HQ 0731759 - Copyright Infringement - IBM Personal Computer XT BIOS Hq. Issuance No. 84-09, Effective February 22, 1984 - IBM Corp. Registration No. TX 1-178-233, published March 7, 1983 - United States International Trade Commision Rulings

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HQ 731759

November 8, 1989

CPR-3 CO:R:C:V 731759 SO

CATEGORY: COPYRIGHT

District Director of Customs
Air Transportation Division
5758 West Century Boulevard, IST 41
Los Angeles International Airport
Los Angeles, California 90045

RE: Copyright Infringement - IBM Personal Computer XT BIOS Hq. Issuance No. 84-09, Effective February 22, 1984 - IBM Corp. Registration No. TX 1-178-233, published March 7, 1983

Dear Sir:

Your transmittal of September 6, 1988, requested a Head- quarters decision pursuant to section 133.43(c)(1), Customs Regulations (19 CFR 133.43(c)(1)), concerning infringement of the above referenced copyright recordation. We regret the delay in responding.

FACTS:

A shipment of 50 PCS S-88 (4-layers) XT Motherboards (Processor Boards) manufactured in Taiwan, arrived at Los Angeles consigned to Duck Computer, Inc. The shipment was detained by Customs on suspicion of copyright infringement of registration No. TX 1-178-233 for the 1501512 IBM Personal Computer XT Basic Input Output System (XT BIOS). IBM posted the required surety bond and submitted a legal brief in support of their demand that the imported motherboards be excluded from entry into the U.S. The importer denied infringement and submitted a copy of a "Confidentiality Agreement Between Firms" upon which their claim of non-infringement is based. The agreement shows that the BIOS had been purchased by "Twinhead International Corp." from "Award Software, Inc." The file was sent to Headquarters for decision.

ISSUE:

Would the motherboards imported by Duck Computer, Inc. infringe the copyright of IBM Corp. for the XT BIOS.

LAW AND ANALYSIS:

The basic test for determining whether there has been an infringement of copyright is whether substantial similarity exists between two works. The appropriate test for determining whether substantial similarity is present is whether an average lay observer would recognize the alleged copy as having been appropriated from the copyrighted work, Ideal Toy Corp. v. Fab- Lu Ltd., 360 F.2d 1022 (1966). The substantial similarity test was developed in order to bar a potential infringer from produc- ing a supposedly new and different work by deliberately making trivial or insignificant variations in specific features of the copyrighted work.

Two steps are involved in the test for infringement. There must be access to the copyrighted work and substantial similarity not only of the general ideas but the expression of those ideas as well. The Customs Laboratory found that the sample XT type motherboard they examined contains 15.84% IBM XT BIOS in place and 33.19% IBM XT BIOS overall and displays the following message: "(C) Award 1986 IBM Compatible."

IBM submitted an analysis from Mark P. Kahler, Attorney, IBM Intellectual Property Law Department located in Boca Raton, Florida. The Department has responsibility for all intellectual property law matters relating to IBM products, including the IBM Personal Computer family of products. Mr. Kahler furnished many reasons for his conclusion that the supplier of the BIOS for the imported motherboards has broadly copied IBM's BIOS software.

The IBM BIOS contains about 1386 instructions. A side by side comparison of the instructions contained in the object code and unassembled source code of the imported article confirms that at least 640 of them, or 46 percent were copied in the Award BIOS. A large number of instruction sequences were reproduced with only minor cosmetic changes. One can effectively copy IBM's XT BIOS without copying the actual addresses or order of the modules. That was particularly true in the creation of the IBM BIOS, whose approximately 19 individual routines or modules contain many arbitrary and unique design choices. In some cases, the Award BIOS includes an arbitrarily changed order of a particular sequence of instructions, where to change the order would not affect the execution of the program. The instructions themselves remain intact. Thus, while those instructions appear to be different, they are really not. Because of the overwhelm- ing similarity between the routines of the Award BIOS and the IBM XT BIOS, the attorney for IBM can only conclude that the Award BIOS was not created independently, but rather major portions of the IBM XT BIOS were copied.

The date of first publication shown on the IBM copyright registration for the 1501512 IBM Personal Computer XT BIOS is March 7, 1983. It is evident that the party that manufactured the imported motherboard in Taiwan had ample opportunity to analyze the copyrighted work. Even without direct evidence of access to the copyrighted work, the substantial similarity between the works is so striking as to preclude the possibility that the works were arrived at independently. The differences noted appear to us to constitute a deliberate attempt to make minor variations in the imported item while preserving the same functions of the IBM copyright protected program.

The importer has denied infringement, having relied on the "Confidentiality Agreement" referred to above to establish non- infringement. The fact that Award Software, Inc., supplied the BIOS for the motherboards has no bearing on the duty of the Customs Service to determine whether or not an article is an infringing importation. Award Software, Inc., cannot give a valid license to Twinhead International Corp. to manufacture articles which infringe an IBM copyright registration. Only IBM can grant such a license.

Section 602(b) of the Copyright Law (17 U.S.C. 602(b)) provides that, "In a case where the making of the copies or phonorecords would have constituted an infringement of copy- right if this title had been applicable, their importation is prohibited." Section 603(c) of the Copyright Law (17 U.S.C. 603(c)) provides that, "Articles imported in violation of the importation prohibitions of this title are subject to seizure and forfeiture in the same manner as property imported in violation of the Customs revenue laws. Forfeited articles shall be destroyed as directed by the Secretary of the Treasury or the court, as the case may be; however, the articles may be returned to the country of export whenever it is shown to the satisfaction of the Secretary of the Treasury that the importer has no reason- able grounds for believing that his or her acts constituted a violation of law."

HOLDING:

We are of the opinion that the Award BIOS ROM's on the imported motherboards infringe the rights of the copyright owner, and they are subject to seizure and forfeiture (17 U.S.C. 603); the motherboards are considered to be transporting computer merchandise and are subject to seizure and forfeiture under 19 U.S.C. 1595a(a). However, the district director may allow the return of the imported articles to the country of export when- ever he is satisfied that the importer had no reasonable grounds
for believing that his act (of importing the infringing articles) constitute a violation of law (19 CFR 133.47). The bond of the copyright owner shall be returned. Copies of this decision may be furnished to all interested parties.

Sincerely,

Marvin M. Amernick

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