JAMES E. HOLST JOHN F. LUNDBERG MARY E. MacDONALD University of California 300 Lakeside Drive, 7th Floor Oakland, California 94612-3565 Telephone: (510) 987-9800 JOEL LINZNER [JL 6426] CARLA J. SHAPREAU [CJS 2689] CROSBY, HEAFEY, ROACH & MAY Professional Corporation 1999 Harrison Street Oakland, California 94612 Telephone: (510) 763-2000 FREDERICK B. POLAK [FBP 3095] POST, POLAK & GOODSELL 280 Corporate Center 65 Livingston Avenue Roseland, New Jersey 07068 Telephone: (201) 994-1100 Attorneys for Defendant The Regents of the University of California UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY UNIX SYSTEM LABORATORIES, INC., Plaintiff, (DRD) -against- BERKELEY SOFTWARE DESIGN, INC., and the Following lndividuals in their Collective Capacity as THE REGENTS OF THE UNIVERSITY OF CALIFORNIA: PETE WILSON, LEO T. MCCARTHY, WILLIE L. BROWN, JR., et al., Defendants. Civil Action No.92-1667 SUPPLEMENTAL AMICUS BRIEF BY DEFENDANTS THE REGENTS OF THE UNIVERSITY OF CALIFORNIA RE PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION Date: 1-22-93 Time: 10:00 a.m. Court: Honorable Dickinson R. Debevoise TABLE OF CONTENTS I INTRODUCTION II ARGUMENT A. NET2 IS NOT AN INFRINGING WORK 1. THE UNIVERSITY CANNOT INFRINGE ITS OWN COPYRIGHT B. DE MINIMIS "LITERAL COPYING" DOES NOT PROVE INFRINGEMENT C. USL CANNOT DISTINGUISH ATARI GAMES AND COMPUTER ASSOCIATES D. USL FORFEITED ITS COPYRIGHT IN 32V 1. CONGRESS' DEFINITION OF PUBLICATION UNDER THE 1976 COPYRIGHT ACT DOES NOT ALTER USL'S FORFEITURE OF ITS COPYRIGHT IN 32V 2. USL DISTRIBUTED 32V WELL BEYOND A SELECTED GROUP 3. USL DID NOT DISTRIBUTE 32V FOR A LIMITED PURPOSE III CONCLUSION TABLE OF AUTHORITIES Apple Computer v. Microsoft Corp., 799 F.Supp. 1006 (N.D. Cal. 1992) 8 Atari Games Corp. v. Nintendo of America, Inc., ___ F.2d ___, 24 U.S.P.Q.2d 1015 (Fed. Cir. 1992) 8,9 Brown Bag Software v. Symantec, 960 F.2d 1465 (9th Cir. 1992) 8 Computer Assoc. International, Inc. v. Altai, Inc., ___ F.2d ___, 1992, 23 U.S.P.Q.2d 1241 (2nd Cir. 1992) 8 Feder v. Videotrip Corp., 697 F.Supp. 1165 (D. Colo. 1988) 7 Harper & Row Publisher's, Inc. v. The Nation, 471 U.S. 539 (1985) 8 Koontz v. Jaffarian, 787 F.2d 906 (4th Cir. 1986) 11 Lotus Development Corp. v. Borland International, Inc., 799 F.Supp. 203 (D. Mass. 1992) 8 Narell v. Freeman, 872 F.2d 907 (9th Cir. 1989) 7 National Broadcasting Co., Inc. v. Sonneborn, 630 F.Supp. 524 (D. Conn. 1985) 14 Paramount Pictures Corp. v. Rubinowitz, 271 U.S.P.Q. 48 (E.D.N.Y. 1981) 14 PRC Realty Systems v. National Ass'n of Realtors 766 F.Supp. 453 (E.D. Va. 1991) rev'd in part without opinion, 972 F.2d 341 (1992) 14 R.L. Polk & Co.v. Musser, 105 F.Supp. 351 (E.D. Penn. 1952) 7 Rokeach v. Avco Embassy Pictures Corp., 1097 U.S.P.Q. 156 (S.D.N.Y. 1977) 7 SAS Institute, Inc. v. S&H Computer Systems, Inc., 605 F.Supp. 816 (M.D. Tenn. 1985) Sega Enterprises, Ltd. v. Accolade, Inc., ___ F.2d ___, slip op. at 41 (9th Cir. 1993) 9 Stewart v. Abend, 495 U.S. 207 (1990) quoting Russell v. Price, 612 F.2d 1123 (9th Cir. 1979), cert. denied, 446 U.S. 952 (1980) 12 Universal Athletic Sales Co. v. Salkeld, 511 F.2d 904 (3rd Cir. 1975) 6 Werlin v. Reader's Digest Assoc., Inc., 529 F.Supp. 451 (S.D.N.Y. 1981) 7 White v. Kimmell, 193 F.2d 744 (9th Cir.1952) 13 Page Statutes 17 U.S.C. Section 301 3 17 U.S.C. Section 405 10,13 1976 Copyright Act 10,13 H.R. Rep. No. 1476 (1976) 13,14 Publications Goldstein, The Law of Copyright 12,13 Nimmer, Nimmer on Copyright 11,13 I. INTRODUCTION USL has made no showing of either quantitative or qualitative similarity between its 32V code and the University's Net2 software. Nonetheless, USL asks this Court to avoid a "morass of issues" and, instead, summarily to condemn 4,176 Net2 source code files en masse and put out of business one independent company that plans to use them. Essentially, USL would have this Court skip the trial and proceed directly with the sentence. In its haste to rush this Court to an erroneous judgment, USL hopes to cover up a gaping hole in its copyright claim by virtually ignoring it (apparently hoping the Court will do likewise), i.e., USL has ceded to the University the copyright in all modifications. improvements and enhancements to 32V developed by the University.Thus, even if one assumes that USL holds