Syntek Semiconductor Co. v. Microchip Technology

• Decision Date: 08 April 2002
• Docket Number: No. 00-17352,00-17353 and 01-15641.,00-17352
• Citation: 307 F.3d 775
• Parties: SYNTEK SEMICONDUCTOR CO., LTD., Plaintiff-Appellant, v. MICROCHIP TECHNOLOGY INCORPORATED, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

307 F.3d 775

SYNTEK SEMICONDUCTOR CO., LTD., Plaintiff-Appellant, v. MICROCHIP TECHNOLOGY INCORPORATED, Defendant-Appellee.

Nos. 00-17352, 00-17353 and 01-15641.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted October 18, 2001.

Filed April 8, 2002.

Amended August 16, 2002.

Second Amendment October 2, 2002.

COPYRIGHT MATERIAL OMITTED

Sean D. Garrison, Lewis and Roca LLP, Phoenix, AZ, for the plaintiff-appellant.

Chad S. Campbell, Brown & Bain, P.A., Phoenix, AZ, for the defendant-appellee.

Before: GOODWIN, HUG and THOMAS, Circuit Judges.

ORDER

The opinion filed April 8, 2002 appearing at 285 F.3d 857 (9th Cir.2002) is amended as follows:

At 285 F.3d at 864, delete all text from "However, if application of the doctrine of primary jurisdiction is limited to an issue in the pending action, rather than the entire dispute, then the court normally should stay the proceedings pending agency action" up to and including the last sentence of Section IV.

In lieu thereof, replace with the following material: "However, the question of whether a party is "unfairly disadvantaged" by dismissal must also be considered. Reiter, 507 U.S. at 268-69, 113 S.Ct. 1213. Because the statute of limitations may prevent Syntek from refiling its claim if necessary at the conclusion of its administrative challenge to the Copyright Office's decision, we stay the proceedings pending the outcome of the administrative process."

With the opinion thus amended, the panel denies Syntek's petition for rehearing.

IT IS SO ORDERED.

ORDER

The mandate issued on September 9, 2002 is hereby recalled.

The opinion filed April 8, 2002 appearing at 285 F.3d 857 (9th Cir.2002) is further amended as follows:

1. At 285 F.3d at 859, delete the phrase "We conclude that, under the circumstances presented by this case, the doctrine of primary jurisdiction requires dismissal of this action in order that the parties may pursue administrative remedies."

In lieu thereof, replace with the following material: "We conclude that, under the circumstances presented by this case, the doctrine of primary jurisdiction requires us to stay this action in order that the parties may pursue administrative remedies."

2. At 285 F.3d at 864, delete the phrase "We vacate the judgment of the district court and remand with instructions to dismiss the action without prejudice pursuant to the primary jurisdiction doctrine in order that the parties may pursue appropriate administrative remedies before the Copyright Office."

In lieu thereof, insert the following sentence: "We vacate the judgment of the district court and remand with instructions to stay the action pursuant to the primary jurisdiction doctrine in order that the parties may pursue appropriate administrative remedies before the Copyright Office."

The mandate shall issue forthwith.

IT IS SO ORDERED.

OPINION

THOMAS, Circuit Judge.

In this appeal, we consider whether a party may obtain a judgment declaring that a copyright registration owned by another is invalid. We conclude that, under the circumstances presented by this case, the doctrine of primary jurisdiction requires us to stay this action in order that the parties may pursue administrative remedies.

I

Both Syntek Semiconductor Co., Ltd. ("Syntek"), a Taiwanese corporation, and Microchip Technology Inc. ("Microchip"), a Delaware corporation, design, manufacture, and sell microcontrollers. Microcontrollers, occasionally referred to as microcomputers, are highly integrated circuits used to control a particular system or process in an electronic product. The operation of microcontrollers is dictated by low level programming microinstructions called microcode, which are fixed in storage. Microchip manufactures and sells the PIC 16C5x microcontrollers, which contain the PIC 16C5x microcode at issue in this action. Syntek challenges the validity of Microchip's U.S. copyright registration of the PIC 16C5x microcode.

