Lexmark International v. Static Control Components, 387 F.3d 522
Lexmark International v. Static Control Components, 387 F.3d 522 (6th Cir. 2004)
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SUTTON, Circuit Judge.
This copyright dispute involves two computer programs, two federal statutes and three theories of liability. The first computer program, known as the “Toner Loading Program,” calculates toner level in printers manufactured by Lexmark International. The second computer program, known as the “Printer Engine Program,” controls various printer functions on Lexmark printers.
The first statute, the general copyright statute, 17 U.S.C. ß 101 et seq., has been with us in one form or another since 1790 and grants copyright protection to “original works of authorship fixed in any tangible medium of expression,” id. ß 102(a), but does not “extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery,” id. ß 102(b). The second federal statute, the Digital Millenium Copyright Act (DMCA), 17 U.S.C. ß 1201 et seq., was enacted in 1998 and proscribes the sale of products that may be used to “circumvent a technological measure that effectively controls access to a work” protected by the copyright statute.
These statutes became relevant to these computer programs when Lexmark began selling discount toner cartridges for its printers that only Lexmark could re-fill and that contained a microchip designed to prevent Lexmark printers from functioning with toner cartridges that Lexmark had not re-filled. In an effort to support the market for competing toner cartridges, Static Control Components (SCC) mimicked Lexmark's computer chip and sold it to companies interested in selling remanufactured toner cartridges.
Lexmark brought this action to enjoin the sale of SCC's computer chips and raised three theories of liability in doing so. Lexmark claimed that SCC's chip copied the Toner Loading Program in violation of the federal copyright statute. It claimed that SCC's chip violated the DMCA by circumventing a technological measure designed to control access to the Toner Loading Program. And it claimed that SCC's chip violated the DMCA by circumventing a technological measure designed to control access to the Printer Engine Program.
After an evidentiary hearing, the district court decided that Lexmark had shown a likelihood of success on each claim and entered a preliminary injunction against SCC. As we view Lexmark's prospects for success on each of these claims differently, we vacate the preliminary injunction and remand the case for further proceedings.
The Parties. Headquartered in Lexington, Kentucky, Lexmark is a leading manufacturer of laser and inkjet printers and has sold printers and toner cartridges for its printers since 1991. Lexmark is a publicly traded corporation and reported $4.8 billion in revenue for 2003.
Static Control Components is a privately held company headquartered in Sanford, North Carolina. Started in 1987, it currently employs approximately 1,000 workers and makes a wide range of technology products, including microchips that it sells to third-party companies for use in remanufactured toner cartridges.
The Two Computer Programs. The first program at issue is Lexmark's “Toner Loading Program,” which measures the amount of toner remaining in the cartridge based on the amount of torque (rotational force) sensed on the toner cartridge wheel. The Toner Loading Program relies upon eight program commands-“add,” “sub” (an abbreviation for subtract), “mul” (multiply), “pct” (take a percent), “jump,” “if,” “load,” and “exit”-to execute one of several mathematical equations that convert the torque reading into an approximation of toner level. If the torque is less than a certain threshold value, the program executes one equation to calculate the toner level, and if the torque equals or exceeds that threshold, the program executes a different equation to calculate the toner level. The exact code of the Toner Loading Program varies slightly for each printer model, and this case involves two versions of the program-one for Lexmark's T520 and T522 printer models and another for Lexmark's T620 and T622 printer models. The Toner Loading Program for the T520/522 printers comprises 33 program instructions and occupies 37 bytes of memory, while the Toner Loading Program for the T620/622 printers comprises 45 program commands and uses 55 bytes of memory. To illustrate the modest size of this computer program, the phrase “Lexmark International, Inc. vs. Static Control Components, Inc.” in ASCII format would occupy more memory than either version of the Toner Loading Program. The Toner Loading Program is located on a microchip contained in Lexmark's toner cartridges.
The second program is Lexmark's “Printer Engine Program.” The Printer Engine Program occupies far more memory than the Toner Loading Program and translates into over 20 printed pages of program commands. The program controls a variety of functions on each printer-e.g., paper feed and movement, and printer motor control. Unlike the Toner Loading Program, the Printer Engine Program is located within Lexmark's printers.
Lexmark obtained Certificates of Registration from the Copyright Office for both programs. Neither program is encrypted and each can be read (and copied) directly from its respective memory chip.
Lexmark's Prebate and Non-Prebate Cartridges. Lexmark markets two types of toner cartridges for its laser printers: “Prebate” and “Non-Prebate.” Prebate cartridges are sold to business consumers at an up-front discount. In exchange, consumers agree to use the cartridge just once, then return the empty unit to Lexmark; a “shrink-wrap” agreement on the top of each cartridge box spells out these restrictions and confirms that using the cartridge constitutes acceptance of these terms. Non-Prebate cartridges are sold without any discount, are not subject to any restrictive agreements and may be re-filled with toner and reused by the consumer or a third-party remanufacturer.
To ensure that consumers adhere to the Prebate agreement, Lexmark uses an “authentication sequence” that performs a “secret handshake” between each Lexmark printer and a microchip on each Lexmark toner cartridge. Both the printer and the chip employ a publicly available encryption algorithm known as “Secure Hash Algorigthm-1” or “SHA-1,” which calculates a “Message Authentication Code” based on data in the microchip's memory. If the code calculated by the microchip matches the code calculated by the printer, the printer functions normally. If the two values do not match, the printer returns an error message and will not operate, blocking consumers from using toner cartridges that Lexmark has not authorized.
SCC's Competing Microchip. SCC sells its own microchip-the “SMARTEK” chip-that permits consumers to satisfy Lexmark's authentication sequence each time it would otherwise be performed, i.e., when the printer is turned on or the printer door is opened and shut. SCC's advertising boasts that its chip breaks Lexmark's “secret code” (the authentication sequence), which “even on the fastest computer available today ... would take Years to run through all of the possible 8-byte combinations to break.” SCC sells these chips to third-party cartridge remanufacturers, permitting them to replace Lexmark's chip with the SMARTEK chip on refurbished Prebate cartridges. These recycled cartridges are in turn sold to consumers as a low-cost alternative to new Lexmark toner cartridges.
