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The Connectix Connection: Matters of Law Take Center Stage ~pj
Wednesday, May 30 2012 @ 11:42 AM EDT

The jury in the Oracle v. Google trial was responsible for deciding matters of fact. They did their best, but they were unable to decide whether or not Google's use of the structure, sequence and organization (SSO) of the Java APIs was fair use. It was 9 to 3 that it was, but there may have to be a new trial on that issue. But now, the parties are talking to the judge, and the Hon. William Alsup must decide matters of law. So now it's time for him to decide whether the SSO of APIs is even copyrightable.

It's hard to find cases directly on point, because it's a new claim Oracle is raising, as David Boies admitted in the hearing in December. But Google has a ruling in a case, Sony Computer Entertainment v. Connectix Corporation case, which is remarkably similar in facts, and the ruling went Connectix's way on appeal. The decision doesn't make clear precisely what Connectix did, and unfortunately, PACER has none of the documents, so the judge asked the parties to brief him on precisely what Connectix did, and as it happens, Google provided Connectix's opening appellate brief as Exhibit GG [PDF] attached to docket #369 [PDF]. And it makes clear that what Connectix did matches very closely what Google did with the 37 APIs.

If I were Oracle, and happily I'm not, I'd be worried about this case, because depending on how the judge views the arguments, he certainly could hang his hat on this case and decide that APIs are not copyrightable. It was a case about ABIs, fair use, and reverse engineering, but Google didn't reverse engineer anything, so let's look at the ABI and fair use arguments and see if it matches.

Google explains in its brief:

Google, like Connectix, implemented some but not all of the functions from the plaintiff’s software system, choosing only those functions necessary to accomplish its purpose. For those functions, Google, like Connectix, ensured that it duplicated the same “entry points” and each function’s functionality, including the information sent to and from the system. Many of the Sony functions, like many of the J2SE functions, performed standard functions familiar to any programmer. Google, like Connectix, wrote its own implementing code. Indeed, the key distinction between the present case and Sony, is that Connectix created intermediate copies of Sony’s implementing code, for which it had to rely on fair use. Google did not copy Oracle’s implementing code, and thus section 102(b) itself precludes copyright infringement liability.
Let's take a closer look, because if the judge accepts this argument, it's a home run for Google on the API question, because it provides the judge a foundation to justify a ruling that APIs are not copyrightable. The Connectix case is generally viewed and used as a fair use case, and it is. But it makes the argument that the ABIs, being functional, are not protectable under copyright law, and that hence there is no need for a fair use defense. If the Java API's SSO is ruled functional as well, that's the potential home run.

As you'll recall, Judge William Alsup asked the parties specifically to brief this case for him. Here are the questions he wanted answered:

  • What did the accused infringer Connectix ultimately duplicate to allow desktops to run Playstation games?

  • For example, was it application binary interfaces (if so, be specific and use examples as to what this would have included)?

  • Was it names that would have been in the source code of the Playstation BIOS?
What is so interesting about the case is that what Connectix did was copy some but not all of the ABIs to create VGS, or Virtual Game System, which Connectix described like this: "VGS emulates the entire complex PlayStation console in software and is entirely different and unique from Sony's BIOS." The idea was to allow users to run PlayStation games not on PlayStations but on their computers. VGS was not compatible with the PlayStations. It was a compatibility based on the selected games being compatible with VGS, not the PlayStation platform with VGS or vice versa.

Why is that so significant? Oracle's brief stresses incompatibility, which it defines as user programs being able to run on both Android and Java, but that's not how the Connectix case defined it. Here's Oracle's definition:

Android is not interoperable with Java. Java applications cannot run on Android. Android applications cannot run on Java. This was intentional. Google did not want an interoperable platform and offers no proof it set out to create one. Google took only what it wanted, hijacking the Java developers by using their familiarity with the Java APIs to get them to program for Android. Google’s “compatibility” claim is not supported by the law or the facts.
But that was true of Connectix also, and Connectix prevailed. The Connectix case involved a different kind of compatibility, and so does Google's.

Google was looking for a different kind of compatibility than the kind Oracle is discussing, in other words. I'll let Google explain:

Oracle argues in its May 23 brief that the Android and J2SE platforms are not compatible for three reasons, but these reasons are irrelevant to determining whether the SSO of the 37 API packages is copyrightable. Specifically, Oracle argues that Android and J2SE applications are not compatible because Android applications (1) typically use a different “entry point” than J2SE applications, (2) once compiled, are in Dalvik bytecode instead of Java bytecode, and (3) once compiled, typically are stored in “apk” files instead of “jar” files.

First, Oracle’s arguments proceed from an erroneous premise—that the “compatibility” analysis should be based on whether the Android platform is compatible in all respects with the J2SE platform. That misses the point. The purpose of implementing the Java language APIs in Android is to allow developers writing in the freely-available Java language to use the familiar, established and basic APIs that Java language developers all learn. See RT 762:13-23 (Bloch); RT 961:13-962:3 (Swetland); RT 1018:4-23 (Morrill); RT 1769:11-17 (Bornstein). Implementing those APIs in Android allows Java language developers to use the skills and experience they have, and ensures that they can reuse source code that they have written using the APIs in the 37 API packages. RT 2183:2-11 (Astrachan). Without these basic APIs, the Java language is largely useless. RT 683:14-684:4 (Reinhold); RT 782:9-14 (Bloch); RT 1477:2-13 (Schmidt); RT 1960:4-8 (Schwartz).

The relevant compatibility analysis, therefore, is whether Google’s implementation of the APIs in the 37 packages is compatible with J2SE’s implementation of those APIs from a technical, computer science perspective—and it is. RT 2172:6-11 (Astrachan); RT 2292:25- 2293:14 (Mitchell). It is irrelevant whether Android is compatible, in its entirety, with a specific product of Oracle, with Oracle’s licensing or business model, or with definitions of “compatibility” that Oracle has chosen to adopt for self-serving business reasons.2

Second, each of Oracle’s arguments also points only to superficial distinctions that ignore that source code that uses the APIs that are common to the two platforms is interoperable with both platforms. With respect to the entry point used, Professor Astrachan explained that while J2SE encloses applications in a method called “main,” Android uses a procedure that is “a little different.” RT 2221:11-2222:3. But Professor Astrachan also explained that, aside from this slightly different startup procedure, “[o]therwise nothing else would change.” RT 2221:18 (emphasis added).3 The other two points that Oracle raised—the differences in the bytecode used and the differences between the “apk” and “jar” file formats—are relevant only to the compiled versions of applications. Neither of the latter two points affects whether source code written for the Android platform will function on the J2SE platform or whether source code written for the J2SE platform can be re-used for the Android platform—the salient question for compatibility.

Oracle further argues that these three arguments represent only the “tip of the iceberg,” in that J2SE and Android applications are not fully compatible because Google did not implement all 168 of the J2SE 5.0 API packages. But as Google explained in its May 23 brief, even if source code written for one platform uses APIs not available on the other platform, the portions of the source code that rely on common APIs will run on both platforms, which means the platforms are, with respect to those APIs, compatible. See Dkt. 1192 at 6:5-10. Professor Mitchell conceded that this is useful. RT 2289:21-23; see also RT 1787:23-1788:4 (Bornstein).

Oracle’s brief illogically assumes that it would for some reason be better for Android to be incompatible in every sense rather than being, as it is, compatible with the APIs in the 37 packages.4 Jonathan Schwartz—Sun’s CEO at the time that Android was launched—testified to the contrary:

Q. And did you actually give interviews in which you said you thought Android was helping Java?

A. I did. . . . .

At least if they picked an Open Source Java implementation, they could be a part of the community. If they had picked something that was completely variant, it would have had no utility to us whatsoever.

RT 1992:2-12.

Indeed, Oracle has itself benefitted from the compatibility between the J2SE and Android platforms. For example, Oracle admitted that it accepted Google’s contribution of Josh Bloch’s TimSort.java and ComparableTimSort.java source code and incorporated it into Oracle’s OpenJDK 7, which is the current Oracle release of J2SE. RT 1865:11-20 (Oracle’s Resp. to Google’s RFA No. 170); RT 822:10-15 (Bloch); see also RT 823:3 (Bloch) (testifying that Dr. Reinhold of Oracle praised the performance of TimSort when J2SE 7 was released). It is undisputed that TimSort is compatible with both the J2SE and Android platforms.

In discussing the issue of compatibility, Connectix talks about Playstation games being compatible on the Connectix product VGS; it wasn't aiming for compatibility between Playstation format and VGS format. It wanted people to be able to run their Playstation games on their computers also, giving consumers a choice. And it quotes from Sega:
Connectix copied Sony's BIOS to create a product that provides consumers an alternative environment in which to run PlayStation games. See Sega, 977 F.2d at 1523-24 ("an attempt to monopolize the market by making it impossible for others to compete runs counter to the statutory purpose of promoting creative expression and cannot constitute a strong equitable basis for resisting the invocation of the fair use doctrine").
Is that not what Oracle would like, a monopoly on Java? And is Google not providing consumers something they very much want that Oracle is not providing?

Oracle, asked by the judge to explain its view of what Connectix did, says that it is "unclear". It's certainly true that PACER has no documents publicly available for this older case. But since Google filed the relevant motion from Connectix as an exhibit, describing what it did, in this very litigation, which Oracle has in its possession, how can it tell the judge that it's "unclear"? Yet it does:

The Court asked the parties to address what Connectix ultimately duplicated to allow desktops to run PlayStation games. The Ninth Circuit and district court opinions do not discuss or analyze this issue. Both courts emphasize that Sony did not accuse the final product of infringement. See, e.g., Sony Computer Entm’t Inc. v. Connectix Corp., 48 F. Supp. 2d 1212, 1217 (N.D. Cal. 1999) (“Sony I”) (“Sony’s copyright infringement claim is based on a theory of intermediate infringement.”); Sony Computer Entm’t, Inc. v. Connectix Corp., 203 F.3d 596, 604 (9th Cir. 2000) (“Sony II”) (“nor does Sony contend that Connectix’s final product contains infringing material”). Unfortunately, because Sony is twelve years old, Oracle could not obtain copies of the complete record within the Court’s briefing timetable.
That's true as in the kind of truth car salesmen tell you. It's true, but it's not the complete picture. If Sony had claimed copyright on the ABI, it would have been about infringement, one presumes. Again, Oracle is asking for something new. More from Oracle's brief:
The materials Oracle has been able to retrieve show the content Connectix duplicated is far simpler than the Java APIs. Connectix alleged it “began with an empty table consisting of entry points into the BIOS.” Connectix’s Opening Appellate Brief, 1999 WL 33623860, at *13 (9th Cir. May 27, 1999). The precise nature of this empty table or its entry points is unclear, but most likely it was a list of memory addresses of functions that game programs could invoke as needed. Connectix alleged that about a third to a half of the functions were “standard ‘C’ language functions that would be familiar to any experienced programmer.” Id. Connectix alleged that it implemented 137 of 242 of the functions from Sony’s BIOS. See id. at *18.

Oracle does not see any reference in the record it retrieved to an application binary interface (“ABI”). An ABI describes low-level system conventions, such as how one routine passes arguments to, and receives a return value from, another. Unlike an API, an ABI does not specify which routines must exist or how they are intended to be used.

As Sony shows, not all interfaces are the same. Nothing in the Sony record suggests that there was significant creativity in the entry point table Connectix copied, in stark contrast to the trial record in this case. Neither opinion addressed whether Connectix copied an original structure, sequence, or organization in its BIOS program or the table. The district court noted that “Sony BIOS consists of a combination of C source code and R3000 micro-processor assembly language.” Sony I, 48 F. Supp. 2d at 1215. The C language does not recognize the concepts of a class or interface hierarchy, and nothing in Connectix’s table approaches the complex interrelationships in the Java APIs. The only reference to sequence at all is Connectix’s claim that its entry point table needed to “contain the same entry points, and be in the same order and format” as Sony’s table. Connectix Opening Appellate Br., 1999 WL 33623860, at *13.

Whether Connectix copied names from Sony’s BIOS, and for what purpose, is also unclear, but it appears to have been very limited, unlike here. Sony alleged that Connectix’s Virtual Game Station (“VGS”) “includes several function names that are identical to function names used in the PlayStation operating system.” Pl.’s Mot. TRO, 1999 WL 33743495 at 2 (N.D. Cal. Feb. 3, 1999). Sony argued this point not to claim that Connectix’s VGS (the final product) was infringing, but instead as evidence to prove that Connectix had, at some intermediate point, disassembled (and therefore copied) Sony’s BIOS when creating the VGS. See id. But it is not clear that the names were used to call the functions—they could have been used for debugging purposes instead—and Connectix’s allegation regarding the table of entry points suggests they were not. Connectix’s Opening Appellate Brief, 1999 WL 33623860, at *13.

In any event, none of this had anything to do with the holding in Sony. Sony, like Sega, was a fair use case about intermediate copying for reverse engineering. See Sony II, 203 F.3d at 608. For the same reasons that Sega does not bear on the copyrightability of the SSO of the Java APIs or absolve Google for its infringement, neither does Sony.

It's unclear, except where it meets Oracle's needs. If it's as unclear as Oracle argues, then how does it know the level of creativity involved? It seems to be even arguing that the case might not have been about ABIs.

However, Google was able to be a lot more specific about what Connectix did, and I'm going to highlight the part I think stands out, to me, anyway -- I don't generally predict what judges will decide:

In Sony Comp. Entm’t, Inc. v. Connectix Corp., the Ninth Circuit held that Connectix’s copying and disassembly of the Sony PlayStation BIOS—the “basic input-output system” that was the software program that operated the Sony PlayStation video game console—was a fair use because Connectix’s purpose in doing so was “for the purpose of gaining access to the unprotected elements of Sony’s software.” 203 F.3d 596, 598, 602 (9th Cir. 2000).

The Ninth Circuit’s opinion does not discuss in any detail precisely what the unprotected elements were; instead, the opinion refers to the “functional” and unprotected elements of the Sony software, without identifying specifically what they are. See, e.g., id. at 603 (“There is no question that the Sony BIOS contains unprotected functional elements.”), 605 (“If Sony wishes to obtain a lawful monopoly on the functional concepts in its software, it must satisfy the more stringent standards of the patent laws.”).

In its opening Ninth Circuit appellate brief, however, Connectix explained that its Virtual Game Station software (“VGS”) emulated both the Sony PlayStation hardware, and the Sony PlayStation BIOS software. In developing VGS, Connectix first emulated the PlayStation’s microprocessor in software. Ex. B (Connectix Br.) at 11.5 Connectix also studied the “interaction between Sony’s BIOS and the hardware” and then “wrote software to emulate the hardware functionality.” Id. at 11-12. The Connectix code that emulated the Sony PlayStation hardware dwarfed the Connectix code that it subsequently wrote that emulated Sony’s BIOS, see id. at 31 n.8, much as the Android source code that implements the 37 API packages is dwarfed by the rest of the Android source code.

