORY CAN END HERE. OPTIONAL ADD FOLLOWS)

       ``It's an important ruling,'' said Jack Russo, a Palo Alto,
Calif., lawyer who specializes in copyright issues.
       ``In the future, if there's a product that becomes the accepted
product in the industry, it will be very difficult to create a
program that competes with it without being willing to retrain
users extensively.''
       The Lotus ruling may affect other lawsuits now pending,
including a suit that Apple Computer Inc. filed against the
Microsoft Corp. and the Hewlett-Packard Co., accusing them of
copying certain portions of its Macintosh software, Russo said.
       ``It's an overwhelming victory for Lotus,'' said Thomas M.
Lemberg, the company's general counsel.
       ``There is a larger message to the industry, and it's a very
helpful one,'' he added.
       ``The copyright law really does protect incentives designed to
reward innovation.''
       Executives at Paperback Software said they intended to appeal
the ruling.
       They said they were still trying to digest the 110-page ruling
made by U.S. District Judge Robert Keeton and would have no
immediate comment.
       ``We're not totally surprised by the direction the judge has
taken,'' said Micheal K. Burdick, Paperback's vice president of
sales and marketing.
       ``Our view is that it is just one step in the legal process.''
       In his ruling Keeton wrote:
       ``I conclude that a menu command structure is capable of being
expressed in many if not an unlimited number of ways, and that the
command structure of 1-2-3 is an original and non-obvious way of
expressing a command structure.''
       The ruling would affect only programs that directly copy the
visual appearance and the command structure of 1-2-3, Lotus
executives said.
       The principal competitor to 1-2-3, Microsoft's Excel program,
has a different appearance and a different menu-based command set.
       Lotus officials said that the ruling did not extend to companies
that publish programs that are compatible with Lotus files, and
that it had no intention of trying to claim copyright protections
over file compatibility.
       Paperback Software was founded in 1984 by Adam Osborne, a
personal computer industry executive who also founded Osborne
computer, the maker of the industry's first transportable computer.

Date: Fri, 29 Jun 90 12:40:56 EDT
From: [e-mail]
To: [e-mail]
Subject: Briefs?

[Someone asked if the League for Programming Freedom had filed
a friend-of-the-court brief in the Lotus case, and if any League
members had testified.]

The League did not file a friend of the court brief in the Lotus case.

There are two reasons to file such a brief: to make legal arguments
that the plaintif and defendant are not going to mention, and to
indicate the opinion of a sector of the public.

In this case, the defendants were making the same arguments we would
make.  And the League is not yet large enough to be regarded as
representing community opinion.  We need more members to do that.

A consequence of not having enough members is that the League also
doesn't have enough money to pay for the writing of a brief.  The FSF
could pay for one, and I considered doing this, but did not because of
the other reasons.

It is not likely that League members will testify in court (as expert
witnesses, I assume you mean).  Some of the people who testified told
me that they expected membership in a political organization to be
held against them; for this specific reason, they did not join the
League.  This is strange, since political activity is supposed to be
one of the sacred aspects of American democracy, but I am assured it
is so.  However, most of us are not needed as expert witnesses,
because a few prominent ones are enough.  The rest of us can join the
League.

It is possible that someone representing the League will testify at a
Congressional committee one of these days, if enough people join.

Date: Fri, 29 Jun 90 13:27:06 EDT
From: [e-mail]
To: [e-mail]
Subject: Style files

[Someone asked whether the problem of user-interface copyright
could be circumvented by developing customizable applications
which users could make compatible with their favorite interfaces
by writing "style files".]

The style file solution does not really solve the problem of
look-and-feel copyright.

It is possible to write a customizable application that uses a style
file to set up the key bindings and menus.  And if the set of bindings
that the application comes with is not compatible with anything, it
will probably be lawful to distribute it.

However, ordinary users don't generally want to go to the trouble of
writing style files themselves.  For a complicated application with a
straight-forward interface but a lot of features, the style file could
be hundreds of lines long.  Writing it would not be something you
would do on impulse, unless you write programs for the fun of it.

Ordinary users could benefit from style files if they did not have to
write them individually--if they could be written once and distributed
widely, as we have done in GNU Emacs to emulate various other editors.
However, distributing a style file for the bindings of 1-2-3 would
cause you to be sued.  Some such distribution will go on, but only
underground, and most users won't be able to find out where to get a
copy.  Businesses will probably refuse to allow them on the premises.