Each of SCC's SMARTEK chips also contains a copy of Lexmark's Toner Loading Program, which SCC claims is necessary to make its product compatible with Lexmark's printers. The SMARTEK chips thus contain an identical copy of the Toner Loading Program that is appropriate for each Lexmark printer, and SCC acknowledges that it “slavishly copied” the Toner Loading Program “in the exact format and order” found on Lexmark's cartridge chip. A side-by-side comparison of the two data sequences reveals no differences between them.
The parties agree that Lexmark's printers perform a second calculation independent of the authentication sequence. After the authentication sequence concludes, the Printer Engine Program downloads a copy of the Toner Loading Program from the toner cartridge chip onto the printer in order to measure toner levels. Before the printer runs the Toner Loading Program, it performs a “checksum operation,” a “commonly used technique” to ensure the “integrity” of the data downloaded from the toner cartridge microchip. Under this operation, the printer compares the result of a calculation performed on the data bytes of the transferred copy of the Toner Loading Program with the “checksum value” located elsewhere on the toner cartridge microchip. If the two values do not match, the printer assumes that the data was corrupted in the program download, displays an error message and ceases functioning. If the two values do match, the printer continues to operate.
The Lawsuit. On December 30, 2002, Lexmark filed a complaint in the United States District Court for the Eastern District of Kentucky seeking to enjoin SCC (on a preliminary and permanent basis) from distributing the SMARTEK chips. The complaint contained three theories of liability. First, Lexmark alleged that SCC violated the copyright statute, 17 U.S.C. ß 106, by reproducing the Toner Loading Program on its SMARTEK chip. Second, it alleged that SCC violated the DMCA by selling a product that circumvents access controls on the Toner Loading Program. Third, it alleged that SCC violated the DMCA by selling a product that circumvents access controls on the Printer Engine Program.
The district court initially concluded that Lexmark had established a likelihood of success on its copyright infringement claim for SCC's copying of its Toner Loading Program. Computer programs are “literary works” entitled to copyright protection, the court reasoned, and the “requisite level of creativity” necessary to establish the originality of the programs “is extremely low.” Because the Toner Loading Program could be written in multiple ways, the district court added, SCC had not rebutted the presumption of validity created by Lexmark's copyright registration for the Toner Loading Program.
In coming to this conclusion, the district court rejected each of the defenses asserted by SCC. First, the district court determined that the Toner Loading Program was not a “lock-out code” (and unprotectable because its elements are dictated by functional compatibility requirements) since “the use of any Toner Loading Program could still result in a valid authentication sequence and a valid checksum.” But even if the Toner Loading Program were a “lock-out code,” the district court believed copyright infringement had still taken place because “ ‘[s]ecurity systems are just like any other computer program and are not inherently unprotectable.’ ” Second, the court rejected SCC's fair use defense in view of the commercial purpose of the copying, the wholesale nature of the copying and the effect of the copying on the toner cartridge market. Third, the district court rejected SCC's argument that Lexmark was “misus[ing]” the copyright laws “to secure an exclusive right or limited monopoly not expressly granted by copyright law.”
The district court next determined that Lexmark had established a likelihood of success on its two DMCA claims, one relating to the Toner Loading Program, the other relating to the Printer Engine Program. Observing that the anti-trafficking provision of the DMCA, “prohibits any product or device that circumvents a technological measure that prevents unauthorized access to a copyrighted work,” the district court concluded that Lexmark had established a likelihood of success that SCC's SMARTEK chip did this very thing. In the district court's view, Lexmark's authentication sequence (not the checksum calculation) constitutes a “technological measure” that “effectively controls access” to two copyrighted works-the Toner Loading Program and the Printer Engine Program. The authentication sequence, it determined, “controls access” because it “controls the consumer's ability to make use of these programs.” Because SCC designed the SMARTEK chip to circumvent Lexmark's authentication sequence, because circumvention was the sole commercial purpose of the SMARTEK chip and because SCC markets these chips as performing that function, the court reasoned that SCC likely had violated the DMCA's prohibitions on marketing circumvention devices.
Finally, the district court determined that the DMCA's “reverse engineering” exception to liability did not apply. Under the exception, circumvention devices may be produced and made available to others “solely for the purpose of enabling interoperability of an independently created program with other programs.”
Because Lexmark had established a likelihood of success on the merits, the district court presumed irreparable harm, and concluded that the public interest would favor an injunction against SCC. After weighing other potential hardships, the district court concluded that the preliminary injunction should issue.
We apply an abuse-of-discretion standard in reviewing a district court's entry of a preliminary injunction. A district court abuses its discretion if it relies upon clearly erroneous findings of fact, employs an incorrect legal standard or improperly applies the correct law to the facts.
Four factors govern whether a district court should enter a preliminary injunction: (1) the plaintiff's likelihood of success on the merits; (2) the possibility of irreparable harm to the plaintiff in the absence of an injunction; (3) public interest considerations; and (4) potential harm to third parties. In the copyright context, much rests on the first factor because irreparable harm is presumed once a likelihood of success has been established, and because an injunction likely will serve the public interest once a claimant has demonstrated a likelihood of success in this setting. We see no reason why a similar presumption of irreparable harm should not apply to claims under the DMCA Like the district court before us, we accordingly focus on the likelihood that Lexmark will succeed on its claims under the general copyright statute and the DMCA.
The Constitution expressly gives Congress the power to grant protection to original works of authorship. Relying on that authority, Congress has established the following standard for copyright protection:
- (a) Copyright protection subsists ... in original works of authorship fixed in any tangible medium of expression .... Works of authorship include the following categories: (1) literary works; (2) musical works ...; (3) dramatic works ...; (4) pantomimes and choreographic works; (5) pictorial, graphic, and sculptural works; (6) motion pictures and other audiovisual works; (7) sound recordings; and (8) architectural works.