After Connectix had written its hardware emulation code, it “reverse engineered Sony’s BIOS by running PlayStation games in conjunction with the BIOS and its software emulator of the hardware.” Id. at 12. This was necessary because “[o]perations systems, system interface procedures, and other programs like the Sony BIOS are not visible to the user when they are operating.” Sony, 203 F.3d at 600. Connectix then “proceeded to write code to emulate the necessary BIOS functionality.” Ex. B at 13. This final step was therefore analogous to the process by which Google wrote its own code implementing the 37 API packages. Connectix “began with an empty table consistent of the entry points into the BIOS.” Id. In order to ensure that the VGS was compatible with PlayStation games, this table had to “contain the same entry points, and be in the same order and format, as the table in Sony’s BIOS.” Id.

It appears that when the software code in PlayStation games invoked the Sony BIOS, this process included the name of the BIOS function that was being accessed. See id. at 13-14 (“Connectix engineers could typically deduce the requisite BIOS functionality by examining the function name, the information sent to and from the BIOS, or the general grouping of functions requested by PlayStation games.”). Through a variety of means, Connectix determined the purpose, parameters and return formats for 137 of the 242 functions implemented in the Sony BIOS,6 and then “independently wrote code to implement the required functionality.” Id. at 13- 15 & n.3. A minority of these functions (“a third to a half”) were standard C programming language functions, id. at 13, while the rest were not. In sum, Connectix’s VGS implemented the Sony PlayStation BIOS interfaces. See JONATHAN BAND & MASANOBU KATOH, INTERFACES ON TRIAL 2.0 at 61 (MIT Press 2011) (in Sony, the Ninth Circuit found that intermediate copies were fair use where “they were necessary for the uncovering of elements not protected by Sony’s copyright—specifically, the BIOS’s interface specifications.”).

Again, this process was analogous to the process by which Google implemented the 37 API packages. Google, like Connectix, implemented some but not all of the functions from the plaintiff’s software system, choosing only those functions necessary to accomplish its purpose. For those functions, Google, like Connectix, ensured that it duplicated the same “entry points” and each function’s functionality, including the information sent to and from the system. Many of the Sony functions, like many of the J2SE functions, performed standard functions familiar to any programmer. Google, like Connectix, wrote its own implementing code. Indeed, the key distinction between the present case and Sony, is that Connectix created intermediate copies of Sony’s implementing code, for which it had to rely on fair use. Google did not copy Oracle’s implementing code, and thus section 102(b) itself precludes copyright infringement liability.

________________________

4 Oracle’s quote from Judge Whyte’s decision in Sun v. Microsoft is inapposite. “Write once, run anywhere was never a promise that if you wrote code for one Java platform that it would automatically/magically work on another.” RT 725:10-12 (Reinhold). Unlike Microsoft, Google has never claimed that Android is an implementation of J2SE. Android is a different platform than J2SE.

5 Google previously filed a copy of Connectix’s opening appellate brief as Exhibit GG to the Reply Declaration of Michael S. Kwun that was filed on August 29, 2011. See Dkt. 369-3.

6 Connectix implemented only 137 of the 242 functions because those were the only functions invoked by the games that Connectix tested. Id. at 18. This parallels Google’s decision to implement some but not all of the J2SE 5.0 API packages, and most but not all of the JS2E 5.0 exceptions. Moreover, this means that VGS likely was not “fully compatible” with the Sony PlayStation—and that full compatibility is not relevant to the section 102(b) analysis.

The central finding then was that the interfaces were not copyrightable. VGS, like Android and Java, was not "fully compatible" according to Oracle's definition of compatibility, and both Connectix and Google used some, but not all, of the functionality in the interfaces. Period. Stop.

I've written to some of the principals involved in the Connectix litigation, and I hope to hear back from them, and perhaps Oracle and Google have thought to do the same. These folks are still alive, you know. It is possible to find out what the judge wishes to know if he is not satisfied with the Google explanation, but frankly, I think the explanation is sensible. I think the judge's question reveals that he is aware that it could not be about anything but ABIs, according to the description. But if I learn anything useful, I'll let you know.

You can purchase the book, "Interfaces on Trial 2.0" here or obtain it as a PDF, and beginning on page 73, it discusses the Sony v. Connectix case:

2.2.4 Sony v. Connectix (2000)

As technology has become more pervasive, lawmakers have felt increasing pressure from certain industries and from segments of the public to impose new regulations in an effort to limit technology’s perceived harmful affects.132 Such regulation could be too broad and could have the unintended consequence of frustrating the growth of useful technologies. To avoid that result, lawmakers would be well advised to follow the example of the U.S. Court of Appeals for the Ninth Circuit in Sony v. Connectix.133

The case concerned Connectix’s development of software that emulated the Sony PlayStation. This emulator, called the Virtual Game Station (VGS), enabled a user to run a PlayStation-compatible game on a Macintosh computer. To ensure compatibility between the emulator and the PlayStation games, Connectix had to reverse engineer the Sony PlayStation. One step in the process of reverse engineering involved loading the PlayStation’s basic input/output system into a computer and running it repeatedly as Connectix engineers developed software that interacted with it. Once they had completed this software, the Connectix engineers developed their own BIOS to interact with the software. The repeated running of the BIOS caused the making of numerous temporary copies of the BIOS in the computer’s random-access memory. Sony asserted that these copies infringed its copyright in the BIOS. The district court agreed and issued a preliminary injunction.

Following its decision in Sega Enters., Ltd., v. Accolade, Inc., the Ninth Circuit reversed the district court’s decision. It found that the temporary copies were excused under the doctrine of fair use because they were necessary for the uncovering of elements not protected by Sony’s copyright—specifically, the BIOS’s interface specifications.

Sony suggested that Sega applied to disassembly, but not to the making of RAM copies while observing the program’s operation. The Ninth Circuit found no reason to distinguish between the different techniques of reverse engineering. Because both methods require intermediate copying, the court reasoned, “we find no reason inherent in these methods to prefer one as a matter of copyright law.”134 The Ninth Circuit also dismissed the district court’s finding that Connectix went beyond Sega in not only studying the BIOS but also using the BIOS to develop the interoperable software. Reverse engineering, the Ninth Circuit observed, “is a technically complex, frequently iterative process. Within the limited context of a claim of intermediate infringement, we find the semantic distinction between ‘studying’ and ‘use’ to be artificial, and decline to adopt it for purposes of determining fair use.”135

Sony argued that Connectix could have avoided making the RAM copies of the BIOS had it followed a different development process. Connectix could have developed its own BIOS at the beginning, and used that BIOS in the development of the interoperable software, rather than use the Sony BIOS in the development of the interoperable software and then develop its own BIOS.

The Ninth Circuit rejected Sony’s argument out of hand:

Even if we were inclined to supervise the engineering solutions of software companies in minute detail, and we are not, our application of the copyright law would not turn on such a distinction. . . . [T]he rule urged by Sony would require that a software engineer, faced with two engineering solutions that each require intermediate copying of protected and unprotected material, often follow the least efficient solution. . . .This is precisely the kind of ‘wasted effort that the proscription against the copyright of ideas and facts . . . [i]s designed to prevent.’136
The court further observed:
Such an approach would erect an artificial hurdle in the way of the public’s access to the ideas contained within copyrighted software programs. . . . We decline to erect such a barrier in this case. If Sony wishes to obtain a lawful monopoly in the functional concepts in its software, it must satisfy the more stringent standards of the patent laws.137
In the same pro-competition vein, the Ninth Circuit rejected the district court’s finding that the Connectix VGS was not transformative under the first fair-use factor because it merely supplanted Sony’s PlayStation console. The court noted that the VGS was “a wholly new product” that “afforded game play in new environments, specifically anywhere a Sony PlayStation console and television are not available, but a computer with a CD-ROM drive is.”138

The Ninth Circuit acknowledged that the VGS might cause Sony to lose some sales of consoles. “But,” it noted, because the Virtual Game Station is transformative, and does not merely supplant the PlayStation console, the Virtual Game Station is a legitimate competitor in the market for platforms on which Sony and Sony-licensed games can be played. For this reason, some economic loss by Sony as a result of this competition does not compel a finding of no fair use. Sony understandably seeks control over the market for devices that play games Sony produces or licenses. The copyright law, however, does not confer such a monopoly.139

In sum, the Ninth Circuit refused to supervise the engineering solutions of software companies in minute detail. It declined to force engineers to follow inefficient procedures. Instead, the court focused on the big picture—what Connectix was trying to do, and how that comported with the objectives of the copyright law.

_____________
132. This subsection is based on Jonathan Band, “Rules to Live By: The Ninth Circuit’s Decision in Sony v. Connectix,” Stanford Technology Law Review (June 2000).

133. Sony Computer Entertainment, Inc. v. Connectix Corp., 203 F.3d 596 (9th Cir.), cert. denied, 121 S. Ct. 172 (2000).

134. Connectix, 203 F.3d at 604.

135. Id. 136. Id. at 605 (citations omitted).

137. Id. 138. Id. at 606. 139. Id. at 607 (citations omitted). 140. 336 F.3d 81 (9th Cir. 2003).

I'm sure Oracle must worry about this case. Because the brief argues some extremely clear and -- to Oracle -- damaging points:
  • To grant copyright to interfaces would be to give the copyright holder broader rights than even patents afford, in that copyright is easier to qualify for and lasts a good deal longer.

  • Connectix is a fair use case, but not because of the ABIs. They, being functional, don't qualify for copyright, so using them doesn't need a fair use defense.

  • Emulation, which is what Connectix was doing, is something that Sun itself does with Java. Without it, there can be no competition against the original software.

  • Granting copyright on interfaces also would be to grant greater protection for copyrighted software than for any other copyrighted work. You are not accused of copyright infringement if you read someone's novel and then write a novel yourself.

  • Connectix's end product was transformative. It gave end users a way to use programs that ran on Sony's PlayStation also on their PCs, and people wanted such a product.

  • Any copying was intermediate, just to run the software so as to study how the BIOS worked and to access its unprotected aspects, and then to reproduce only those ABIs that were required for the games Connectix wanted to work to do so. It didn't copy all the ABIs, just the ones it wanted. It also didn't copy Sony's software and then sell it themselves.

  • The two products were not interoperable themselves. The compatibility was for programmers, to aid them in writing code so that it would be possible to run selected games on Connectix that also ran on Sony's PlayStation.

  • The brief, in footnote 1, uses the words "interoperability" and "compatibility" interchangeably.
Are you seeing the application that Google sees in this case? Oracle is talking about interoperability, defining it to mean that Java programs can run on Android and vice versa. But that's not the kind of interoperability that Connectix created. Connectix, like Google, was creating a programmer environment that was conducive to compatibility for them. It's a world of difference, and Connectix prevailed.

Of course the unprotectable elements included the BIOS ABIs. What else, technically, could it be? It might have included the APIs as well, but either way we are talking about *functionality*. To understand why that matters, here's a comment from a usually reliable Groklaw member, xtifr, where he explains why, if anything, the Connectix case should mean that APIs are even *less* copyrightable than the ABIs the court found not protectable in Connectix:

It looks to me like the Connectix case was about ABIs--Application Binary interfaces, not about APIs (Application Program Interface. ABIs are about the kind of binary compatibility that Oracle is discussing, but APIs are for the programmer. They are in the source, and may not even exist anymore once the code passes through a compiler. I'm not sure which should be afforded more protection (assuming the value is non-zero in either case), but my instincts tell me that APIs are less protectable than ABIs!

An API only appears in the source code--though it may match an underlying ABI. It's basically (as I've argued before) an extension to the language, expressive in the same way that words in a language are: it's not the words that are protected (not the API), but the use (a program using that API--as well, of course, as the implementation behind the API). Oracle keeps talking about binary compatibility, which is irrelevant when we're discussing APIs. The point of using an existing API is to provide a familiar language for the programmer. And, like any other computer language, is inherently not protectable....

There's a reason why ISO standards for languages like C and C++ (which actually have standards, unlike Java, which really still only has Oracle's whim)--the APIs are part of the language. Even third-party APIs merely extend the language. It's still a language, and the Java language (and like any computer language) is not copyrightable, because it's a means of expression, not an expression itself.

So not only is Oracle's argument unavailing, but they're not even on-point in half of what they talk about.

Here's the sad part. Microsoft bought Connectix in 2003.

Update: And here's some news we weren't expecting: the LA Times has an editorial, saying that Judge Alsup should rule that APIs are not copyrightable:

The legal battle between Google and Oracle over the use of Java in Google's Android software is more than just another bruising patent fight between rival tech companies. The more unusual and disturbing aspect of the dispute is Oracle's claim to hold copyrights to Java's "application programming interfaces," or the bits of code that let apps written in Java work with other programs. Although a federal jury found that Google violated those copyrights (but not Oracle's patents), District Judge William Alsup can still hold that APIs aren't copyrightable. He should....

Extending copyright protection to programming interfaces would discourage the inter-operability and interaction that are a prime source of innovation. The providers of software platforms could encourage others to implement their APIs to create new Web-based services or apps, then try to extract royalties from the ones that proved popular. The implications are even worse in the case of programming languages such as Java. Giving a company a sweeping claim over a language's APIs, which are crucial to a program's workability, could effectively let it decide what programs can be written in that language. Google earns no plaudits for creating a version of Java that doesn't inter-operate with the ones Sun championed. But that doesn't justify stretching the bounds of copyright law to give Oracle control over Java's APIs.

Here's the Connectix opening appellate brief, as text, although I haven't quite finished the ending. I will work on that while you take a look at the rest [update - it's complete now]:

*******************************

EXHIBIT GG

APPEAL NO. 99-15852
___________________

THE UNITED STATES COURT OP APPEALS
FOR THE NINTH CIRCUIT

SONY COMPUTER ENTERTAINMENT INC., et al.,

Plaintiffs/Appellees,

vs.

CONNECTIX CORPORATION,

Defendant/Appellant.

