HQ 0732291 - Copyright Infringement - BIOS Personal Computer AT (VERSION 1.0) - Program Listing - Issuance No. 85-73 Effective May 23, 1985 - IBM Corp. Registration No. TX 1-422-557, published August 14, 1984 - United States International Trade Commision Rulings

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HQ 732291

January 10, 1990

CPR-3 CO:R:C:V 732291 SO

CATEGORY: COPYRIGHT

District Director of Customs
511 N.W. Broadway
Room 198
Portland, Oregon 97209

RE: Copyright Infringement - BIOS Personal Computer AT (VERSION 1.0) - Program Listing - Issuance No. 85-73 Effective May 23, 1985 - IBM Corp. Registration No. TX 1-422-557, published August 14, 1984

Dear Sir:

Your letter of March 31, 1989, requested a Headquarters 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 6 personal computers manufactured in Korea, arrived at Los Angeles consigned to Leading Technologies. A Notice of Redelivery was issued by Customs because the imported articles were suspected of infringing the above referenced copy- right registration (No. TX 1-422-557)for the IBM Personal Computer AT (VERSION 1.0) Basic Input Output System (AT BIOS). IBM posted the required surety bond and submitted a legal brief in support of their demand that the imported computers be excluded from entry into the U.S. The importer denied infringement and submitted a copy of a licensing agreement between Phoenix Technologies Ltd. and Samsung Electronics Co., a Korean Corpora- tion upon which their claim of non-infringement is based. The agreement shows that Phoenix licensed Samsung to manufacture an IBM AT COMPATIBLE ROM BIOS. The file was sent to Headquarters for decision.

ISSUE:

Would the personal computers imported by Leading Technologies infringe the copyright of IBM Corp. for the AT 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 pair of 27256-25 EPROMS from the imported articles contain computer code 35.8 percent identical to the IBM AT BIOS, copyright registration TX 1-422-557, U.S. Customs issuance No. 85-73.

In accordance with 19 CFR 133.43(b), IBM has obtained a sample computer from Customs which contained a BIOS ROM (read- only memory silicion chip) having the NCR BIOS stored therein. The NCR BIOS provides most of the same functions as the IBM AT BIOS. 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 has a degree in Electrical and Computer Engineering and has studied assembly language programming formally. He feels that there is such an overwhelming similarity between many of the routines or modules of the NCR BIOS and the IBM code, that it can only be concluded that the NCR BIOS was not created independently, but rather, major portions of the IBM code were copied.

The IBM AT BIOS was designed and written between August, 1982 and January, 1984. An IBM programmer/manager, John Paul, managed a team of programmers who adopted the original IBM XT BIOS for use with the IBM Personal Computer AT. The IBM AT BIOS took at least two and a half man-years to write and an additional two man-years to test. IBM's AT BIOS can logically be broken down into three general groups of routines or modules: the "power-on self-test" routine; specific device-handling routines; and system service routines. Because the constituent modules of the IBM AT BIOS need not be in any given order, they may be placed in wholly arbitrary locations in memory. A vector table will keep track of the actual addresses in memory. Therefore, one can effectively copy IBM's AT BIOS without copying the actual addresses or order of the modules.

A side by side comparison was made of the IBM object code (with address) and the NCR object code (with address), along with the "disassembled source code" obtained for each. Although the NCR BIOS duplicates the organization of the IBM AT BIOS, some sections of the compared modules were rearranged in the NCR BIOS. Due to its large size, the Fixed Disk Module of the IBM AT BIOS is regarded as being a major module of the IBM AT BIOS. A review of the side-by-side comparison confirms that at least 585 of the 760 instructions or 70% were copied in the NCR BIOS. At least 456 of the instructions or 60% were reproduced without any change whatsoever in the NCR BIOS. In addition, the NCR BIOS copies a large number of instruction sequences with only minor cosmetic changes. In other cases, the NCR BIOS disguises its copying by using instructions that, although they appear different, are functionally identical to the corresponding IBM instructions. Information on other modules follows:

NUMBER OF % COPIED % EQUIVALENT
IBM MODULE STATEMENTS VERBATIM STATEMENTS

TIMER INTERRUPT 29 29 0
PRINT SCREEN ? 60 17
REAL TIME CLOCK ? 28 53
TEST 4 DIAGNOSTIC 390 39 13

In addition, an error in the Timer Interrupt Module, which was corrected by IBM, was copied in the NCR BIOS Timer Interrupt Module. Because of the overwhelming similarity between the routines of the NCR BIOS and the IBM AT BIOS, the IBM attorney can only conclude that the NCR BIOS was not created independently, but rather major portions of the IBM AT BIOS were copied.

The date of first publication shown on the IBM copyright registration for the IBM Personal Computer AT BIOS is August 14, 1984. It is evident that the party that manufactured the imported computer in Korea 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, relying on the agree- ment between Phoenix and Samsung referred to above to establish non-infringement. The fact that Phoenix licensed Samsung to manufacture an IBM compatible computer has no bearing on the duty of the Customs Service to determine whether or not an article is an infringing importation. Phoenix cannot give a valid license to Samsung 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 NCR BIOS ROM's infringe the rights of the copyright owner, and they are subject to seizure and forfeiture (17 U.S.C. 603); the motherboards and the other associated hardware 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 actions (in importing the infringing articles) constituted 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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