- (b) In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.
The copyright statute grants owners of protected works the exclusive right to use them in certain ways.
As this case comes to the court, the parties agree that computer programs may be entitled to copyright protection as “literary works” under 17 U.S.C. ß 101 and may be protected from infringement under 17 U.S.C. ß 106. And that is true with respect to a computer program's object code (the binary code-a series of zeros and ones-that computers can read) and its source code (the spelled-out program commands that humans can read).
The parties also agree that Lexmark has registered the Toner Loading Program with the Copyright Office, which is an infringement suit prerequisite, and which constitutes prima facie evidence of the copyright's validity. And the parties agree that SCC shoulders the burden of rebutting the presumptive validity of Lexmark's copyright.
The parties also share common ground when it comes to most of the general principles of copyright infringement applicable to this case. A plaintiff may establish a claim of copyright infringement by showing (1) ownership of a valid copyright in the computer program at issue (here, the Toner Loading Program) and (2) that the defendant copied protectable elements of the work. The first prong tests the originality and non-functionality of the work, both of which are presumptively established by the copyright registration. The second prong tests whether any copying occurred (a factual matter) and whether the portions of the work copied were entitled to copyright protection (a legal matter). If no direct evidence of copying is available, a claimant may establish this element by showing that the defendant had access to the copyrighted work and that the copyrighted work and the allegedly copied work are substantially similar.
As to the first prong, the Supreme Court has instructed that “[o]riginal ... means only that the work was independently created by the author (as opposed to copied from other works), and that it possesses at least some minimal degree of creativity,” even if the work is not a “novel” one. And although constitutionally mandated, the threshold showing of originality is not a demanding one.
But even if a work is in some sense “original” under ß 102(a), it still may not be copyrightable because ß 102(b) provides that “[i]n no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of [its] form.” This provision embodies the common-law idea-expression dichotomy that distinguishes the spheres of copyright and patent law. “[U]nlike a patent, a copyright gives no exclusive right to the art disclosed; protection is given only to the expression of the idea-not the idea itself.” While this general principle applies equally to computer programs, id.; see also House Report at 5667 (extending copyright protection to computer programs only “to the extent that they incorporate authorship in programmer's expression of original ideas, as distinguished from ideas themselves”), the task of separating expression from idea in this setting is a vexing one.
In ascertaining this “elusive boundary line” between idea and expression, between process and non-functional expression, courts have looked to two other staples of copyright law-the doctrines of merger and scenes a faire. Where the “expression is essential to the statement of the idea,” or where there is only one way or very few ways of expressing the idea, the idea and expression are said to have “merged.” In these instances, copyright protection does not exist because granting protection to the expressive component of the work necessarily would extend protection to the work's uncopyrightable ideas as well. For computer programs, “if the patentable process is embodied inextricably in the line-by-line instructions of the computer program, [ ] then the process merges with the expression and precludes copyright protection.”
For similar reasons, when external factors constrain the choice of expressive vehicle, the doctrine of “scenes a faire”-“scenes,” in other words, “that must be done”-precludes copyright protection. In the literary context, the doctrine means that certain phrases that are “standard, stock, ... or that necessarily follow from a common theme or setting” may not obtain copyright protection. In the computer-software context, the doctrine means that the elements of a program dictated by practical realities-e.g., by hardware standards and mechanical specifications, software standards and compatibility requirements, computer manufacturer design standards, target industry practices, and standard computer programming practices-may not obtain protection. As “an industry-wide goal,” programming “[e]fficiency” represents an external constraint that figures prominently in the copyrightability of computer programs.
Generally speaking, “lock-out” codes fall on the functional-idea rather than the original-expression side of the copyright line. Manufacturers of interoperable devices such as computers and software, game consoles and video games, printers and toner cartridges, or automobiles and replacement parts may employ a security system to bar the use of unauthorized components. To “unlock” and permit operation of the primary device (i.e., the computer, the game console, the printer, the car), the component must contain either a certain code sequence or be able to respond appropriately to an authentication process. To the extent compatibility requires that a particular code sequence be included in the component device to permit its use, the merger and scenes a faire doctrines generally preclude the code sequence from obtaining copyright protection.
In trying to discern whether these doctrines apply, courts tend to “focus on whether the idea is capable of various modes of expression.” The question, however, is not whether any alternatives theoretically exist; it is whether other options practically exist under the circumstances. In order to characterize a choice between alleged programming alternatives as expressive, in short, the alternatives must be feasible within real-world constraints.
The Supreme Court's decision in Feist helps to illustrate the point. In Feist, the alleged infringer had included 1,309 of the plaintiff's alphabetically-organized telephone book listings in its own telephone directory. The facts comprising these listings, it was clear, theoretically could have been organized in other ways-for instance, by street address or phone number, or by the age or height of the individual. But by virtue of tradition and settled expectations, the familiar alphabetical structure copied by the defendant amounted to the only organizational option available to the defendant. Id For these reasons, the Supreme Court determined that alphabetical phone listings did not satisfy the low threshold of originality for copyright protection.
One last principle applies here. Even if the prerequisites for infringement are met-the copyright is valid and SCC copied protectable elements of the work-Congress has established a fair use defense to infringement claims to ensure that copyright protection advances rather than thwarts the essential purpose of copyright: “[t]o promote the Progress of Science and useful Arts.” Congress has permitted others to use copyright-protected works, “including ... by reproduction,” when courts determine the use to be “fair” according to a non-exhaustive list of factors:
(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.
With respect to computer programs, “fair use doctrine preserves public access to the ideas and functional elements embedded in copyrighted computer software programs.”