On Appeal From The United States District Court
For The Northern District Of Ca1ifomia
No. C 99-00390 CAL

The Honorable Charles A. Legge, District Judge

_____________________

OPENING BRIEF OF APPELLANT CONNECTIX CORPORATION

____________________

William Sloan Coats (94864)
Stephen J. Rosenman (170220)
Evangelina Almirantearena (138765)
Vickie L. Feeman (177487)
HOWREY & SIMON
[address, phone, fax]

Counsel for Defendant/Appellant CONNECTIX CORPORATION

May 26, 1999

TABLE OF CONTENTS

CORPORATE DISCLOSURE STATEMENT .............................. 1

STATEMENT OF JURISDICTION ...................................... 2

STATEMENT OF THE ISSUES ..................................... 3

STATEMENT OF THE CASE ....................................... 4

I. THE NATURE OF THE CASE ................................ 4

II. THE COURSE OF PROCEEDINGS .............................. 7

III. STATEMENT OF THE FACTS .................................. 8

A. Sony PlayStation .................................... 9

B. Reverse engineering Program Code. ................... 10

C. Functional Elements of Sony's BIOS. .................. 10

D. Connectix' Reverse engineering of the PlayStation .............. 11

1. Observing Unprotected Aspects of Sony's BIOS ............ 11

2. Emulating Sony's BIOS Functionality. ................ 13

3. Comparing Unprotected Aspects of Sony's BIOS. ................. 14

4. Disassembling Small Portions of Code. ................... 14

E. Success of Virtual Game Station. ...................... 15

F. Examples of the District Court Misunderstanding Reverse
engineering Software And Emulation Technology........... 17

SUMMARY OF THE ARGUMENT ................................ 21

ARGUMENT ................................................. 24

I. STANDARD OF REVIEW ON APPEAL OF PRELIMINARY
INJUNCTIVE RELIEF ..................................... 24

i

II. SONY DID NOT DEMONSTRATE A LIKELIHOOD OF SUCCESS
ON ITS COPYRIGHT CLAIM BECAUSE CONNECTIX FAIRLY
USED THE UNPROTECTED ELEMENTS OF SONY's BIOS TO
CREATE A COMPATIBLE PRODUCT ...................... 24
A. The Balance of Fair Use Factors Weighs Overwhelmingly in
Connectix' Favor. ................................. 25

B. The Evidence Establishes It Was Necessary For Connectix To
Copy Sony's BIOS In Order To Access Its Unprotected Ideas
And Functional Elements; Connectix Must Prevail On The
Second Fair Use Factor ............................... 27

1. The Ninth Circuit recognized the unique nature of software in Sega v. Accolade ....................... 27

2. Connectix had a legitimate interest in accessing the
unprotected elements of Sony's BIOS ............................ 29

3. The functional aspects of Sony's BIOS are invisible. ............. 29

4. Connectix necessarily used Sony's BIOS to discover the
functional requirements needed to create a compatible
product. .............................. 30

5. Connectix undertook substantial effort to develop its
own innovative software product. .................... 31

6. There is no viable alternative to copying to access the
unprotected elements, and a clean room approach would
not have avoided the need to copy. ................. 33

7. The district court erroneously rejected some of
Connectix' evidence of fair use. ................. 34

C. The Evidence Overwhelmingly Demonstrates VGS Is
Transformative And That The Purpose And Character Of
Connectix' Use Supports Finding The Second Fair Use Factor
In Connectix' Favor. ............................. 36

ii

D. Connectix Disassembled Only Small Portions Of Sony's BIOS
And The Third Fair Use Factor Should Weigh In Connectix'
Favor................................................ 38

E. Any Impact On The Potential Market For The PlayStation
Hardware Console Is Speculative, Minimal And Incidental And
The Fourth Fair Use Factor Favors Connectix ................ 39

F. The District Court Improperly Put The Burden Of Proof Of
Fair Use On Connectix At The Preliminary Injunction Stage ........... 40

G. Connectix' Use Of Information Freely Available On The
Internet Was Proper And Has No Impact On Its Fair Use
Defense. ....................................... 41

III. THE DISTRICT COURT ERRONEOUSLY ENJOINED THE SALE
OF AN UNDISPUTEDLY NONINFRINGING PRODUCT BASED
SOLELY ON INTERMEDIATE COPYING ....................... 41

IV. CONNECTIX IS PERMITTED TO COPY THE SONY BIOS IT
OWNS AS AN ESSENTIAL STEP IN UTILIZING IT IN
CONJUNCTION WITH A COMPUTER ................... 44

V. SONY CANNOT ENFORCE ITS COPYRIGHT BECAUSE IT IS
MISUSING IT AS A MATTER OF LAW ...................... 46

A. Sony Is Misusing Its Copyright To Obtain Patent-like Protection Over Its PlayStation Video Game System ............. 46

B. Sony Is Misusing Its Copyright To Preclude Consumers From
Choosing Other Platforms On Which To Play Video Games ............ 48

VI. VGS DOES NOT TARNISH THE PLAYSTATION MARK ..................... 49
A. Although Some Users May Prefer The PlayStation, Other Users
And Reviewers Enthusiastically Praise VGS ................... 49

B. Sony Has Not Suffered Any Lessening Of The Capacity Of Its
Marks To Identify And Distinguish Its
Goods .................... 53

VII. CONCLUSION AND STATEMENT OF RELIEF SOUGHT .................... 54

iii

TABLE OF AUTHORITIES

CASES

Accuride Int'l, Inc. v. Accuride Corp., 871 F.2d 1531, 1538 (9th Cir.
1989) ...................................... 49

Alcatel U.S.A., Inc. v. DGI Technologies, Inc., 166 F.3d 772, 790-91
(5th Cir. 1999) ..................................... 42, 46, 47

Allen v. Academic Games League ofAmER1ca, 89 F.3d 614, 616 (9th
Cir. 1996) ......................................... 48

Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d 252, 264 (5th Cir.)
cert. denied, 449 U.S. 899 (1980) .......................... 50

Cadence Design Systems, Inc. v. Avant! Corp., 125 F.3d 824, 830-31
(9th Cir. 1997), cert. denied, 118 S. Ct. 1795 (1998) ............. 43

Campbell v. Accuff-Rose, 510 U.S. 569, 577 (1994) ......... 21, 25, 26, 27, 29, 38, 43

Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405
(1990) ................................ 24

Harper & Row, Publishers Inc. v. Nation Enterprises, 471 U.S. 539,
547 (1985) ...................................... 25

Kepner-Tregoe, Inc. v. Leadership Software, Inc., 12 F.3d 527, 538
(5th Cir.), cert. denied, 513 U.S. 820, 115 S. Ct. 82 (1994) ......... 42

Lasercomb AmER1ca, Inc. v. Reynolds, 911 F.2d 970, 977-79 (4th Cir.
1990)) ............................................ 47, 48

Lewis Galoob Toys, Inc. v. Nintendo of AmER1ca, Inc., 964 F.2d 965,
971 (9th Cir. 1992) .................................. 48

MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511, 517-19
(9th Cir. 1993) ............................... 44, 45

Minnesota Mining and Manufacturing Co. v. Rauh Rubber, Inc., 943
F. Supp. 1117, 1132 (D. Minn. 1996), aff' d, 130 F.3d 1305
(8th Cir. 1997) ............................. 49

iv

Panavision Int'l L.P. v. Toeppen, 945 F. Supp. 1296, 1304 (C.D. Cal.
1996), affd, 141 F.3d 1316, 1325 (9th Cir. 1998) ............. 49, 50

Practice Management Info. Corp. v. AmER1can Med. Ass' n, 121 F.3d
516, 521 (9th Cir. 1997), as amended, 133 F.3d 1140 (9th Cir.
1998), cert. denied, 119 S. Ct. 40 (1998) ............... 46, 47

Religious Technology Center v. Netcom On-line Communication
Services Inc., 923 F. Supp. 1231, 1242 n.12 (N.D. Calif. 1995) ........ 25

Ringling Bros. & Barnum & Bailey Combined Shows, Inc. v. Utah
Division of Travel Development, 170 F.3d 449, 452-61 (4th Cir.
1999) ......................................... 52

Roe v, Anderson, 134 F.3d 1400, 1402 (9th Cir. 1998), aff'd, 67
U.S.C.W. 4291 (1999) .................................. 24

Sega v. Accolade, 977 F.2d 1510
(9th Cir. 1992) ................. 4, 20, 21, 22, 27-34, 36-42, 46, 47

St. John v. North Carolina Parole Comm'n, 764 F. Supp. 403, 412
(W.D.N.C. 1991) affd, 953 F.2d 639 (4th Cir. 1992) ................ 50

The New Kids On The Block v. News AmER1ca Publ'g, 971 F.2d 302,
308 (9th Cir. 1992) ................................... 53

Triad Systems Corp. v. Southeastern Express Company, 64 F.3d
1330, 1335 (9th Cir. 1995) cert. denied, 516 U.S. 1145 (1996) .... 44, 45

Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156 (1975) ....... 48

Vault v. Quaid, 847 F.2d 255, 260 (5th Cir. 1988) ................ 45

OTHER AUTHORITIES

3 McCarthy, Trademarks and Unfair Competition § 24.16[1] ................... 49

European Software Directive, Article 5 and 6 ................. 22

M. Nimmer & D. Nimmer, Nimmer on Copyright, § 13.03[A][1][d] .......... 24

v

RULES

17 U.S.C. § 502(a) ......................... 41, 44

17 U.S.C. § 106 ...................................... 42

17 U.S.C.§ 102(b) .................................... 24, 25, 28

17 U.S.C.§ 107 .................................... 21, 25, 26

17 U.S.C.§ 117 .............................................. passim

17 U.S.C. § 502 ....................................... 42, 44

17 U.S.C. § 504 ............................................ 43

17 U.S.C. § 1203 ....................................... 45

28 U.S.C.§ l292(a)(1) ............................ 2

28 U.S.C. § 1331 ............................................ 2

28 U.S.C.§ 1338 ............................................. 2

28 U.S.C.§ 1367 ............................................... 2

35 U.S.C. § 100 ............................................... 6

Fed. R. App. P. 4(a)(1) ................................... 2

Fed R. App. P. 26.1 .......................................... 1

vi

CORPORATE DISCLOSURE STATEMENT

Pursuant to Rule 26.1 of the Federal Rules of Appellate Procedure, defendant-appellant Connectix Corporation states that it is a corporation organized under the laws of the state of California. Connectix Corporation has no parent corporations or any publicly held companies owning 10% or more of its stock.

1

STATEMENT OF JURISDICTION

This is an appeal from an interlocutory decision granting appel1ees' (collectively "Sony") motion for preliminary injunction. The district court had jurisdiction pursuant to 28 U.S.C. § § 1331, 1338, and 1367.

The district court's decision was entered on April 20, 1999. That decision is appealable and this Court has jurisdiction under 28 U.S.C. § 1292(a)(1). Appellant Connectix Corporation ("Connectix") timely filed a notice of appeal on April 28, 1999, pursuant to Federal Rule of Appellate Procedure 4(a)(l).

2

STATEMENT OF THE ISSUES

1. Whether the district court erred in finding that Cormectix' necessary use of Sony's code in order to access its unprotected elements was not a fair use.

2. Whether the district court erred in enjoining Connectix from selling its software product that all parties concede does not infringe any copyrighted work of plaintiffs.

3. Whether the district court erred in enjoining Connectix from loading program code it owns into a computer as an essential step in utilizing the code in conjunction with that computer pursuant to 17 U.S.C. § ll7.

4. Whether the district court erred in enjoining Connectix based on copyrights that are being misused by Sony.

5. Whether the district court erred in finding that Sony established a likelihood of success on its trademark dilution claim.

3

STATEMENT OF THE CASE

I. THE NATURE OF THE CASE

In this case, Sony seeks to distort the copyright and trademark laws to give Sony a patent-like monopoly over its PlayStation video game system. All Connectix has done is load and observe the operation of Sony's published BIOS computer code, and disassemble small portions of code into human readable form, for the sole purpose of achieving compatibility with PlayStation games. Connectix' software product, Virtual Game Station ("VGS"), when installed on a personal computer, permits video games that play on a PlayStation to play on a personal computer. Thus, the personal computer emulates a PlayStation console. Connectix is not alone in using computer software to emulate the behavior of other products: such well known products as Sun Microsystems' Java language use emulation. [CR67, ¶¶ 10-11; CR69, Exh. G]

The issue in this case is not whether copying occurred, but rather whether the copying was necessary in order to understand and create a new noninfringing work compatible with PlayStation games. The district court flatly has failed to follow the existing Ninth Circuit precedent on this issue, Sega v. Accolade, 977 F.2d 1510 (9th Cir. 1992).

Sony can assert a copyright claim for only one reason: unlike every other copyrighted work, the ideas and functions embodied in object code are not visible and thus cannot be ascertained readily by human beings. Accessing and studying the unprotected aspects of code requires either observing the code in operation or disassembling it. Both of those processes, by necessity, create copies. For every other copyrighted work the law is clear: a copyright holder can retain control over

4

the ideas embodied in that work only if it keeps the work secret. If the copyright holder sells its work to the public, as Sony has done, then, unlike under patent law, the copyright holder can monopolize only the expression of its ideas. The ideas themselves are available for anyone to use. This is the fundamental bargain of copyright law; it is the engine for human progress -- one idea building upon another.

Sony is attempting to break that fundamental bargain. Sony is economically exploiting its copyrighted BIOS and yet claiming that no one else can learn and use the ideas in its program code. If Sony wanted protection for its ideas, it should have sought a patent, which, unlike a copyright, does protect ideas. Absent a patent, Sony has no lawful right to monopolize the ideas in its programs. As is true with every other copyrighted work, Sony's ideas should be available to everyone.

The PlayStation is a video game console that enables users to play video games on a television set. Connectix necessarily used code resident in the PlayStation during Connectix' reverse engineering process to understand how to emulate it. Then, Connectix created an entirely new work, VGS, that allows PlayStation games to run on Macintosh computers. Sony concedes that Connectix' final product does not contain or otherwise infringe any of Sony's copyrighted code; Sony also concedes that copying and disassembly of Sony's code is necessary to create a compatible product. [CR5, ¶ 5; CRI 11, ¶5]

This is an appeal from the district court's order (1) enjoining Connectix from making copies of or using Sony's code as a step in developing a version of VGS for Windows-based computer systems, (2) enjoining Connectix from selling

5

or distributing VGS for either Macintosh or Windows-based computer systems, and (3) ordering Connectix to deliver to the court all copies of Sony's code.

The district court's order prevents Connectix from using common reverse engineering techniques to make a compatible software product. Under the trial court's logic, the entire U.S. software industry would be prevented from making compatible products if they competed in any manner with the product being reverse engineered. Such logic would preclude competition and innovation in the AmER1can computer industry, and make a copyright, with its trivial requirements to obtain and its long duration, a far more powerful form of intellectual property protection than a patent. See, 35 U.S.C. § l0O et seq. Indeed, if such protection were available to other works under copyright law, new and unique works of literature, art and music produced by artists who had previously studied competing reproductions could also be enjoined from sale.

