Software Arts, Lotus Trial Opens in Federal Court

Jane Fitz Simon,
The Boston Globe

September 8, 1988

The first day of trial in Software Arts vs. Lotus Development Corp. added more paper to already massive files but did little to clarify the facts.

At issue is whether Software Arts has the right to sue Lotus for copyright infringement and misappropriation of trade secrets related to its now defunct VisiCalc electronic spreadsheet, or whether its right to sue Lotus was transferred or extinguished when Lotus acquired most of Software Arts' assets in June 1985.

The trial opened yesterday in US District Court in Boston before Judge Robert E. Keeton. Under an agreement between the two sides, Keeton is deciding the first phase of the case without a jury.

If Keeton rules that Software Arts has grounds to proceed with its $100 million suit against Lotus and its founder, Mitchell Kapor, it opens the way for a potentially precedent-setting case involving the copyright protection of software.

Software Arts contends that Lotus copied the look and feel of its VisiCalc software, the first big-selling personal computer program, into Lotus' best-selling 1-2-3 electronic spreadsheet.

For much of yesterday, Julian E. Lange was on the witness stand. Lange, a former Harvard Business School professor, was the chief operating officer at Software Arts in 1985 when the then struggling company was looking for a buyer. He is one of three remaining Software Arts officers who filed the suit against Lotus in April 1987.

A major portion of the questioning of Lange focused on the assets-purchase agreement signed between Lotus and Software Arts in June 1985. Software Arts contends that the agreement did not include future claims against copyright violations.

Lange yesterday said that his earlier statement to customers and creditors of Software Arts that the company had sold "substantially all" of its assets to Lotus "was not a correct statement."

Software Arts agreed to sell most of its assets to Lotus after falling on hard times. It was disclosed yesterday that Bolt Beranek and Newman Inc. of Cambridge was one of several companies that expressed an interest in acquiring Software Arts in 1985. Ashton-Tate Inc., of Torrance, Calif., also expressed an interest.

Subject to Judge Keeton's schedule, the trial is scheduled to resume this afternoon.

Copyright 1988