In applying these requirements to this case, it helps to clarify the terms of debate between the parties. Lexmark claims copyright protection in, and infringement of, the code that composes its Toner Loading Program. It has not alleged that SCC copied any other portion of its chip, including any of the data on which the SHA-1 algorithm-the authentication sequence or “secret handshake”-appear. Presumably that is because SCC replaced Lexmark's SHA-1 function with a different publicly available encryption program to enable interoperability of its chip with Lexmark's printers. Nor does it matter whether SCC copied the Toner Loading Program knowingly or innocently because copyright infringement does not have a scienter requirement. Finally, when it comes to the merits of the infringement claim, the parties primarily debate whether the Toner Loading Program satisfies the originality requirement (prong one), as distinct from whether any copying by SCC is substantially similar to the Lexmark chip (prong two). That is because the parties agree that SCC's SMARTEK chip copied all aspects of the Toner Loading Program.
In our view, the district court committed three related legal errors in determining that Lexmark had a likelihood of prevailing on its copyright claim with respect to the Toner Loading Program. First, the district court concluded that, because the Toner Loading Program “could be written in a number of different ways,” it was entitled to copyright protection. In refusing to consider whether “external factors such as compatibility requirements, industry standards, and efficiency” circumscribed the number of forms that the Toner Loading Program could take, the district court believed that the idea-expression divide and accompanying principles of merger and scenes a faire play a role only in the “substantial similarity” analysis and do not apply when the first prong of the infringement test (copyrightability) is primarily at issue. In taking this path, the district court relied on cases invoking Nimmer's pronouncement that the idea-expression divide “constitutes not so much a limitation on the copyrightability of works, as it is a measure of the degree of similarity that must exist between a copyrightable work and an unauthorized copy.” And in concluding more generally that the copyrightability of a computer program turns solely on the availability of other options for writing the program, the court relied on several cases from other circuits.
This reasoning, to start with, conflicts with Feist. As the Supreme Court's recent decision suggests, one does not satisfy the originality requirement for copyright protection merely by showing that the work could have been put together in different ways. Just as it failed to suffice in Feist that the author of the competing telephone book could have organized the listings in some manner other than the individual's last name, so it does not suffice here that SCC could have written the Toner Loading Program in some other way. As in Feist, the court must ask whether the alternative ways of putting together the competing work are feasible in that setting.
Nor does Nimmer support the district court's “a number of different ways” reasoning. As a matter of practice, Nimmer is correct that courts most commonly discuss the idea-expression dichotomy in considering whether an original work and a partial copy of that work are “substantially similar” (as part of prong two of the infringement test), since the copyrightability of a work as a whole (prong one) is less frequently contested. But the idea-expression divide figures into the substantial similarity test not as a measure of “similarity”; it distinguishes the original work's protectable elements from its unprotectable ones, a distinction that allows courts to determine whether any of the former have been copied in substantial enough part to constitute infringement. Both prongs of the infringement test, in other words, consider “copyrightability,” which at its heart turns on the principle that copyright protection extends to expression, not to ideas.
Neither do the cited cases support the district court's initial frame of reference. Franklin Computer, and Formula International, involved copies of Apple's operating system program-a program whose size and complexity is to the Toner Loading Program what the Sears Tower is to a lamppost. Given the nature of the Apple program, it would have been exceedingly difficult to say that practical alternative means of expression did not exist and indeed no defendant in the cases advanced that argument. And Franklin Computer, and Whelan Assocs., do not establish that any variation in the modes of expression establishes copyrightability, as they acknowledge the potential relevance of the merger and scenes a faire doctrines. While E.F. Johnson rejected the defendant's argument that the computer software program at issue was not protectable because it was needed for “compatibility” with a certain radio system, it did so only after finding that “the exact duplication of the [program] ... was not the ‘only and essential’ means of achieving compatibility.”
Second, given the district court's mistaken view of the legal standard for distinguishing protectable expression from unprotectable ideas, the constraints on the Toner Loading Program established by the evidence need to be reconsidered. To discern whether “originality” exists in the work, the court should ask whether the ideas, methods of operation and facts of the program could have been expressed in any form other than that chosen by the programmer, taking into consideration the functionality, compatibility and efficiency demanded of the program.
In presenting evidence in support of its motion for a preliminary injunction, Lexmark focused on establishing that the Toner Loading Program could have been written in other ways. Dr. Maggs, Lexmark's expert, described several possible alternatives in his declaration: (1) different constants and equations could be used; (2) a lookup table could be used in lieu of equations; (3) some measure other than torque could be used to approximate toner level (e.g., the number of pages printed); or (4) the same equations could be used in a different sequence. He concluded that over 50 different programs could be written to substitute for the Toner Loading Program.
Dr. Goldberg, SCC's expert, acknowledged that certain changes could be made to the program, for example, by changing the sequence of elements in the program, or by writing the Toner Loading Program in a different programming language altogether. But Dr. Goldberg conceded this point only as a theoretical matter, as he concluded that functionality and efficiency considerations precluded any material changes to the Toner Loading Program.
Dr. Goldberg concluded that several external constraints limit the options available in designing the Toner Loading Program. For one, the Printer Engine Program that downloads and executes the program understands only a single programming language composed of eight simple commands. For another, the program must consist of only 55 bytes because the printer downloads only these particular bytes. Efficiency considerations and the physical realities of the printer and toner cartridge also restrict the forms that the Toner Loading Program could take. Id. As a result, Dr. Goldberg concluded, these external factors together “dictate the way that the simple toner loading program looks,” and the resulting program is a “no-thought translation of the formulas to the language that the internal loading program must be written in, and [the programmer doesn't] have much choice.” Id. Dr. Goldberg responded to Dr. Maggs' testimony that the Toner Loading Program could take alternative forms by noting that Dr. Maggs' proposed changes were trivial-that they did not make any “substantial difference to the nature of the program”-or that they were so inefficient and repetitive as to be “ridiculous.” Instead, Dr. Goldberg concluded, the Toner Loading Program as it is written is the most “straightforward, efficient, natural way to express the program.” Id. By contrast, Dr. Maggs' testimony did not reference any of these functional considerations discussed by Goldberg, meaning that the record fails to establish any affirmative support for the contention that Dr. Maggs' proposed alternatives satisfy the memory restrictions of the program.