In this appeal, Connectix seeks reversal of the district court's preliminary injunction order because it was based on an erroneous view of the law and a clearly erroneous assessment of the evidence. The district court erroneously found that Connectix' necessary copying of Sony's code to access its unprotected functional elements in order to create a compatible product was not a fair use. Among other things, the district court erroneously placed the burden of fair use on Connectix, failed to determine whether or to what extent it was necessary for Connectix to copy Sony's code and rejected declarations submitted by Connectix in support of its opposition to Sony's motion. The court also erroneously found that Connectix' innovative product, which emulates the functionality of the unprotected PlayStation entirely in software, was not transformative. In prohibiting Connectix from fairly using Sony's code to access and study its

6

unprotected aspects, the district court erroneously granted Sony a patent-like monopoly over the invisible ideas and functions embodied in its copyrighted code.

The district court also erred in enjoining Connectix from selling VGS despite the court's express finding that VGS does not contain or otherwise infringe any copyrighted matER1al. The district court further erred by enjoining Connectix from loading program code it owns into a computer pursuant to 17 U.S.C. § 117. Additionally, the evidence and law do not support the district court's finding that Sony established a likelihood of success on its trademark dilution claim based merely upon evidence that a select group of survey participants marginally prefer the PlayStation.

Connectix requests that this Court reverse the district court's preliminary injunction order and allow Connectix to fairly use Sony's copyrighted code to access its unprotected elements and to sell its compatible VGS products.

II. THE COURSE OF PROCEEDINGS

On January 27, 1999, Sony filed its complaint alleging copyright infringement, trademark dilution and other causes of action. On February 3, 1999, Sony filed an ex parte application for a temporary restraining order, and Connectix filed an opposition to that application. The district court denied the application at a hearing on February 4, 1999. Sony again sought a temporary restraining order on March 3, 1999. Connectix filed an opposition to Sony's second application on March 5, 1999. On March 11, 1999, the district court denied Sony's second application, permitting Connectix to continue selling VGS but it did prohibit further copying of Sony's code in the development process.

After expedited discovery, Sony filed its Motion for Preliminary Injunction on March 10, 1999. Connectix filed its response on shortened time on March 19,

1999, and Sony filed its reply on March 26, 1999. A hearing on Sony's motion was held on April 9, 1999. On April 20, 1999, the district court issued an order enjoining Connectix' use of Sony's code and Connectix' sale of both Macintosh and Windows based VGS. [CR106]

On April 24, 1999, Connectix filed an ex parte motion with the district court to stay or modify the injunction. A hearing on the motion was held on April 27, 1999, during which the district court denied Connectix' motion.

Connectix filed a timely notice of appeal on April 28, 1999. On April 30, 1999, Connectix filed an emergency motion for stay of the district court's injunction order pending appeal, or an expedited briefing schedule. The Ninth Circuit issued an order denying the stay on May 12, 1999, but ordered that this appeal be set for the first available date for oral argument after Sony files its response.

III. STATEMENT OF THE FACTS

Ten years ago, inventor Jon Garber formed Connectix to market and distribute a software product known as Virtual that used emulation to virtually extend the RAM of a Macintosh II computer. [CR69, Exh. A] Since then, Connectix has invented a continuous stream of innovative and highly successful software products. Those products include Virtual PC, Ram Doubler, Speed Doubler and Surf Express. [CR70, Exh. F] Many of the products developed by Connectix are emulator products, designed to be compatible and compete with products reverse engineered by Connectix.

On September 17, 1998, Connectix privately demonstrated a working version of a PlayStation emulator to Sony. On January 5, 1999, Connectix

8

released VGS to the public at the MacWorld Expo 1999 trade show in San Francisco, at which it was selected Best of Show. [CR70, Exh. F] VGS is an innovative computer software program that runs on an ordinary personal computer and allows a personal computer to emulate the Sony PlayStation console so users can play PlayStation compatible video games on their personal computers. [CR67, ¶10; CR65, ¶7] VGS thus provides consumers an entirely new environment in which to play their PlayStation games. [CR67, ¶¶12, 15]

A. Sony PlayStation.

The PlayStation console is essentially a single-purpose computer that interfaces with a television set to allow users to play video games on their television set. [CR77, ¶2; CR67, ¶13] The central component of the PlayStation console is a MIPS R3000 microprocessor. The PlayStation also includes a graphics processing unit ("GPU"), a geometry transfer engine ("GTE"), a sound processing unit ("SPU"), a decompressor ("MDEC") and a compact disk drive ("CD-drive"). [CR77, ¶2] PlayStation games are computer programs stored on compact disks, which are loaded into the CD-drive of a PlayStation console, and which interact and operate with the console. [CR65, ¶3] The various console components work together to interpret and execute instructions from PlayStation games and to display resulting video images and sounds on a television set. [CR82, ¶6]

Basic control of the PlayStation hardware is provided by program code, which is resident in the hardware and which the parties have referred to as Sony's BIOS. [CR77, ¶3; CR40, ¶¶4-5; CR67, ¶¶14-15] Sony's BIOS is stored in Read Only Memory ("ROM") in the PlayStation hardware as a sER1es of 1's and O's that

9

can be understood and executed by a microprocessor, but which cannot be read by humans.

B. Reverse engineering Program Code.

Reverse engineering is the process of starting with a finished product and working backwards to analyze and understand how the product operates or how it was made. [CR67, ¶30; ER1, p. 28:19-23; ER2, p. 37:14-22] There are only four ways to reverse engineer computer program code: (1) by reading documentation about the code; (2) by observing the operation of the code; (3) by examining a printout of the instructions contained within the code; or (4) by examining individual instructions as the code is being run on a computer. [CR67, ¶35]

The first method (reading documentation) rarely provides sufficient information to reverse engineer a product and the reverse engineer must of necessity typically resort to the last three methods, each of which require intermediate copying of the program code. [CR67, ¶¶36-37] In the second method, to observe its operation, the code must necessarily be loaded (copied) into a computer's main memory where it can be executed. [CR67, ¶¶37-38, 40] In the third method, examining printed instructions requires disassembling (copying) the code (translating the 1's and 0's of object code into human readable form) and printing a copy of the resulting text. [CR67, ¶¶37, 39; ER2, pp. 37:23-38:I0] In the final method, observing instructions in real-time as program code is executed requires loading a copy of the code into memory and disassembling (copying) the instructions into human readable form. [CR67, ¶¶37, 40]

C. Functional Elements of Sony's BIOS.

Sony's BIOS contains many functional elements, including the manner in which it interacts and interoperates with the PlayStation hardware and game

10

programs and the processes it instructs the hardware to perform. [CR77, ¶¶2-3; CR40, ¶¶5-6; CR65, ¶¶2-6; CR68 ¶64; CR82, ¶¶3-4] Those functional elements are not protected by copyright law. 17 U.S.C. § 102(b). Moreover, the PlayStation consists mainly of hardware components, such as the MIPS R3000 microprocessor, GPU, GTE, SPU, and MDEC, [CR77, ¶¶2-3], which are likewise unprotected by copyright law. To make VGS compatible with PlayStation games and allow them to play on a personal computer, it was necessary for Connectix to reverse engineer and emulate those unprotected elements.1 [ER1, p. 91:13-17; CR65, ¶¶6-7; CR67, ¶¶13-20]

D. Connectix' Reverse engineering of the PlayStation.

1. Observing Unprotected Aspects of Sony's BIOS.

Connectix began developing its innovative product by writing software which would emulate or perform the same functions as the PlayStation hardware but on a whole new set of hardware -- a personal computer. [ER2, pp. 1 15:13-116:8; ER1, p. 159:3-17; CR65, ¶¶12-17] Connectix first emulated the central component of the PlayStation, the MIPS R3000 microprocessor, which executes the game instructions and BIOS code. [ER2, p. 116:14-18; CR65, ¶12; CR68, ¶19] Connectix wrote an interpreter, which examines instructions one at a time from the BIOS or game programs, and then performs those operations on a Macintosh Power PC. [CR65, ¶12; CR68, ¶¶19-26]

With this interpreter, Connectix engineers reverse engineered the unprotected interaction between Sony's BIOS and the hardware. [ER2, p. 1 16:9-

_____________
1 Compatibility is used here to mean compatibility between hardware and software. This idea is often referred to as "interoperabi1ity."

11

18; CR65, ¶¶l4-15, 17, 27; CR68, ¶4, 35; CR67, ¶26] Because the operation of the BIOS and the hardware were not visible on the PlayStation, accessing those unprotected aspects necessarily required loading the code onto a computer where it could be run and observed.2 [CR40, ¶¶3-4; CR67, ¶¶33, 38-39; CR65, ¶¶9-10] Once they understood the functionality the BIOS required from the hardware, the engineers wrote software to emulate the hardware functionality. [CR65, ¶16; CR68, ¶¶40, 41, 50, 54]

Connectix next reverse engineered Sony's BIOS by running PlayStation games in conjunction with the BIOS and its software emulator of the hardware. [CR65, ¶17] Not all games access all of the PlayStation hardware or utilize all of the PlayStation functionality. [CR68, ¶33] Thus, Connectix had to run numerous games in order to study the multitude of different requests received by the BIOS and how it responded to those requests. [CR65, ¶17] Connectix needed to understand every facet of this information to develop a software product that would be compatible with PlayStation games. [CR65, ¶¶15-17; CR68, ¶5]

______________
2 Connectix engineers, who each owned a PlayStation, first used a copy of Sony's BIOS they downloaded from the Internet. [ER2, p. 1 10:2-13; CR64, ¶13] Connectix was unaware at this point that there was more than one version of Sony's BIOS, and assumed the version it was downloading was a captured image of the code contained within the PlayStations that it already owned. [CR64, ¶13] It was not until progress on the emulator was sufficient to display some text screens (which appeared in Japanese) that it became obvious that this code was not such a copy, whereupon Connectix purchased yet another new, up-to-date PlayStation, and made sure it had an accurate, U.S. image. [CR64, ¶¶2, 13] Connectix then downloaded and reverse engineered code from that PlayStation. [CR64, ¶¶2-3; ER2, p. 122:16-24; ER1, pp. 54:21-56:16]

12

2. Emulating Sony's BIOS Functionality.

Once Connectix had gained some understanding of the unprotected manner in which the BIOS interacts with the hardware, the engineers removed Sony's BIOS from their emulation software in its entirety and proceeded to write code to emulate the necessary BIOS functionality. [ER2, pp. 121:24-122:8 ; ER1, pp. 65:23-66:14; CR65, ¶¶18-20; CR68, ¶¶63-74] Connectix wrote this code independently; it did not copy Sony's BIOS or examine a disassembled version of Sony's BIOS and most certainly did not gradually convert Sony's BIOS into its code. [ER2, pp. 120:9-121:5, 144:12-18; ER1, p. 157:5-7; CR64, ¶¶6-7; CR65, ¶23; CR68, ¶¶3, 6] Rather, Connectix began with an empty table consisting of entry points into the BIOS. [ER2, pp. 89: 18-24, 120:9-18; CR65, ¶18; CR68, ¶¶64-65, 69; CR82, ¶7] For VGS to be compatible with PlayStation games, Connectix' table must necessarily contain the same entry points, and be in the same order and format, as the table in Sony's BIOS. [ER1, p. 91:13-17; CR65, ¶18; CR68, ¶69]

Many of the BIOS functions Connectix implemented (a third to a half) are standard "C" language functions that would be familiar to any experienced programmer. [CR65, ¶19; ER1, p. 86:4-11] To determine what was required of other functions, Connectix ran PlayStation games and recorded on its computer hard drive each time a game attempted to access Connectix' partially implemented "BIOS." [ER2, pp. 120:18-21, 121:15-19; CR65, ¶19; CR68, ¶76] Connectix did not use Sony's BIOS during this process. [ER2, pp. 121:24-122:8] Rather, using their experience and skill as programmers, Connectix engineers typically could deduce the requisite BIOS functionality simply by examining the function name, the information sent to and from the BIOS, or the general grouping of functions

13

requested by PlayStation games.3 [ER2, pp. 121:12-19, 144:16-145:3; CR65, ¶20; CR68, ¶77] Other times they examined the hardware accesses performed before and after a function call to deduce the functionality the call supported. [ER2, pp. 121:15-19, 144:16-145:3; CR65, ¶¶17, 20; CR68, ¶78] The engineers then independently wrote code to implement the required functionality. [ER2, pp. 120:21-24, 144:16-145:3; CR65, ¶¶19-20; CR68, ¶77]

3. Comparing Unprotected Aspects of Sony's BIOS.

On a few occasions, Connectix engineers could not determine the required BIOS functionality by running games on their emulator. [CR65, ¶21] There were also times when their emulation software failed to operate in a manner fully compatible with PlayStation games. [ER2, pp. 129:16-130:2; CR65, ¶21; CR68, ¶6] On these occasions, the engineers again executed Sony's BIOS on their computer and observed its operation as described above. [ER2, pp. 129:7-130:2; CR65, ¶21; CR68, ¶¶7, 9] Using a combination of intuition and skill, they compared information generated by running a game with Sony's BIOS with information generated by running a game with their emulated "BIOS" to gain some understanding of the unprotected ideas and functionality embodied in Sony's BIOS. [ER2, pp. 129:7-130:2, 130:17-131:4; CR65, ¶21; CR68, ¶6]

4. Disassembling Small Portions of Code.

The engineers disassembled small portions of code as they ran the BIOS on their computer and examined the resulting human readable text on the computer

____________
3 Connectix has implemented only 137 of the 242 functions implemented in Sony's BIOS. [CR64, ¶ 10]

14

screen.4 [ER2, p. 125:16-24; ER1, pp. 62:2-22, 112:4-8; CR65, ¶¶22, 26, 28; CR68, ¶71] The disassembled instructions provided one more piece of information to aid the engineers in deducing the unprotected aspects of Sony's BIOS. [ER1, pp. 62:2-22, 154:21-25; CR65, ¶16; CR67, ¶27] However, this technique of reverse engineering was even more time-consuming and difficult than observing the operation of the BIOS and Connectix used it only when necessary. [ER2, p. 125:16-24; ER1, pp. 62:2-22, 116:14-16; CR65, ¶22; CR68, ¶7]

E. Success of Virtual Game Station.

Using the reverse engineering techniques described above, Connectix independently created its noninfringing and innovative VGS.5 [ER2, pp. 120:9-121:5, 144:12-18; ER1, p. 157:5-7; CR64, ¶¶6-7; CR65, ¶23; CR68, ¶¶3, 6]

VGS has been a huge success.6 [CR70, Exh. N] It won the prestigious "Best of Show" award upon its release at the MacWorld Expo 1999 trade show in

_____________
4 Connectix engineers wrote a disassembler very early in the process that translates object code into human readable form. [ER2, p. 113:10-11; CR65, ¶13; CR68, ¶23] They tested this disassembler by running the Japanese BIOS obtained from the Internet through the disassembler in its entirety. [ER2, pp. 110:1-13, 113:4-114:2; CR65, ¶13; CR68, ¶¶24-25] Connectix' use of Sony's BIOS to test this disassembler is distinct from its use of the BIOS to develop VGS; Connectix engineers did not study or otherwise use the disassembled instructions generated by this test in their development of VGS. [ER2, pp. 114:3-14, 120:25-121:5; CR68, ¶3]

5 At least one other PlayStation emulator product also has entered the market.

6 Connectix has aggressively sought to protect its successful VGS product against piracy and to prevent consumers from playing pirated PlayStation games on VGS. Connectix has included technological measures in its software that detect and disable the play of counterfeit games. [CR64, ¶11] Unlike Sony, Connectix

15

San Francisco. [CR69, Exh. L]. VGS has also been enthusiastically praised by reviewers:
"As to whether the program works, the answer is yes, surprisingly well." Newsweek Magazine; "We have been playing around with the CVGS for hours now and we are really amazed with the outstanding performance. The emulation is seamless. The games never jumped or became sluggish on any of the systems." PlayStation Users Group; "All of the games ran very smoothly, or at least as smoothly as the PlayStation in the other room." consoledomain.com; "IGNPSX has [had] the opportunity to test the software on the base- model G3 setup comparable in performance to an iMac, and the results were quite impressive to say the least." psmonline.com, January 6, 1999; "Not only did the game run just fine, it ran at full PlayStation speed! I was completely and totally blown away." kearney.net; "I highly recommend VGS, and my highest compliments go to Connectix." versiontracker.com.
[CR 69, Exhs. E-K]

________________
continuously polices the Internet for evidence that hackers have circumvented its measures and then attempts to update them accordingly in each new release of its software. Id. Owners of previous releases of VGS freely download upgrades (which also contain desirable performance improvements) off of Connectix' website and thus Connectix' updated antipiracy measures are effectively incorporated into prior releases of VGS. Id.

