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Computer programs have long enjoyed copyright protection as “literary works” — protection that presumptively extends to the software on microchips embedded in countless consumer products, ranging from cars to washing machines. Spare and replacement parts for these goods — on which billions of dollars are spent each year — often must use the proprietary software written for the device for which they are made. May manufacturers invoke the copyright laws to block use of such software, effectively forcing consumers to use only authorized parts and equipment? A ruling by the 6th U.S. Circuit Court of Appeals issued last month, concerning software used in printer toner cartridges, indicates that the courts will be hostile to such efforts. Lexmark International Inc. v. Static Control Components Inc., 2004 WL 2382150 (6th Cir. Oct. 26, 2004). Plaintiff printer manufacturer Lexmark International Inc. sold toner cartridges with an embedded chip containing a tiny software program known as the “toner loading program” (TLP). The TLP takes up no more than 55 bytes of memory — less than is necessary to spell out the caption of this case in ASCII format. Unless the TLP sends a specific encrypted signal to the “printer engine program” (PEP) included in Lexmark printers, the printer will not function properly, effectively blocking consumers from using cartridges that Lexmark has not authorized. The defendant, Static Control Components Inc., designed its rival “SMARTEK” microchip to replicate Lexmark’s authentication sequence so that third-party manufacturers could sell cheaper substitutes for Lexmark’s cartridges. In mimicking Lexmark’s chip, Static Control unwittingly copied the TLP. In December 2002, Lexmark sued Static Control in federal court in Kentucky under three theories of liability: First, it alleged direct copyright infringement of the TLP. Second, it alleged that Static Control violated �1201(a)(2) of the Digital Millennium Copyright Act (DMCA) by selling a microchip that circumvented access controls on the TLP. Third, it alleged that Static Control violated the DMCA by circumventing access controls on the PEP. To prove copyright infringement, a plaintiff must show ownership of a valid copyright and copying of protectable elements of the work. The parties agreed that Static Control copied the TLP, but debated whether the program is copyrightable. Static Control also asserted a fair use defense under 17 U.S.C. 107. Section 1201(a)(1) of the DMCA forbids circumvention of a “technological measure that effectively controls access” to a copyrighted work. Section 1201(a)(2) prohibits the sale of devices “primarily designed” to circumvent such measures. However, the DMCA also contains an exception, which Static Control claimed, for circumventing an access control to “reverse engineer” the program for interoperability. 17 U.S.C. 1201(f). The district court granted a preliminary injunction, crediting each of Lexmark’s three claims. The court was unmoved by amicus briefs submitted by a computer industry association, a recycling advocacy group, an automotive parts trade association and a group of law professors — all of whom supported Static Control. A 6th Circuit panel (with one partial dissent) vacated the injunction, finding no likelihood of success on any of the claims. In addressing the copyright infringement claim, the majority opinion questioned the copyrightability of the TLP for a number of reasons. First, the opinion invoked the copyright doctrines of merger (which holds that there is no copyright protection when a work’s expression merges with its idea or function) and scenes a faire (denying protection to elements of a work that are “standard, stock” or dictated by industry specifications or by compatibility requirements). The expression of the simple TLP had merged with its function as part of the toner cartridge “authentication sequence.” Although the TLP could theoretically have been written in many other ways, efficiency and other external factors dictated the program’s composition. Second, the court questioned whether the TLP “has sufficient originality to warrant copyright protection.” The majority opinion cited Sega Enters. Ltd. v. Accolade Inc., 977 F.2d 1510, 1524 n.7 (9th Cir. 1992), as “noting that 20-byte code is of de minimis length and therefore likely a ‘word’ or ‘short phrase’ that is not protected by copyright law.” 2004 WL 2382150, at 13. While holding out the poems of e.e. cummings as examples of short, simple expressions that merit copyright protection, the opinion cautioned that “unless a creative flair is shown, a very brief program is less likely to be copyrightable because it affords fewer opportunities for original expression.” Id. at 15. Third, the majority opinion determined that even if the content of the TLP could be copyrighted, it functioned as a password or “lock-out code,” becoming part of the method of operation of the printer. “To the extent compatibility requires that a particular code sequence be included in the