a valid copyright in 32V, USL cannot claim that Net2 is an infringing derivative work based upon 32V because -- by agreement with AT&T -- the University owns the copyright in that derivative work. As a result of AT&T's grant of ownership to the University of all modifications, enhancements and improvements to 32V, USL cannot complain that the University's distribution of its Net2 software infringes any copyright USL may hold in 32V. While USL may wish to complain that the University has breached an agreement not to distribute to non-USL licensees any University-owned code that "contains" old 32V code, that is a matter of contract law. As the Second Joint Declaration of Dr. McKusick and Keith Bostic ("Second Joint Decl.") and the Second Declaration of Dr. McKusick ("Second McKusick Decl.") explain, there has been no substantial breach of that commitment. USL would lead this Court to believe that Dr. McKusick provided the equivalent of a "smoking gun" with his deposition testimony on the subject of whether Net2 contains 32V code. In reality, however, McKusick's testimony was as explosive as a "pop gun." As Dr. McKusick states in his second declaration, his testimony was intended to explain the University's treatment of AT&T 32V code for which a trade secret possibly could have been asserted: before the University would release code that contained a reimplementation of a 32V algorithm, the CSRG staff looked forpublic explications of the algorithm in question; if an algorithm was publicly describedin pseudo-code, the University included the algorithm (implemented by improved codedeveloped by the University) in the Net2 release. Second McKusick Decl., at Para. 2.3.Header files -- which were essential to ensure the compatibility of Net2 withapplications, programs and peripherals -- were also included in Net2. Id. at Para. 4. Itis a gross misuse of the McKusick deposition to represent it as an admission ofwidespread incorporation of 32V code in Net2 because -- in fact -- there is virtuallyno 32V code in the Net2 source files. Id. at Para. 2. A painstaking review of the Net2 source code files has uncovered only 14 files (out of the total 4,176 Net2 source files) which contain any 32V code in them. As explained in the Second McKusick Declaration, those files collectively contain only 186 lines of common code (out of the 1.5 million lines of source code in Net2). Id.at 1 2. In the kernel -- which USL concedes is the core of the system -- only 56 lines of source code from Net2 (which has 230,995 lines of source code in the kernel)match lines from the 14,293 lines of source code in the 32V kernel. Id. at Para 1. After spending hundreds of hours searching for textual matches, USL's paid expert could only find and report on two source files in Net2 that actually contain 32V code which he considered significant. The first, Net2's "ufs_disksubr.c" file contained 14 lines of code (out of 358 total lines) that also appeared in 32V. Id. at Para. 2.1.1. The second example belatedly cited by Dr. Carson in his Reply Affidavit, is the "cpio.c" file: this file was included in Net2 by the University at the specific request of AT&T. See Second Joint Decl., at 1 6.2. But even if it were not estopped to complain about "cpio.c," the inclusion of that file and the 14 lines from "ufs_disk.subr.c" -- out of the total 1.5 million lines of source code in Net2 -- hardly amounts to either copyright infringement or a material breach of the agreement not to distribute the University-owned enhancements that "contained" 32V code. In any event, USL's judicial admissions confirm that its claimed copyright in 32V has been waived. DeFazio Exhibit F establishes that 32V was created in 1978. USL's moving papers admitted that 32V was published in object code. But -- as the certificate attests -- the copyright in 32V was not registered until 1 991, long after the five year grace period expired. Although USL may claim copyright protection for its current version of Unix (SVR4), any copyright in the long-obsolete 32V code was forfeited years ago. USL's trade secret claim (at least on this record) is wholly specious because no specific trade secret has been identified by USL. First, insofar as USL would like to claim trade secret protection for,the 32V source code in