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F. Examples of the District Court Misunderstanding Reverse
Engineering Software And Emulation Technology.

The district court did not have a clear understanding of the technological complexities of reverse engineering software in general, and emulation technology in particular:
  • The district court mixed patent law and copyright law principles in attempting to understand and comprehend the issues surrounding reverse engineering of copyrighted computer code. [CR17, p. 38; CR28, p. 7] Indeed, that confusion has caused the district court to give Sony patent-like protection based only on a copyright.

  • Although both Connectix engineers expressly testified at their depositions that they did not merely incrementally change Sony's BIOS, or use it as a template in any manner, but rather removed it in its entirety and independently wrote code to emulate the requisite BIOS functionality, [ER2, pp. 122:4-8, 130:6-131:4; ER1, p. 66:15-18], the district court nonetheless erroneously found that Connectix engineers "gradual1y converted" Sony's code. [CR106, pp. 9, 11]

  • The district court erroneously found that "VGS does not do anything new, anything different, or anything unique from the PlayStation" because "it plays PlayStation games on a visual platform." [CR106, p. 15] In a software product, VGS has succeeded in emulating the hardware and firmware elements of the PlayStation console to allow VGS consumers to play video games on their personal computers -- an entirely new and different environment for game play. It enables, for example, owners of PlayStation games to run their games on a laptop computer while flying at 30,000 feet, far from a television or electrical outlet for a

17

    PlayStation game console. Moreover, while no games currently exist solely for use on VGS, it is feasible that in the future such games could be developed.

  • The district court erroneously found that "the Sony BIOS is the vital component of the PlayStation console," [CR 106, p. l8], despite evidence that the PlayStation contains many other components that are much more critical to the operation of the PlayStation -- including the R3000 microprocessor, which executes the instructions from the BIOS and game programs. [CR 77, ¶¶2-3; CR 67, ¶¶13-15]

  • The district court mistakenly found that Connectix took "the heart of the original" (i.e., Sony's BIOS) and made it "the heart of a new" (i.e., VGS), when it is undisputed that Connectix independently wrote code to emulate the functionality of the BIOS, and did not copy the BIOS, or any portion of it, into its end product. [ER2, pp. 121:24-122:8; ER1, pp. 65:23-66:14; CR65, ¶¶18-20; CR68, ¶¶63-74] The evidence also does not demonstrate that the BIOS is "the heart" of the PlayStation -- it simply controls some of the basic operation of the system. [CR77, ¶3] Moreover, Connectix has implemented only a portion (137 of the 242) of the functions implemented in Sony's BIOS. [CR64, ¶10]. The other functions were not used by any game Connectix tested, and therefore the elements those functions required and what functionality they produced could not be ascertained from observation and were not emulated in VGS. The absence of BIOS functions that are not actually used by games is direct evidence that Connectix did not gradually convert the BIOS but rather independently wrote its code.

  • The district court also erroneously found that VGS contains the same components as a PlayStation, [CRl06, p. 15], when VGS does not contain any

18

    hardware components whatsoever, but rather emulates the necessary functionality of the PlayStation hardware entirely in software. [CR67, ¶10] Emulating hardware functionality with a software program is fundamentally different than building a console from identical hardware components. Such a transformation from hardware to software is inherently transformative; in fact, the resulting software expression is protectable by copyright, whereas the original hardware components are not.

  • The district court states that "Connectix demonstrated and promoted" a VGS prototype with Sony's BIOS. [CR106, p. 15] Connectix only demonstrated a prototype VGS with Sony's BIOS to Sony once. [ER1, p. 67:12-68:4] Connectix never demonstrated, promoted, displayed or released a version of VGS containing any portion of Sony's BIOS to anyone else.

  • The district court erroneously found that Connectix used the PlayStation logo on VGS packaging (which is simply not true) and that VGS was "an almost perfect substitute" for PlayStation but then found in its dilution discussions that VGS was not a substitute for PlayStation. [CR106, pp. 22, 24]

  • The district court expressed doubt at the TRO hearing on March 11, 1999 that it fully understood the relevant technology, and that the record, including the deposition transcripts of Connectix engineers, was sufficiently clear or complete. [CR49, pp. 2, 5-6, 14-16] Yet the court refused to consider the declarations of Connectix engineers and expert submitted to explain the relevant technology, and clarify and complete the record necessary to decide the issues before the court. [CR1O6, pp. 11-12, 17]

  • The district court was unable to separate the issues involving the normal copying of Sony's BIOS as part of the execution of the program in order to

19

    use it, from the fair use issues surrounding disassembly of the BIOS. That is dramatically illustrated by the district court confusing the 17 U.S.C. § 117 discussion in Sega regarding disassembly, with the relevance of Section 117 in this case to making a copy of the BIOS when Connectix started up its emulator software, which is expressly permitted by Section 117. [CR106, pp. 20-21]

  • The district court tried to distinguish Sega by stating that Connectix was creating VGS to compete with, rather than to be used in conjunction with, Sony's PlayStation. This is a distinction without a difference because the Sega defendant likewise created its games to compete with, rather than be used in conjunction with, the Sega video games it had copied and disassembled. VGS is compatible with PlayStation games, not a PlayStation console.

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SUMMARY OF THE ARGUMENT

The district court erroneously found that Connectix' observation and limited disassembly of Sony's BIOS during its development of VGS does not constitute a fair use of the code. No case has ever held that merely running and observing computer code in order to access and study the unprotected ideas and functions embodied therein is not a fair use of the code. To the contrary, in Sega v. Accolade, the Ninth Circuit recognized that observing the operation of computer code is one method of accessing the invisible unprotected elements of the code. 977 F.2d 1510, 1520, 1525 n.7 (9th Cir. 1992). Running and observing code, of necessity, requires copying. Such copying is a fair use and moreover protected under 17 U.S.C. § 117 which permits copying for the purpose of running code on a computer. Under Sega , disassembling program code -- even wholesale disassembly -- is also a fair use when, as in this case, it is necessary to understand the unprotected ideas and functions embodied in the code. Id. at 1520.

It is undisputed that Connectix independently created the entirety of its VGS software. Sony does not argue, and cannot argue, that there is any substantial similarity between VGS and Sony's BIOS. Thus, Sony's pejorative charge that Connectix is a "free-rider" is colorful rhetoric, but has nothing to do with reality. Connectix simply did not copy Sony's BIOS and then sell it.

The fair use doctrine, codified in 17 U.S.C. § 107, by its terms "permits and requires courts to avoid rigid application of the copyright statute when, on occasion it would stifle the very creativity which that law is designed to foster. Campbell v. Acuff-Rose, 510 U.S. 569, 577 (1994). As this Court recognized in Sega, reverse engineering of computer software is one situation where the copyright holder's right to control copying must give way to a competitor's right

21

to access unprotected aspects of the software and the public's interest in a greater selection of creative works. 977 F.2d at 1526. The district court's decision stifles the creativity of every independent developer of software and confers upon software copyright holders far greater rights than those afforded other literary works. This is in direct conflict with Sega. The district court's decision effectively makes copyright protection more restrictive than patent protection, a result which cannot be countenanced by this Court.

The district court's order also enables Sony to misuse its copyright to gain patent-like protection over its PlayStation and to preclude consumers from choosing other platforms on which to play their games. It denies consumers the choice of an alternative game platform under the guise of trademark law simply because a small and select group of survey participants indicated a slight preference for the PlayStation. Sony has not, and indeed cannot, show that VGS has lessened the distinctive quality or selling power of its PlayStation mark.

If the decision of the district court is not reversed, the American software industry, which has prospered in the existing environment of free access to ideas and free competition, will be severely and adversely impacted. The district court's decision would thus also impact the availability and price of consumer goods. For example, under the district court's ruling, IBM would be the only ones making IBM PC's and the PC-compatible market would never have come to exist.

Moreover, in Europe, the right to create compatible products through reverse engineering is protected by statute. European Software Directive, Articles 5 and 6. If the district court's decision is affirmed, Sony and other hardware manufacturers will gain absolute control over access to their computers and operating systems, and software companies in the United States will be precluded

22

by copyright law from producing interoperable software. European companies and companies around the world will not be similarly restricted, to the detriment of American industry, workers and consumers.

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ARGUMENT

I. STANDARD OF REVIEW ON APPEAL OF PRELIMINARY
INJUNCTIVE RELIEF

The Ninth Circuit reviews a district court's order granting preliminary injunctive relief for abuse of discretion. Roe v. Anderson, 134 F .3d 1400, 1402 (9th Cir. 1998), aff'd,67 U.S.C.W. 4291 (1999). A district court necessarily abuses its discretion by basing its ruling on (1) an erroneous view of the law; or (2) a clearly erroneous assessment of the evidence. Cooter & Gell v. Hartmarx Corp.; 496 U.S. 384, 405 (1990); Roe, 134 F.3d at 1402. In this case, the district ` court's grant of injunctive relief was based on a combination of legal errors and a clearly erroneous assessment of the facts.

II. SONY DID NOT DEMONSTRATE A LIKELIHOOD OF
SUCCESS ON ITS COPYRIGHT CLAIM BECAUSE
CONNECTIX FAIRLY USED THE UNPROTECTED
ELEMENTS OF SONY's BIOS TO CREATE A COMPATIBLE
PRODUCT

Copyright law protects Connectix' right to access the ideas and functional elements of Sony's BIOS. 17 U.S.C. § 102(b) (no copyright protection for any "ideas, procedure, process, system, method of operation, concept, principle or discovery, regardless of the form in which it is . . . embodied in such work"); M. Nimmer & D. Nimmer, Nimmer on Copyright, §13.03[A][1][d], at 13-41 ("If the defendant 'used' plaintiff' s program only to extract its ideas . . . no infringement should be found regardless of the quantum of literal copying."). The deposition and declaration testimony before the district court overwhelmingly demonstrates that Connectix necessarily copied Sony's BIOS in order to access the ideas and

24

functional elements needed to create a product compatible with PlayStation games. Indeed, Sony's witness so testified. [CR5, ¶5; CR11, ¶5]

The district court's order erroneously grants Sony a patent-like monopoly over the ideas and functions embodied in its copyrighted code. [CR106, p.16] It thus conflicts with Section 102(b) of the Copyright Act as well as decisions of the United States Supreme Court. 17 U.S.C. §102(b); Acuff-Rose, 510 U.S. at 575 n.5; Harper & Row, Publishers Inc. v. Nation Enterprises, 471 U.S. 539, 547 (1985). It further prevents Connectix from using Sony's copyrighted code in a reasonable and fair manner to develop its own creative work pursuant to 17 U.S.C. § 107. Acuff-Rose, 510 U.S. at 575 ("From the infancy of copyright protection, some opportunity for fair use of copyrighted materials has been thought necessary "to promote the Progress of Science and useful Arts"); Harper & Row, 471 U.S. at 549 ("Fair use was traditionally defined as a privilege in others than the owner of the copyright to use the copyrighted material in a reasonable manner without his consent.") (internal quote omitted). It also unfairly limits consumers' choice of video game platforms.

Accordingly, the district court abused its discretion in enjoining Connectix from fairly reverse engineering Sony's BIOS during its development process and from selling its VGS products, and that injunction should be dissolved by this Court.

A. The Balance of Fair Use Factors Weighs Overwhelmingly
in Connectix' Favor.

The four statutory fair use factors "weighed together in light of the purposes of copyright" overwhelmingly support a finding that Connectix fairly copied Sony's BIOS in order to create a compatible product. Acuff-Rose, 510 U.S. at

25

578; 17 U.S.C. §107. As described below, each individual factor strongly favors Connectix' necessary use of the BIOS to access its unprotected elements during Connectix' development of VGS; weighing those factors together, the support for fair use is indisputable.

Connectix prevails on the first statutory fair use factor, the purpose and character of the use, because its VGS software emulator is transformative and its copying was intermediate and thus any commercial benefit was indirect. The alleged "copying" was for research purposes; it is only the eventual use of the information learned that is commercial. [See Section C] Connectix prevails on the second factor, the nature of the work, because of the unique nature of software, which made it necessary for Connectix to copy the BIOS to access its invisible, unprotected aspects. [See Section B] Connectix prevails on the third fair use factor, the amount used, because Connectix only disassembled small portions of the BIOS to access the functional aspects necessary to create a compatible product, and used no Sony copyrighted matER1al in VGS. [See Section D] Connectix prevails on the fourth factor, the effect on the market and value of the work, because Connectix copied the BIOS to create a compatible product and any loss to Sony resulting therefrom is purely speculative and minimal. [See Section E]

Moreover, the statutory factors are not exclusive and not to be rigidly applied. Acuff-Rose, 510 U.S. at 577-78. The undisputed facts of this case necessarily require a finding of fair use to further the fundamental copyright goal of promoting science and the arts. Id. It is undisputed that (1) the unprotected aspects of Sony's BIOS are invisible; (2) running and observing the BIOS necessarily requires copying it into a computer in its entirety; (3) creating VGS

26

required some disassembly of the BIOS; (4) Connectix disassembled only small portions of the BIOS; (5); Connectix' intermediate copying of Sony's BIOS simply facilitated its entry into the game console market and (6) VGS provides consumers a new environment in which to play their games. This evidence goes to the heart of fair use and overwhelmingly demonstrates Connectix only did what was reasonably needed to create a product that fairly competes with the unprotected PlayStation and provides consumers a choice of platforms on which to play their PlayStation games.