In the end, there is not really much difference between reprogramming
a spreadsheet with a style file and reprogramming it by changing the
C code.

Style files do offer a possibility for political action.  Someone who
is willing to go to jail for civil disobedience could distribute a
compatibility style file persistently and openly, accepting no money
so there could be no doubt of the person's motives, refusing to obey
court orders to stop, and thus challenging Lotus to put him or her in
jail.  This would bring home to the public the absurdity and injustice
of Lotus's power like nothing else.  Using a mere style file instead
of an entire program would make the point even stronger.

However, we have plenty of things to try before we need to resort to
this.  If we simply organize enough programmers as members of the
League, we can probably persuade Congress we are right without any
pain at all.

Date: 29 Jun 90 18:42:37 GMT
From: gore![e-mail]  (Jacob Gore)
Organization: Gore Enterprises
Subject: Re: Style files
References: <[e-mail]>
Sender: [e-mail]
To: [e-mail]

Apple, in its suit against Hewlett-Packard, claimed that NewVawe infringed
on Mac copyrights because it COULD be configured to look like a Mac screen.
The facts that their "evidence" was not the default configuration of
NewVawe did not deter them.

Much as I hate government involvement in this (or just about anything), I'm
afraid that legislation is called for.  We're already fighting off attacks
to legislate monopolies, perhaps it's time for a counterattack.

Jacob
--
Jacob Gore        [e-mail]            boulder!gore!jacob

Date: Mon, 2 Jul 90 13:45:18 EDT
From: [e-mail]
To: [e-mail]
Subject: Are extortion fees exorbitant?

[Someone suggested that we "solve" the problem by buying licenses
from Lotus.  He suggested this would be perfectly satisfactory if
the fees were not exorbitant.]

Giving Lotus the power to control who uses the interface users know is
bad for the public interest and takes away our freedom.  (For
arguments for this, see the position paper that I mentioned recently.)

It is short-sighted to consider only the cost Lotus might choose to
impose on us in this occasion.  Even if, amazingly, they were to make
it so small as to be insignificant, there is no reason to expect the
next owner of a user interface monopoly to do likewise.

For both of these reasons, what we must do is try to take away Lotus's
new power.  If Lotus offers a few of us surrender on painless terms,
we should still keep resisting.

For the Free Software Foundation, this is a moot point, since the
alternative of surrender is not available.  Licenses usually require
payment per copy.  There is no way for this to be done for a free
program.  We cannot require our users to pay Lotus when they
redistribute (not even in special cases), nor can we pay the fee for
them.

Lotus Sues 2 on Copyright Violation, NYT, D1

by John Markoff

Acting swiftly to capitalize on last week's Federal court ruling
giving copyright protection to the set of computer commands used in
its popular 1-2-3 spreadsheet program, the Lotus Development
Coprporation sued to California software companies yesterday, accusing
them of copyright infringement.

.... The suits today named BORLAND INTERNATIONAL and the SANTA CRUZ
OPERATION as defendants.

....

Borland executives argued that the Lotus suit was without merit
because Borland's spreadsheet, Quattro Pro, does not mimic the Lotus
command set; rather, it has its own distinctive menu system.  However,
it is possible to configure the Quattro program so that it appears
with ``1-2-3-compatible menu tree commands.''  The user must install
special files for this operation, which is detailed in the Quattro
program guide.

........

TO:        Lotus Employees

FROM:      Tom Lemberg, vice president and general counsel

SUBJ:      Copyright lawsuits

DATE:      2 July 1990

Today, Lotus filed copyright infringement suits against Borland International,
developer of Quattro and Quattro Pro, and The Santa Cruz Operation (SCO),
developer of SCO Professional.  At the heart of our complaints against Borland
and SCO is our belief that both companies' products infringe Lotus' copyrights
by copying the menu commands and command structure of Lotus 1-2-3, among other
elements of 1-2-3's user interface.

We have a responsibility to our customers, you, our employees, and our
shareholders to vigorously protect our copyrights.

