HQ 0450068 - Copyright infringement of an IBM registered and recorded copyright of an EGA Code BIOS program (Registration TX 1-869-411 and Headquarters Issuance Number 86-207) - United States International Trade Commision Rulings

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HQ 450068

August 24, 1990

TRA CO:R:P IPR 450068 TPT

CATEGORY: COPYRIGHT

District Director of Customs
Los Angeles, California 90731

RE: Copyright infringement of an IBM registered and recorded copyright of an EGA Code BIOS program (Registration TX 1-869-411 and Headquarters Issuance Number 86-207)

Dear Sir:

This is in reply to your May 10, 1990 letter forwarding a case file in a matter involving potential copyright infringement with regard to the importation of Prolite 286 Laptop Computers.

FACTS:

CAF Technology, Inc., imported a shipment of 100 Prolite 286 Laptop computers. The merchandise was entered on January 2, 1990, and is valued at $171,400. A sample was sent to the Customs laboratory in Los Angeles for possible infringement of a registered and recorded copyright. The Customs laboratory determined that the computer graphics EGA code BIOS was 39.61 percent similar overall with IBM's EGA code BIOS.

Pursuant to Customs regulations, 19 C.F.R. 133.43, the shipment of computers was detained on suspicion of copyright infringement. The importer denied piracy. IBM posted the required surety bond in the amount of $205,680 and submitted a written demand for exclusion of the suspected merchandise. The importer and copyright owner submitted written materials for their respective positions to the Customs district director. The file was sent to Headquarters for a decision on the issue of copyright infringement.

Subsequent to the detention of this shipment of laptop computers, a Customs inspector interviewed Mr. Eric Huang, vice president and general manager of CAF. During the interview, Mr. Huang stated that CAF bought the BIOS program from Genoa and thereafter CAF technicians made modifications to the program so it would meet CAF specifications. Mr. Huang stated that the modifications were approved by Genoa.

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ISSUE:

Whether the EGA Code BIOS programs resident in the Eproms of the imported laptop computers infringe the above-referenced IBM copyright?

LAW AND ANALYSIS:

Section 602(b) of the Copyright Law (17 U.S.C. 602(b)) prohibits the importation of articles infringing a copyright and section 603(c) of the Copyright Law (17 U.S.C. 603(c)) provides that such articles are subject to seizure and forfeiture in the same manner as property imported in violation of Customs revenue laws. However, the articles may be returned to the country of export whenever it is shown to the satisfaction of the Secretary of the Treasury (Customs) that the importer had no reasonable grounds for believing that his or her acts constituted a violation of law (19 C.F.R. 133.47). The burden of proof shall be upon the party claiming that the article is in fact an infringing copy (19 C.F.R. 133.43(c)(1)).

The basic test for determining whether a copyrighted work has been infringed is to establish that unauthorized copying has occurred. Whelan Associates, Inc. v. Jaslow Dental Laboratory, Inc., 797 F.2d 1222 (3d Cir. 1986), cert. denied, 479 U.S. 1,031 (1987); Atari, Inc. v. North American Philips Consumer Electronics Corp., 672 F.2d 607, 614 (7th Cir. 1982), cert. denied, 459 U.S. 880 (1982). Since direct evidence of copying is often unavailable, copying may be proved by inference by showing that the alleged infringer had access to the copyrighted work and by evidence of substantial similarity between the copyrighted work and the alleged infringing work. Whelan at 1232.

The specific inquiry is whether the alleged infringing work is so similar to the protected work that an ordinary reasonable person would conclude that the alleged infringer fully appropriated the protected work by taking material of substance and value. Atari at 614. It is not a defense to infringement to claim that slight differences or variations exist between the protected work and the alleged copy. E.F. Johnson Co. v. Uniden Corporation of America, 623 F. Supp. 1485, 1492 (D. Minn. 1985). Furthermore, it is a basic tenet of copyright law that only the expression of an idea may be granted copyright protection, not the idea. Atari at 615.

The importer argues that it does not believe that the EGA BIOS licensed to it from Genoa Systems Corporation is an infringement of IBM's copyright. The importer states that its belief of non-infringement is based upon a release of a October, 1989 shipment of the same type of merchandise after analysis by a Customs

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laboratory. The importer contends that documents supplied to Customs in connection with the October, 1989 shipment indicate that it is a legal licensee of Genoa who in turn is a legal licensee of Award Software. The importer states that a license agreement between its parent, Fontex Corporation, and IBM and a sales history have been presented to Customs for resolving this matter.