B. The Evidence Establishes It Was Necessary For Connectix
To Copy Sony's BIOS In Order To Access Its Unprotected
Ideas And Functional Elements; Connectix Must Prevail
On The Second Fair Use Factor.

1. The Ninth Circuit recognized the unique nature of
software in Sega v. Accolade.

In Sega , this Court expressly recognized that operating systems, such as Sony's BIOS, are invisible to the user and thus typically require copying in order to access the unprotected ideas and functional concepts embodied in the code. 977 F.2d at 1520, 1525. Holding such copying "per se an unfair use" would unfairly grant owners of copyrighted object code "a de facto monopoly over the functional aspects of [their] work[s] - aspects that were expressly denied copyright _ protection by Congress." Id. at 1526; see also, 17 U.S.C. § 102(b). Rather, because Copyright law protects expression, and not ideas, Section 107 necessarily permits the copying of a computer program if it is "the only means of gaining access to those unprotected aspects of the program." Id. at 1520. The district court's order erroneously prevents Connectix from doing so and consequently grants Sony an unwarranted monopoly over unprotected elements of its BIOS.

27

In Sega, the Ninth Circuit independently examined the record and concluded that it was necessary for the defendant to copy the plaintiffs program code in order to understand its functional requirements.7, Id. at 1525-26. In particular, the Sega Court relied on the following: (1) evidence that the unprotected aspects of the plaintiff's code were invisible because it distributed its computer program in only object code form; (2) evidence that the defendant copied the plaintiff's software solely to discover the functional requirements for compatibility; (3) lack of evidence that the defendant sought to avoid performing its own creative work; (4) evidence that the defendant did not simply copy the plaintiffs code into its final product, but rather wrote its own code; (5) lack of evidence of a viable alternative to disassembling the object code and (6) the fact that using a clean room would not avoid the need for disassembly. Id. at 1522, 1525-26. Based on this evidence, the Court determined the defendant fairly used the plaintiff's copyrighted code to create a compatible product. Id. at 1520.

The record in this case overwhelmingly demonstrates it was likewise necessary for Connectix to copy Sony's BIOS in order to access its unprotected functional aspects needed to develop Connectix' VGS product that is compatible with PlayStation games.

________________
7 The defendant in Sega used the plaintiff's program code as follows. The defendant first disassembled the entirety of both the plaintiff's video game code and code contained in the video game console, the Sega BIOS. Id. at 1514-15. The defendant then printed out the disassembled code and studied and annotated the printouts. Id. at 1515. Next, the defendant loaded the plaintiff's code into a computer and repeatedly modified it and studied the results in order to discover the functional requirements necessary for compatibility with the plaintiffs console and games. Id. The defendant then used the information it obtained to create video game programs that would play on the plaintiffs console and compete with the plaintiff's video game programs. Id.

28

2. Connectix had a legitimate interest in accessing the
unprotected elements of Sony's BIOS.

In the present case, it is undisputed that Connectix copied Sony's BIOS in order to develop an emulated video game platform that would be compatible with PlayStation games, and would provide consumers an entirely new environment in which to play their games. [CR106, pp. 5-6] Connectix needed to understand unprotected functional aspects of Sony's BIOS in order to emulate the PlayStation system such that VGS would be compatible with PlayStation games. [ER1, p. 91:13-17; CR65, ¶¶6-7; CR67, ¶¶13-20] Connectix thus had a legitimate interest in accessing the unprotected aspects of Sony's BIOS. See Sega, 977 F.2d at 1520 (a party determining how to make a compatible product has a legitimate interest in accessing the unprotected elements of a computer program); see also, Acuff-Rose, 510 U.S. at 575-576 (recognizing that the historical roots of fair use lie in the fact that progress is best served by permitting borrowing from, and building upon, the works of others).

3. The functional aspects of Sony's BIOS are invisible.

It is undisputed that Sony's BIOS operating system cannot be read or observed by humans. [CR40, ¶¶3-4; CR67, ¶¶33, 38-39; CR65, ¶¶9, l0] Because the unprotected functional aspects of Sony's BIOS are invisible, it was necessary for Connectix to use a copy of the BIOS to study and understand those aspects. See Sega, 977 F.2d at 1525 (copying was necessary because the unprotected aspects of the code were not accessible to the human eye).

Moreover, because operation of Sony's BIOS is not visible on a PlayStation, it was necessary for Connectix to load a copy of the code into a computer in order to observe its operation. [CR40, ¶¶3-4; CR67, ¶¶33, 38-39;

29

CR65, ¶¶9-10] The loading of code Connectix owns into a computer as part of the execution of the program is protected under 17 U.S.C. § 117. It is also a fair use because it is necessary to observe, and thus access and study, the unprotected elements of the code. See Sega, 977 F.2d at 1520.

4. Connectix necessarily used Sony's BIOS to discover
the functional requirements needed to create a
compatible product.

Through their deposition and declaration testimony, Connectix engineers explained why it was necessary to observe the operation of Sony's BIOS in order to access the functional requirements needed to create a product that would be compatible with PlayStation games. [CR65, ¶¶14-17; ER2, p. 116:9-18] They further explained why it was necessary to load the code onto a computer where its operation would be visible. [CR67, ¶¶33, 38-39; CR65, ¶¶9-10] From observing its operation, Connectix was able to deduce unprotected functionality such as how the BIOS interfaced and interacted with the game programs, how the game programs used the BIOS to communicate with and control PlayStation hardware and what was expected from the hardware. [ER2, pp. 144:16-145:3; CR65, ¶17; CR68, ¶¶4, 6; CR67, ¶26] This information was essential to Connectix' development of software that is compatible with PlayStation games. [ER1, p. 91:13-17; CR65, ¶¶5-7, 15-17; CR67, ¶¶13-20]

Sony's engineer testified that Connectix could not have created VGS without disassembling Sony's BIOS. [CR5, ¶5; CR11, ¶5]; see also Sega, 977 F.2d at 1525 ("humans often cannot gain access to the unprotected ideas and functional concepts contained in object code without disassembling that code"). Connectix engineers also explained how they used disassembly when necessary to

30

access and understand certain BIOS functionality. [ER2, p. 125: 16-24; ER1, pp. 62:2-22; 112:4-8; 116:14-16, 154:21-25; CR65, ¶¶16, 22, 26, 28; CR68 ¶¶5, 7, 71]

5. Connectix undertook substantial effort to develop its
own innovative software product.

There is no evidence suggesting that Connectix sought to avoid performing its own creative work. See Sega, 977 F.2d at 1522 (finding fair use based in part on fact that defendant developed its own creative work). In fact, the evidence demonstrates the opposite: Connectix submitted declarations and source code documentation showing the substantial effort Connectix undertook to create the first commercially available PlayStation emulator, which increases consumers' choice of products. [ER2, pp. 73:3-75:2; ER1, p. 145:9-24; CR82, ¶¶9-11] Connectix fully documented each step of VGS development through an Automatic Source Code Control System, which automatically marked each change to any source file. [CR82, ¶9] From July 6, 1998 to January 4, 1999, Connectix made a total of at least 4106 changes to its software -- an average of over 20 changes per calendar day, virtually all of which were commented in the control system.8 [CR82, ¶10]

It is undisputed that Connectix did not copy any portion of Sony's BIOS into its final product, but instead wrote its own code. See Sega, 977 F.2d at 1522 (finding fair use based in part on fact that end product did not contain any of

_____________
8 While the copyrighted BIOS is at issue in this case, the many hardware components which make up a PlayStation, such as the central processor, CD and gamepad controllers, sound and graphics hardware, none of which were copyrighted, have all been emulated in entirely new expressions of software by Connectix. Emulation of these other elements dwarfs the amount of code written for Connectix' "BIOS."

31

plaintiff's code). Connectix engineers testified, both at their depositions and in their declarations, that they removed Sony's BIOS from their software in its entirety prior to independently writing code to emulate necessary BIOS functionality. [ER2, pp. 121:24-122:8; ER1, pp. 65:23-66:14; CR65, ¶¶18-20; CR68, ¶¶63-74] They further testified that they wrote this code by operating PlayStation games on their emulator without Sony's BIOS and deducing the functionality the games were expecting the BIOS to perform. [ER2, pp. 116:9-18, 120:15-24, 121:12-19, 144:16-145:3; CR65, ¶¶17, 19-20; CR68, ¶¶4, 6, 76-78]

As they developed their own "BIOS" code, Connectix engineers used Sony's BIOS only on occasions when they could not deduce the functionality of the BIOS. [ER2, pp. 125:16-24, 129:16-130:2, 130:17-l3l:4; ER1, pp. 62:2-22, 109:6-110:17, 112:4-8; CR65, ¶¶17, 21-22, 28; CR68, ¶¶6, 17, 79-81] Even then, they did not copy any BIOS code; they studied the BIOS to determine the required functionality, and then independently wrote code to emulate it. [ER2, pp. 130:6-131:4, 144:16-145:3; CR65, ¶20; CR68, ¶77]

The record provides no support for the district court's finding that "Connectix' engineers admitted that they used copies to gradually convert Sony's code to their own code." [CR106, p.11] Indeed, the record is directly contrary: both Connectix engineers expressly testified at their depositions that they did not merely incrementally change Sony's BIOS, or use it as a template in any manner, in emulating the BIOS. [ER2, pp. 122:4-8, 130:6-131:4; ER1, p. 66:15-18] Not even Sony suggests that Connectix' software is substantially similar to Sony's BIOS, which one would expect if Connectix had simply converted Sony's code. Rather, it is undisputed that Connectix undertook substantial effort to

32

independently develop its own code and that the district court clearly erred in finding that Connectix simply converted Sony's code into its own.

6. There is no viable alternative to copying to access the
unprotected elements, and a clean room approach
would not have avoided the need to copy.

Sony has put forth no evidence of a viable alternative to Connectix' copying of Sony's BIOS. See Sega, 977 F.2d at 1526 (finding fair use based in part on fact that record provided no support for a viable alternative to copying). Rather, Sony simply seeks to make it impossible for Connectix, or any other potential competitor, to access the functional elements it needs to create a compatible product and thus to stifle game platform competition and limit consumers' choice of products.

Moreover, use of a clean room would not have avoided the need to copy Sony's BIOS. See Sega , 977 F.2d at 1526 (finding fair use based in part on fact that use of clean room would not have avoided the need for copying). As described above, it was necessary to disassemble small portions of Sony's BIOS in order to discover the unprotected ideas and functionality embodied in the code. The researchers in a clean room would still have to copy and disassemble the Sony BIOS. Use of a clean room would only be an issue where the end product is substantially similar to the copied product -- which is not this case.

In sum, it is undisputed that Sony's BIOS contains "unprotected aspects that cannot be examined without copying." See Sega, 977 F.2d at 1526. It is thus afforded "a lower degree of protection then more traditional literary works. " Id. It was necessary for Connectix to copy the BIOS to access those unprotected aspects and thus the second fair use factor regarding the nature of the copyrighted work overwhelmingly favors Connectix.

33

7. The district court erroneously rejected some of
Connectix' evidence of fair use.

The district court clearly erred in rejecting the declarations submitted in support of Connectix' opposition to Sony's motion. [CR106, pp. 11-12, 17] The deposition transcripts solely relied upon by the district court were conducted by Sony in preparing for its motion for preliminary injunction, and were shortened and expedited at Sony's request. [CR49, p. 14]. It would have been inappropriate and imprudent for Connectix to seek the direct testimony of its engineers at that time, and given the schedule the depositions were on, would have been impossible as well.

Sony's goal in the depositions was to discover whether Connectix had copied Sony's BIOS. Connectix engineers freely admitted to copying the BIOS during the development process. The engineers did not contradict or retract those admissions in their declarations. [CR65, ¶¶14-17, 21-22, 25-28; CR68, ¶¶2-9, 37-39, 55] The issue in this case is not whether copying occurred, but rather whether the copying was necessary in order to understand and create a new, non-infringing work compatible with PlayStation games.

The parties and the district court had always contemplated that the relevant facts would be presented through declarations. [CR49, pp. 14-16, 26-27] In their declarations, Connectix engineers described in detail their development process and the purpose, nature and quantity of their copying of Sony's BIOS during that process. [CR65, ¶¶13-24; CR68, ¶¶19-90] They further described why it was necessary to copy Sony's BIOS to access its functional aspects, and why they needed to understand those aspects to develop a compatible product. [CR65, ¶¶1-7, 9-12, 15-17, 21-22; CR68, ¶¶31, 33, 37-39, 51, 64, 68, 78-81, 86, 89-90] This testimony was crucial to Connectix' fair use defense and does not contradict or

34

retract the engineers' deposition testimony regarding their copying of Sony's BIOS, but does explain why such copying was necessary. [ER2, pp. 116:9-18, 120:18-21, 121:15-19, 125:16-24, 129:7-130:2, 130:17-131:4, 144:16-145:3; ER1, pp. 62:2-22, 112:4-8, 154:21-25]

Connectix' expert, Andrew Johnson-Laird, described reverse engineering of program code generally, and why it is necessary to copy code in developing compatible products. [CR67, ¶¶30-46] This testimony, and the attached articles on reverse engineering written by Mr. Laird, were intended as a tutorial to aid the district court's understanding of reverse engineering, as indicated at the March 11, 1999 hearing. [CR67, Exhs. B-C; CR49, pp. 15-16, 26-27] Mr. Laird also provided his opinion regarding the necessity of Connectix' copying of Sony's BIOS in developing VGS. [CR67, ¶¶10-29] Mr. Laird stated that in forming his opinion he reviewed certain portions of the deposition testimony of Connectix engineers as well as their declarations. [CR67, ¶8; See CR106, p. 17 (erroneously finding that Connectix' expert did not consider the depositions of its engineers in formulating his opinion)] Mr. Laird did not contradict the deposition testimony of the Connectix engineers, [CR106, p. 17], but rather stated that Connectix used well-accepted reverse engineering techniques in developing VGS and that the copying performed by Connectix was necessary to access the functional aspects of Sony's BIOS needed to create a compatible product. [CR67, ¶¶21, 24-29]

In sum, the district court clearly erred in refusing to consider the declarations submitted by Connectix in support of its fair use defense. The district court never understood that the issue in this case was not what was done, but why it was done. Those declarations, combined with the deposition testimony of Connectix engineers, clearly demonstrate the "why": that it was necessary for

35

Connectix to copy Sony's BIOS to access its unprotected functional aspects needed to create a compatible product. The district court's rejection of Connectix' fair use defense and its grant of injunctive relief are based upon a clearly erroneous assessment of the evidence.

