Chapter 4
Derivative Works: Statute and Case Law

As described in the earlier general discussion of copyleft, strong copyleft licenses such as the GPL seek to uphold software freedom via the copyright system. This principle often causes theoretical or speculative dispute among lawyers, because “the work” — the primary unit of consideration under most copyright rules – is not a unit of computer programming. In order to determine whether a “routine” an “object”, a “function”, a “library” or any other unit of software is part of one “work” when combined with other GPL’d code, we must ask a question that copyright law will not directly answer in the same technical terms.

Therefore, this chapter digresses from discussion of GPL’s exact text to consider the matter of combined and/or derivative works — a concept that we must understand fully before considering GPLv2 2–3. At least under USA copyright law, The GPL, and Free Software licensing in general, relies critically on the concept of “derivative work” since software that is “independent,” (i.e., not “derivative”) of Free Software need not abide by the terms of the applicable Free Software license. As much is required by  106 of the Copyright Act, 17 U.S.C.  106 (2002), and admitted by Free Software licenses, such as the GPL, which (as we have seen) states in GPLv2 0 that “a ‘work based on the Program’ means either the Program or any derivative work under copyright law.” It is being a derivative work of Free Software that triggers the necessity to comply with the terms of the Free Software license under which the original work is distributed. Therefore, one is left to ask, just what is a “derivative work”? The answer to that question differs depending on which court is being asked.

The analysis in this chapter sets forth the differing definitions of derivative work by the circuit courts. The broadest and most established definition of derivative work for software is the abstraction, filtration, and comparison test (“the AFC test”) as created and developed by the Second Circuit. Some circuits, including the Ninth Circuit and the First Circuit, have either adopted narrower versions of the AFC test or have expressly rejected the AFC test in favor of a narrower standard. Further, several other circuits have yet to adopt any definition of derivative work for software.

As an introductory matter, it is important to note that literal copying of a significant portion of source code is not always sufficient to establish that a second work is a derivative work of an original program. Conversely, a second work can be a derivative work of an original program even though absolutely no copying of the literal source code of the original program has been made. This is the case because copyright protection does not always extend to all portions of a program’s code, while, at the same time, it can extend beyond the literal code of a program to its non-literal aspects, such as its architecture, structure, sequence, organization, operational modules, and computer-user interface.

4.1 The Copyright Act

The copyright act is of little, if any, help in determining the definition of a derivative work of software. However, the applicable provisions do provide some, albeit quite cursory, guidance. Section 101 of the Copyright Act sets forth the following definitions:

A “computer program” is a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result.

A “derivative work” is a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications which, as a whole, represent an original work of authorship, is a “derivative work.”

These are the only provisions in the Copyright Act relevant to the determination of what constitutes a derivative work of a computer program. Another provision of the Copyright Act that is also relevant to the definition of derivative work is  102(b), which reads as follows:

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.

Therefore, before a court can ask whether one program is a derivative work of another program, it must be careful not to extend copyright protection to any ideas, procedures, processes, systems, methods of operation, concepts, principles, or discoveries contained in the original program. It is the implementation of this requirement to “strip out” unprotectable elements that serves as the most frequent issue over which courts disagree.

4.2 Abstraction, Filtration, Comparison Test

As mentioned above, the AFC test for determining whether a computer program is a derivative work of an earlier program was created by the Second Circuit and has since been adopted in the Fifth, Tenth, and Eleventh Circuits. Computer Associates Intl., Inc. v. Altai, Inc., 982 F.2d 693 (2nd Cir. 1992); Engineering Dynamics, Inc. v. Structural Software, Inc., 26 F.3d 1335 (5th Cir. 1994); Kepner-Tregoe, Inc. v. Leadership Software, Inc., 12 F.3d 527 (5th Cir. 1994); Gates Rubber Co. v. Bando Chem. Indust., Ltd., 9 F.3d 823 (10th Cir. 1993); Mitel, Inc. v. Iqtel, Inc., 124 F.3d 1366 (10th Cir. 1997); Bateman v. Mnemonics, Inc., 79 F.3d 1532 (11th Cir. 1996); and, Mitek Holdings, Inc. v. Arce Engineering Co., Inc., 89 F.3d 1548 (11th Cir. 1996).

Under the AFC test, a court first abstracts from the original program its constituent structural parts. Then, the court filters from those structural parts all unprotectable portions, including incorporated ideas, expression that is necessarily incidental to those ideas, and elements that are taken from the public domain. Finally, the court compares any and all remaining kernels of creative expression to the structure of the second program to determine whether the software programs at issue are substantially similar so as to warrant a finding that one is the derivative work of the other.

Often, the courts that apply the AFC test will perform a quick initial comparison between the entirety of the two programs at issue in order to help determine whether one is a derivative work of the other. Such a holistic comparison, although not a substitute for the full application of the AFC test, sometimes reveals a pattern of copying that is not otherwise obvious from the application of the AFC test when, as discussed below, only certain components of the original program are compared to the second program. If such a pattern is revealed by the quick initial comparison, the court is more likely to conclude that the second work is indeed a derivative of the original.