component device to permit its use, the merger and sc�nes � faire doctrines generally preclude the code sequence from obtaining copyright protection.” Id. at 8. Beyond casting doubt on Lexmark’s copyright, the majority opinion also found merit in Static Control’s fair use defense. Static Control, the opinion noted, “was not seeking to exploit or unjustly benefit from any creative energy that Lexmark devoted to writing the program code,” but simply copied the code to permit “printer functionality.” Id. at 17. The copying affected the market for toner cartridges, not a market for the copyrighted material itself. A market for manufactured goods, the court found, “is not the sort of market or value that copyright law protects.” Id. District Judge John Feikens, sitting by designation, dissented. The dissent would have sustained the lower court’s finding that the TLP is sufficiently original, pointing to evidence that the program could have been written in various different ways, so that its content was not wholly dictated by compatibility requirements. The dissent also found little merit in the fair use defense, finding that Static Control’s copying had diminished the value of the TLP, a value “represented by the market for toner cartridges.” Id. at 32. The entire panel rejected both of Lexmark’s DMCA claims. The court unanimously agreed that the DMCA “was not intended by Congress to be used to create a monopoly in the secondary markets for parts or components of products that consumers have already purchased.” Id. at 25. The majority opinion concluded that the TLP did not, as the statute requires, “effectively control access” to the copyrighted PEP. Even without authentication, any owner of a Lexmark printer could read the PEP embedded in the printer. The TLP is necessary to operate the printer itself, not to access the content of the PEP from the printer memory. The court distinguished previous cases applying the DMCA to technological measures (such as the Content Scrambling System encryption program that prevents unauthorized access to the content of recorded DVDs) that completely blocked access to copyrighted content. As for Lexmark’s DMCA claim regarding the TLP itself, the majority held that Static Control’s chip “does not provide ‘access’ to the [TLP] but replaces the program.” Id. at 22. Feikens took a different approach, stressing that unlike traditional copyright law, there is an element of scienter present in the DMCA. Section 1201(a)(2) requires plaintiffs to show that the device being marketed must have been “primarily designed or produced” for circumvention purposes. Feikens found that the record “points overwhelmingly to the conclusion” that Static Control did not realize it was copying the TLP when making its rival chip. Without knowing of the copyrighted TLP on the chip, Static Control could not be deemed to have “primarily designed or produced” a device to access that program. The majority also found merit in Static Control’s �1201(f)(3) interoperability defense to the DMCA claims. It found that, as the defense requires, Static Control’s chip included an “independently created computer program” designed to enable interoperability with “other programs.” Id. at 22. The Lexmark majority clearly intended to send a strong message against use of the copyright laws to protect market positions. Circuit Judge Gilbert S. Merritt added a separate concurrence to “emphasize that our holding should not be limited to the narrow facts surrounding either the [TLP] or the [PEP]. We should make clear that in the future companies like Lexmark cannot use the DMCA in conjunction with copyright law to create monopolies of manufactured goods for themselves just by tweaking the facts of this case.” Id. at 24. The Lexmark opinion, moreover, follows on the heels of Chamberlain Group Inc. v. Skylink Technologies Inc., 381 F.3d 1178 (Fed. Cir. 2004), which rejected a garage door manufacturer’s attempt to use the DMCA to stop a rival from manufacturing a universal garage door opener. The Chamberlain court criticized a construction of the DMCA that would allow a manufacturer “to add a single copyrighted sentence or software fragment to its product, wrap the copyrighted material in a trivial ‘encryption’ scheme, and thereby gain the right to restrict consumers’ rights to use its products in conjunction with competing products.” Id. at 1201. Unless other circuit courts take a very different view, in the wake of these opinions, manufacturers seeking to use the copyright laws to lock out competition will face a steep challenge. Lewis R. Clayton is a litigation partner in the New York office of Paul, Weiss, Rifkind, Wharton & Garrison (www.paulweiss.com), and co-chairman of the firm’s intellectual property litigation group. He can be reached at [email protected]. Drew L. Harris, a litigation associate with the firm, assisted in the preparation of this article. If you are interested in submitting an article to law.com, please click here for our submission guidelines.

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