GPSolo September 2007
INTELLECTUAL PROPERTY LAW
Judicial Support for Semiconductor Reverse Engineering
Every progressive company does competitive intelligence as a means to anticipate or respond to its competitors, whether in manufacturing or advanced technology. Reverse engineering for competitive intelligence is a completely acceptable and legal practice throughout industry. What one does with the information gathered from reverse engineering is the determining legal factor.
What one does with the information gathered from reverse engineering is the determining legal factor.
Legislative support. The Semi-conductor Chip Protection Act of 1984 was enacted to deal with fears that foreign companies were unfairly competing with American semiconductor companies by creating rote copies of American chips, particularly memory chips. At the time, there was no protection for the physical layout or “mask work” of a chip, and it was not clear that copyright protection extended to programs embodied in integrated circuit chips. Reverse engineering was integrated into this legislation, acknowledging that copying is an accepted mode of competition in the industry. The act provides that “the owner of a particular semiconductor chip product made by the owner of the mask work or by any person authorized by the owner of the mask work, may import, distribute or otherwise dispose of or use, but not reproduce, that particular semiconductor chip product without the authority of the owner of the mask work.” This exclusion reaffirms the right to reverse engineer a chip to understand its operation and structure and learn from what is revealed, and also the right to create new chips based on the legitimate reverse engineering of a protected work.
The Digital Millennium Copyright Act (DMCA, 1998), the most recent updating of the Copyright Act, intends to offer protection to copyright holders against the circumvention of technological measures used to protect their works. The technological measures referenced include the following: measures that prevent unauthorized access to a copyrighted work and measures that prevent unauthorized copying of a copyrighted work.
It is prohibited to make or sell devices that are used to circumvent either category of technological measure. This “anti-circumvention provision” means that it is unlawful to descramble a scrambled work, to decrypt an encrypted work, or other-wise avoid, bypass, remove, deactivate, or impair a technological measure without the authority of the copyright owner. The act includes two exceptions relevant to reverse engineering: an exception for de-encrypting if it is required for research and if the copyright owner’s permission has been requested, and an exception for reverse engineering but only for the limited purpose of achieving interoperability among computer programs.
Courts support reverse engineering. There is a clear line of cases that support reverse engineering for the purposes of understanding functionality and for reference in developing new versions of information or code. As long as a device or piece of software has been legitimately obtained, reverse engineering for the purposes of investigating and understanding the device or program is considered a legitimate purpose even if carried out in a commercial context.
The jurisprudential support for reverse engineering can be reviewed in a number of prominent cases. One of the leading cases on fair use in the context of the reverse engineering of computer software is Sega Enterprises Ltd. v. Accolade Inc., 977 F. 2d 1510 (9th Cir. 1992),decided by the Ninth Circuit Court of Appeals. The defendant, Accolade, had analyzed Sega’s video game programs in order to determine the Genesis console compatibility requirements. Sega challenged Accolade’s reverse-engineering process on the grounds that the intermediate copying during disassembly constituted a violation of Sega’s copyright in the game cartridge object code. The Ninth Circuit Court held that Accolade’s intermediate copying of the Sega object code was protected by the fair use exception to copyright violation.
The court considered four factors relevant to determining whether reverse engineering of software constituted a fair use of the copyrighted work. First, in considering the purpose and character of the use, the court determined that even though Accolade eventually used the information obtained by the copying to produce a competing product, this was not conclusive. Although the end goal was commercial in nature, the purpose was to study the functional requirements only and, therefore, this use was legitimate. Second, the court considered the nature of the work. It noted that not all copyrighted works are entitled to the same level of protection. In particular, the protection provided by copyright does not extend to the ideas underlying the work. The fact that computer programs cannot be examined without a certain amount of literal copying proved to be a significant factor in this case. Third, it considered the amount of work copied, noting that even though Accolade copied the entire work, it would still not by definition preclude a finding of fair use. Fourth, with respect to the effect on the potential market for the copyrighted work, the court cautioned against making this factor determinative. The court conceded that Accolade’s entry into the game market undoubtedly affected the market for Genesis-compatible games in an indirect fashion, but further indicated that allowing Sega to try to monopolize the market by making it impossible for others to compete ran counter to the statutory purpose of the Copyright Act to promote creative expression. The court therefore found the fourth factor favored Accolade despite the minor economic loss that Sega might suffer. The court determined that where disassembly is the only means to gain access to the ideas and functional elements embedded in a copyrighted computer program and where the reason for seeking such access is to achieve interoperability, disassembly is a fair use of the copyrighted work.
In Lexmark v. Static Control Components Inc., 253 F. Supp. 2d 943 (E.D. Ky. 2003), Lexmark, a manufacturer of laser printers, alleged that Static Control had reverse engineered Lexmark’s “authentication” procedure in order to make its aftermarket laser printer cartridges work with Lexmark printers. Lexmark claimed that Static Control had manufactured, distributed, and sold microchips for use with several of Lexmark’s printers and cartridges, thus violating anti-circumvention provisions of the DMCA. At that time, Lexmark was granted a preliminary injunction that prevented Static Control from the sale of the microchips in question. The Sixth Circuit Court of Appeals ruled that the injunction should not have been granted and that Static Control had not violated the DMCA.
In Chamberlain v. Skylink, 292 F. Supp. 2d 1040 (N.D. Ill. 2003), Chamberlain alleged that Skylink reverse engineered the protocol used to activate the controller for garage door openers manufactured by Chamberlain in order to sell their own compatible remote openers. The judgment from the United States Court of Appeals for the Federal Circuit states:
Chamberlain’s proposed construction would allow copyright owners to prohibit exclusively fair uses even in the absence of any feared foul use. . . . It would therefore allow any copyright owner, through a combination of contractual terms and technological measures, to repeal the fair use doctrine with respect to an individual copyrighted work—or even selected copies of that copyrighted work. Again, this implication contradicts § 1201(c)(1) [of the DMCA] directly. Copyright law itself authorizes the public to make certain uses of copyrighted materials. Consumers who purchase a product containing a copy of embedded software have the inherent legal right to use that copy of the software. What the law authorizes, Chamberlain cannot revoke.
In sum, U.S. law favors a relatively wide scope for reverse engineering. The use of reverse-engineering knowledge as reference material for the creation of competing hardware platforms and interoperable computer programs is also fully protected.
Terry Ludlow is the founder and CEO of Chipworks, a reverse-engineering company.
for more Information About the section OF intellectual property law
This article is an abridged and edited version of one that originally appeared on page 1 of IPL Newsletter, Fall 2006 (25:1). For more information or to obtain a copy of the periodical in which the full article appears, please call the ABA Service Center at 800/285-2221.
Periodicals: Chair’s Bulletin, a monthly electronic update of Section activities and timely intellectual property issues; IPL Newsletter, a quarterly newsletter with current developments and Section news; Annual Report, a comprehensive summary of committee activities.
Books and Other Recent Publications: Fundamentals of Intellectual Property Valuation: A Primer for Identifying and Determining Value; The Intellectual Property Handbook: A Practical Guide for Franchise, Business and IP Counsel; Patent Litigation Strategies Handbook, 2d ed. Pamphlet series intended for clients, including Marketing Your Invention, Submitting an Idea, What Is a Patent?, What Is a Trademark?, and What Is a Copyright? Extensive course materials in connection with CLE programs are also available.