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25 IPL Newsl. 1 (2006-2007)

handle is hein.journals/iprolane25 and id is 1 raw text is: A Publication of The ABA Section of Intellectual Property Law www.abanet.org/intelprop Volume 25, Number 1: Fall 2006 Judicial Support for Serniconductor Reverse Engineering BY TERRY LUDLOW The lights are bright in the surgery, but this isn't a hospital. A man in a lab coat is engaged in a delicate operation. By means of a precise and rigorous exploratory surgery, he will find out exactly what he needs to know- Let's take a closer look. He's operating on...a Terry Ludlow cell phone? The expert analyst in this sce- nario is not employing a surgical procedure to repair the cell phone; in fact, he is making use of reverse engineer- ing to determine how the phone works in order to gain competitive intelligence on it and possibly to see if it might be infringing any patents. Reverse engineering brings to mind one main question for the intellectual property lawyer: Is it legal? By exploring the historical context of reverse engineering and looking at a few modern cases dealing with reverse engineering and intellectual property regimes, it is discovered that not only is reverse engineering legal, but it is also a means of maintaining competition that is fair and healthy for the marketplace. Historical Context Historically, the ethical basis for reverse engineering is linked to the importance that copyright law ascribes to copying as an integral step in advancing knowledge. In 1989, in Bonito Boats Inc. v. Thunder Craft Boats,' Justice Sandra Day O'Connor of the U.S. Supreme Court stated: From their inception, the federal patent laws have embod- ied a careful balance between the need to promote innova- tion and the recognition that imitation and refinement through imitation are both necessary to invention itself and the very lifeblood of a competitive economy. The novelty and nonobviousness requirements of patentability embody a congressional understanding, implicit in the patent clause Terry Ludlow is the founder and CEO of Chipworks, a reverse-engineering company. He may be reached at Tludlow@ chipworks.com. itself, that free exploitation of ideas will bt the rule to which the federal protection of a patentis the exception. The public at large remains free to discover and exploit the trade secrets through reverse engineering of products in the public domain or by independent develop- ment... Reverse engineering of chemical and mechanical articles in the public domain often leads to significant advances in technology. The competitive reality of reverse engineering may act as a spur to the inventor creating an incentive to develop inventions which meet the rigorous requirements of patentability. Reverse engineering is widely accepted in industry as a means for companies to obtain competitive intelli- gence. Every year, General Motors, for example, strips down dozens of brand new vehicles from their competi- tors to see what those competitors are doing.2 In this way, it can find new ways to improve its own processes and perhaps lower costs. Every progressive company does competitive intelligence as a means to anticipate or (continued on page 30) pp Keeping Current with the Chair ................. 3 Patent Securitizations, Patently Bad Idea? Risk/Benefit Approach Reveals Possible Reasons for Lack of Patent Securitizations ........... ..................... 4 The eBay Effect: Real Change or Status Quo? An Examination of Requests for Injunctive Relief in Patent Actions since eBay v. MercExchange .............. 14 The Myth of Copyleft Protection: Reconciling the GPL and Linux with the Copyright Act ............ 22 Tax Strategies Are Not Patentable Inventions ........ 35 FP Group News ............................... 40 Recent Developments in Intellectual Property Law .... 44 THE A PropN CF Intellectual Property Law Defending Liberty Pursuing lustice VISIT THE SECTION WEB SITE AT WWW.ABANET.ORG/INTELPROP

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