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A bevy of law professors — along with library and computer industry groups — are worried about a court ruling they say could undermine fair use of copyrighted material. They are upset about a U.S. Court of Appeals for the Federal Circuit decision that allows shrink-wrap license agreements to ban reverse engineering of software products. Professor Mark Lemley of the University of California, Berkeley’s Boalt Hall School of Law filed a brief on behalf of the amici asking the U.S. Court of Appeals for the Federal Circuit to clarify its “sweeping language” in Bowers v. Baystate Technologies Inc., 01-1108. The Federal Circuit ruled in August that Baystate breached its contract with software vendor Harold Bowers because his shrink-wrap license agreement specifically prohibited reverse engineering of the software product. Baystate argued that the Copyright Act pre-empts licensing terms that limit the use of copyrighted materials. But the Federal Circuit disagreed, citing a 1994 decision by the 1st U.S. Circuit Court of Appeals involving misappropriation of trade secret software. “The panel in essence held that by using a shrink-wrap license, a publisher could require users to waive all their privileges under the Copyright Act,” Lemley wrote. “Such a result would remake copyright law as we know it.” Shrink-wrap licenses are unsigned agreements between the purchaser of a software program and the manufacturer that specify the conditions for use of the software. The term refers to the cellophane-wrapped boxes that software products are packaged in; once the package is broken the consumer is bound to the licensing terms. In addition to prohibiting reverse engineering, Lemley said shrink-wrap licenses could also be used to deny a scholar his fair use privilege to quote a novel — or a library the ability under the first sale doctrine to lend books. Specifically, such licenses can be applied to digital books or other content available online. For example, the Web site of the Central Pacific Railroad Photographic History Museum includes a very lengthy agreement for viewing the site. It requires viewers to waive the right to claim fair use in copying material from the site. Lemley submitted the brief on behalf of 33 intellectual property professors, the American Library Association, the Computer & Communications Industry Association, the Electronic Frontier Foundation and other groups. The amici did not ask the court to reverse its decision but to clarify that in some cases intellectual property law pre-empts shrink-wrap license terms. “In some circumstances, such as in a trade secret context, a restriction on reverse engineering may be consistent with copyright policy,” Lemley wrote. “We are concerned, however, that the panel in this case has gone to the opposite extreme, adopting a blanket rule that such restrictions are never pre-empted.” Baystate attorney Robert Kann, a partner at Boston’s Bromberg & Sunstein, said the concern in this case is that “software companies will be able to sue their competitors for following standard industry practice of reverse engineering their product.” Lemley said there was a long legal battle in the 1990s when many computer software companies and hardware manufacturers sought to assure the legality of reverse engineering. In 1992, he said, the 9th Circuit ruled that copyright law allowed the practice, as did subsequent courts. The Federal Circuit may be moved by Lemley’s arguments. It has asked Bowers’ counsel to respond to the brief. Lemley said the Federal Circuit rarely grants petitions, and asking for the other side to respond is akin to the U.S. Supreme Court asking for a response to a cert petition. “It says the court thinks there’s something serious here,” Lemley said. But Bowers’ attorney, Frederic Meeker, a partner at Washington, D.C.’s Banner & Witcoff, contends the court’s request is not unusual. “Obviously, we don’t agree with the position,” Meeker said, adding that he could not comment further. Meeker plans to file a reply brief today.

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