Military testing company granted rare fair use ruling over API software code

Astronics Test Systems is granted summary judgment on its fair use defence | Verdict carries significant implications for the use of API declaring code in US military programmes.

A company that tests equipment for the US military has been granted a fair use summary judgment in a case involving application program interface (API) code.

The ruling, delivered by Judge George Wu in the US District Court for the Central District of California, favoured Astronics Test Systems in its dispute with Teradyne—in one of the first copyright disputes involving API declaring code since the US Supreme Court's fair use opinions in Google v Oracle and Andy Warhol Foundation for the Visual Arts v Goldsmith.

An API is a set of functions and parameters that enable communication between two software applications or different layers within the same application.

The precedential decision, delivered December 6, dismissed Teradyne’s claim of copyright infringement—the only remaining claim in the case.

The court determined that all four fair use factors favoured Astronics.

It recognised Astronics' provision of transformative compatibility software, emphasised the public-accessible aspect of the code, deemed Astronics' use reasonable, and highlighted that the use did not negatively impact the market for Teradyne's code.

The court said its “tentative conclusion” was that Astronics had “successfully demonstrated that its use of Teradyne’s copyrighted material constitutes a fair use under 17 U.S.C. § 107” and a jury would not be needed to make a determination.

“Such a conclusion would seemingly mean there would be no need to reach the other three summary judgment/partial summary judgment motions on-file,” the court concluded.

The decision affirms that software copyrights cannot be used to create barriers around markets for uncopyrightable equipment containing software.

Additionally, the victory ensures the continued access of the US military to Astronics' automated test equipment (ATE).

Teradyne initiates its lawsuit

Teradyne, a military defence contractor, sued Astronics in March 2020 in an effort to end Astronics' use of declaring code from Teradyne's software.

This code was crucial for Astronics to create compatible, mission-critical equipment for the US government.

The ability to use this code without recompiling was essential for running government-written software programs on the latest safety-testing equipment,

This was necessary to prevent the possibility of risks being introduced into government systems.

The original complaint included seven claims, including patent infringement, copyright infringement, and various state-law claims—which were dismantled by dismissing most state law claims on preemption grounds and invalidating Teradyne's patent.

The second amended complaint, filed in August 2022, included a single copyright infringement claim referring to 16 separate works protected by registered copyrights.

Factual background

Teradyne and Astronics are key players in the manufacturing and supply of ATE, including digital test instruments (DTI).

ATE is computerised machinery that employs DTIs to conduct measurements and diagnose faults in units under test—crucial for identifying faults in military equipment.

The decision also reiterates that the commercial aspect alone doesn't determine fair use; the assessment considers the overall purpose and character of the use, said Kirkland.

Teradyne's M9-Series DTIs are used widely in the US military, including by the Navy, Air Force, army, and Marine Corps.

Teradyne owns copyrighted programs for M9-Series DTIs, while Astronics offers legacy digital emulation and digital functional library for its T940 DTI.

Astronics admitted to using Teradyne's code in creating its software.

‘Serving public good’

The fair use arguments put forward by Astronics included the purpose and character of the use, the nature of the copyrighted work, the amount and substantiality of the portion used, and the effect of the use on the potential market for the copyrighted work.

The core of its defence is that the code is used minimally, serving a public benefit and aligning with industry goals in a transformative way.

The court recognised Astronics' commercial use, however saw the first fair use —the purpose and character of the use—as balanced, leaning slightly toward fair use because of the transformative nature of the use.

Astronics successfully argued that the code in question is functional and lacks creativity, aligning with principles established in the Google case and supporting a fair use finding.

Astronics' argument about reasonable copying for compatibility, compared to the Google case, led the court to lean towards a fair use finding.

Finally, the court recognised that Astronics' software doesn't directly impact the market for Teradyne's copyrighted works. Stressing the significance of considering public benefits, the court concluded that this factor supports a fair use finding.

The court ruled that Astronics has successfully demonstrated fair use with three of the four fair use factors strongly supporting this finding.

The litigation team for Astronics included Dale Cendali, Joshua Simmons, Yvonne Beeler, Yimeng Dou, Yan-Xin Li, Miranda Means, Julien Jean-George Crockett, Nick Teleky, and Josh Berlowitz from Kirkland & Ellis.

Did you enjoy reading this story?  Sign up to our free daily newsletters and get stories sent like this straight to your inbox