We began looking at the 1-2-3 copyright issue several years ago when we became
aware of products from other vendors that we believe violated our copyrights.
In January 1987, we sued Paperback Software International and others for
copyright infringement.  Last week, federal Judge Robert E. Keeton established
the copyrightability of Lotus 1-2-3's user interface in his decision in Lotus
vs. Paperback.  We awaited a decision in that case before proceeding against
Borland and SCO whom we believe copied substantial elements of the user
interface of Lotus 1-2-3.

The copyright law provides the legal framework that encourages the innovation
that has driven our industry's success.  It gives successful innovators
protection from those who would profit by copying their creations.  It also
encourages lawful and fair competition by rewarding innovation; it outlaws
unfair competition by those who copy and sell the creations of others.  We
believe the copyright law as it pertains to software protects developers large
and small by incenting them -- and investors -- to invest the money, make the
enormous effort and take the great risks it takes to achieve success in the
marketplace.

Similar to Lotus vs. Paperback, the suits we filed today will provoke
considerable debate in the developer, consultant and user communities.  We
expect varying reactions.  Those who disagree with us on this issue are
entitled to their opinions and have a right to express them.  We will respect
those rights as we pursue ours.

                              IMPORTANT GUIDELINES

If you are discussing Quattro, Quattro Pro and SCO Professional with anyone,
you must follow the following guidelines:

Even if asked, you should not talk about these cases against Borland and SCO,
other than to state the following:

"The suits against Borland and SCO have been filed and are now in litigation.
Other than to say that Lotus has charged Borland and SCO with violating its
copyrights by copying central aspects of the user interface of Lotus 1-2-3 in
their products Quattro, Quattro Pro and SCO Professional, I cannot comment on
the suits.  If you have questions, please contact Lotus' corporate
communications department."

You should not predict or speculate about the outcome of the cases against
Borland or SCO, or the consequences of a particular outcome.

You should not state as a conclusion that Quattro, Quattro Pro or SCO
Professional are illegal or violate Lotus' copyrights.  With that limitation,
you may explain the advantages of Lotus 1-2-3 or other Lotus products over
competitive products (including any version of Quattro or SCO Professional).

If asked about Judge Keeton's ruling in Lotus' suit against Paperback Software
and Stephenson Software, you should refer the questioner to Lotus' press
release about the decision, dated June 28, 1990.  You should not expand upon
that press release and should refer any further questions about the Paperback
decision to Lotus' corporate communications department.  A copy of the June 28,
1990, press release was sent to you via EMail.  If you need another copy,
contact Lotus' corporate communications department.

Thank you in advance for your compliance with these guidelines.


Contact    Richard Eckel
           Lotus Development Corporation
           [phone]
           MCI ID: 374-8749

                                                          FOR IMMEDIATE RELEASE

                    Lotus Files Copyright Infringement Suits

           Against Borland International and The Santa Cruz Operation

      CAMBRIDGE, Mass., July 2, 1990 -- Lotus Development Corp. today filed
separate suits in Boston's U.S. District Court against two California software
companies, charging copyright infringement of the company's best-selling
software, Lotus 1-2-3.

     The suits charge that products marketed by Borland International Inc. of
Scotts Valley, Calif. and The Santa Cruz Operation Inc. (SCO) of Santa Cruz,
Calif. violate Lotus' copyrights in the user interface of Lotus 1-2-3.  The
specific products named in the suits are Quattro and Quattro Pro from Borland
International and SCO Professional from SCO.

     Federal District Court Judge Robert Keeton last week ruled that Paperback
Software International of Berkeley, Calif and Stephenson Software Ltd. of
Vancouver, British Columbia violated Lotus' copyright in Lotus 1-2-3 by copying
substantial elements of the software program's user interface.

     "Lotus 1-2-3 is our most significant product, in which we have invested
considerable resources to meet the evolving needs of our customers," said
Thomas Lemberg, Lotus' vice president and general counsel.  "We have a
responsibility to our customers, employees and shareholders to protect our
product from unlawful copying.

     "Among other things, we believe that in developing Quattro and Quattro Pro
and SCO Professional, Borland International and The Santa Cruz Operation have
copied the Lotus 1-2-3 commands and menu structure virtually in their
entirety," Lemberg added. "These are specific elements of Lotus 1-2-3 that the
Court last week ruled cannot be copied. This suit has nothing to do with
customers, resellers or add-in developers of either Borland or SCO."