Even aside from Dr. Goldberg's testimony that the Toner Loading Program is the most efficient means of calculating toner levels, the alternatives suggested by Dr. Maggs do not appear to support the district court's initial conclusion that the program is expressive. Dr. Maggs' first and third suggestions-that different equations and values or a different means of measuring toner level altogether could have been used-do not appear to represent alternative means of expressing the ideas or methods of operations embodied in the Toner Loading Program; they appear to be different ideas or methods of operation altogether. Selection from among competing ideas or methods of operation generally does not result in copyright-protectable expression. Nor would the use of a “lookup table” appear to differ meaningfully from the use of other equations directly. Instead of executing a mathematical formula on a given input, this program merely “looks up” in a data table the output of that same formula for the given input value. Finally, Dr. Maggs' fourth suggestion-that the same equations could be reordered-does not appear to show originality because such alterations may be too trivial to support a finding of creative expression.
To the extent these alternatives suggest any originality in the Toner Loading Program, at any rate, the quantum of originality may well be de minimis and accordingly insufficient to support the validity of Lexmark's copyright in the work. Because the district court initially looked at these issues and this evidence through the wrong frame of reference, its conclusion that the Toner Loading Program had sufficient originality to obtain copyright protection does not support the preliminary injunction. At the permanent injunction stage of this dispute, we leave it to the district court in the first instance to decide whether the Toner Loading Program has sufficient originality to warrant copyright protection.
Third, and perhaps most significantly, the district court erred in assessing whether the Toner Loading Program functions as a lock-out code. Even if the constraints described by Dr. Goldberg-the programming language, the program size, efficiency concerns-did not dictate the content of the Toner Loading Program, the fact that it also functions as a lock-out code undermines the conclusion that Lexmark had a probability of success on its infringement claim.
The Toner Loading Program, recall, serves as input to the checksum operation that is performed each time the printer is powered on or the printer door is opened and closed (i.e., for toner cartridge replacement). After downloading a copy of the Toner Loading Program to calculate toner levels, the Printer Engine Program runs a calculation-the checksum-using every data byte of the Toner Loading Program as input. The program then compares the result of that calculation with a “checksum value” that is located elsewhere on Lexmark's toner cartridge chip. If any single byte of the Toner Loading Program is altered, the checksum value will not match the checksum calculation result. Only if the checksum value is correspondingly changed to accommodate any alterations in the data bytes will the printer function.
In addition to its general conclusion that external constraints on the program were not relevant, the district court concluded that the checksum operation did not operate as a strict constraint on the content of the Toner Loading Program because “SCC's identical copying of Lexmark's Toner Loading Programs went beyond that which was necessary for compatibility.” According to the district court, the program could be altered rather simply, even in view of the checksum operation, because reasonable trial and error of no more than 256 different data combinations would have enabled SCC to discover and encode the correct checksum value on its chip. In reaching this conclusion, the court downplayed the significance of Dr. Goldberg's testimony regarding the importance of contextual information to the ease or difficulty of guessing the correct checksum value, saying that Dr. Goldberg called the task “extraordinarily difficult,” then dismissing his testimony without further explanation. Dr. Goldberg, however, did not describe this endeavor as “extraordinarily difficult” but as “computationally impossible,” a point that Lexmark did not then, and does not now, refute. Contrary to Judge Feikens' suggestion, moreover, Lexmark offered no evidence to show that the task of “turning off” the checksum operation altogether (without contextual information) would be any different from, or any less arduous than, the task of altering the checksum value to accommodate another program.
The difficulty of deriving the proper checksum value and the corresponding degree to which the checksum operation acts as a constraint on the content of the bytes comprising the Toner Loading Program may be an open question at the permanent injunction phase. But for purposes of the preliminary injunction, Dr. Goldberg's unchallenged testimony that it would be “computationally impossible” to modify the checksum value without contextual information suffices to establish that the checksum operation imposes a compatibility constraint in the most literal sense possible: if any single byte of the Toner Loading Program is altered, the printer will not function. On this record, pure compatibility requirements justified SCC's copying of the Toner Loading Program.
In defense of the district court's decision, Lexmark raises several other arguments, all unavailing. First, Lexmark notes that it “creatively inserted” in the Toner Loading Program a computer code representation of its stock ticker symbol, “LXK.” Lexmark describes this segment as “non-functional” because it does not translate into source code contributing to the toner-calculating program. It is not clear whether these three letters would support a finding of creative expression in the work as a whole. What is clear is that the bytes containing the “LXK” reference are functional in the sense that they, like the rest of the Toner Loading Program, also serve as input to the checksum operation and as a result amount to a lock-out code that the merger and scenes a faire doctrines preclude from obtaining protection.
Second, Lexmark argues that if the Toner Loading Program is not copyrightable, then “most computer programs would not be copyrightable.” Lexmark Br. at 17. But the slope of this decision is neither as slippery nor as steep as Lexmark suggests. Most computer programs do not simultaneously operate as a lock-out code that is “computationally impossible” to alter without input from the programmer; and most programs are not as brief as this one.
In reaching this conclusion, we do not mean to say that brief computer programs are ineligible for copyright protection. Short programs may reveal high levels of creativity and may present simple, yet unique, solutions to programming quandaries. Just as a mathematician may develop an elegant proof, or an author may express ideas in a spare, simple, but creative manner, see, e.g., e.e. cummings, so a computer programmer may develop a program that is brief and eligible for protection. But unless a creative flair is shown, a very brief program is less likely to be copyrightable because it affords fewer opportunities for original expression.