4.2.1 Abstraction

The first step courts perform under the AFC test is separation of the work’s ideas from its expression. In a process akin to reverse engineering, the courts dissect the original program to isolate each level of abstraction contained within it. Courts have stated that the abstractions step is particularly well suited for computer programs because it breaks down software in a way that mirrors the way it is typically created. However, the courts have also indicated that this step of the AFC test requires substantial guidance from experts, because it is extremely fact and situation specific.

By way of example, one set of abstraction levels is, in descending order of generality, as follows: the main purpose, system architecture, abstract data types, algorithms and data structures, source code, and object code. As this set of abstraction levels shows, during the abstraction step of the AFC test, the literal elements of the computer program, namely the source and object code, are defined as particular levels of abstraction. Further, the source and object code elements of a program are not the only elements capable of forming the basis for a finding that a second work is a derivative of the program. In some cases, in order to avoid a lengthy factual inquiry by the court, the owner of the copyright in the original work will submit its own list of what it believes to be the protected elements of the original program. In those situations, the court will forgo performing its own abstraction, and proceed to the second step of the AFC test.

4.2.2 Filtration

The most difficult and controversial part of the AFC test is the second step, which entails the filtration of protectable expression contained in the original program from any unprotectable elements nestled therein. In determining which elements of a program are unprotectable, courts employ a myriad of rules and procedures to sift from a program all the portions that are not eligible for copyright protection.

First, as set forth in  102(b) of the Copyright Act, any and all ideas embodied in the program are to be denied copyright protection. However, implementing this rule is not as easy as it first appears. The courts readily recognize the intrinsic difficulty in distinguishing between ideas and expression and that, given the varying nature of computer programs, doing so will be done on an ad hoc basis. The first step of the AFC test, the abstraction, exists precisely to assist in this endeavor by helping the court separate out all the individual elements of the program so that they can be independently analyzed for their expressive nature.

A second rule applied by the courts in performing the filtration step of the AFC test is the doctrine of merger, which denies copyright protection to expression necessarily incidental to the idea being expressed. The reasoning behind this doctrine is that when there is only one way to express an idea, the idea and the expression merge, meaning that the expression cannot receive copyright protection due to the bar on copyright protection extending to ideas. In applying this doctrine, a court will ask whether the program’s use of particular code or structure is necessary for the efficient implementation of a certain function or process. If so, then that particular code or structure is not protected by copyright and, as a result, it is filtered away from the remaining protectable expression.

A third rule applied by the courts in performing the filtration step of the AFC test is the doctrine of scenes a faire, which denies copyright protection to elements of a computer program that are dictated by external factors. Such external factors can include:

Any code or structure of a program that was shaped predominantly in response to these factors is filtered out and not protected by copyright. Lastly, elements of a computer program are also to be filtered out if they were taken from the public domain or fail to have sufficient originality to merit copyright protection.

Portions of the source or object code of a computer program are rarely filtered out as unprotectable elements. However, some distinct parts of source and object code have been found unprotectable. For example, constants, the invariable integers comprising part of formulas used to perform calculations in a program, are unprotectable. Further, although common errors found in two programs can provide strong evidence of copying, they are not afforded any copyright protection over and above the protection given to the expression containing them.

4.2.3 Comparison

The third and final step of the AFC test entails a comparison of the original program’s remaining protectable expression to a second program. The issue will be whether any of the protected expression is copied in the second program and, if so, what relative importance the copied portion has with respect to the original program overall. The ultimate inquiry is whether there is “substantial” similarity between the protected elements of the original program and the potentially derivative work. The courts admit that this process is primarily qualitative rather than quantitative and is performed on a case-by-case basis. In essence, the comparison is an ad hoc determination of whether the protectable elements of the original program that are contained in the second work are significant or important parts of the original program. If so, then the second work is a derivative work of the first. If, however, the amount of protectable elements copied in the second work are so small as to be de minimis, then the second work is not a derivative work of the original.

4.3 Analytic Dissection Test

The Ninth Circuit has adopted the analytic dissection test to determine whether one program is a derivative work of another. Apple Computer, Inc. v. Microsoft Corp., 35 F.3d 1435 (9th Cir. 1994). The analytic dissection test first considers whether there are substantial similarities in both the ideas and expressions of the two works at issue. Once the similar features are identified, analytic dissection is used to determine whether any of those similar features are protected by copyright. This step is the same as the filtration step in the AFC test. After identifying the copyrightable similar features of the works, the court then decides whether those features are entitled to “broad” or “thin” protection. “Thin” protection is given to non-copyrightable facts or ideas that are combined in a way that affords copyright protection only from their alignment and presentation, while “broad” protection is given to copyrightable expression itself. Depending on the degree of protection afforded, the court then sets the appropriate standard for a subjective comparison of the works to determine whether, as a whole, they are sufficiently similar to support a finding that one is a derivative work of the other. “Thin” protection requires the second work be virtually identical in order to be held a derivative work of an original, while “broad” protection requires only a “substantial similarity.”