     In his 113-page decision last Thursday, Judge Keeton said that the user
interface of Lotus 1-2-3, including the structure, sequence and organization of
the program's menus, are copyrightable.

     "I conclude that a menu command structure is capable of being expressed in
many if not an unlimited number of ways, and that the command structure of
1-2-3 is an original and nonobvious way of expressing a command structure,"
Judge Keeton stated in the opinion.

     "The user interface of 1-2-3 is its most unique element, and is the aspect
that has made 1-2-3 so popular," the Court wrote.

     "The software industry has thrived because of the innovative creations of
hosts of developers," Lemberg said.  "As last week's decision makes clear, the
copyright law protects such innovative expressions as the menus in Lotus
1-2-3.  Lawful competition is based on innovation, not imitation.  One effect
of seeking to enforce our copyrights is to protect software innovators
everywhere from illegal copying, which ultimately leads to advances in
technology that benefit customers."

     Lotus Development Corp. is the leading provider of applications software
for personal computers and information services delivered on CD-ROM, and is a
worldwide supplier of applications software for workstations, minicomputers and
mainframes.

Technology & Science:
 Lotus Development Wins Suit Charging
 Paperback Software Violated Copyright
 ----
 By William M. Bulkeley
 Staff Reporter of The Wall Street Journal


WALL STREET JOURNAL (J) 06/29/90
Copyright (c) 1990 Dow Jones & Company, Inc.

  BOSTON -- Lotus Development Corp. won a closely watched lawsuit in
which it charged that Paperback Software International had violated
its copyright on its best-selling 1-2-3 program.

   Federal District Court Judge Robert Keeton ruled that "liability
for infringement" of Lotus's copyright was established by Lotus in the
three-year-old case.

   Software copyrights have been a contentious issue in the software
industry since Lotus filed its suit against Paperback, which is based
in Berkeley, Calif. Paperback's VP Planner program used different
computer code than Lotus's 1-2-3, but its commands and user interface -
- the screens and keystrokes that the user sees and uses -- were so
similar as to violate Lotus's copyright, Judge Keeton ruled. He called
the copying "overwhelming and pervasive."

   Judge Keeton's 113-page ruling was issued late yesterday afternoon
in Boston. The ruling isn't likely to have much financial impact on
Lotus, which analysts say has maintained its dominant 60% market share
despite competition from clonemakers such as Paperback and other
software companies.

   However, "it's going to be a long hot summer for the defendants in
all the pending software copyright suits," said Robert Therrien, an
analyst with PaineWebber.

   Apple Computer Inc. is suing Microsoft Corp. and Hewlett-Packard
Inc. over alleged violations of its copyright on the Macintosh
computer interface. "There's a strong probability that Apple has a
good case," Mr. Therrien said.

   Many computer law experts had predicted that Lotus would win the
case, based on the growing body of software copyright law. "This is
going to re-emphasize that screen displays are copyrightable subject
matter even if the underlying code is different in the two products,"
said John Yates, an Atlanta computer law specialist who represented
Digital Communications Associates Inc., Alpharetta, Ga. in its
successful copyright-infringement suit against Softklone Distributing
Corp.

   Thomas Lemberg, Lotus's vice president and general counsel, said
the ruling "is definitive. It is a major victory and we feel very good
about it." Henry Gutman, Lotus's outside counsel on the case, added,
"It's a very important decision."

   Mr. Lemberg said that Lotus expects to request an injunction
prohibiting Paperback from continuing to sell VP Planner at a
conference that Judge Keeton scheduled for July 19. The issue of
damages in the case had been reserved for a separate phase of the
trial.

   Attorneys for Paperback couldn't be reached for comment.

   In his ruling, Judge Keeton said that he didn't find the concept of
a copyright on "look and feel" of a program to be "significantly
helpful." Many software lawyers, frustrated by the difficulties of
defining what elements make a program creative and innovative have
used the phrase "look and feel," which is borrowed from copyright
decisions on music, plays and novels. He said he preferred the concept
of a user interface.

   Judge Keeton said that some aspects of the user interface weren't
evidence of copyright violation. For example, what he called the
"rotated `L' " arrangement of headings for rows and columns and the
use of the slash key to start commands, aren't copyrightable he said.

