Federal Circuit Narrows Scope for Copyrighting Software Function
by Dennis Crouch
The copyright lawsuit between the data-software company SAS Institute and its scrappy copycat World Programming has been interesting to follow over the past several years, and the Federal Circuit has now issued a controversial opinion in the case. SAS Inst. v. World Programming Ltd., — F.4th — (Fed. Cir. 2023). The majority opinion authored by Judge Reyna and joined by Judge Wallach affirmed the lower court ruling that SAS failed to establish copyrightability of its claimed program elements. Writing in dissent, Judge Newman argued that the majority’s rejection of copyrightability represents a “far-reaching change” not supported by either precedent or good policy. I called this outcome controversial. The outcome would also be controversial had Judge Newman’s position prevailed.
The case is properly seen as an extension of the Supreme Court’s decision in Google
LLC v. Oracle America, Inc., 141 S. Ct. 1183 (2021). In that case, the Court found that Google’s use of Java API naming conventions in its Android operating system was fair use under copyright law. Because its fair use decision decided the case, the court did not rule separately on whether the API was even copyrightable in the first place. In SAS v. WPL, the Federal Circuit squarely addressed the copyrightability question.
To be clear, computer software can still be copyrightable. But, parties asserting protection will need to do a much better job of showing how their creative authorial input survives the “abstraction-filtration-comparison test,” which the Federal Circuit applied in its decision.
Copyright law’s abstraction-filtration-comparison (AFC) test is used to determine whether a particular work is entitled to copyright protection. The AFC test involves breaking down a work into its constituent parts, abstracting the unprotectable elements, filtering out any remaining unoriginal or unprotectable elements, and then comparing the remaining protectable elements to the allegedly infringing work. The AFC test has been previously adopted by the Second, Fifth, and 10th Circuits.
Here, the court did not delve into the comparison step — and instead simply held that there was nothing left to infringe after abstraction & filtration.
The decision is also substantially procedural. The district court held a copyrightability hearing and followed a burden shifting procedure created by the 11th Circuit in Compulife Software Inc. v. Newman, 959 F.3d 1288 (11th Cir. 2020). In particular, the court first assumed that the work was copyrightable based upon the registration documents. It then allowed the defense to present its filtration argument to show a lack of copyrightability. If that evidence is sufficient (as it was here), the burden then shifts back to the copyright holder to rebut — and “to establish precisely which parts of its asserted work are, in fact, protectable.” The difficulty for SAS is that it offered no rebuttal and instead “refused to engage in the filtration step and chose instead to simply argue that the SAS System was ‘creative.'” Slip Op. SAS presented an expert witness on copyrightability, but the district court found it extremely unreliable and thus excluded the testimony. (The expert had not seen anything to filter out — even clearly unprotectable elements).
The majority walked through each of these issues and ultimately affirmed on all grounds.
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Some background: SAS makes data analysis software. A key feature of the SAS product is that folks can write programs using SAS syntax in order to get certain results. Thus there are a number of data jockeys who are experts in SAS code. WPL is a UK based software company who obtained several copies of SAS statistical software and made their own clone version by rewriting the code and by relying upon an early version of SAS that is not protected by copyright. The WPL version allows folks to use SAS language to get the same results — but at a much lower price. When I sa “same results” — the clone pretty much identically copied output styles so that a chart made with WPL looks basically identical to a chart made in SAS using the same code.
SAS sued in E.D.Tex for copyright infringement. Judge Gilstrap dismissed the copyright claims — holding that the software was unprotectable. Copyright infringement appeals are ordinarily not heard by the Federal Circuit, but in a case of what appears to be appellate-forum shopping, SAS had also included patent infringement allegations that they eventually stopped pursuing. Under the rules of procedure, if patent claims were raised in the case at some point, then the appeal heads to the Federal Circuit.
The copyright case is not about copying code. It appears rather to be about copying the input syntax format used by individuals to input their programs and the output design styles for outputting data in some particular style. In the filtration analysis, WPL provided a host of evidence to show that these features should be “filtered out” of the SAS copyrights.
- WPL established that an earlier version of the SAS System, “SAS 76,” was in the public domain.
- WPL showed that many Input Formats and Output Designs in the current SAS System are identical or nearly identical to those in SAS 76 and should be filtered.
- WPL demonstrated that the SAS Language should be filtered because it is open and free for public use.
- WPL’s expert identified various allegedly copied materials that contained unprotectable elements such as open-source, factual, data, mathematical, statistical, process, system, method, and well-known and conventional display elements.
Bringing these together the Federal Circuit concluded that the defense had presented sufficient evidence to show uncopyrightability and that the district court was justified in requiring SAS to directly and particularly rebut the evidence rather than simply allowing a trial on the copyright as a whole.
The district court was correct to exercise its authority and require SAS to articulate a legally viable theory on which it expected to base its copyright infringement claims. Conversely, it would be improper for a district court to permit a matter to proceed to trial on the basis of vague and unidentified theories.
Writing in dissent, Judge Newman argued that Fifth Circuit law protects this sort of computer software architecture even from non-literal copying. The key citation is likely to a the Fifth Circuit’s 1994 Engineering Dynamics case:
Most courts confronted with the issue have determined that copyright protection extends not only to the literal elements of a program, i.e., its source code and object code, but also to its “nonliteral” elements, such as the program architecture, “structure, sequence and organization,” operational modules, and computer-user interface.
Eng’g Dynamics, Inc. v. Structural Software, Inc., 26 F.3d 1335 (5th Cir. 1994). Judge Newman noted that “computer programs” are expressly protected within the Copyright Act
Copyright protection subsists . . . in original works of authorship . . . including . . . (5) computer programs.
17 U.S.C. 102. As the Nimmer treatise explains, this 1980 amendment to the laws “dispels any lingering doubts as to the copyrightability of computer programs. It is
therefore now firmly established that computer programs qualify as work of authorship in the form of literary works, subject to full copyright protection.”
1 NIMMER ON COPYRIGHT § 2A.10(B) (2022 ed.).
Here, Judge Newman particularly noted that the collection of the various input functions and output designs is easily copyrightable. And, this is the same analysis done by the Federal Circuit in its original Oracle v. Google decision.
Judge Newman also concluded that the district court improperly shifted the burden of proof to the copyright holder.
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