C. The Evidence Overwhelmingly Demonstrates VGS Is
Transformative And That The Purpose And Character Of
Connectix' Use Supports Finding The Second Fair Use
Factor In Connectix' Favor.

The district court's finding that VGS cannot be transformative because it directly competes with the PlayStation, [CR106, p. 15], conflicts with this Court's "decision in Sega and is not supported by the evidence. See 977 F.2d at 1522-23 (concluding that directly competing video games were the result of defendant's own creative work and thus transformative). The record overwhelmingly establishes that Connectix expended substantial effort in developing its technologically innovative emulation software. VGS emulates the entire complex PlayStation console in software and is entirely different and unique from Sony's BIOS.

The evidence further demonstrates that VGS -- a software emulation program -- is entirely innovative, different, unique and creative as compared to Sony's game console hardware. It is undisputed that VGS provides consumers an entirely new environment in which to play their PlayStation games. Thus consumers could, and probably would, choose to buy both VGS and a PlayStation. VGS enables, for example, PlayStation game owners to run their games on a laptop computer while flying at 30,000 feet, far from a television or electrical outlet for a PlayStation game console. Moreover, while no games currently exist solely for use on VGS, it is feasible that such games could be developed.

36

The district court's attempt to distinguish Sega because "Connectix is not creating its own product to be used in conjunction with Sony's PlayStation" is a distinction without a difference. [CRl06, p. 16] The defendant in Sega was not creating games to be used "in conjunction" with the video games the Court found it had copied and disassembled. Rather, the defendant created its games to be compatible with the Sega console, and those games competed directly with the plaintiffs games that were copied and disassembled. Similarly, Connectix' emulation software is created for compatibility with PlayStation games, not the PlayStation console.

Moreover, where, as in this case, a defendant makes only intermediate use of copyrighted material, the Court should examine the nature of the actual use of the copyrighted work, and not simply focus its inquiry on the end product. Sega , 977 F.2d at 1522-23 (making intermediate copies of code to discover the functional requirements for compatibility is a fair use). The inquiry as to whether a defendant's work is transformative was judicially created through cases involving actual copying of the plaintiff's copyrighted materials in the end product. See Acuff-Rose, 510 U.S. at 579 ("transformative use is not absolutely necessary for a finding of fair use"). In this case, Connectix necessarily made only intermediate copies of Sony's BIOS, and did not copy any of that code into its final product. `

The compatible product created by Connectix provides consumers the option to play their video games on an entirely new and different platform. Accordingly, the first fair use factor (i.e., "the purpose and character of use") overwhelmingly favors Connectix.

37

D. Connectix Disassembled Only Small Portions Of Sony's
BIOS And The Third Fair Use Factor Should Weigh In
Connectix' Favor.

The district court's finding that Connectix' copying was not a fair use because Connectix loaded the entire Sony BIOS into its computer is likewise erroneous. [CRIO6, pp. 18-19] As described in section IV, Connectix is permitted to do so under Section 117 of the Copyright Act. Moreover, Connectix necessarily loaded Sony's BIOS into its computer to observe the unprotected functional aspects of the code. Because of the nature of the computer software, the entirety of a program must be loaded and copied into RAM as a preliminary step in order to access it. [CR67, ¶¶38-39; CR65, ¶¶9-11] Connectix only did so in order to investigate and understand the unprotected elements and functions. [CR67, ¶¶17, 25-26; CR65, ¶¶9-11, 15, 17] Observing the operation of a computer program is less intrusive, and less prone to copying in the final product, than the creation and direct examination of a human readable copy of the actual code. See Sega, 977 F.2d at 1525, n.7.

Connectix disassembled only small portions of BIOS code in reverse engineering it. [ER1, pp. 53: 25- 54:20, 58:16-23] In any event, because the copying was intermediary, even wholesale disassembly would not tip the balance in the copyright holder's favor. Id. at 1525-27 (wholesale disassembly fair because "the ultimate (as opposed to direct) use" was limited). This again reflects the fact that the four fair use factors were designed for the case where the defendants product contained portions of the copyrighted work.

In sum, Connectix disassembled limited portions of Sony's code for the sole purpose of accessing the functional aspects necessary to create a compatible

38

product. The third fair use factor regarding the extent of the use thus favors Connectix.

E. Any Impact On The Potential Market For The PlayStation
Hardware Console Is Speculative, Minimal And Incidental
And The Fourth Fair Use Favors Connectix.

Connectix' use of Sony's BIOS during the development of VGS simply enabled it to enter the market for running PlayStation games. See Sega, 977 F.2d at 1523 ("use which simply enables the copier to enter the market for works of the same type" is not per se unfair, even if it adversely affects potential sales). Thus, the district court's finding that Connectix' copying of the Sony BIOS during development of VGS was not a fair use because Sony is being harmed by the sale of VGS is not in accord with Sega.

The evidence does not support the district court's finding that individuals who purchase VGS will be less likely to buy a PlayStation console. [CR106, p. 19] It is more likely that VGS purchasers may already own a PlayStation console and simply buy VGS to give them another option of where to play their PlayStation games. [CR70, ¶¶13-18, 44] Indeed, VGS purchasers may be likely to choose a PlayStation system over a competitor's system, such as Nintendo or Sega, because they already own, and are familiar with, PlayStation games through their use of VGS. [CR70, ¶¶14-18, 26]

The district court completely ignored this evidence, as well as evidence that VGS could benefit Sony by increasing the sale of PlayStation games, which provides Sony a significantly greater profit margin than the sale of PlayStation consoles. [CR70, ¶¶12, 18, 26-30] Thus, any loss of Sony console sales or profits due to the sale of VGS is at best speculative, and at worst non-existent.

39

Connectix copied Sony's BIOS to create a product that provides consumers an alternative environment in which to run PlayStation games. See Sega, 977 F.2d at 1523-24 ("an attempt to monopolize the market by making it impossible for others to compete runs counter to the statutory purpose of promoting creative expression and cannot constitute a strong equitable basis for resisting the invocation of the fair use doctrine"). Any minor economic loss Sony may suffer does not justify prohibiting Connectix from fairly copying Sony's BIOS to access the unprotected elements necessary to create its compatible product and does not justify precluding consumers' choice of an alternative platform on which to play] their games. The fourth fair use factor regarding the effect of VGS on the potential market for the PlayStation weighs in favor of Connectix notwithstanding any minor economic loss Sony may suffer.

F. The District Court Improperly Put The Burden Of Proof Of
Fair Use On Connectix At The Preliminary Injunction
Stage.

The district court erroneously placed the burden of proving fair use on Connectix. [CRIO6, p. 13] By forcing the burden of proof upon Connectix at this early stage in the litigation, the court erroneously assessed the evidence in a light most favorable to the moving party and clearly erred in finding that the fair use factors favored Sony. See Religious Technology Center v. Netcom On-line Communication Services Inc., 923 F. Supp. 1231, 1242 n.12 (N.D. Calif. 1995) ("plaintiffs, as the parties moving for a preliminary injunction, have the burden of proving a likelihood of success on their infringement claim, including the fair use defense").

40

G. Connectix' Use Of Information Freely Available On The
Internet Was Proper And Has No Impact On Its Fair Use
Defense.

Connectix obtained technical documentation from public websites during the initial stages of research and development and used them in good faith. The websites from which Connectix obtained documentation in no way indicated it was confidential or proprietary; they contained no warnings or restrictive language whatsoever. [CR68, ¶17] Moreover, this information was still available on the Internet eight months after it was first obtained by Connectix; indeed, most of it was even posted on the official web site of the Middlesex University School of Computing Science presumably with Sony's permission. [CR66, ¶¶3-5, Exh. C]. Connectix had no reason to know or suspect that any information it used was secret, or that it was not permitted to use the materials, and Connectix use of this information in no way bars it from asserting fair use as a defense.

III. THE DISTRICT COURT ERRONEOUSLY ENJOINED THE
SALE OF AN UNDISPUTEDLY NONINFRINGING PRODUCT
BASED SOLELY ON INTERMEDIATE COPYING

The district court exceeded its authority under Section 502 of the Copyright Act by enjoining Connectix from selling VGS despite the court's express finding that "it is undisputed that the VGS does not contain any copyrighted material." [CR1O6, pp. 26-27] Section 502 authorizes district courts to grant injunctive relief only where "reasonable to prevent or restrain infringement of a copyright." 17 U.S.C. § 502(a) (emphasis added). In this case Sony concedes, and the district court expressly found, that VGS does not itself infringe Sony's copyright. Enjoining the sale of VGS is thus not reasonably aimed at preventing or

41

restraining infringement of Sony's copyrights and is beyond the scope of remedial action authorized by Section 502.

The district court cited no statutory authority for enjoining the sale of Connectix' noninfringing product. Instead, the district court relied solely on Sega, a case in which the Ninth Circuit overturned a district court's grant of injunctive relief 977 F.2d at 1514. In particular, the district court based its ruling on the Sega Court's holding that "intermediate copying of computer object code may infringe the exclusive rights granted to the copyright owner in Section 106 of the Copyright Act regardless of whether the end product of the copying also infringes those rights." [CR106, p. 26] The Sega Court did not, however, hold or even suggest that district courts have authority to enjoin sale of noninfringing end products based solely on such intermediate copying. See id. Such a remedy is not aimed at preventing or restraining the intermediate copying and thus is not authorized by the Copyright Act. See l7 U.S.C. § 502.

Although the Ninth Circuit has not expressly addressed this specific issue, Connectix is aware of no case in which the Ninth Circuit or any other court has enjoined sale of a noninfringing computer program based on intermediate copying. The Fifth Circuit, which was directly confronted with a district court enjoining noninfringing products based on prior infringement by the defendant, held that the district court had exceeded its authority. Kepner-Tregoe, Inc. v. Leadership Software, Inc., 12 F.3d 527, 538 (5th Cir.), cert. denied, 513 U.S. 820, (1994). In Kepner-Tregoe, the district court found that the defendant had copied the plaintiffs copyrighted materials in developing its original software product. The district court enjoined the sale of that product, as well as all future modifications. The Fifth Circuit reversed, concluding that the district court could

42

enjoin only future versions of the defendant's software that infringe the plaintiff's copyrighted materials. Id.; see also Alcatel U.S.A., Inc. v. DGI Technologies, Inc., 166 F.3d 772, 790-91 (5th Cir. 1999) (recognizing that the Fifth Circuit has "previous1y rejected such a 'fruit of the infringing tree' doctrine [for copyright infringement].)

The issue of whether a district court may enjoin sale of a product where copyright infringement occurs only during the development process was recently raised (but not decided) before the Ninth Circuit in Cadence Design Systems, Inc. v. Avant! Corp., 125 F.3d 824, 830-31 (9th Cir. 1997), cert. denied, 118 S. Ct. 1795 (1998). The comments made by the Court strongly suggest that the Ninth Circuit agreed with the Fifth Circuit's conclusion that Section 502 requires proof of actual copying in the enjoined product. Id. Indeed, the Court remanded the case to the district court and instructed it to determine whether there was any infringing material in the defendant's work, and, if so, to issue an injunction. The Ninth Circuit also suggested that if the infringing portion of a work is minimal and damages to the plaintiff are minor, the balance of hardships must be determined, rather than presuming irreparable injury.9 Id. at 830.

The only rationale the district court provided for enjoining sale of a noninfringing end product is that it is the "only effective remedy" for intermediate infringement. [CR106, pp. 26-27] This explanation ignores Section 504 of the Copyright Act, which provides for recovery of damages upon a finding of copyright infringement. 17 U.S.C. § 504; Acuff-Rose, 510 U.S. at 578 n.10 (recognizing that injunctive relief may not be appropriate in cases "raising

____________
9 In this case, there is ng infringing material in the final product and the balance of hardships weighs overwhelmingly against Sony. [CR70, ¶12]

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reasonable contentions of fair use where there may be a strong public interest in the publication of the secondary work and the copyright owner's interest may be adequately protected by an award of damages for whatever infringement is found")(internal quotes omitted). In this case, the question is not whether copying was done, nor even whether copying was necessary, but rather "how much" copying was necessary. To the extent that the district court ultimately determines some portion of Connectix' copying infringed Sony's copyright, monetary damages for those acts of infringement would provide an appropriate and effective remedy.

The district court's decision usurps the role of Congress by essentially ignoring the limited scope of injunctive relief authorized by 17 U.S.C. § 502. If Congress had determined that it is in the public's interest to authorize courts to enjoin the sale of noninfringing software programs or other works based solely on copyright infringement occurring during product development, then it could have amended Section 502. A district court may not exceed the authority granted it by the Copyright Act simply to achieve what it concludes is a desirable result.

IV. CONNECTIX IS PERMITTED TO COPY THE SONY BIOS IT
OWNS AS AN ESSENTIAL STEP IN UTILIZING IT IN
CONJUNCTION WITH A COMPUTER

The district court also erroneously enjoined Connectix from loading a copy of Sony's BIOS it owns into a computer pursuant to Section 117 of the Copyright Act. [CR106, pp. 20, 27] The district court relied on MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511, 517-19 (9th Cir. 1993) and Triad Systems Corp. v. Southeastern Express Company, 64 F.3d 1330, 1335 (9th Cir. 1995) cert. denied, 516 U.S. 1145 (1996), to find that Connectix loading of the BIOS into its

44

computer is a copy. [CR106, p. 10] In each of those cases, unlike the instant case, software was loaded by an unlicensed third party in violation of a license agreement, and thus was outside the scope of the protection of Section 1 17.10 MAI Systems Corp., 991 F.2d at 518, n.5; Triad Systems Corp., 64 F.3d at 1333, n.3. A license of software seemingly does not fall within the reach of 17 U.S.C. 117.