Third, invoking the Federal Circuit's decision in Atari I, 975 F.2d at 840, Lexmark argues that even if the Toner Loading Program amounts to a lock-out code, it still may be eligible for protection. In Atari I, Nintendo developed a program (known as “10NES”) that blocked its game console from accepting unauthorized game cartridges. Relying on this program, Nintendo sold game cartridges that generated a data stream that “unlocked” the game console, allowing it to load and run the game. The Federal Circuit determined that the 10NES program was copyrightable despite arguments that the program constituted unprotectable ideas rather than expression and that the merger doctrine precluded copyright protection.
The Federal Circuit's rationale for accepting copyright protection for the 10NES program does not undermine our conclusion because the 10NES program was not a “lock out” code in the same sense that the Toner Loading Program is. In Atari, the data bytes of the 10NES program did not themselves do the “unlocking” of the game console; the program, when executed, generated an arbitrary stream of data that in turn enabled the console to function. That same data stream, the court concluded, could have been produced by a number of alternative programs; for this reason, the expression contained in the computer program did not “merge” with the process. Here, by contrast, the data bytes comprising the Toner Loading Program themselves act as the input to the checksum operation that must be successfully completed for the printer to operate. None of these bytes of the program can be altered without impeding printer functionality given the compatibility requirements created by the checksum operation. Compatibility requirements in Atari, in short, did not preclude the possibility of substituting other programs for the 10NES, while they do here.
For like reasons, Judge Feikens is correct that a poem in the abstract could be copyrightable. But that does not mean that the poem receives copyright protection when it is used in the context of a lock-out code. Similarly, a computer program may be protectable in the abstract but not generally entitled to protection when used necessarily as a lock-out device.
In view of our conclusion on this preliminary-injunction record that the Toner Loading Program is not copyrightable, we need not consider SCC's fair-use defense. Yet because this defense could regain relevance at the permanent injunction phase of the case (e.g., if further evidence undermines our conclusion that the program is not copyrightable), two related aspects of the district court's discussion deserve comment.
The district court correctly outlined the four factors for determining whether SCC fairly used Lexmark's Toner Loading Program: (1) the purpose and character of the use, including whether it is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work. All of these factors except the second, the district court reasoned, counseled against a finding of fair use, and the second factor favored SCC's position only “slightly.” As a result, the court concluded, the fair-use defense did not apply.
With respect to the first factor-the purpose of the use-it is true that a profit-making purpose generally militates against a finding of fair use. But it is not the case that any profit-making purpose weighs against fair use, as the “crux” of this factor “is not whether the sole motive of the use is monetary gain.” The question is whether “the user stands to profit from exploitation of the copyrighted material without paying the customary price.” In copying the Toner Loading Program into each of its SMARTEK chips, SCC was not seeking to exploit or unjustly benefit from any creative energy that Lexmark devoted to writing the program code. As in Kelly, SCC's chip uses the Toner Loading Program for a different purpose, one unrelated to copyright protection. Rather than using the Toner Loading Program to calculate toner levels, the SMARTEK chip uses the content of the Toner Loading Program's data bytes as input to the checksum operation and to permit printer functionality. Under these circumstances, it is far from clear that SCC copied the Toner Loading Program for its commercial value as a copyrighted work-at least on the preliminary-injunction record we have before us.
With respect to the fourth factor-the effect of the use on the value of the copyrighted material-the relevant question likewise is whether the infringement impacted the market for the copyrighted work itself. In Kelly, for example, the Ninth Circuit concluded that the fourth factor favored a finding of fair use because the Internet search engine's utilization of the plaintiff's copyrighted images did not harm the value or marketability of the original photos. Here, the district court focused on the wrong market: it focused not on the value or marketability of the Toner Loading Program, but on Lexmark's market for its toner cartridges. Lexmark's market for its toner cartridges and the profitability of its Prebate program may well be diminished by the SMARTEK chip, but that is not the sort of market or value that copyright law protects. Lexmark has not introduced any evidence showing that an independent market exists for a program as elementary as its Toner Loading Program, and we doubt at any rate that the SMARTEK chip could have displaced any value in this market.
Enacted in 1998, the DMCA has three liability provisions. The statute first prohibits the circumvention of “a technological measure that effectively controls access to a work protected [by copyright].” The statute then prohibits selling devices that circumvent access-control measures:
- No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that-:
- (A) is primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a [copyrighted work];
- (B) has only limited commercially significant purpose or use other than to circumvent a technological measure that effectively controls access to a [copyrighted work]; or
- (C) is marketed by that person or another acting in concert with that person with that person's knowledge for use in circumventing a technological measure that effectively controls access to a [copyrighted work].
The statute finally bans devices that circumvent “technological measures” protecting “a right” of the copyright owner. The last provision prohibits devices aimed at circumventing technological measures that allow some forms of “access” but restrict other uses of the copyrighted work, such as streaming media, which permits users to view or watch a copyrighted work but prevents them from downloading a permanent copy of the work.
The statute also contains three “reverse engineering” defenses. A person may circumvent an access control measure “for the sole purpose of identifying and analyzing those elements of the program that are necessary to achieve interoperability of an independently created computer program with other programs, and that have not previously been readily available to [that person].” A person “may develop and employ technological means” that are “necessary” to enable interoperability. And these technological means may be made available to others “solely for the purpose of enabling interoperability of an independently created computer program with other programs.” All three defenses apply only when traditional copyright infringement does not occur and only when the challenged actions (in the case of the third provision) would not violate other “applicable law[s].”
In filing its complaint and in its motion for a preliminary injunction, Lexmark invoked the second liability provision-the ban on distributing devices that circumvent access-control measures placed on copyrighted works. According to Lexmark, SCC's SMARTEK chip is a “device” marketed and sold by SCC that “circumvents” Lexmark's “technological measure” (the SHA-1 authentication sequence, not the checksum operation), which “effectively controls access” to its copyrighted works (the Toner Loading Program and Printer Engine Program). Lexmark claims that the SMARTEK chip meets all three tests for liability under ß 1201(a)(2): (1) the chip “is primarily designed or produced for the purpose of circumventing” Lexmark's authentication sequence, 17 U.S.C. ß 1201(a)(2)(A); (2) the chip “has only limited commercially significant purpose or use other than to circumvent” the authentication sequence, id. ß 1201(a)(2)(B); and (3) SCC “market[s]” the chip “for use in circumventing” the authentication sequence, id. ß 1201(a)(2)(C). The district court agreed and concluded that Lexmark had shown a likelihood of success under all three provisions.
