Ben Baker, 44/76 SEA vs PKWare - What's It About? I suppose most of you know by now know t
Ben Baker, 44/76
SEA vs PKWare -- What's It About?
I suppose most of you know by now know that System Enhance-
ment Associates (SEA) is suing Phil Katz and PKWare. There has
bee a lot of comment (I hesitate to call it discussion) on the
suit in conferences in FidoNet and the commercial services. Most
of what I have read gave me the impression that the writer
thought about it for at least 30 milliseconds, then flamed! So
what's it really about?
First, a little history. In CP/M days, there were a number
of utilities for compressing and decompressing files, based on
the Huffman coding technique. The most popular were called SQ
and USQ, but there were several variations. There was at least
one utility called LIB, which did not do compression (remember
the total memory space was only 64K, and CP/M used at least 4K of
that), but it did collect files, "squeezed" or otherwise, into a
single file so that they could be treated as a unit.
When MS-DOS came along, many of the old CP/M utilities were
ported. Among them were several (often incompatible) variations
of SQ/USQ. Our own Tom Jennings ported LIB to DOS. DOS BBS op-
erators then had all the functionality they had in CP/M; they
could compress files, and they could pack them into "library"
files, in separate steps of course. But DOS wasn't memory poor
like CP/M. The climate was right for something "new." Enter
Henderson, one of SEA's principals, borrowing from concepts
developed by Brian Kernigan, wrote a "library" utility which
overcame a limitation of LIB by using a distributed directory in-
stead of a fixed-length directory at the front of the file. It
also had built-in Huffman code compression, eliminating the need
for SQ/USQ. He called it ARC. Almost overnight, it became a
standard among bulletin board operators.
As ARC developed, it acquired a number of useful features,
encryption and LZ compression, for example, stirring interest in
the commercial marketplace. Thus ARC became one of those prod-
ucts marketed both commercially and as shareware.
In an effort to encourage porting ARC to other systems such
as Unix, SEA made the sources for ARC available for download on
its bulletin board. These files bear the SEA copyright notice,
and before people may legally do anything with them other than
study them, they need SEA's permission. When someone asks per-
mission to port, it is granted with three restrictions on the re-
sulting program: it may not be sold, it may not be used commer-
cially and a copy must be submitted to SEA for redistribution
(under the same restrictions). Someone may also use the sources
in a commercial product, but in this case, a source license fee
is charged and the resulting program may NOT be a general purpose
A short time later PKXARC appeared on the scene, followed
quickly by PKARC. Katz hadn't followed the rules, but then, ARC
wasn't making anybody rich as shareware, and Katz wasn't address-
ing the much more lucrative commercial market SEA had developed
for ARC, so SEA overlooked it. Then, last year, an ad for PKARC
and PKXARC appeared in "PC Tech Journal" on the page facing SEA's
ad for ARC. Katz' ad priced the product a dollar and a half less
than ARC, and even went so far as to make comparisons to "the
other ARChive utility."
SEA then sent a "cease and desist" letter to PKWare, propos-
ing the following agreement: PKWare would withdraw all commer-
cial advertising and cease attempts at commercial distribution,
and SEA would forgive past violations and grant PKWare an unlim-
ited cost-free license to market its derivative products as
shareware with a non-commercial restriction. Katz refused.
I suspect, though I don't know, that there were additional
exchanges between SEA and PKWare. Were it me, I would have de-
manded a source license fee and royalties on sales to date. In
any event, no agreement was reached, so SEA filed suit.
As I understand it, there are four counts in the complaint
(not necessarily in this order): 1) "look-and-feel" violation, 2)
copyright violation, 3) trademark violation, and 4) unfair trade
practice. Let's look at them one at a time.
I placed "look-and-feel" first because it's fairly easy to
dismiss. I personally don't think SEA has a prayer on this one.
"Look-and-feel" is the current legal buzz-word so SEA's lawyer
tossed it in, but I can't imagine it applying in this case.
A concept or idea cannot be copyrighted, but the expression
of a concept or idea sure can, and a program is the expression of
one or more concepts or ideas. If the development of PKXARC and
PKARC were entirely independent of ARC, merely employing the con-
cepts used there, then the second count cannot be sustained. If
it can be shown that Katz obtained or had access to the sources
for ARC, then he probably infringed on SEA's copyright. If it
can be shown that he actually used them in developing his pro-
grams, then he IS guilty of copyright infringement. Even if he
translated them to assembly language, he violated the copyright.
Translating a novel from English to German without the permission
of the author and/or publisher is prohibited by copyright laws
world-wide. Same principle.
Is ARC a trademark? As relating to archiving or compression
utilities, you bet. Does the name "PKARC" violate that trade-
mark? Suppose I developed a new soft drink and began marketing
it under the name "BBCOKE." How quickly would I find myself in
court? And isn't there a network developer using the name "ARC,"
and are they in jeopardy? No! If I were a fuel dealer, I could
sell all the "Coke" (a coal derivative) I wanted and the Coca
Cola Co. couldn't care less. This one will be tough for Katz to
Why is a trademark important, anyway? A company spends con-
siderable effort, not to mention money, establishing a trademark.
I mentioned Coke in the previous paragraph. Did anyone have any
doubt what company I was referring to? This is called "product
recognition" and it is an extremely valuable asset. SEA has it
with "ARC," but that didn't just happen. They worked at it. My
"BBCOKE" would be trading on product recognition it didn't earn
on its own. If I then sought out advertisements for Coca Cola,
and placed ads of my own, claiming (whether right or not) "BBCOKE
is better than the other cola" next to all I could find, would I
be engaging in fair trade? Do you think I could argue that I was
not trying to deliberately undermine the effect of their adver-
tising and take advantage of their recognition? Do you suppose
that Coca Cola would give me the courtesy of a letter before they
fell on me like a ton of bricks? If any of the first three
counts can be sustained, then the fourth probably should be also.
A recent "PC Week" article has caused considerable comment
on this issue. One mentioned a "fact" cited in the article that
PKWare was a four-employee company operating out of Katz' home,
and implied this was a Goliath attacking a David. The "facts"
may or may not be true. The article was so badly written and so
poorly researched as to call into question all of its "facts."
The fact is that SEA is a four-employee (counting the principals)
company. The Wayne (not Fort Wayne) NJ corporate address is Andy
Foray's home. These are TWO small companies. Neither has the
resources to pursue a protracted legal battle. I think we can
expect a reasonably quick resolution.
So how does it all affect you? Will you still be allowed to
use a Unix port of ARC? Of course. Most ports have been made
with permission, and even those which have not are not encroach-
ing on SEA's commercial market. Will you still be able to use
PKARC or PKXARC copies you obtained through shareware? You did
so in good faith and SEA has neither the resources nor the in-
clination to search you out and persecute you. In fact, should
Katz lose the suit, he might still be granted a license to market
his programs as shareware. For that, we'll have to await the fi-
nal resolution. SEA is NOT being vindictive. They are trying to
protect what they regard as a valuable commercial asset.
If you are a shareware software developer, as I am, it may
affect you in a different way. The lawyers have been telling us
for several years that the copyright laws do in fact protect
products marketed as "shareware." But so far, no court has said
so, and the courts of the land are the final arbiters of the law.
A win for SEA, particularly on the second count above, would
place all, big or small, on notice! Shareware is NOT public do-
main! A win for Katz, on the other hand, is a signal to share-
ware authors, and a source of inexpensive, quality software might
well dry up. If that happened, it would hurt developers and
users alike. Think about it.
E-Mail Fredric L. Rice / The Skeptic Tank