   However, he said that the menu of commands that a user can invoke,
such as copy, move, file "is capable of being expressed in many . . .
ways." He noted that other spreadsheets, including Microsoft's Excel
have very different command menus. And he concluded that the menu is a
key element of 1-2-3's user interface, which "is the aspect that has
made 1-2-3 so popular."

   In a separate development, Lotus shifted responsibility for some
jobs among vice presidents and hired a new vice president from Apple
Computer Inc.

   Lotus named Donald P. Casey, Apple's vice president of networking
and engineering, as its new vice president of the spreadsheet
division, in charge of its key revenue source.

   The departure of Mr. Casey, however, is a blow to Apple, whose
research and development organization is still reeling from the ouster
early this year of Jean-Louis Gassee. Since then, John Sculley,
Apple's chief executive officer, has been overseeing the company's
research and development activities. Mr. Casey directly reported to
Mr. Sculley and recently was handed responsibility for producing new
products for the company's Apple II family as well as networking
products.

   Mr. Casey, 44 years old, said that the Lotus job "is a great
opportunity." He said he wasn't leaving Apple in a dispute over
strategy, but declined to comment on Apple's outlook.

   Mr. Casey succeeds Frank Ingari who becomes vice president of the
new Emerging Markets Business Group, which will seek markets in the
home and small businesses. June Rokoff, vice president of graphics
products will become vice president of a new group in charge of
communications and information services, including its CD-Rom
products. David Roux who had headed some of those operations becomes
vice president of business development.

Technology:
 Lotus Takes
 Hard Line
 On Software
 ----
 By Ron Suskind
 Staff Reporter of The Wall Street Journal


WALL STREET JOURNAL (J) 07/03/90
Copyright (c) 1990 Dow Jones & Company, Inc.

  CAMBRIDGE, Mass. -- Lotus Development Corp., emboldened by its
copyright victory against a small software company, is now waging
battle against more formidable rivals.

   Lotus filed suit against California-based Borland International
Inc., claiming that Borland's upstart Quattro software infringes on
the copyright of Lotus's best-selling 1-2-3 spreadsheet.

   The suit, which includes a similar complaint against Santa Cruz
Operation Inc., another California software maker, comes on the heels
of Lotus's copyright infringement victory last week over Paperback
Software International.

   Legal experts say that last week's decision, while not ensuring
future success in court, has strengthened Lotus's position. "Lotus is
now in an extremely powerful position to enforce its copyright against
Borland and others," says Lee Gesmer, a partner at the law firm of
Lucash, Gesmer & Updegrove, a specialist in copyright law.

   Regardless of what happens, Lotus's aggressive posture could deter
other potential rivals from trying to invade its turf.

   Borland and Quattro Pro were obvious targets for Lotus's next legal
attack because Quattro has become a hot product. While Lotus dominates
the spreadsheet business with a market share of about 60%, Borland
claims that Quattro Pro is winning some business from Lotus. In heavy
national over-the-counter trading yesterday, Borland stock plummeted
$4.375, or more than 20%, to close at $17 a share. Lotus's stock
closed at $34.625 a share over the counter, down 12.5 cents.

   "The heart of the case for us is the similarity in menus," or
screens and keystrokes that the user sees and uses, says Lotus general
counsel Tom Lemberg, noting Lotus's special interest in Quattro Pro,
Borland's latest version of its Quattro spreadsheet. "Without the
Quattro Pro, we wouldn't have a case."

   In terms of keystrokes, Lotus, for instance, claims that Quattro
Pro's use of the "C" key to denote what type of currency to use on a
spreadsheet, as well as the use of "FR" for file retrieve, constitute
infringements on Lotus's 1-2-3.

   "We believe that the Quattro software is of original design,"
responds Borland spokesman Dick O'Donnell, "and if you ask Quattro
users why they use our software, they'll tell you it's because of the
features they get that they can't get elsewhere."

   Borland has specifically targeted Lotus's 1-2-3 with its Quattro
Pro. Borland sells Quattro Pro for just $99 to owners of 1-2-3,
compared with the normal Quattro Pro price of $495.