We initially consider Lexmark's DMCA claim concerning the Printer Engine Program, which (the parties agree) is protected by the general copyright statute. In deciding that Lexmark's authentication sequence “effectively controls access to a work protected under [the copyright provisions],” the district court relied on a definition in the DMCA saying that a measure “effectively controls access to a work” if, “in the ordinary course of operation,” it “requires the application of information, or a process or treatment, with the authority of the copyright owner, to gain access to the work.” Because Congress did not explain what it means to “gain access to the work,” the district court relied on the “ordinary, customary meaning” of “access”: “the ability to enter, to obtain, or to make use of,” D. Ct. Op. at 41 (quoting Merriam-Webster's Collegiate Dictionary 6 (10th ed.1999)). Based on this definition, the court concluded that “Lexmark's authentication sequence effectively ‘controls access' to the Printer Engine Program because it controls the consumer's ability to make use of these programs.”
We disagree. It is not Lexmark's authentication sequence that “controls access” to the Printer Engine Program. It is the purchase of a Lexmark printer that allows “access” to the program. Anyone who buys a Lexmark printer may read the literal code of the Printer Engine Program directly from the printer memory, with or without the benefit of the authentication sequence, and the data from the program may be translated into readable source code after which copies may be freely distributed. Maggs Hr'g Test., JA 928. No security device, in other words, protects access to the Printer Engine Program Code and no security device accordingly must be circumvented to obtain access to that program code.
The authentication sequence, it is true, may well block one form of “access”-the “ability to ... make use of” the Printer Engine Program by preventing the printer from functioning. But it does not block another relevant form of “access”-the “ability to [ ] obtain” a copy of the work or to “make use of” the literal elements of the program (its code). Because the statute refers to “control[ling] access to a work protected under this title,” it does not naturally apply when the “work protected under this title” is otherwise accessible. Just as one would not say that a lock on the back door of a house “controls access” to a house whose front door does not contain a lock and just as one would not say that a lock on any door of a house “controls access” to the house after its purchaser receives the key to the lock, it does not make sense to say that this provision of the DMCA applies to otherwise-readily-accessible copyrighted works. Add to this the fact that the DMCA not only requires the technological measure to “control[ ] access” but also requires the measure to control that access “effectively,” and it seems clear that this provision does not naturally extend to a technological measure that restricts one form of access but leaves another route wide open.
Nor are we aware of any cases that have applied this provision of the DMCA to a situation where the access-control measure left the literal code or text of the computer program or data freely readable. And several cases apply the provision in what seems to us its most natural sense.
Lexmark defends the district court's contrary ruling on several grounds. First, it contends that SCC waived this argument by failing to raise it in the district court. The premise of this argument remains unclear. Below, SCC indeed claimed that the DMCA by its terms did not cover its conduct. While SCC may not have anticipated the district court's specific reliance on the “to make use of” definition of “access” in its preliminary injunction ruling, the district court's ruling also does not say that SCC conceded the point. Under these circumstances, it is well within our discretion to allow SCC to explain why the district court's resolution of this purely legal question-an interpretation of a statute-is mistaken.
Second, Lexmark counters that several cases have embraced a “to make use of” definition of “access” in applying the DMCA. While Lexmark is partially correct, these cases (and others as well) ultimately illustrate the liability line that the statute draws and in the end explain why access to the Printer Engine Program is not covered.
In the essential setting where the DMCA applies, the copyright protection operates on two planes: in the literal code governing the work and in the visual or audio manifestation generated by the code's execution. For example, the encoded data on CDs translates into music and on DVDs into motion pictures, while the program commands in software for video games or computers translate into some other visual and audio manifestation. In the cases upon which Lexmark relies, restricting “use” of the work means restricting consumers from making use of the copyrightable expression in the work. As shown above, the DMCA applies in these settings when the product manufacturer prevents all access to the copyrightable material and the alleged infringer responds by marketing a device that circumvents the technological measure designed to guard access to the copyrightable material.
The copyrightable expression in the Printer Engine Program, by contrast, operates on only one plane: in the literal elements of the program, its source and object code. Unlike the code underlying video games or DVDs, “using” or executing the Printer Engine Program does not in turn create any protected expression. Instead, the program's output is purely functional: the Printer Engine Program “controls a number of operations” in the Lexmark printer such as “paper feed[,] paper movement[,][and] motor control.” Lexmark Br. at 9; cf. Lotus Dev., 49 F.3d at 815 (determining that menu command hierarchy is an “uncopyrightable method of operation”). And unlike the code underlying video games or DVDs, no encryption or other technological measure prevents access to the Printer Engine Program. Presumably, it is precisely because the Printer Engine Program is not a conduit to protectable expression that explains why Lexmark (or any other printer company) would not block access to the computer software that makes the printer work. Because Lexmark's authentication sequence does not restrict access to this literal code, the DMCA does not apply.
Lexmark next argues that access-control measures may “effectively control access” to a copyrighted work within the meaning of the DMCA even though the measure may be evaded by an “ ‘enterprising end-user.’ ” Doubtless, Lexmark is correct that a precondition for DMCA liability is not the creation of an impervious shield to the copyrighted work. Otherwise, the DMCA would apply only when it is not needed.
But our reasoning does not turn on the degree to which a measure controls access to a work. It turns on the textual requirement that the challenged circumvention device must indeed circumvent something, which did not happen with the Printer Engine Program. Because Lexmark has not directed any of its security efforts, through its authentication sequence or otherwise, to ensuring that its copyrighted work (the Printer Engine Program) cannot be read and copied, it cannot lay claim to having put in place a “technological measure that effectively controls access to a work protected under [the copyright statute].”