In contrast, Connectix and each Connectix engineer owns a copy of Sony's BIOS and thus is permitted to load the code into a computer as an essential step in utilizing it. 17 U.S.C. § 117 (permitting the owner of a copy of a computer ` program to make a copy of that program "as an essential step in the utilization of the computer program in conjunction with a machine"). Congress, recognizing that computer programs must necessarily be used in conjunction with computers, and that such use requires loading (i.e., copying) the program into computer memory, enacted Section 117 to "provide that persons in rightful possession of copies of programs be able to use them freely without fear of exposure to copyright liability." Vault v. Quaid, 847 F.2d 255, 260 (5th Cir. 1988). Moreover, Section 117 protects Connectix' right, as an owner of a PlayStation that it purchased in a store, to copy Sony's BIOS as an essential step in using it with a machine, even if it is not "employed for a use intended by the copyright owner." Vault, 847 F.2d at 261 ("Section 1 17(1) contains no language to suggest that the copy it permits must be employed for a use intended by the copyright owner, and,

___________
10 Moreover, those cases involved loading a computer operating system in order to repair a computer and as such have been expressly overruled by statute. 17 U.S.C. § 1203.

45

absent clear congressional guidance to the contrary, we refuse to read such limiting language into this exception.").

Connectix does not claim that its disassembly of small portions of Sony's BIOS was protected by Section 117. Accordingly, the district court's conclusion that Sega precludes Connectix' Section 117 defense because "the Ninth Circuit rejected the use of Section 117 to excuse intermediate copying by disassembly" is irrelevant and misses the point entirely. [CR106, p. 21] Sega makes no reference to booting up a program, which was not an issue in Sega. Connectix' booting up and running a program, as opposed to its disassembly, is protected by Section 117. The district court's order erroneously prevents Connectix from legally copying program code it owns into a computer pursuant to 17 U.S.C. § 117, and this Court should reverse the district court's order.

V. SONY CANNOT ENFORCE ITS COPYRIGHT BECAUSE IT IS
MISUSING IT AS A MATTER OF LAW

A. Sony Is Misusing Its Copyright To Obtain Patent-like
Protection Over Its PlayStation Video Game System.

Connectix has established as a matter of law that Sony is misusing its copyright to obtain patent-like protection over its uncopyrighted PlayStation video game system. See Alcatel USA, Inc., 166 F.3d at 793 (upholding jury finding that plaintiff misused its copyright to obtain a monopoly over its uncopyrighted microprocessor cards); see also Practice Management Info. Corp. v. American Med. Ass'n, 121 F.3d 516, 521 (9th Cir. 1997), as amended, 133 F.3d 1140 (9th Cir. 1998), cert. denied, 119 S. Ct. 40 (1998)(ho1ding that defendant established copyright misuse as a matter of law).

46

It is undisputed that the unprotected ideas and functionality embodied in Sony's BIOS are invisible and cannot be accessed without copying the code. [CR40, ¶ ¶ 3-4; CR67, ¶ ¶ 33, 38-39; CR65, ¶ ¶ 9, 10] It is also undisputed that those aspects of the BIOS are necessary to create a compatible product. [ER1, p. 91:13-17; CR65, ¶ ¶ 6-7; CR67, ¶ ¶ 13-20] Indeed, Sony's own chief engineer repeatedly testified that Connectix could not have created VGS without disassembling Sony's BIOS. [CR5, ¶5; CR11, ¶5] The law permits companies to compete with Sony through their own efforts by studying the elements necessary for compatibility with PlayStation games. See Sega , 977 F.2d at 1520.

Yet, through its series of TRO and preliminary injunction applications, Sony has prevented Connectix from using Sony's BIOS to access unprotected elements of the code and thus stifled Connectix' development and sale of its compatible and competitive VGS product. See Alcatel, 166 F.3d at 793-94 (upholding finding of misuse where plaintiff effectively prevented defendant from developing its product by not allowing defendant to use plaintiff'ss copyrighted software to test the product for compatibility). Sony is thus misusing its copyrighted BIOS to illegally extend its monopoly to its PlayStation video game system, a system that is not, and cannot, be protected by copyright law. See Practice Management Info., 121 F.3d at 520 ("defense of copyright misuse "forbids the use of the [copyright] to secure an exclusive right or limited monopoly not granted by the [Copyright] Office"' ) (quoting, Lasercomb America, Inc. v. Reynolds, 911 F.2d 970, 977-79 (4th Cir. 1990)); Alcatel, 166 F.3d at 793-94 (same).

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B. Sony Is Misusing Its Copyright To Preclude Consumers
From Choosing Other Platforms On Which To Play Video
Games.

Connectix has also established as a matter of law that Sony is misusing its copyright to preclude consumers from choosing other platforms on which to play their video games. Practice Management Info. Corp., 121 F.3d at 520-21 (copyright misuse established as a matter of law where plaintiff used its copyright to preclude a third party from using a competitor's product). Through its maintenance of the present suit to restrain Connectix' development and sale of VGS, Sony is improperly seeking to restrict video game consumers' right to choose where and how they play their games. The Copyright Act does not grant Sony the right to control the manner in which consumers play games. See Allen v. Academic Games League of America, 89 F .3d 614, 616 (9th Cir. 1996)(refusing to interpret the Copyright Act in a manner that would allow copyright owners to control when and where purchasers may play games); see also Lewis Galoob Toys, Inc. v. Nintendo of America, Inc., 964 F .2d 965, 971 (9th Cir. l992)("a party who distributes a copyrighted work cannot dictate how that work is to be enjoyed"). Sony's attempt to limit consumer choice is an impermissible extension of its rights and contrary to the public policies embodied in the grant of a copyright. See Lasercomb America, 91 1 F .2d at 977-79 (the crucial question in determining copyright misuse is "whether the copyright is being used in a manner violative of the public policy embodied in the grant of a copyright"). The limited scope of Sony's monopoly "reflects a balance of competing claims upon the public interest," with the ultimate aim being to increase the availability of a broader

48

range of creative products. See id., at 978, n.20 (quoting Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156 (1975)).

Sony's misuse of its copyright is established as a matter of law based on the undisputed facts in the record, and thus precludes enforcement of Sony's copyright. Accordingly, the district court abused its discretion in enjoining Connectix' use of Sony's BIOS in the development of VGS, as well as Comiectix' sale of its noninfringing VGS products. [CR106, p. 20].

VI. VGS DOES NOT TARNISH THE PLAYSTATION MARK 11

A. Although Some Users May Prefer The PlayStation, Other
Users and Reviewers Enthusiastically Praise VGS.

Contrary to the district court's holding, the overwhelming case authority provides that dilution by garnishment claims "generally involve using the trademark in an 'unwho1esome or degrading context.'" Minnesota Mining and Manufacturing Co. v. Rauh Rubber, Inc., 943 F. Supp. 1117, 1132 (D. Mimi. 1996), aff'd, 130 F.3d 1305 (8th Cir. 1997) (quoting 3 McCarthy, Trademarks and Unfair Competition § 24.16[1]); see also Accuride Int'l, Inc. v. Accuride Corp., 871 F.2d 1531, 1538 (9th Cir. 1989) ("Injury to business reputation is typically invoked where the plaintiff's mark or name is tarnished or degraded through association with something unsavory").

_____________
11 Although the district court found that Sony established a likelihood of success on its dilution claim, the court did not appear to base its grant of injunctive relief upon that finding. [CR106, pp. 26-27] In any event, that finding is based on an erroneous view of the law and a clearly erroneous assessment of the facts and thus does not support the court's grant of injunctive relief.

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Neither Sony nor the district court cited any authority (nor is there any) supporting a finding of tarnishment based on mere product preferences, as the district court did in this case. [CR1O6, pp. 24-25] Indeed, the one case relied on by the district court, Panavision Int'l L.P. v. Toeppen, 945 F. Supp. 1296, 1304 (C.D. Cal. 1996), afford, 141 F.3d 1316, 1325 (9th Cir. 1998), did not deal with . garnishment. Rather, Panavision dealt with the wholly inapposite situation of "cyber piracy" of Internet domain names. The Panavision standard for garnishment quoted by the district court is clearly dicta. [CR106, p. 25] Indeed, the Panavision court specifically stated that the defendant's conduct "varies from the two standard dilution theories" of garnishment and blurring. Panavision, 945 F. Supp. at 1304.

The only evidence submitted by Sony to support its tarnishrnent claim was the result of two focus groups commissioned by Sony indicating that a total of sixteen male participants marginally "preferred the PlayStation" to VGS. [CR39, ¶10] Sony's surveys did not suggest that participants were "confused about the source of their unsatisfactory game playing experience using the VGS," as argued by Sony -- and Sony has submitted no evidence supporting that argument. [CR106, p. 23] Sony's survey evidence also did not indicate that VGS lessened the capacity of Sony's trademarks to identify or distinguish the PlayStation. The mere product preferences described in Sony's survey evidence, even if true, do not suggest that VGS in any way tarnishes the PlayStation mark. 12

_______________
12 Any reliance by the district court on Sony's focus group evidence would have been error in any event. The sample size and composition of Sony's focus groups can not be generalized to the relevant population of home video game consumers, making its findings unreliable. A group of sixteen young males does not appropriately represent the target population for the PlayStation and VGS, which appeal to a much larger universe, including younger children, women, and older

50

The district_court appears, instead, to have based its finding of tarnishment exclusively on a single Internet website print-out containing reviews of VGS by consumers. [CR106, p. 24; CR69, Exh. I] The Internet print-out was part of a larger collection of mostly positive reviews of VGS by actual game players and product testers that Connectix submitted to the district court. [CR69, Exhs. E-L] Specifically, the district court found that the reviews contained in Exhibit "I" "indicate that game players are associating the poor performance with the PlayStation game, and not with VGS" and thus that VGS tarnishes the PlayStation mark.13 [CR1 06, p. 24] The district court based this finding solely on the fact that these reviews mentioned the word "game" rather than "VGS" when describing performance.Id.

The district court's semantic misinterpretation of the Exhibit "I" reviews is clearly erroneous. Those reviews are of the new VGS product and not the

____________
males. [CR 39, ¶3] See e.g., Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d 252, 264 (5th Cir.) cert. denied, 449 U.S. 899 (1980) (focus group survey inadmissible for failure to "include a fair sampling of those most likely to partake of the alleged infringer's goods or services"); St. John v. North Carolina Parole Comm'n, 764 F. Supp. 403, 412 (W.D.N.C. 1991) aff'd, 953 F.2d 639 (4th Cir. 1992) (relevant focus group results inadmissible since responses from 24 individuals were not of assistance to jury). Moreover, the focus groups were paid for by Sony and used Sony proffered equipment; the quality of computer equipment used with VGS effects game play.

13 Connectix recognizes that Exhibit "I" does contain, along with numerous positive reviews, some negative comments about VGS performance. Connectix presented the "bad" along with the "good" to give the court a balanced, unbiased look at the public's opinion of VGS. Contrary to the district court's conclusion, the majority of the reviews were very positive: "Runs great… Ran flawlessly. Very cool graphics … Perfect, absolutely perfect… Runs beautifully! Not even a small glitch during the movies or game play... Played flawlessly. Frame rate and sound were perfect Perfectly, absolutely smooth." [CR 69, Exhs. E-L]

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PlayStation games. The reviewers were commenting on how VGS performs with various existing PlayStation games; the reviewers were likely already familiar with how the games played on the PlayStation. That the reviewers specifically referred to the "game" rather than to VGS is perfectly logical -- they were reviewing and commenting on VGS performance on a game by game basis. The reviewers' statements do not in any way support the district court's finding that game players are confused about the source of any alleged performance problems.

In fact, Connectix has made sure consumers understand any difference in game performance experienced while playing PlayStation games on VGS is attributable to VGS. Connectix has carefully noted that not all PlayStation games work on VGS and published a list for consumers of games that meet Connectix' strict quality standards. [CR6, Exh. 4] Furthermore, there could be no confusion about sponsorship of VGS that would diminish the ability of the PlayStation mark to identify Sony's product; the packaging for VGS is covered with a conspicuous disclaimer stating: "This product is not affiliated with, nor authorized, endorsed, or licensed in any way by Sony Corporation, its affiliates or subsidiaries." [CR12, Exh. 2]

There is simply no evidence supporting the district court's finding of garnishment, which precludes consumers from choosing an alternative game platform based on the preferences of a select group of survey participants. The order is based on an erroneous view of the standard for tarnishment and a clearly erroneous assessment of the evidence, and should be reversed.

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B. _ Sony Has Not Suffered Any Lessening Of The Capacity Of
Its Marks To Identify And Distinguish Its Goods.

The district court also failed to make a finding of actual economic harm. A recent ruling by the United States Court of Appeals for the Fourth Circuit has clarified that the federal Trademark Act requires a showing of actual "lessening of the capacity of a famous mark to identify and distinguish goods or services." Ringling Bros. -- Barnum & Bailey Combined Shows, Inc. v. Utah Division of Travel Development, 170 F.3d 449, 452-61 (4th Cir. 1999). Harm of this sort may not be presumed; rather, the plaintiff must show the defendant's conduct "has caused actual economic harm to the famous mark's economic value by lessening its former selling power as an advertising agent for its goods or services." Id. at 461. No such showing was made here.

Connectix specifically argued to the trial court that Sony had not shown that Connectix' nominative use of Sony's trademarks14 with VGS had lessened the capacity of Sony's mark to identify and distinguish Sony's goods or services. [CR62, pp. 33-34] Sony produced no evidence of actual economic harm to the value of Sony's marks or to the selling power of the marks. Indeed, it is entirely likely VGS has actually increased sales of PlayStation games by providing a new platform on which to play the games. Yet the district court would deny consumers this choice even absent any showing of harm to Sony. [CR106, p. 25]

_____________
14 The district court erroneously found that the VGS packaging uses the PlayStation logo, which simply is not true. [CR106, p. 22] Sony does not, and cannot, object to Connectix' nominative use of the PlayStation mark to state compatibility with PlayStation games. See The New Kids On The Block v. News America Publ'g, 971 F.2d 302, 308 (9th Cir. 1992).

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VII. CONCLUSION AND STATEMENT OF RELIEF SOUGHT

For the foregoing reasons, Connectix respectfully requests that the Court reverse the district court's grant of injunctive relief.

Dated: May 26, 1999

HOWREY & SIMON

By: [signature]
William Sloan Coats

Attorneys for Appellant
Connectix Corporation

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[PJ: There are a number of documents included, which you can find in the PDF itself, but here's a list: 1. Statement of related cases (none)
2. Certificate of Compliance Pursuant to Circuit Rule 32(e)(4) [related to double spacing and proper font use]
3. Certificate of service
4. Copyright Law Chapter 17, Sections 102, 105, 106, 116, 117, 1202, 1204, 1205, 502, 504; [Ct. of Appeals section on jurisdiction, Westlaw] 28 Section 1292, 1331, 1338, 1367; [trademark law] 15 U.S.C. Section 1125, 1126, 1127; Uncodified Lanham Act Provisions Section 46(a). 5. EU Council Directive 91/250/EEC of May 14, 1991 on the legal protection of computer programs. 6. Patent law Section 101, 102, 103, 154. 7. Copyright law 17 Section 107, fair use.]

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