its entirety, the claim is surely preempted by the Copyright Act. See 17 U.S.C. 301(a). Indeed, the bar of Section 301 (a) is so clear that USL makes no effort to dispute the point. Second, to the extent USL's expert claims trade secret protection for specific file names or values, Messrs. McKusick and Bostic previously demonstrated the documentation of those "secrets" in the public domain. USL's predecessor-- AT&T-- had agreed that the University need not keep secret "any information or technical data relating to the licensed software which is now available to the general public or which later becomes available to the general public" See DeFazio Decl., Exh. B, Para. 4.07. Even if the law recognized a claim where the alleged trade secrets were publicly documented (which it does not) it is far too late for USL to renege upon the release granted to the University in 1 4.07 of the 32V license. Finally, the equities in no way favor USL. As set out in detail in the University's amicus brief and supporting declarations, USL has incorporated huge portions of the University's code into its current SVR4 Unix operating system. USL does not deny that it pays the University nothing to use the original code and ~ functionality developed by the University, yet it charges over $200,000 per license for an operating system that is approximately 50% University code. A court sitting in equity cannot condemn a public university which has so freely bestowed its gifts upon a private corporation simply because it also has made them available for other members of the public to use. II. ARGUMENT A. NET2 IS NOT AN INFRINGING WORK USL would have the Court believe that McKusick's testimony that Net2 contains some 32V code -- regardless of how slight and insignificant that code maybe -- is some kind of "trump" card which dictates "the end of the case." USL should not be so smug: (1) the University's copyright in the derivative Net2 code is an absolute defense to USL's copyright claims; (2) USL has made no showing that the trivial (and accidental) duplication of 186 lines of 32V source code sprinkled among the 1.5 million lines of Net2 source code is either quantitatively or qualitatively substantial and its default on this critical issue renders it impossible for the Court to find infringement of any protectible expression in 32V (even if the University were not privileged to create derivative works). 1. The University Cannot Infringe Its Own Copyright USL's copyright claim proceeds upon an erroneous syllogism: i.e., (1)USL owns the copyright in 32V [fn.1]; (2) Net2 is a derivative work based upon 32V; therefore, (3) Net2 (or any program incorporating Net2) is an infringing work. The flaw in USL's reasoning was hidden from the Court in USL's opening papers but revealed by the University's amicus brief and supporting evidence. Although parts of Net2 may be derivative programs which enhanced and improved 32V, USL expressly granted the University the right to create such derivative works and -- furthermore-- granted the University ownership of all such derivative works. Accordingly, as the copyright certificates attached as Exhibits G and H to the DeFazio Declaration attest,the University holds the copyright in the BSD code (of which Net2 is a subset). USL inexcusably failed to bring to the Court's attention the numerous written, signed agreements between the parties in which AT&T surrendered any claim to joint ownership of the derivative BSD code: "AT&T does not assert any ownership interest in any modification or derivative work made by [the University].... " Karels Decl., Exh. A * * * "AT&T-IS claims no ownership interest in any portion of such modification or derivative work that is not part of a [AT&T] Software Product." Shapreau Decl., Exh. G. * * * "The Regents of the University of California (the University) is the proprietor and owner of enhancements and additions to 32V ... AT&T shall have no right, title or interest in or to such proprietary software...." Towers Decl., Exh. A. [fn.1] As the Court is well aware, the issue of whether the copyright in 32V has been forfeited is subject to much debate. For purposes of this section of the argument, however, the Court may assume that USL holds a valid 32V copyright. The University supplied the