4.4 No Protection for “Methods of Operation”

The First Circuit has taken the position that the AFC test is inapplicable when the works in question relate to unprotectable elements set forth in  102(b). Their approach results in a much narrower definition of derivative work for software in comparison to other circuits. Specifically, the First Circuit holds that “method of operation,” as used in  102(b) of the Copyright Act, refers to the means by which users operate computers. Lotus Development Corp. v. Borland Int’l., Inc., 49 F.3d 807 (1st Cir. 1995). In Lotus, the court held that a menu command hierarchy for a computer program was uncopyrightable because it did not merely explain and present the program’s functional capabilities to the user, but also served as a method by which the program was operated and controlled. As a result, under the First Circuit’s test, literal copying of a menu command hierarchy, or any other “method of operation,” cannot form the basis for a determination that one work is a derivative of another. As a result, courts in the First Circuit that apply the AFC test do so only after applying a broad interpretation of  102(b) to filter out unprotected elements. E.g., Real View, LLC v. 20-20 Technologies, Inc., 683 F. Supp.2d 147, 154 (D. Mass. 2010).

4.5 No Test Yet Adopted

Several circuits, most notably the Fourth and Seventh, have yet to declare their definition of derivative work and whether or not the AFC, Analytic Dissection, or some other test best fits their interpretation of copyright law. Therefore, uncertainty exists with respect to determining the extent to which a software program is a derivative work of another in those circuits. However, one may presume that they would give deference to the AFC test since it is by far the majority rule among those circuits that have a standard for defining a software derivative work.

4.6 Cases Applying Software Derivative Work Analysis

In the preeminent case regarding the definition of a derivative work for software, Computer Associates v. Altai, the plaintiff alleged that its program, Adapter, which was used to handle the differences in operating system calls and services, was infringed by the defendant’s competitive program, Oscar. About 30% of Oscar was literally the same code as that in Adapter. After the suit began, the defendant rewrote those portions of Oscar that contained Adapter code in order to produce a new version of Oscar that was functionally competitive with Adapter, without having any literal copies of its code. Feeling slighted still, the plaintiff alleged that even the second version of Oscar, despite having no literally copied code, also infringed its copyrights. In addressing that question, the Second Circuit promulgated the AFC test.

In abstracting the various levels of the program, the court noted a similarity between the two programs’ parameter lists and macros. However, following the filtration step of the AFC test, only a handful of the lists and macros were protectable under copyright law because they were either in the public domain or required by functional demands on the program. With respect to the handful of parameter lists and macros that did qualify for copyright protection, after performing the comparison step of the AFC test, it was reasonable for the district court to conclude that they did not warrant a finding of infringement given their relatively minor contribution to the program as a whole. Likewise, the similarity between the organizational charts of the two programs was not substantial enough to support a finding of infringement because they were too simple and obvious to contain any original expression.

In the case of Oracle America v. Google, 872 F. Supp.2d 974 (N.D. Cal. 2012), the Northern District of California District Court examined the question of whether the application program interfaces (APIs) associated with the Java programming language are entitled to copyright protection. While the court expressly declined to rule whether all APIs are free to use without license (872 F. Supp.2d 974 at 1002), the court held that the command structure and taxonomy of the APIs were not protectable under copyright law. Specifically, the court characterized the command structure and taxonomy as both a “method of operation” (using an approach not dissimilar to the First Circuit’s analysis in Lotus) and a “functional requirement for compatibility” (using Sega v. Accolade, 977 F.2d 1510 (9th Cir. 1992) and Sony Computer Ent. v. Connectix, 203 F.3d 596 (9th Cir. 2000) as analogies), and thus unprotectable subject matter under  102(b).

Perhaps not surprisingly, there have been few other cases involving a highly detailed software derivative work analysis. Most often, cases involve clearer basis for decision, including frequent bad faith on the part of the defendant or over-aggressiveness on the part of the plaintiff.

4.7 How Much Do Derivative Works Matter?

It is certainly true that GPL intends for any work that is determined a “derivative work” under copyright law must be licensed as a whole under GPL, as will be discussed in the following chapter. However, as we finish up our discussion derivative works, we must note that preparation of a derivative work is by far not the only way to create a new work covered by GPL.

In fact, while derivative work preparation is perhaps the most exciting area of legal issues to consider, the more mundane ways to create a new work covered by GPL are much more common. For example, copyright statutes generally require permission from the copyright holder to grant explicit permission to modify a work in any manner. As discussed in the next chapter, the GPL does grant such permission, but requires the modified work must also be licensed under the terms of the GPL (and only GPL: see 7.3 in this tutorial). Determining whether software was modified is a substantially easier analysis than the derivative work discussions and considerations in this chapter.

The question of derivative works, when and how they are made, is undoubtedly an essential discussion in the interpretation and consideration of copyleft. That is why this chapter was included in this tutorial. However, as we return from this digression and resume discussion of the detailed text of the GPLv2, we must gain a sense of perspective: most GPL questions center around questions of modification and distribution, not preparation of derivative works. Derivative work preparation is ultimately a small subset of the types of modified versions of the software a developer might create, thus, while an excessive focus on derivative works indulges us in the more exciting areas of copyleft, we must keep a sense of perspective regarding their relative importance.