1. Class 3 Copyright, Winter, 2010 Ideas v. Expression Randal C. Picker Leffmann Professor of Commercial Law The Law School The University of Chicago 773.702.0864/r-picker@uchicago.edu Copyright © 2005-10 Randal C. Picker. All Rights Reserved.

2. July 2, 2015Copyright © 2005-10 Randal C. Picker2 Baker v. SeldenSelden n Core Facts u 1859: Selden copyrights book “Selden’s Condensed Ledger, or Bookkeeping Simplified” w Book is description of approach to bookkeeping and blank forms with lines and headings designed to illustrate the implementation of the system

3. July 2, 2015Copyright © 2005-10 Randal C. Picker3 Baker v. Selden u Baker creates forms with “a different arrangement of the columns” and “different headings” u Selden claims a copyright violation

4. July 2, 2015Copyright © 2005-10 Randal C. Picker4 Patenting the System n Should Selden Have Sought a Patent on the Bookkeeping System? u Is this eligible? u If so, what are the advantages of getting a patent (relative to copyright)? u Disadvantages?

5. July 2, 2015Copyright © 2005-10 Randal C. Picker5 Patenting the System n Issues u Patent system runs tougher filters for eligibility w Novelty/nonobviousness means leap relative to current knowledge must be meaningful w Patent office judges that initially w Business method patent history quirky u If patented, can block other uses of the system u Shorter period of protection (20 years vs. life of the author + 70 years (302(a)))

6. July 2, 2015Copyright © 2005-10 Randal C. Picker6 Copying the Book n Hypo u Selden publishes copyrighted book as in case, but no forms u Baker copies the book, word-for-word n Is the book copyrightable? Does Baker infringe the copyright?

7. July 2, 2015Copyright © 2005-10 Randal C. Picker7 Answer n Yes u “There is no doubt that a work on the subject of book-keeping, though only explanatory of well-known systems, may be a subject of a copyright; but, then, it is claimed only as a book. … But there is a clear distinction between the book, as such, and the art which it is intended to illustrate.”

8. July 2, 2015Copyright © 2005-10 Randal C. Picker8 Not Copying the Book n Hypo u Selden publishes copyrighted book as in case, but no forms u Baker reads the book, understands the system, and writes a book using Baker’s expression to describe the system and copies no language from Selden’s book n Copyright infringement?

9. July 2, 2015Copyright © 2005-10 Randal C. Picker9 Answer n No

10. July 2, 2015Copyright © 2005-10 Randal C. Picker10 Painting by Numbers n Hypo u Selden creates the painting the “Condensed Ledger” u It represents the bleakness of human existence, the desire to reduce human existence to meaningless figures u Baker sees the painting and paints one exactly like it n Copyright infringement?

11. July 2, 2015Copyright © 2005-10 Randal C. Picker11 Answer n Infringement u Painting will qualify as a “pictorial, graphic and sculptural work” u Copyright eligible under 102(a)(5) u Owner of copyright has exclusive right to copy under 106(1)

12. July 2, 2015Copyright © 2005-10 Randal C. Picker12 Copying the Forms Book n Hypo u Selden publishes a book of blank forms u Baker copies the book, form-by-form n Is the book copyrightable? Does Baker infringe the copyright?

13. July 2, 2015Copyright © 2005-10 Randal C. Picker13 Answer n The Court concludes: u “The conclusion to which we have come is, that blank account-books are not the subject of copyright; and the mere copyright of Selden’s book does not confer upon him the exclusive right to make and use account-books ruled and arranged as designated by him and described and illustrated in said book.”

14. July 2, 2015Copyright © 2005-10 Randal C. Picker14 Why? n Actual Facts u Baker created forms different from Selden’s u Why shouldn’t we think of that as an alternative expression of the system u Therefore, no infringement if Selden had copyright in form, and no reason not to allow copyright to Selden?

15. July 2, 2015Copyright © 2005-10 Randal C. Picker15 Forms As Necessary Incidents to System n Says the Court: u “And where the art it teaches cannot be used without employing the methods and diagrams used to illustrate the book, or such as are similar to them, such methods and diagrams are to be considered as necessary incidents to the art, and given therewith to the public; not given for the purpose of publication in other works explanatory of the art, but for the purpose of practical application.”

16. July 2, 2015Copyright © 2005-10 Randal C. Picker16 Idea/Expression Dichotomy n No Control over Ideas u You cannot use copyright to gain control over an idea (102(b)) n Copyright Protects Expressions of Ideas u My expression of an idea doesn’t block you from creating your expression of the idea u Both of our expressions will be protected under 102(a)

17. July 2, 2015Copyright © 2005-10 Randal C. Picker17 In Baker v. Selden n The Idea u Selden’s system of bookkeeping n The Expression u Selden’s book describing the system n And the Forms? u Court seems to assume small number of possible expressions in creating forms and therefore not copyrightable

18. July 2, 2015Copyright © 2005-10 Randal C. Picker18 Copyright Office on Blank Forms “ Blank forms and similar works designed to record rather than to convey information cannot be protected by copyright. In order to be protected by copyright, a work must contain at least a certain minimum amount of original literary, pictorial, or musical expression. Copyright does not extend to names, titles, and short phrases or clauses such as column headings or simple checklists. The format, arrangement, or typography of a work is not protected. ”

