Integrated Circuits and Semiconductor Chip Protection

The Semiconductor Chip Protection Act 1984 (the “Act”) is included in Title 17 of the U.S. Code with the Copyright Act.  The Act creates a completely new form of intellectual property right.  It involves a composite of patent and copyright protection.  Rights granted under the Semiconductor Chip Protection Act do not "affect any right or remedy held by any person" under the Copyright Act.

The Act originated due to concerns in the industry that copyright protection might not extend to programs embodied in chips because they were useful per se.  The Copyright Office traditionally refused to register copyrights for chips or their designs.  It was theorized that additional protection was required.

Scope of Protection
The law provides a special form of protection for "mask works fixed in a semiconductor chip product".  A mask work is defined as "a series of related images, however fixed or encoded:  (1) having or representing the predetermined 3-dimensional pattern of metallic insulating or semiconductor material present or removed from layers a semiconductor chip product;  and (2) in which series the relation of images to one another is that each image has the pattern of the surface of one form of the semiconductor chip product".
The Act provides that in order that the work be treated as "fixed", it must be embodied in the chip permanently to permit the mask work to be perceived or reproduced from the product for a period of more than transitory duration.  Chip products must have 2 or more layers of metallic insulating or semiconductor material placed on or removed from a piece of semiconductor material in accordance with a pre-determined pattern.
Protection is granted for the 3-dimensional pattern or typography of a semiconductor chip.  The work must be original and not consist simply of designs that are staple, commonplace or familiar in the semiconductor industry or constitute variations of designs combined in a manner that considered as a whole, they are not original.
Protection for mask works does not extend to any "idea, procedure, process, system, method of operation, concept, principle or discovery, regardless of the form in which it is described, explained, illustrated or embodied in the work".  The mask work owner has exclusive rights to reproduce the mask work and to import or distribute semiconductor chip products incorporating the work. 

Infringement Standard
An action for infringement is available against “any person who violates any of the exclusive rights of the owner of a mask work under this chapter.”  Infringement will occur if a person induces or knowingly causes another to reproduce a protected mask work or to import or distribute a chip embodying that work.  Either the owner of the mask work or the exclusive licensee of all rights thereunder may commence an infringement action.

Exclusions from Protection
There are exclusions from infringements similar to the fair use provisions of the Copyright Act.  There is no infringement of rights in a mask work if a person reproduces the work solely for the purpose of teaching, analyzing or evaluating the concepts or techniques employed in the mask work or the circuitry, logic flow or organization of components used.  It is not necessarily infringement if a person incorporates the results of the analysis in a person's own original mask work.
In other words, reverse engineering of a protected mask work may create new works if the new work is sufficiently original to receive its own protection under the Act.  This reflects the conventional copyright principle that protection is given only to a particular expression of an idea, not to the idea itself.    The Act also provides that importation and distribution of a chip product made by the owner of the mask work or with his consent is not an infringement of the new rights.  Innocent infringers do not violate the Act.

Term and Registration Requirements
Protection is given for a period of 10 years from the date that the mask work is first commercially utilized or the date on which the work is registered whichever occurs first.  Application for registration must be filed within 2 years of the date on which the work is first commercially exploited.  Registration is a prerequisite for an infringement action to be filed.

Notice Provisions
The Act provides for the giving of notice to the public of a claim to protection in the work by placing the words "mask work" the symbol M in a circle or the symbol “M” on a work.  Protection is not negated if a notice is not affixed to the work.  However, if the notice is not applied, the owner of the mask work rights may not be able to obtain a remedy against an innocent infringer.

Ownership of Rights
Ownership of rights under the Act is similar to that of the Copyright Act.  The creator is deemed to be the owner or the employer of the creator is the owner if the work was made “within the scope of a person’s employment”.  In the Copyright Act, under the “work made for hire” concept, the commissioner of a copyright work may be deemed to be the owner if the deviser agreed that the work was made as a work made for hire.  However, the commissioner of a mask work is not automatically considered to be the creator.  In the case of mask works, an assignment of ownership rights to the commissioner is required.

Protection of Works of Foreign Origin
The Act protect mask works of persons who are citizens of or domiciled in the U.S. or citizens or domiciles of foreign nations having a mask works treaty with the U.S. and mask works which were first commercially exploited in the U.S., unless a presidential proclamation provides the protection to nationals of other countries.  Such a proclamation can only be made when the foreign nation provides protection for mask work owners who are nationals or domiciles of the U.S.  The Act provides for the grant of interim protection while the matter is being considered, including the grant of protection covering countries which are making good faith efforts and reasonable progress towards providing protection for mask works of U.S. nationals and domiciles".  Interim protection has been afforded to the works of nationals or domiciliaries of Australia, Canada, Japan, Switzerland and all EEC-member states.

The Act provides for different forms of relief, including injunctive relief, damages (both actual and statutory), impoundment and destruction of infringing articles and costs and attorneys’ fees.  In terms of damages, the mask work owner is entitled to actual damages resulting from the infringement and also to the infringer’s profits.

Reverse Engineering
The Act provides an exemption for reverse engineering in response to requests from the U.S. semiconductor industry.  The Act does not require improvement of the owner’s design or layout in order to constitute reverse engineering, instead of copying.  The Act requires a new and original layout, not necessarily an improved chip layout.  In general, legitimate reverse engineering has a prime purpose of improving a chip or layout.  In Brooktree Corp. v. Advanced Micro Devices, Inc. 977 F.2d 1555, 24 U.S.P.Q. 2d (BNA) 1401 (Fed. Cir. 1992), the Federal Circuit Court compared reverse engineering and improvements, although this may be somewhat misleading and not required by the Act.

The Act was designed to ensure incentives for innovation in the semiconductor industry by preventing illegal copies from invading the market created by an owner.  Copying may occur both in illegal piracy and in proper reverse engineering.
Although second sourcing is a proper purpose of reverse engineering, simple copying is not permitted.  Legitimate reverse engineering must include extraction, analysis and evaluation of a chip’s design and operation.  Copying is merely the first step to permit the reverse engineer to study, dissect, analyze and understand the chip design.
The reverse engineer will leave records as a paper trail through the research, for example, logic and circuit diagrams, trial layouts, computer simulations, etc., which reflects the substantial time and effort in developing its own design.  The costs incurred and efforts spent by a party in reverse engineering are significant factors in deciding whether the exemption from infringement is available.

Home | Our Mission | Newsletters | Resources | About Us | Contact Us

72 Allston Way, San Francisco, CA 94127 | (415) 571.8880
Copyright © 2014, Fukuda Law Firm     Disclaimer

Our newsletters do not provide legal advice or opinions. Legal questions may be complicated and experienced counsel
should be consulted in connection with particular cases.  Advice should be given relative to specific facts and conditions.