Hacking the Xbox

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Hacking the Xbox: An Introduction to Reverse Engineering
(a) disassemble, decompile or otherwise derive source code from the
Software, (b) reverse engineer the Software, (c) modify or prepare
derivative works of the Software, (d) copy the Software, except as
expressly permitted in this Agreement, (e) rent or lease the Software, or
(f) use the Software in any manner that infringes the intellectual property
or other rights of Licensor or another party.”
Companies argue that such provisions legally bind purchasers not to reverse
engineer their software. If they do so anyway, they have breached a contract
and can be sued for damages. The problem, of course, is that the antireverse-engineering
provision gives the copyright owner rights beyond those
it would have under, say, the Sega decision.
Whether this kind of contractual prohibition is enforceable is a hotly
disputed issue. Courts have sometimes rejected reverse engineering
defenses in trade secrecy cases because this activity exceeded the scope of
licensed uses of the software. 38 Courts have sometimes refused to enforce
software shrinkwrap license restrictions against reverse engineering because
of a conflict between the clause and federal intellectual property policy. In
Vault Corp. v. Quaid Software Ltd., 39 the maker of copy-protection software
tried to enforce an anti-reverse-engineering clause under Louisiana law
against a firm that had reverse-engineered its copy-protection scheme. The
court held that federal law preempted the contractual clause as a matter
of federal policy, the same argument used in Bonito Boats to override the
Florida boat hull law.
In addition, Section 301 of the Copyright Act preempts state-created or
state-enforced rights “that are equivalent to any of the exclusive rights
within the general scope of copyright . . . .” As might be expected,
there’s a debate about what “equivalent” means. Courts have said that
contract provisions enforceable under state law are “equivalent” to
federal copyright when the conditions for infringement are the same. But
if infringement of the state-created right requires an “extra element,” it is
not “equivalent.”
38 E.g., Technicon Data Sys. Corp. v. Curtis 1000, Inc., 224
U.S.P.Q. (BNA) 286 (Del. Ch. 1984) (holding that a consultant to a
hospital used improper means to obtain trade secret interface
information by wiretapping the hospital’s licensed software
system to study the manner in which the server software
exchanged data with the client software because this use had
not been authorized by the hospital; stating further that even if
the use had been authorized, the action would have
breached restrictive terms in the license); see also DSC
Communications Corp. v. Pulse Communications, Inc., 170 F.3d
1354 (Fed. Cir. 1999) (holding that there was a triable issue of fact
as to whether Pulsecom’s use of a “snooper board” at a
telephone company to get access to interface information
about DSC’s software resulted in a misappropriation of a trade
secret in view of restrictions in the telephone company’s license
to use DSC’s software).
39 847 F.2d 255 (5th Cir. 1988).