omissions in USL's half-told story by placing this critical evidence before the Court. Although USL dismisses these contracts as mere "wasted paper," the University trusts the Court sees their significance. Net2 cannot be an infringing work because the creation of the derivative code in Net2 was expressly authorized by AT&T and ownership of that derivative code was expressly given by AT&T to the University. Significantly, USL makes no effort to dispute the University's ownership of the copyright in the derivative code in Net2. For this obvious reason, this case is far different from cases such as SAS Institute, Inc. v. S&H Computer Systems. Inc., 605 F. Supp. 816 (M.D. Tenn. 1985) where the defendant had no right to create a derivative work, much less ownership of the copyright in such derivative work. Essentially, USL asks this Court to find the University has infringed its own copyright; that is a legal impossibility which the Court should not pause long to consider. [fn2] [fn2] The question of whether the Net2 software contains any significant portion of 27 | 32V code is a "red herring" in the context of USL's copyright claim because the University owns all of the derivative code it developed, including those 14 files (out of 4,176 Net2 files) which contain a smattering of original 32V code. USL may attempt to seek remedies under contract law for any material breach of the University's agreement not to distribute University-owned derivative programs which "contain" 32V code but USL has no copyright claim against Net2. B. DE MINIMIS "LITERAL COPYING" DOES NOT PROVE INFRINGEMENT In Universal Athletic Sales Co. v. Salkeld, 511 F.2d 904 (3rd Cir. 1975), the Third Circuit recognized the rule for cases (such as this one) of de minimis similarity:"[I]f the points of dissimilarity not only exceed the points of similarity, but indicate that the remaining points of similarity are (within the context of plaintiff's work) of minimal importance either quantitatively or qualitatively then no infringement results."511 F.2d at 909 n.4. Reversing a preliminary injunction, the Court of Appeals recognized that mere copying is not enough to prove infringement: "substantial similarity to show that the original work has been copied is not the same as substantial similarity to prove infringement." 511 F.2d at 911. USL must prove similarities between 32V and Net2 that are quantitatively or qualitatively substantial. Thus, USL's assertion that proof of trivial copying "establishes literal copyright infringement" and "renders unnecessary the substantial similarity analysis" is plain wrong. See Narell v. Freeman, 872 F.2d 907, 910 (9th Cir. 1989) ("A finding that a defendant copied a plaintiff's work, without application of a substantial similarity analysis, has been made only when the defendant has engaged in virtual duplication of a plaintiff's entire work.") USL has established neither quantitative nor qualitative substantiality on this motion. First, the 14 lines of common source code, the few common file names and two common comments are quantitatively de minimis. See Joint Decl., at 11 13, 28,39, and 47; Second Joint Decl., at 114, 6; Second McKusick Decl., at 12. Second,USL has made no effort to explain why -- qualitatively -- the 14 lines of common code (out of 1.5 million) or two comments (out of 33,350) are so important to either it or the University's work as to justify a finding of infringement. The only evidence before this Court is that the common code is insignificant and easily could be replaced and that the comments are automatically omitted from the program once it is compiled. Second Joint Decl., at 11 6.1, 6.2. This trivial, fragmented (and accidental, Second McKusick Decl., at 1 5) duplication of code/comments is insufficient to establish infringement. [fn3] [fn3] Compare, Feder v. Videotrip Corp., 697 F. Supp. 1165, 1176 (D. Colo. 1988) ("If, however, the similarity is only as to non-essential matters, then a finding of no substantial similarity should result... thus the Courts have applied a de minimis standard in ruling that some similarities, while suspect, may be too insignificant to arise to the level of 'substantial."'); Werlin v. Reader's Digest Assoc., Inc., 528 F. Supp.464 (S.D.N.Y. 1981) ("the Court finds the literal