   Borland, anticipating Lotus's suit, actually fired the first shot.
Friday, the company filed for a declaratory judgment in federal court
in San Jose, Calif., stating that Quattro doesn't infringe on Lotus's
copyright. Because of Borland's lightning strike, says Rick Sherlund,
an analyst with Goldman Sachs, the case will most likely proceed in
California rather than before the federal judge in Boston who ruled in
Lotus's favor in the Paperback case. "It was a shrewd move," says Mr.
Sherlund.

   Santa Cruz Operation said the software Lotus has legally attacked,
called SCO Professional, is a spreadsheet package for a multi-user
UNIX operating system. "We haven't seen the complaint, but, to the
best of our knowledge, we haven't violated any copyrights," said
company spokeswoman Janet Morton. She added that SCO Professional has
been selling in the multi-user arena since 1986, while Lotus only
recently entered the UNIX-spreadsheet market.

   "We have every intention of appealing" last week's decision, said
Michael Burdick, a vice president for marketing of Paperback Software
International of Berkeley, Calif. "The judge's extending of copyright
law to user interface has created broad adverse effects on the
computer software industry, as is evidenced by the Lotus-Borland suit
just filed. The legal wrangling has already begun."

   The suit underscores how litigious the software industry has
become. Apple Computer Inc., for example, has lawsuits pending against
both Microsoft Corp. and Hewlett-Packard Co., charging their products
infringe on Apple copyrights. Many small developers of software have
decried the trend, claiming that the lawsuits stifle the creativity
and entrepreneurial spirit that helped build the software industry.
But the companies filing the suits counter that they are simply
protecting their property from competitors who seek to benefit
unfairly by copying unique features.

============================================================================
SUBJECT:  Lotus sues more ``look and feel'' software mimics
SOURCE:   UPI via First! (TM) of INDIVIDUAL, Inc.
DATE:     July 2, 1990
----------------------------------------------------------------------------

    BOSTON (UPI) _ Lotus Development Corp., encouraged by victory in a case
last week, sued two California software makers in U.S. District Court Monday
for allegedly infringing the copyright on its Lotus 1-2-3 spreadsheet
program.

    Lotus charged that Borland International Inc. of Scotts Valley and the
Santa Cruz Operation Inc. of Santa Cruz are violating Lotus's rights to the
commands and memory structure on its flagship software product when they
sell products that mimic Lotus 1-2-3.

    Such so-called ``look and feel'' cases turn less on the facts of copying
than on whether the program's user interface is protected by copyright. The
user interface includes the graphics, menu structure and key-stroke commands
that a user would interact with and thus provides the look and feel of the
program.

    A spokeswoman for the Santa Cruz Operation, Brigid Fuller, described her
company's SCO Professional spreadsheet as ``a 1-2-3 work-alike. It works
just like Lotus 1-2-3,'' she said.

    However, a spokesman for Borland, Richard O'Donnell, said, ``We believe
Quattro is an original program and does not infringe on Lotus in any way....
But somebody who has used 1-2-3 would not have a steep learning curve to use
this product,'' he added.

    The suits against Borland, for its Quattro and Quattro Pro programs, and
SCO followed by only two business days the Lotus court victory in a ``look
and feel'' case against Paperback Software Intern ational and a Canadian
supplier, Stephenson Software Ltd. of Vancouver, British Columbia.

    In the Paperback case, Lotus won the right to extend copyright
protection to the graphic displays, menus and key strokes that make up the
user interface of Lotus's program.

    However, a Paperback Software spokesman said the company would appeal
last week's ruling to the 1st U.S. Circuit Court of Appeals.

    Thomas Lemberg, chief counsel for Lotus, said the new suits were
prompted by last week's decision.

    ``We began looking at the question of copyright violations several years
ago. And we've been awaiting the decision in the Paperback case before
proceeding against anybody else who we think may have violated our
copyrights.''

    He declined to say whether more suits would follow, but said: ``We from
time to time look at people and we consider suing them.''

    Borland filed an action in U.S. District Court in San Jose on Friday,
the day afte r the Paperback decision, asking for ``court confirmation that
our Quattro Pro product does not infringe any copyrights of Lotus's
products,'' O'Donnell said.

    A securities analyst, Scott Smith of Donaldson Lufkin & Jenrett in New
York, said ``I think Lotus is going to try to push the limits of its victory
in the (earlier) software suit and cut down the competition in spreadsheets.
I think they're going to go after the people who are in the realm of the
decision last week.''