The importer has submitted a laboratory report from Genoa. The importer states that the report demonstrates how the object code of Genoa's BIOS was modified so that the program would work on the laptop computers.

The importer submitted a November 16, 1989 letter from Mr. Walter Lin, Director of Engineering, Genoa Systems Corporation, to Mr. Jeff Flink of Award Software. This letter concerned the October, 1989 shipment of laptop computers of the same type prior to the one in question. In the letter the discussion centers on the Award EGA BIOS.

Based upon the release of the earlier shipment, the importer avers that it is an innocent party and it had no reasonable grounds to believe that the EGA BIOS licensed to CAF would infringe IBM's copyright. The importer requests that Customs permit exportation of the merchandise to the country of exportation.

IBM contends that the Genoa BIOS code resident in the laptop computer infringes its EGA BIOS. IBM states that the EGA BIOS became available commercially in October, 1984. IBM states that others are free to write programs that will work with or replace the IBM EGA BIOS, but others are not free to copy without IBM's consent.

IBM argues that, although the Genoa BIOS is intended to be compatible with the IBM EGA BIOS, it would have been impossible for the Genoa BIOS to be written without the programmer having access to the information about the IBM EGA BIOS contained in IBM's copyrighted Technical Reference Manual Options and Adapters Volume 2.

IBM was provided a sample of the imported Genoa BIOS. IBM conducted a test and compared the imported BIOS with the IBM EGA BIOS ROM. IBM contends that there is an overwhelming similarity between the key modules and concludes that it could not be independently created. IBM also asserts that major portions were copied. IBM states that its EGA BIOS contains approximately 2,574 instructions. In its side-by-side analysis, IBM compared 1,247 instructions with the Genoa BIOS. IBM found 578 instructions (46.3 percent) copied identically in the Genoa BIOS. IBM contends that this constitutes a substantial taking sufficient to establish infringement. Further, IBM argues that at least another 503 instructions (40.3 percent) are equivalent to the IBM EGA BIOS.

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IBM obtained its copyright registration for the EGA Code BIOS on June 10, 1986. The importer, while arguing that it believes that infringement does not exist, does not address the issue of access to the protected work. Therefore, we conclude that the importer did have access to IBM's copyrighted work.

The importer states that it has submitted documents to Customs showing the existence of a license agreement between its parent, Fontex, and IBM and between it and Genoa. First, the file does not include any documents indicating license agreements between any entities. Additionally, the importer's reference that it is a licensee of Genoa who in turn is a licensee of Award software does not establish any connection with IBM. Further, based upon the assertions of the importer, Customs Headquarters made inquiries into the existence of such documents by contacting the district office; however, no copyright licensing agreement was found as a result of the district search into documents the importer submitted related to this shipment or the October, 1989 shipment.

Independent of the EGA code BIOS analyses submitted by the importer and IBM, Customs's laboratory analysis of the imported EGA code BIOS found 39.61 percent similarity overall with the protected work. In view of our conclusion that the importer had access to the protected work and the laboratory's results as to the level of overall similarity, we find that this gives rise to a conclusion of copyright infringement since the importer, notwithstanding its statements, has not produced any documents demonstrating IBM's grant of authority to make copies or import this merchandise.

HOLDING:

We conclude that the EGA Code BIOS, resident in the imported laptop computers, infringes IBM copyright, TX 1-869-411 (Customs Issuance No. 86-207), and that the importation of the EGA Code BIOS is an unauthorized importation under 17 U.S.C. 602 and is subject to seizure and forfeiture under 17 U.S.C. 603. The laptop computers are subject to seizure and forfeiture under title 19, United States Code, section 1595a(a), for facilitating the importation of articles contrary to law. Under 19 C.F.R. 133.43(d), the district director may now seize the detained

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articles and proceed to forfeiture in accordance with 19 C.F.R. Part 162 or permit the importer to return the articles to the country of export if the conditions of 19 C.F.R. 133.47 are met. The district director is advised to return the bond to the copyright owner.

Sincerely,

John F. Atwood, Chief

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