duplication that occurred hereto be so fragmented as to be de minimis, and accordingly declines to rely on this similarity to find copyright infringement."); Rokeach v. Avco Embassy Pictures Corp., 1097 U.S.P.Q. 156, 161 (S.D.N.Y. 1977) (one hundred words out of 70,000 a de minimis taking); R.L. Polk & Co. v. Musser, 105 F. Supp. 351, 353 (E.D. Penn. 1952)(less than one-half of one percent of a work being copied "was trivial and inconsequential").USL's citation of Harper & Row Publisher's. Inc. v. The Nation, 471U.S. 539 (1985) is off point because the misappropriated text was qualitatively the most important part of plaintiff's work. C. USL CANNOT DISTINGUISH ATARI GAMES AND COMPUTER ASSOCIATES USL misuses the opinion in Lotus Development Corp. v. Borland International Inc., 799 F. Supp. 203 (D. Mass. 1992). That case addresses duplication of a "user interface," i.e., the screen display generated by a program and the keystrokes used to operate it. Borland argued that its emulation of Lotus' screen display, menu structure and keystroke sequences were justified because people were familiar with Lotus 1-2-3, and therefore it had become a "standard." This case is far different. It does not involve mere user interfaces with which the public has become comfortable; this case deals with technical requirements. If certain header files, symbols or function names are not included in a system, that system simply will not work with certain applications programs or peripherals. See Joint Decl., at 1 28.3, 1 47. Thus, unlike Lotus, this case falls squarely within the description of the unprotected elements of a computer program set forth only a few months ago by the Federal Circuit: the unprotected elements of a computer program include "expression dictated by external factors (like the computer's mechanical specifications, compatibility with other programs, and demands of the industry served by the program) ..." Atari Games Corp. v. Nintendo of America. Inc., F.2d 24 U.S.P.Q.2d 1015, 1020 (Fed. Cir. 1992). See also Computer Assoc. International, Inc. v. Altai. Inc., __F.2d ___, 1992, 23 U.S.P.Q.2d 1241, 1252-3 (2nd Cir. 1992); Brown Bag Software v. Symantec, 960 F.2d 1465, 1475-6 (9th Cir. 1992); Apple Computer v. Microsoft Corp., 799 F.Supp. 1006, 1020-21 (N.D. Cal. 1992). USL's effort to distinguish Atari Games and Computer Assoc. is off base: contrary to USL's reading of those cases, they do not turn on when the infringed program was created. Indeed, the CONTU Report explicitly acknowledges that an original program may lose copyright protection under circumstances such as those presented here. "[C]omputer programs are, in essence, utilitarian articles - articles that accomplish tasks. As such they contain many logical, structural, and visual display elements that are dictated by the function to be performed, by considerations of efficiency, or by external factors such as compatibility requirements and industry demands. [citing Computer Assoc.] In some circumstances, even the exact set of commands used by the programmer is deemed functional rather than creative for purposes of copyright. When specific instructions. even though previously copyrighted. are the only and essential means of accomplishing a given task. their later use by another will not amount to infringement." Sega Enterprises. Ltd. v. Accolade, Inc., ___F.2d___, slip op. at 41. (9th Cir. 1993) (as amended), quoting CONTU Report at 20. All of the recent cases and the legislative history as set forth in the CONTU Report recognize that when the copyright holder's program was created is not important; what is important is whether the code in the accused work is "dictated by external factors." As explained in detail in the First Joint Declaration and the Second Joint Declaration, the header file names and symbols that are common to 32V and Net2 are required by the need for "compatibility with other programs and demands of the industry served by the program." Atari Games, supra. As such, they are not protectible by USL's claimed copyright in 32V. D. USL FORFEITED ITS COPYRIGHT IN 32V USL forfeited its copyright in 32V when it globally published 32V without a copyright notice and failed to timely cure the notice defect. USL's use of the limited publication argument to