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Contract case could hurt reverse engineering

A US Supreme Court decision could call into question a common practice among software companies - studying competitors' products to improve their own offerings.

The legality of this practice, called reverse engineering, is in question after a court found that a software company had violated a shrink-wrapped licence contract when it reverse-engineered a competitor's piece of software.

Last week, the Supreme Court decided not to hear the accused software company's appeal.

Although the breach of contract ruling applies only to the US Court of Appeals for the Federal Circuit, the Supreme Court's lack of action could embolden other software companies to prohibit reverse engineering or take away other fair use rights allowed under copyright law by including such prohibitions in an end user license agreement, said  Karen Copenhaver, a patent and intellectual property lawyer.

But the lawyer who defended the reverse engineering prohibition said the case was simply about a small software developer trying to protect his investment.

The case in question involves software inventor Harold Bowers, who has alleged that Baystate Technologies violated a section of his software's end user licence agreement that forbade users from reverse engineering his software. A lower court agreed and awarded Bowers $5.27m (£3.2m).

Baystate had looked at Bowers' computer-aided design (CAD) software to make improvements in its competing package, although the extent of the reverse engineering is still in dispute, 12 years after the first legal action in the case.

Although reverse engineering is generally defined as reversing software's machine code to the source code, Baystate claims it looked only at Bowers' user interface to improve its CAD software product.

"There was no evidence of cracking encrypted source code or anything of that nature," said Bob Kann, Baystate's lawyer. "This may cause havoc in the industry. Before this case, it was perfectly legal to evaluate a competitor's product."

But Bowers' lawyer argued that Baystate had two weeks in its development schedule to examine Bowers' software, giving the software supplier time to look at more than the user interface.

The impact of the case, said Copenhaver, is that end-user licence agreements could become more restrictive.

Meeker said the inventor was trying to protect a piece of software he had worked on for years.

Grant Gross writes for IDG News Service


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