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A hardware manufacturer’s numbering of its parts is not entitled to copyright protection if the choice of numbers is not “creative,” but instead follows a system in which each digit of the part number corresponds to a characteristic of the part, a federal appeals court has ruled. The ruling in Southco Inc. v. Kanebridge Corp. overturns an injunction issued last year by senior federal Judge Norma L. Shapiro of the U.S. District for the Eastern District of Pennsylvania, who held that Pennsylvania-based Southco had the right to block a competitor from publishing its numbering system on a comparison chart to show that the competitor’s parts are “interchangeable.” In a January 2000 opinion, Shapiro found that Southco’s numbering system was a “complex code” with “unique, non-intuitive and highly complex attributes.” If the numbering system were not protected by copyright, Shapiro said, Southco “would suffer as a direct result of widespread use by unauthorized competitors.” Now a unanimous three-judge panel of the 3rd U.S. Circuit Court of Appeals has ruled that Southco’s part numbers don’t even qualify for copyrights. “Southco’s part numbers are completely devoid of originality and instead result from the mechanical application of the numbering system,” 3rd Circuit Judge Samuel A. Alito wrote in an opinion joined by Judges Dolores K. Sloviter and Anthony J. Scirica. “We conclude that the creative spark is utterly lacking in Southco’s part numbers and that these numbers are examples of works that fall short of the minimal level of creativity required for copyright protection,” Alito wrote. New Jersey-based Kanebridge’s success in the appeal may have had something to do with the impressive support it received from the U.S. Justice Department. In a friend-of-the-court brief, lawyers from DOJ, the U.S. Copyright Office and the U.S. Patent & Trademark Office argued that Shapiro’s ruling threatened the “delicate equilibrium” that Congress established with copyright laws “between protecting private ownership of expression as an incentive for creativity and enabling the free use of basic building blocks for future creativity.” The government lawyers argued that Southco “seeks to use copyright law to forestall competition.” And even if Southco’s part numbers are entitled to copyright protection, they said, Kanebridge’s use of the numbers in its ad was protected under the “fair use” doctrine. Southco manufactures “captive screw fasteners” — devices used in assembling the panels of items such as computers and telecommunications equipment. Its numbering system was designed to assist its employees and customers in identifying and distinguishing among its products. Under the system, each fastener is assigned a unique nine-digit number, with each digit describing a specific physical parameter of the fastener. But the appellate court found that the creation of the numbers themselves does not involve any creativity since they follow a rigid system in which each digit has a specific meaning. As Alito described it: “Anyone who is familiar with Southco’s system should be able to determine all of the relevant features of a particular screw from its part number alone.” Kanebridge is a distributor for Matdan America, a competing manufacturer of panel fasteners that often sets out to beat Southco’s price. Because Southco’s numbering system has become an industry standard, many of Kanebridge’s customers often use Southco part numbers when ordering Matdan parts. As a result, Kanebridge began using Southco’s part numbers in comparison charts that were included in advertisements. The charts show Kanebridge’s and Southco’s numbers for equivalent fasteners in adjacent columns, making it clear that the parts are interchangeable. Kanebridge’s lawyers — Steven B. Pokotilow, Ian G. Dibernardo and Kiersten M. Skog of Stroock Stroock & Lavan in New York, along with Stanley H. Cohen of Caesar Rivise Bernstein Cohen & Pokotilow in Philadelphia — argued that such use is perfectly legal. To make competition viable, they said, Kanebridge has to be allowed to “cross-reference” Southco parts “in an honest, accurate and comparative manner.” Without that right, they said, consumers would lose the chance to get cheaper alternative fasteners. But Southco’s lawyers, James C. McConnon and Alex R. Sluzas of Paul & Paul in Philadelphia, argued that courts have authorized the use of copyright law to protect complex numbering systems. Judge Shapiro agreed, finding that, in copyright law, “originality is a low threshold for a plaintiff to meet; even a slight amount will suffice.” Southco’s system, she said, easily meets the test because “it was created out of nothing and has developed to some use as an industry standard.” Instead of using “random numbers,” Shapiro found that Southco instead assigns them based on a system designed more than 20 years ago and refined ever since. “The numbering system is a complex code expressing numerous detailed features of Southco’s hardware products,” she wrote. “Each part number tells the story of a part’s size, finish and utility.” But Judge Alito found that the legal analysis should focus not on the numbering system, but on the numbers themselves. And looking at the case through that lens, Alito said, it was clear that the numbers were not the result of any creativity at all. “To satisfy the originality requirement, Southco’s part numbers must display some minimal level of creativity. Although the originality requirement is not demanding, it nevertheless is a prerequisite for copyright protection since copyright protection is available only for ‘original works of authorship,’” Alito wrote. Alito found that although Southco “devoted time, effort, and thought to the creation of the numbering system,” the system also made it “impossible for the numbers themselves to be original.” Under the system, Alito found, “there is simply no room for creativity when assigning a number to a new panel fastener. The part has certain relevant characteristics, and the numbering system specifies certain numbers for each of those characteristics. As a result, there is only one possible part number for any new panel fastener that Southco creates.” Each number, he said, “results from the mechanical application of the system, not creative thought.” Alito found that Shapiro erred in relying on dicta from the 8th Circuit in its 1986 decision in Toro Co. v. R&R Products Co. In Toro, the 8th Circuit held that a lawn care machine manufacturer’s part numbering system lacked sufficient originality for copyright protection because the manufacturer arbitrarily assigned a random sequential number to each new part it created and offered no evidence that the numbers used were intended to encode any information. “The random and arbitrary use of numbers in the public domain does not evince enough originality to distinguish authorship,” the Toro court wrote. But Shapiro quoted the Toro court’s qualification of its ruling: “This is not to say that all parts numbering systems are not copyrightable. A system that uses symbols in some sort of meaningful pattern, something by which one could distinguish effort or content, would be an original work.” Alito found that reliance on Toro was unfounded since its ruling was premised on a “sweat of the brow” theory, under which courts considered the amount of effort expended by an “author” in assessing whether a work was original. Since then, Alito said, the U.S. Supreme Court has clearly rejected the “sweat of the brow” theory, finding that it “flouted basic copyright principles.” And the Toro court suggested only that a numbering “system” might be original, Alito noted. “Here, as we have emphasized, the issue is not the originality of Southco’s system but of its parts numbers themselves,” Alito wrote.

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