escape the consequences of its conduct stretches the bounds of the limited publication doctrine beyond all reasonable parameters in light of USL's admissions that: 32V was created in 1978 (DeFazio Decl., Exh. F); 32V was distributed in source and object code to thousands of licensees around the world (Exh. M and 0 to Forte Aff.; Greene Depo., at 82:20; 83:7-9 attached to the Shapreau Decl.); USL published 32V in object code (USL's Moving Papers at 11 and 27 and Reply at page 5 footnote 10 and page 10, first bullet);[fn4] USL failed to affix copyright notices to its 32V UNIX operating system in both source and object code until 1984 (Pfeffer Decl.,at Paras 4-5;[fn5] see also McKusick Decl., at Para. 5 and Joint Decl., at Para 28.4; Exhibit A attached to the Second Shapreau Decl. and Shapreau Decl., at 12; compare Exhibit A attached to the Second Karels Decl. and Karels Decl., at Para. 2)[fn6] and USL failed to register 32V until 14 years after it first published this work. DeFazio Aff., Exh. F. USL is mistaken when it claims that the University has not looked in the proper place for USL's missing copyright notices. The University has looked at a copy of the container for the source code version of 32V and found no copyright notice affixed. Exhibit A, attached to the Second Shapreau Decl.; see also McKusick Decl., at 1 5. In addition, the header files contained in the object code version of 32V have likewise [fn4] USL does not dispute the University's legal argument and authority that the source and object code for 32V are but one work. [fn5] USL's Mr. Pfeffer has admitted that: No copyright notice was included in those [object code] files in order to avoid any possible implication that AT&T had "published" these files so as to deprive them of their trade secret status. Pfeffer Decl., at Para. 4. In 1984,when AT&T initiated its general purpose computer business, it decided that the binary code which it was planning to provide with such computers should bear a copyright notice in the name of AT&T." Id. at Para. 5. [fn6] USL erroneously contends in footnote 10 of its Reply that because the copyright notice requirements have been removed from post-Berne Convention Implementation Act works, that USL should be relieved of the statutory requirements of the 1976 Copyright Act. If Congress had intended the Berne Convention Implementation Act to be retroactive, it would have provided for such a result. Instead, Congress specifically required that copyright notice be affixed to "copies...publicly distributed ...before the effective date of the Berne Convention Implementation Act of 1988...." 17 U.S.C. Section 405(a). SUPPLEMENTAL AMICUS BRIEF BY DEFENDANT THE REGENTS 10 entered the public domain as a result of publication without copyright notice. Joint Decl., at 1 28.4; see also Second Karels Decl., and Exhibit A attached thereto.i Moreover, USL's reliance on Exhibits 1-4 attached to the Weitz Reply Aff., as evidence that copyright notices were properly affixed to its 32V code is nothing short of ridiculous, in light of the fact that Exhibits 1-4 are not versions of 32V and are, therefore, irrelevant.~ Moreover, Sun Microsystems copyright notices, affixed to Exhibits 1-2, did not transform 32V, which had already entered the public domain, into a properly copyrighted work.9 USL incorrectly claims at footnote 21 that a copyright notice in a derivative work is "deemed notice of the copyright in all underlying works." As Nimmer has pointed out: if the underlying work itself had previously been published without a copyright notice, then a derivative work incorporating such pre- existing work cannot, under any circumstances regardless of the notice used,serve to revive the pre-existing work, which had theretofore entered the public domain. Nimmer, Nimmer On Copyright, 7.12[C], at 7-100.1(1992) . [fn7] USL's citation to Koontz v. Jaffarian, 787 F.2d 906, 909-910 (4th Cir. 1986) does not support its copyright notice argument because even if USL had provided reasonable copyright notice for its code within its 32V manual (which it did not), no notice existed whatsoever for the multitude of copies of 32V code distributed through Western Electric and AT&T's source code exchange program, in which copies of 32V were exchanged without a