Apple v. Microsoft: The End at Last?

Is the day finally at hand when we will be able to view these two words without a “v.” separating them? Perhaps, at least with respect to the $5.5 billion lawsuit filed in 1988 by Apple against Microsoft and Hewlett-Packard alleging copyright infringement and breach of contract.

On September 19, 1994, a panel of judges in the 9th Circuit U.S. Court of Appeals upheld by a 3-0 vote a Federal District Court’s 1992 ruling that Microsoft’s Windows and Hewlett-Packard’s NewWave screen displays (or graphical user interfaces) did not violate Apple’s copyrights in its Macintosh screen display.

The suit arose from a 1985 license agreement between Apple and Microsoft. Apple had objected to Microsoft’s release of Windows 1.0. The two companies struck a deal whereby Microsoft could continue marketing Windows 1.0 and all derivative versions. Microsoft was also permitted to sublicense these rights, and did so, to Hewlett-Packard. In return, Apple was granted rights to use certain Microsoft products and Microsoft agreed to delay a single IBM-compatible product.

The legal fighting began as a result of Apple’s contention that Microsoft and Hewlett-Packard copied more of the Macintosh display than the original license agreement permitted.

In 1992, after painstaking hearings, the District Court ruled that over 90 percent of Windows and two-thirds of NewWave were within the scope of the original 1985 license agreement. The court then examined to what extent copyright law protected aspects of the Mac display not permitted to be copied by the license agreement. It concluded that the remaining elements, such as various icons, were primarily graphical symbols representing generic ideas or purely functional components of the program, or were insufficiently original to merit copyright protection.

Copyright law essentially protects the original expression of ideas in tangible form, such as books, artwork, music and computer software, from unauthorized copying, distribution or modification. It does not apply to ideas. While it is well-settled that copyright protections extend to computer software, the extent to which copyright law protects screen displays has been the subject of much litigation, with many courts reaching varied results.

In the Apple case, the District Court had ruled that the usual test for determining whether copyright infringement had occurred did not apply to functional or generic elements of a screen display. Typically, a plaintiff in a copyright infringement lawsuit must show that the alleged infringing “copy” is “substantially similar” to the original work. But here, the Court refused to apply this standard. Instead, it said Apple must prove the allegedly infringing elements of Windows and NewWave were “virtually identical” to the allegedly copied elements of the Mac display — a much higher standard.

One element of the Macintosh interface claimed to be infringed was the familiar wastebasket icon used to depict the destruction or deletion of a file. The Court concluded that it was not protected by copyright law because it illustrated a predominantly functional element of the program — deleting a file — and there are only a limited number of ways to graphically illustrate this function. The Court concluded that because individual elements of the Macintosh program could be legally copied, Apple would have to demonstrate that the overall appearances of Windows and NewWave, taken as a whole, were virtually identical to the Macintosh display in order to prove infringement.

Apple refused to go to trial with this higher burden of proof and appealed the ruling to the Appellate Court. The Appellate Court held that the District Court had used the proper standard.

Apple’s options now include seeking further review from a larger appellate panel or the Supreme Court, which could refuse to hear the case.

The entire saga has been costly for Apple and could get worse: the Appellate Court ordered the District Court to reconsider its rejection of Microsoft’s and Hewlett-Packard’s request for reimbursement of its attorneys’ fees, estimated at several million dollars. As a further bite out of Apple, the Appellate Court agreed with the District Court that the 1985 license agreement permitted Microsoft to make future products that resemble Macintosh even more closely than the original Windows 1.0.

Attorney Eric Freibrun specializes in Computer law and Intellectual Property protection, providing legal services to information technology vendors and users. Tel.: 847-562-0099; Fax: 847-562-0033; E-mail: eric@freibrun.com.

October 1st, 1994|