Reverse engineering in limbo

A recent U.S. Supreme Court decision shedding doubt on the legality of reverse engineering could have a significant impact on the way software is commonly developed and improved.

The legality of reverse engineering, generally defined as reversing software's machine code back to the source code to build or improve new offerings, is now in question. A lower court found that a software company had violated a shrink-wrapped license contract when it reverse engineered a competitor's piece of software. The Supreme Court has decided not to hear the accused software company's appeal.

Outlawing the widespread practice of reverse engineering may force developers away from current product-building methods, lead to fewer investments in startups that rely on the practice, and could present new challenges with product interoperability, according to observers.

The breach of contract ruling applies only to the U.S. Court of Appeals for the Federal Circuit. But the Supreme Court's lack of action could embolden some software companies to prohibit reverse engineering or take away other fair-use rights allowed under copyright law by including such prohibitions in their EULAs (end-user license agreements), said Karen Copenhaver, a patent and intellectual property lawyer at Boston-based Testa, Hurwitz, and Thibeault.

The case in question, Bowers v. Baystate Technologies, involves software inventor Harold L. Bowers, who alleged that Baystate violated a section of his software's EULA that forbade users from reverse engineering his software. A lower court agreed and awarded Bowers $5.27 million.

As a result of the case, EULAs could become more restrictive, Copenhaver said.

Contracts between two software developers that prohibit reverse engineering may be appropriate, Copenhaver said, but broad prohibitions in EULAs would hinder software companies trying to check out competitors' products.

The case could lead to more reverse engineering lawsuits and fewer investments in software startup companies, which often use some form of reverse engineering to create new products, according to Andrew Greenberg, a lawyer at Carlton Fields law firm in Tampa, Fla.

“Reverse engineering is just plain what everybody does,” Greenberg said. “The way [software companies] decide how to compete is by looking at our competition’s product and deciding how to improve it.”

Furthermore, the case puts in doubt reverse engineering for the purposes of creating a piece of software that interoperates with another program. It also gives shrink-wrap licenses more legal standing than U.S. copyright law, which has traditionally protected reverse engineering, Greenberg added.

“Interoperability of products is one of the key features that made things like the Internet possible,” Greenberg said. “The case, at its heart, would rewrite the copyright law and put it in a shrink-wrap."