The parties' dispute began in 1992, when Microchip came to believe that Syntek had begun to make and sell unauthorized clones of Microchip's PIC 16C5x microcontrollers in Taiwan. In anticipation of potential litigation against Syntek, Microchip registered its PIC 16C5x microcode with the U.S. Copyright Office. In late 1992, Microchip filed a complaint for copyright infringement against Syntek in the Taipei District Court. The Taiwan public prosecutor indicted Syntek in 1993. Syntek and Microchip settled that lawsuit, with Syntek agreeing to pay Microchip $400,000 and cease manufacturing the products that Microchip had identified as infringing.

In 1994, Microchip again came to believe that Syntek was manufacturing and selling products that infringed Microchip's copyright in the PIC 16C5x microcode. Microchip investigated and then presented its findings to the public prosecutor in Taiwan, who indicted Syntek and two of its senior officers for criminal copyright infringement. In April of 1999, the Taiwan criminal court found Syntek's officers guilty of criminal copyright infringement. Syntek has appealed that decision.

In March of 1999, as the Taiwan criminal proceedings were drawing to a close, Syntek filed this suit, challenging the validity of Microchip's copyright registration. In this suit, Syntek alleges that it has been harmed by Microchip's possession of an invalid copyright registration in two distinct ways. First, Syntek alleges that it has been harmed by Microchip's ability to use its copyright registration as evidence in the Taiwan court proceedings. Second, Syntek alleges that it has been harmed by Microchip's ability to use its registration to threaten Syntek's customers with liability for copyright infringement if they purchase Syntek's products. In response to these harms, Syntek filed this action seeking a declaratory judgment that Microchip's U.S. copyright registration of the PIC 16C5x microcode is invalid because Microchip did not comply with the applicable regulations when registering its program. The district court granted summary judgment for Microchip on the basis that Microchip complied with applicable copyright regulations. Syntek timely appealed.

II

Microchip's PIC 16C5x microcode is a computer program. Computer programs are works of authorship entitled to protection under the Copyright Act. 17 U.S.C. § 101, 102. The Copyright Act defines a computer program as "a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result." 17 U.S.C. § 101. Computer programs can be expressed in either source code or object code. "Source code is the computer program code as the programmer writes it, using a particular programming language." Compendium of Copyright Office Practices, § 321.01. Source code is a high level language that people can readily understand. "Object code is the representation of the program in machine language binary ... which the computer executes." Id. at § 321.02. Source code usually must be compiled, or interpreted, into object code before it can be executed by a computer. Object code can also be decompiled into source code. Source code and object code are "two representations of the same computer program. For registration purposes, the claim is in the computer program rather than in any particular representation of the program." Id. at § 321.03. However, source code created by decompiling object code will not necessarily be identical to the source code that was compiled to create the object code.

The Copyright Act requires that a party seeking to register a copyright deposit two complete copies of a published work, 17 U.S.C. § 408(b)(2), where copies are defined as "material objects ... in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device." 17 U.S.C. § 101. The Copyright Act allows the Register to "require or permit ... the deposit of identifying material instead of copies" for particular types of works. 17 U.S.C. § 408(c)(1). The Register has enacted regulations which allow for the deposit of "identifying portions," rather than copies, for computer programs. 37 C.F.R. § 202.20(c)(2)(vii)(A). The regulations define "identifying portions" as "the first and last 25 pages ... of the source code" or the entire source code if the program is 50 pages or less. 37 C.F.R. § 202.20(c)(2)(vii)(A)(1). The regulations do not explicitly provide for the deposit of object code. However, both Copyright Office Circular 61, Copyright Registration for Computer Programs, and Compendium II, the Compendium of Copyright Office Practices, allow for the deposit of object code instead of source code. Circular 61, page 2; Compendium II, § 324.04. Both of these publications provide that the deposit of object code leads to a rule of doubt registration, or a registration without the ordinary presumption of validity, because the deposit of object code does not allow the Register to determine the existence of copyrightable material. Id.

Microchip did not have in its possession the original PIC 16C5x source code when it registered its program with the Copyright Office; so Microchip deposited source code that it had decompiled from the object code embedded in the PIC 16C5x computer chip. Microchip informed the Copyright Office of the nature of its deposit, stating that "the source code listing provided ... is a listing which was regenerated from the object code of the work because Applicant could not, after a reasonable search, find a listing of the source code of the work." Provided with this information, the Copyright Office registered Microchip's copyright. Syntek claims that the Copyright Office should not have registered the code because the decompiled source code that Microchip deposited did not comply with the applicable regulations as it is not a bona fide copy of the original source code.¹

III

Under...