Nor can Lexmark tenably claim that this reading of the statute fails to respect Congress's purpose in enacting it. Congress enacted the DMCA to implement the Copyright Treaty of the World Intellectual Property Organization, and in doing so expressed concerns about the threat of “massive piracy” of digital works due to “the ease with which [they] can be copied and distributed worldwide virtually instantaneously.” As Congress saw it, “copyrighted works will most likely be encrypted and made available to consumers once payment is made for access to a copy of the work. [People] will try to profit from the works of others by decoding the encrypted codes protecting copyrighted works, or engaging in the business of providing devices or services to enable others to do so.” Backing with legal sanctions “the efforts of copyright owners to protect their works from piracy behind digital walls such as encryption codes or password protections,” Congress noted, would encourage copyright owners to make digital works more readily available.
Nowhere in its deliberations over the DMCA did Congress express an interest in creating liability for the circumvention of technological measures designed to prevent consumers from using consumer goods while leaving the copyrightable content of a work unprotected. In fact, Congress added the interoperability provision in part to ensure that the DMCA would not diminish the benefit to consumers of interoperable devices “in the consumer electronics environment.” 144 Cong. Rec. E2136 (daily ed. Oct. 13, 1998) (remarks of Rep. Bliley). See generally Anti-Circumvention Rulemaking Hearing, at 44-56, at http://www.copyright.gov/1201/2003/hearings/transcript-may9.pdf (testimony of Professor Jane Ginsburg) (Section 1201(a) does not “cover[ ] the circumvention of a technological measure that controls access to a work not protected under [the Copyright] title. And if we're talking about ball point pen cartridges, printer cartridges, garage doors and so forth, we're talking about works not protected under this title.”).
In view of our conclusion regarding the Printer Engine Program, we can dispose quickly of Lexmark's DMCA claim regarding the Toner Loading Program. The SCC chip does not provide “access” to the Toner Loading Program but replaces the program. And to the extent a copy of the Toner Loading Program appears on the Printer Engine Program, Lexmark fails to overcome the same problem that undermines its DMCA claim with respect to the Printer Engine Program: Namely, it is not the SCC chip that permits access to the Printer Engine Program but the consumer's purchase of the printer. One other point deserves mention. All three liability provisions of this section of the DMCA require the claimant to show that the “technological measure” at issue “controls access to a work protected under this title,” which is to say a work protected under the general copyright statute, id. ß 102(a). To the extent the Toner Loading Program is not a “work protected under [the copyright statute],” which the district court will consider on remand, the DMCA necessarily would not protect it.
The district court also rejected SCC's interoperability defense-that its replication of the Toner Loading Program data is a “technological means” that SCC may make “available to others” “solely for the purpose of enabling interoperability of an independently created computer program with other programs.” In rejecting this defense, the district court said that “SCC's SMARTEK microchips cannot be considered independently created computer programs. [They] serve no legitimate purpose other than to circumvent Lexmark's authentication sequence and ... cannot qualify as independently created when they contain exact copies of Lexmark's Toner Loading Programs.”
Because the issue could become relevant at the permanent injunction stage of this dispute, we briefly explain our disagreement with this conclusion. In particular, the court did not explain why it rejected SCC's testimony that the SMARTEK chips do contain other functional computer programs beyond the copied Toner Loading Program data. The affidavit of Lynn Burchette, an SCC manager, states that “[the SMARTEK] chip has a microprocessor, with software routines we developed that control its operation and function. Our chip supports additional functionality performed by our software beyond that of [the chip on Lexmark's toner cartridges].” And Dr. Goldberg testified that “Static Control has written a substantial amount of software for managing this chip; for not only providing the int[er]operability features, but also for managing the additional functionality that the [chip manufacturer] provides and which the remanufacturers may want.”
Instead of showing why these statements are wrong, Lexmark contends that this is not “credible evidence” that “independently created computer programs” exist on the SMARTEK chip. Yet Lexmark bears the burden of establishing its likelihood of success on the merits of the DMCA claims. Because Lexmark has offered no reason why the testimony of SCC's experts is not “credible evidence” on this point and has offered no evidence of its own to dispute or even overcome the statements of Burchette and Goldberg, SCC also has satisfied the “independently created computer programs” requirement and may benefit from the interoperability defense, at least in the preliminary injunction context.
Lexmark argues alternatively that if independently created programs do exist, (1) they must have existed prior to the “reverse engineering” of Lexmark's Toner Loading Program, and (2) the technological means must be “necessary or absolutely needed” to enable interoperability of SCC's SMARTEK chip with Lexmark's Printer Engine Program. As to the first argument, nothing in the statute precludes simultaneous creation of an interoperability device and another computer program; it just must be “independently” created. As to the second argument, the statute is silent about the degree to which the “technological means” must be necessary, if indeed they must be necessary at all, for interoperability. The Toner Loading Program copy satisfies any such requirement, however, because without that program the checksum operation precludes operation of the printer (and, accordingly, operation of the Printer Engine Program), unless the checksum value located elsewhere on the chip is modified-which appears to be a computational impossibility without the contextual information that Lexmark does not disclose. See supra.
Also unavailing is Lexmark's final argument that the interoperability defense in ß 1201(f)(3) does not apply because distributing the SMARTEK chip constitutes infringement and violates other “applicable law” (including tortious interference with prospective economic relations or contractual relations). Because the chip contains only a copy of the thus-far unprotected Toner Loading Program and does not contain a copy of the Printer Engine Program, infringement is not an issue. And Lexmark has offered no independent, let alone persuasive, reason why SCC's SMARTEK chip violates any state tort or other state law.
Because Lexmark failed to establish a likelihood of success on any of its claims, whether under the general copyright statute or under the DMCA, we vacate the district court's preliminary injunction and remand the case for further proceedings consistent with this opinion.
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