19. July 2, 2015Copyright © 2005-10 Randal C. Picker19 Lotus v. BorlandBorland n Core Facts u Lotus 1-2-3 emerges as dominant spreadsheet u Lotus has command interface with 469 commands and fifty menus and submenus u End-users create combinations of commands in macros

20. July 2, 2015Copyright © 2005-10 Randal C. Picker20 Lotus v. Borland u Borland enters with new spreadsheet Quattro Pro after three years of development u QP comes with Borland designed interface but also with a “Lotus Emulation Interface” u If user chooses latter, Lotus macros will work with QP and end-user need not learn new commands

21. July 2, 2015Copyright © 2005-10 Randal C. Picker21 Lotus v. Borland u Lotus wins on summary judgment u Borland drops the emulation interface but keeps a Key Reader program to process Lotus macros n Lotus claims copying of the interface and infringement: Should they win?

22. July 2, 2015Copyright © 2005-10 Randal C. Picker22 Lotus Questions n 1. Why did Borland want to imitate Lotus’s interface? n 2. How will interface creation incentives be muted if we allow imitation? n 3. What benefits will flow from allowing imitation?

23. July 2, 2015Copyright © 2005-10 Randal C. Picker23 Managing Switching Costs: Lotus v. Borland n Lotus’s Position u Dominant Spreadsheet u Lotus Interface as Standard n Embrace and Extend Strategy u Standard Microsoft strategy u Used by Borland here u Adopt predecessor’s platform (“embrace”) and extend it by adding new features n Minimizes switching costs

24. July 2, 2015Copyright © 2005-10 Randal C. Picker24 The Mechanism for the Entry Barrier n Incumbent Leverages Copyright to Impair Competition u In US, copyright arises with fixation and lasts and lasts u Easy property vests control in author u Opportunistic assertion of copyright to control related market

25. July 2, 2015Copyright © 2005-10 Randal C. Picker25 Lock In and Entry Barriers n $10 to Create System, $2 to create link n What is the entry cost for the 2 nd entrant?

26. July 2, 2015Copyright © 2005-10 Randal C. Picker26 Decentralized Investments and Lock-In n Initial Entrant Expenditure: $10 n Customer Expenditures n $2 a piece, total $16 n Entrant faces $26 entry cost u Initial customer expenditures create entry barrier n Appropriate first mover advantage?

27. July 2, 2015Copyright © 2005-10 Randal C. Picker27 Section 102(b) n In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.

28. July 2, 2015Copyright © 2005-10 Randal C. Picker28 Locating the Realm of Copyright Protection n Three places: u The spreadsheet itself/the Lotus screen displays u The computer source code u The menu commands and hierarchy/the macro structure

29. July 2, 2015Copyright © 2005-10 Randal C. Picker29 The Spreadsheet/The Screen Displays n Understanding Ideas and Expressions u An infinite number of computer programs could be created from a programming language u The spreadsheet is a particular expression of a particular programming language

30. July 2, 2015Copyright © 2005-10 Randal C. Picker30 The Spreadsheet/The Screen Displays u Shouldn’t Lotus have contended that Borland’s spreadsheet—the grid layout and structure of labeling for rows and columns— infringed on the corresponding expression that Lotus made in Lotus 1-2-3? u Also see footnote 10: “ … [W]e take no position on whether the Lotus 1-2-3 screen displays constitute original expression capable of being copyrighted.”10

31. July 2, 2015Copyright © 2005-10 Randal C. Picker31 The Computer Source Code n Hypo u Lotus creates computer source code for Lotus u Borland copies it, byte-by-byte n Copyright infringement?

32. July 2, 2015Copyright © 2005-10 Randal C. Picker32 Answer n Yes u After some work in the caselaw; see footnote 11, citing Altai; see also Apple v. Franklin, 714 F.2d 1240 (3d Cir. 1983)11Altai714 F.2d 1240

33. July 2, 2015Copyright © 2005-10 Randal C. Picker33 The Menu/Commands and Expression n Designing the Menu and Commands u Many choices possible, perhaps an infinite number u Lotus chose one from the multitude n Shouldn’t this be thought of as expressive? n If not expressive enough, can’t Lotus fix that by being more expressive?

34. July 2, 2015Copyright © 2005-10 Randal C. Picker34 Expression Isn’t the Point Here n Look at 102(b) Again u In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work

35. July 2, 2015Copyright © 2005-10 Randal C. Picker35 Expression Isn’t the Point Here n Meaning? u Even if expressive, if the expression operates as a method of operation, the expression can’t be copyrighted n How should we determine what constitutes a method of operation under Sec. 102(b)?

36. July 2, 2015Copyright © 2005-10 Randal C. Picker36 Property Rights Alternatives n Strong-Form Property Rights u Lotus has a copyright in the interface and Borland cannot use it without a license n First-Mover Property Rights u Lotus has full control over its interface and can change it at any time without advance disclosure to competitors

37. July 2, 2015Copyright © 2005-10 Randal C. Picker37 Property Rights Alternatives n Weak-Form Property Rights u Create duty of predisclosure of changes u Limit right to change interface?

38. July 2, 2015Copyright © 2005-10 Randal C. Picker38 Paper on Lotus and More n Copyright and the DMCA: Market Locks and Technological Contracts u http://papers.ssrn.com/sol3/papers.cfm?abs tract_id=690901 http://papers.ssrn.com/sol3/papers.cfm?abs tract_id=690901