Software Unfiltered: The Shifting Burdens In Computer Software Copyrightability

Gunnar Larson g at xny.io
Mon May 22 10:02:31 PDT 2023


Software Unfiltered: The Shifting Burdens In Computer Software
Copyrightability

https://www.mondaq.com/unitedstates/patent/1316176/software-unfiltered-the-shifting-burdens-in-computer-software-copyrightability?email_access=on

The Federal Circuit weighed in on the test, and burdens, for showing
copyrightability of "nonliteral elements" of computer software in its SAS
Inst. v. World Programming Ltd decision.1 The Court affirmed a lower court
ruling that SAS failed to establish copyrightability of its computer
software's claimed elements after World Programing Limited ("WPL")
successfully established that a substantial portion of the allegedly
infringed elements are not protectable by copyright, shifting the burden
back to SAS. The decision, authored by Judge Reyna with a dissent from
Judge Newman, further held that, after this burden shift, SAS failed to
provide evidence that individual elements of its software programming could
survive an abstraction-filtration-comparison analysis as adopted in the
Second, Fifth, and Tenth Circuits.

I. The District Court: SAS Failed to Address the
Abstraction-Filtration-Comparison Test After WPL Successfully Shifted the
Burden
The lower court decision arose from the Eastern District of Texas, where
SAS accused WPL of infringing the copyright in the "nonliteral elements" of
its software, as well as other claims that were not relevant on appeal.
"Nonliteral elements" are those elements that are not written in code,
including for example the "program architecture, structure, sequence and
organization, operational modules, and user interface." After both parties
moved for summary judgment on the nonliteral copyright infringement claims,
the district court held a "copyrightability hearing" to allow the parties
to argue the issue of copyrightability with supplemental briefing.

The district court applied the abstraction-filtration-comparison analysis
of copyrightability. Under this framework, a court first breaks down a work
to its various sub-elements to individually determine the copyrightability
of those elements ("abstraction"). It then removes any sub-elements that it
determines are not eligible for copyright protection ("filtration"). The
remaining, protected, elements are compared against the allegedly
infringing software ("comparison") to make an infringement determination.
Here, the district court ruled that SAS failed to provide, during the
filtration step, evidence of the copyrightability of any individual element
of its software.

Noting that there was no clear guidance in the Fifth Circuit as to the
burden of proof for the "filtration" step, the district court adopted the
Eleventh Circuit's burden shifting framework. Under this framework, once
the copyright holder satisfies its initial burden of copyrightability (such
as through presentation of valid copyright registrations), the burden first
shifts to the alleged infringer to identify and substantiate the "species
of unprotectability" as to why the work is not subject to copyright
protection. Then, if met, the burden shifts back to the copyright holder to
establish what precise portions of the work are copyrightable.

Here, the district court ruled that SAS met its initial threshold burden,
and that WPL, the alleged infringer, met its prima facie burden of showing
multiple sub-elements should not be eligible for copyright protection. It
then concluded that SAS had not met its shifted burden to establish what
specific portions were eligible. Specifically, rather than engage with the
filtration analysis, SAS relied on its copyright registration (the evidence
for its initial threshold burden), and arguments that the SAS system was
"creative." The court ruled that this reliance on "creativity" of the
arrangement of the system failed to meaningfully engage with the test or
show the individual copyrightability of any elements of the SAS system.

II. The Majority Opinion: The Federal Circuit Accepts the Shifting
Framework and that SAS Failed to Engage with It
On appeal, SAS challenged the burden shifting
abstraction-filtration-analysis framework. The Federal Circuit, however,
upheld it as keeping with established precedent. The Federal Circuit noted
that evidence of a valid registration does not mean that every element of
the work (such as the non-literal elements at issue here) is protectable.
Rather, the registration creates a "rebuttable" presumption of
copyrightability. The Federal Circuit found the framework adopted by the
district court correctly required the copyright holder to respond to proof
of uncopyrightability advanced by the defendant by identifying what
specific elements of its own work are entitled to copyright. That SAS
either "failed or refused to do so" proved dispositive.

III. The Dissent: Judge Newman Contends the Majority Decision Rejects the
Copyrightability of Nonliteral Elements.
Judge Newman, in dissent, offered an alternative interpretation of the
case. By her reasoning, precedent already protects the claims made by SAS
for copyrightability. Specifically, this case originated in the Fifth
Circuit, and in Eng'g Dynamics, Inc. v. Structural Software, Inc., 26 F.3d
1335, 1341 (5th Cir. 1994) the Fifth Circuit had opined on the
copyrightability of "nonliteral" elements of computer software programs
generally. Judge Newman contended this previous ruling should have
categorically answered the "copyrightability" question for SAS's claim
without further analysis. Judge Newman argued that, rather than simply
finding SAS failed to meet its burden, the majority reached an extension on
the Supreme Court's decision in Google LLC v. Oracle America, Inc., 141 S.
Ct. 1183 (2021), which ruled that Google's use of Oracle's Java API naming
conventions constituted fair use of Oracle's copyrighted materials. There,
the Supreme Court did not reach the copyrightability question, leaving open
the baseline question of whether the Java API naming conventions were
copyrightable in the first place. Judge Newman contends that the SAS
decision incorrectly says they are not.

According to Judge Newman, "[t]he existence of possible infringement
defenses based on the extent of copying does not negate copyrightability of
the work." Her analysis suggests the burden-shifting paradigm used by the
majority where a copyright holder must prove the copyrightability of
individual elements rather than relying on the selection or arrangement of
elements, analogous to the precedential Supreme Court ruling in Feist, is
inappropriate. This dissent would require that copyrightability and
infringement be separate analyses, and the framework used by the majority
calls that approach into question. Under Judge Newman's dissent, SAS would
seemingly have proven copyrightability when it showed a valid copyright for
its software under a selection and arrangement of literal and non-literal
elements.

The majority addressed Judge Newman's dissent in its opinion, specifically
finding "a key step prior to engaging in an infringement analysis is to
determine which elements of the asserted material are copyrightable," also
citing Eng'g Dynamics, Inc. v. Structural Software, Inc. which held "[t]o
establish copyright infringement, a plaintiff must prove ownership of a
valid copyright and copying of constituent elements of the work that are
copyrightable.". Under the majority's formulation of copyrightability
analysis, a copyrightability analysis for claims of non-literal software
infringement is not a one-step process, and instead involves an extra step
to prove not only whether a copyright is held, but whether the underlying
work is entitled to copyright protection.

IV. Future Implications: The Shifting Burdens of Shifting Burdens
An open question is the applicability of this decision on future software
copyright infringement actions involving claims of non-literal copying. It
is possible the decision will represent primarily a procedural ruling that
centers on the district court's use of a "Copyrightability Hearing" during
pre-trial procedure and the evidence proffered by a plaintiff's expert for
copyrightability. But the majority's decision in this case will likely
reinforce a burden-shifting scheme in copyright infringement actions, where
a copyright holder should be prepared to substantiate the copyrightability
of specific elements of its copyright.

The case is SAS Inst. v. World Programming Ltd., — F.4th — (Fed. Cir. 2023).

Footnote

1. Typically, copyright actions are appealed to the regional circuit court
of appeals, here the Fifth Circuit. This decision was appealed to the
Federal Circuit instead because the plaintiff included patent infringement
claims in its complaint. Even though the plaintiff appealed on only
copyright issues, this granted jurisdiction to the Federal Circuit under 28
U.S.C. § 1295(a)(1).
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