manual. Moreover, in the case of a time-sharing system such as 32V, it is highly doubtful whether a copyright notice affixed to a manual or to packaging would give reasonable notice of the claim of copyright under 17 U.S.C. Section 401(c); see also Nimmer, Nimmer on Copyright, 7.10[A][1], at 7-69 (1992).. [fn8] The University does not contend that USL's forfeiture of its copyright in the antiquated, outdated 32V version of the Unix operating system constitutes a forfeiture of USL's copyright in subsequent versions of the UNIX operating system which contain new code. Therefore, copyright notices contained in System III and V code are not germane to this litigation [fn9] The University's copy of the copyright notice purportedly affixed to Exhibit 4 attached to the Weitz Aff. is not legible and Exhibit 3 does not appear to contain any copyright notice. Moreover, if USL had carefully read Stewart v. Abend, 495 U.S. 207 (1990), cited by USL, it would have discovered that the case involved the issue of whether the owner of a derivative work infringed the rights of a successor owner of the preexisting work by continued distribution and publication of the derivative work during the renewal term of the pre-existing work. In fact the Supreme Court quoted the 'well-established doctrine that a derivative copyright protects only the new material contained in the derivative work, not the matter derived from the underlying work.' Stewart v. Abend 495 U.S. 207, 223 (1990) quoting, Russell v. Price, 612 F.2d 1123, 1128 (9th Cir. 1979), cert denied, 446 U.S. 952 (1980). In fact, the Copyright Act itself addresses this very issue in Section 103(b) which provides: The copyright in a compilation or derivative work extends only to the material contributed by the author of such work, as distinguished from the preexisting material employed in the work, and does not imply any exclusive right in the preexisting material. The copyright in such work is independent of, and does not affect or enlarge the scope, duration, ownership, or subsistence of, any copyright protection in the preexisting material. 17 U.S.C. Section 103(b). Accordingly, USL's widespread distribution of 32V without a copyright notice has injected 32V into the public domain. 1. Congress' Definition of Publication Under The 1976 Copyright Act Does Not Alter USL's Forfeiture of its Copyright in 32V USL mistakenly contends that under the 1976 Copyright Act its "contractual restrictions [alone] negate any requirement of notice" (Moving Papers, at 6 and 7). USL's incredible contention that the "selected group" requirement no longer exists under the 1976 Act is unsupported by the Copyright Act, cases construing it and the commentators. [fn10] [fn10] USL suggests that cases which continue to apply the three part test promulgated in Kimmell are "patently inconsistent with the intent of Congress and should not be followed." Moving Papers at 8. USL does not cite one single case to support its rather unique legal position. Instead, USL cites a "work for hire" case hoping that will do. For example, Goldstein, in The Law of Copyright, analyzes the House Report discussion of limited publication in the 1976 Act, which characterizes the "public" as "persons under no explicit or implicit restrictions with respect. to disclosure of [a work's] contents," [fn11] in which Goldstein states: Congress arguably intended to drop the first element of the test employed under the 1909 Act [the selected group requirement]. But the reference to restrictions on "disclosure," rather than to restrictions on "copying" as required under the 1909 Act, suggests that Congress probably contemplated distribution to a limited group beyond which thework would not be disclosed. Courts have adopted this construction.... (citations omitted, emphasis added). Goldstein, Copyright, Section 3.3.1, at 258; see also Nimmer, The Law of Copyright, Section 4.13[B], at 4-72-73 and the cases cited therein. [fn11] H.R. Rep. No. 1746, 94th Cong., 2d Sess. 138 (1976). Furthermore, USL is confused when it cites to the legislative history to support its contention that Congress adopted the definition of "publication" in the1976 Act because it viewed the common law definition of "publication" (as crystallized in White v. Kimmell, 193 F.2d 744, 746-747 (9th Cir. 1952) as "defective." Moving Papers, at 6-7, quoting, H.R.Rep. No. 1476, 94th Cong., Second Session, 129- 130 (1976). The House Report to which USL selectively cites at pages 129-130 discusses "publication" in the context of preemption of common law copyright claims under Section 301 of the 1976 Act and the need for national uniformity in copyright protection, as well as the change in the nature of "publications" in light of the 20th Century communications revolution. The legislative history does not, as USL suggests, criticize the three part test used by the courts to determine when a "limited publication" occurs. [fn12] [fn12] Reference to other sections of the 1976 Copyright Act, and its legislative history, which focus on the issue of when copyright interests are implicated by public distribution, (although not on point) may aid the Court in its determination of whether 32V has been distributed beyond a "selected group." For example, the Copyright Act makes clear that a copyright will not be invalidated if copyright "notice has been omitted from no more than a relatively small number of copies... distributed to the public....17 U.S.C. Section 405(a) (emphasis added). In addition, under clause (1) of the definition of "publicly" in section 101 (the definitions section of the Act) a performance or display is "public" if it takes place "at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered." H.R. Rep. No. 1746, 94th Cong., 2d Sess. at 64 (1976). 2. USL Distributed 32V Well Beyond A Selected Group As amply discussed in the University's Amicus Brief at 28:1-29:16, USL has failed to meet the "selected group" requirement. The cases cited by USL do not undercut the University's facts and law which demonstrate that USL has published 32V to a non-selected group. Both Paramount Pictures Corp. v. Rubinowitz, 217 U.S.P.Q. 48 (E.D. N.Y. 1981) and National Broadcasting Co., Inc. v. Sonneborn, 630 F.Supp. 524 (D. Conn. 1985), arose under the 1909 Act and the courts' discussion of the 1976 Act is mere dicta. However, neither of these opinions states that the selected group requirement does not exist under the 1976 Act. [fn13] PRC Realty Systems v.National Ass'n of Realtors, 766 F.Supp. 453, 461 (E.D. Va. 1991 ), rev'd in part without opinion, 972 F.2d 341 (1992), summarily disposes of the publication issue without any discussion of the change in the publication analysis in the 1976 Act with respect to the selected group requirement. Therefore, because USL cannot satisfy the selected group requirement, its limited publication argument must fail. ...[fn13] Moreover, in National Broadcasting Co.. Inc. v. Sonneborn, 630 F.Supp. 524 (D. Conn. 1985), the court noted that "[t]he number of persons with the technical ability to broadcast or copy 'Peter Pan' was relatively small in the early to mid 1960's." Id. at 536. This comment indicates that had a large number of individuals had sufficient technical ability to copy or broadcast the work, a general publication might occur. 3. USL Did Not Distribute 32V For A Limited Purpose USL fails to address the "limited purpose" requirement which focuses on the publisher's conduct (not on restrictions placed on the recipient of the work) and requires that the publication be for a limited purpose, such as review, criticism, promotion, education, or performance. Instead, USL contends that one of the general purposes of the copyright law, i.e., to encourage creativity by enabling copyright authors to profit from their work, is sufficient to meet this requirement; it is not. See the University's Amicus Brief, at 30:15-31:18 and cases cited therein. As such, USL's limited purpose argument falls short of meeting the required showing of a limited purpose in its publication of 32V. CONCLUSION For all of the foregoing reasons, this Court should rule that Net2 is not an infringing work even if USL possess a valid copyright in 32V. Nor should the Court find that the University misappropriated any trade secrets by releasing Net2. DATED: January 19, 1993. CROSBY, HEAFEY, ROACH & MAY Professional Corporation By Joel Linzner Attorneys for Defendant Regents of the University of California POST, POLAK & GOODSELL By Frederick B. Polak Attorneys for Defendant The Regents of the University of California