Ibm-Fujitsu Order Exposes Morass of Software Copyright Law

By Coy, Peter | THE JOURNAL RECORD, September 19, 1987 | Go to article overview

Ibm-Fujitsu Order Exposes Morass of Software Copyright Law


Coy, Peter, THE JOURNAL RECORD


NEW YORK - Two computer giants submitted to a dictated peace this past week in a landmark case that highlighted the turmoil over copyright laws governing computer programs.

A pair of arbitrators announced an order giving themselves sweeping powers to regulate relations between International Business Machines Corp. and Japan's Fujitsu Ltd. - the world's largest and fourth largest computer makers, respectively.

The arbitrators did something the courts could not do. They not only terminated a dispute over IBM allegations that Fujitsu illegally copied its software, but established a detailed mechanism to prevent future conflicts for a period of five to 10 years.

The decisive action announced Tuesday contrasted conspicuously with the legal morass that has enveloped the field of computer software copyrights.

Copyrights are supposed to protect and encourage innovation, but some computer innovators say uncertainty over what can be copyrighted and the threat of endless litigation are actually doing the opposite.

Often, software disputes pit companies that have well-established products against companies that are trying to seize a piece of the business by making products that are similar but cheaper or with extra features.

Each party typically claims that it alone is on the side of progress and innovation.

The danger of prolonged confusion over copyrights is that cautious computer companies might choose the safe course and stand pat, a course that would ultimately ruin one of the few industries in which the United States remains clearly No. 1 in the world.

Copyright cases dragging through the courts include a landmark computer chip dispute between Intel Corp. and Japan's NEC Corp. and three cases over the ``look and feel'' of Lotus Development Corp.'s best-selling 1-2-3 spreadsheet program.

Although the arbitration order contains some bad news for both IBM and Fujitsu, it has the merit of letting the companies know exactly where they stand with each other.

Fujitsu will pay IBM a lump sum for a paid-up license to use the operating systems that control IBM's mainframe computers and will be given access for a fee to the programming information that will allow it to make functional equivalents of future IBM operating systems.

The order guarantees that Fujitsu will be able to continue as a competitor to IBM, the dominant force in the $20 billion-a-year worldwide business of mainframe computers.

Some lawyers think the IBM-Fujitsu order will encourage other companies to set up arrangements to avoid copyright entanglements.

In fact, that has already begun to happen. Many companies that are working on products designed to be compatible with those of an industry leader - such as clones of the IBM personal computer - have the work done in a ``clean room.''

The clean room is a work area staffed only by people who are supposed to have no familiarity with the inner workings of the product they are mimicking and thus cannot be accused of illegal copying.

The IBM-Fujitsu case is a twist because it creates what is, in effect, a ``dirty room.'' Fujitsu engineers will be allowed to look at all of IBM's programming code for its operating systems, but the arbitrators will control how much of it they can carry out the door.

Copyright lawyers tend to say the system is working as is.

Courts are gradually managing to clarify the areas of software copyrights that were left vague by the 1976 copyright law, argues Robert Morgan of Fish & Neave, a New York law firm specializing in intellectual property.

Others are not so sure.

``I have some questions about whether the courts will ever be conversant enough with the technology to make me comfortable with the judge or the juries making the decision,'' said Michael Scott, director of the non-profit Center for Computer Law in Los Angeles. …

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