[07-02-90 at 08:41 EDT, Copyright 1990, UPI, File: u0702204.000]

From: [e-mail]  (Bob Sutterfield)
Organization: Morning Star Technologies
Subject: Why I have joined LPF
Sender: [e-mail]
To: [e-mail]

People look at me and say things like "gee, Bob, you don't look like a
frothing-at-the-mouth socialist to me!" and "you mean you really go in
for all RMS' dogma?" so I thought I might explain why I have decided
to join LPF.

No, I am not a socialist.  I was raised at the knee of a true disciple
of Keynesian economics.  In fact, I recently gave up my status as a
state lackey to become as grimy a capitalist as anyone you'd ever want
to meet.  I don't even like trade unions, considering them (as have
generations of my fathers before me) to be institutionalized price
collusion.  But that's another topic...

Our company makes some products that operate similarly to some
products made by other companies, in either their user interfaces or
their programmatic interfaces.  The recent Lotus decision (if I
understand it correctly) might render some of our products litigiously
vulnerable.  This would reduce our company's opportunities in the
marketplace.

What's more, some parts of our development environment consists of
software that, though free, operates similarly to software that one
might license from other companies.  We have chosen this development
environment because it is reliable, flexible, and technologically
preferable to the alternatives; it's also less expensive.  In some
cases, alternatives don't really exist:  we depend upon abilities of
the GNU C compiler, assembler, and loader in our day-to-day work.
Those software development tools, and our use of them, might become
litigiously vulnerable, in light of the recent Lotus decision.  This
also would reduce our company's opportunities in the marketplace.

Besides the commercial issues, as a philosophical programmer I
disagree with the judge's decision in the Lotus look-n-feel case.  I
find his assessment of the issues to be lacking in understanding of
the history and traditions of this profession, as well as the
practical realities and advantages of computing in a community of
cooperating collaborators.  To advance technologically, we must avoid
wasting our collective time re-solving problems to which satisfactory
solutions have already been found.  We must take full advantage of all
the discoveries that have preceded the present moment.

I don't know for sure how much good the League for Programming Freedom
will really do, or if anything or any group can affect the judicial
climate that gives rise to events like the Lotus decision.  And I
don't always agree with everything RMS does or with all the beliefs he
holds.  But LPF is a group of which I've become aware that might be
able to respond to things like the Lotus decision in a constructive
manner.

I have decided to contribute in the form of dues and membership count,
and potentially via other means, to LPF's efforts.  I encourage you to
consider membership as one means of expressing your support for the
freedoms we enjoy in the computing community.  If your company will be
negatively affected by such decisions, I encourage you to consider
corporate membership as well.

To join the LPF send $42 to:
    League for Programming Freedom
    1 Kendall Sq, #143
    PO Box 9171
    Cambridge, MA 02139
    or phone [phone]

From: [e-mail]  (Russ Nelson)
Organization: Clarkson University, Potsdam, NY
Subject: Why I joined the LPF also.
Sender: [e-mail]
To: [e-mail]

I joined the League for Programming Freedom also.  I was outraged at the
Lotus decision, and again now that Lotus is sueing Borland.

Lotus should not be granted monopoly privileges for their user
interface.  Their user interface became the defacto standard because
they sold many copies of it.  You may argue that that was because of
their user interface, but there are many more factors involved, such
as features, price, marketing, etc.  In any case, Lotus has earned
a great deal of money from 1-2-3.  That is the intrinsic reward for
creating a defacto standard.  They do not need an extrinsic reward
for their standard.

Some may argue that monopoly protections (be they copyrights, patents,
or trade secrets) are necessary for innovation.  They are ignoring the
current high level of innovation in the computer industry.  Anyone who
listens to users will quickly realize that we do not need *more*
change.  If anything, we need less change.

I would think that the judge in question (don't remember his name)
would realize this.  Perhaps someday we'll have leaders who are
selected for their ability to manage technology, rather than leaders
who are selected for their ability to be selected.

--
--russ (nelson@clutx [.bitnet | .clarkson.edu])  Russ.Nelson@$315.268.6667
In Communism's central planning, citizens are told "you will make widgets".
In Capitalism's advertising, citizens are told "you will buy widgets".