In 1988 Ashton-Tate charged Fox Software with copyright infringement for copying the command structure of the user interface of its popular data base program known as "dBASE."
Ashton-Tate latter was acquired by another software development firm, Borland International. Borland was a defendant in a similar lawsuit brought by Lotus Development Corp. By virtue of its ownership of Ashton-Tate, Borland was in litigation on both sides of the same issue.
Because of concerns about the market power Borland would have in the database market if it owned copyrights in both dBASE and its own database product and could exclude competitors like Fox from offering commercially viable substitute programs, the Justice Department conditioned its approval of Borland's acquisition of Ashton-Tate on its seeking a prompt resolution of the two user interface copyright lawsuits in a manner that will not give Borland undue market power.
In the early 1990s, while Microsoft had yet to ship its own desktop database ,the only key application that the software giant did not sell, Borland had two: the market-leading dBASE, and Paradox, an easy-to-use product for consumers.
Microsoft poured money and dozens of developers into a project to build a desktop database, code-named Cirrus. In the making for nearly three years, Cirrus would become Microsoft Access, which was its leading database, bundled with Microsoft's nearly ubiquitous Office application suite.
Microsoft's onslaught continued in March of 1992. To counter dBASE, a favorite of business application developers at the time, Microsoft shelled out $173 million in a merge with Fox Software, makers of FoxPro, the No. 2. database on the market.
Microsoft's merge with Fox Software was well timed. The two companies had been in negotiations for three years, but talks didn't get serious until a threatening lawsuit against Fox Softwarec was lifted. The suit was filed in 1988 by Ashton-Tate, which Borland acquired in 1991. Ironically, after Borland acquired Ashton-Tate, the company dropped the suit under pressure from the Justice Department and promised not to file a similar suit for ten years, clearing the way for Microsoft's acquisition.
The day the news broke, Borland's stock dropped by 10 percent, and the downward spiral had begun. For the next three years, Borland executives would spend all of their time and energy battling Microsoft.
The California Court's Decision
When Ashton-Tate filed its copyright infringement suit against Fox Software and Santa Cruz Operation in November 1988, it could hardly have imagined a worse outcome than it experienced two years later at the hands of federal judge Terry Hatter. Ashton-Tate's suit alleged that Fox and SCO's "FoxBASE" line of programs infringed Ashton-Tate's copyrights in dBASE II, dBASE III, dBASE III Plus and dBASE IV. In its complaint, Ashton-Tate claimed that the "organization, structure and sequence" of the dBASE programs reflected forms of expression "original" to Ashton-Tate and that Fox and SCO had illegally copied the "unique look and feel" of the programs, including "commands, menus and text."
Brooks & Kushman has successfully handled major computer software litigation throughout the country, including the defense of Fox Software of Perrysburg, Ohio in the Ashton-Tate copyright case.
On December 11, 1990, Judge Hatter issued an order invalidating Ashton-Tate's copyrights in its own dBASE line of programs, the foundation of its business, on the ground that Ashton-Tate had knowingly deceived the United States Copyright Office when it filed its copyright registrations for the dBASE programs. The court stated that although Ashton-Tate knew that its programs were derived from JPLDIS, a public domain program developed by the Jet Propulsion Laboratory, it had "repeatedly failed" to disclose this fact to the Copyright Office when it filed its copyright applications for the programs.
The sanction imposed by the court on Ashton-Tate falls under the quaintly (but descriptively) named legal doctrine of "unclean hands." The defense of unclean hands may be raised by the defendant in a copyright suit when the plaintiff has acted in a highly inequitable manner with respect to the work in question (e.g., by procuring a copyright through fraudulent representations made to the Copyright Office). However, because the copyright owner's transgression must be of serious proportions, this defense is seldom successful. Judge Hatter's rare application of the rule indicates that he found Ashton-Tate's failure to disclose the antecedents of its programs to have been intentional, rather than negligent or inadvertent.
The consequence of the ruling, if it is upheld on the appeal which Ashton-Tate is certain to seek, is to strip Ashton-Tate of its copyright rights in dBASE, and permit any company to copy the user interface of the program.