Prior to August 1983, the concept of copyright applying to computer software wasn’t settled law. Companies had sued one another for copyright violation, but prior to Apple taking Franklin Computer to court for copying the ROMs and the operating system disks for the Apple II and Apple II+ computers, no case had gone to trial. On August 30, 1983, Apple prevailed over Franklin.
Franklin’s origins
Franklin Computer was a New Jersey-based maker of computers that specialized in selling Apple II clones. Its founders observed that hundreds of companies made products for Apple computers, but there was no alternative to the Apple system unit, so they became the alternative. The name Ace was an acronym for “Apple Compatible Equipment.”
Cloning Apple made plenty of sense at the time. The Apple II had the industry’s largest software library, and their computers were more expensive than the competition. It seemed likely there would be a market for an inexpensive Apple II clone.
Like IBM, Apple built their machines using off-the-shelf components. The only thing inside the Apple II that another company couldn’t buy was the operating system ROM. This was the part that ultimately caused problems for Franklin.
Apple’s case against Franklin
In 1982, the idea that computer software could be copyrighted didn’t have much legal precedence behind it. Computer companies typically did place copyright notices on their software, but no one had really established whether the notices would hold up in court.
Franklin took a chance and built a close copy of the Apple II, and simply lifted the ROM from Apple, making only a few changes to the code. It was very much a derivative work.
On May 12, 1982, Apple sued.
Franklin offered a very simple defense, consisting of three key arguments.
The computer code in question existed only in machine readable form, not in any of the forms traditionally associated with copyright at the time.
The computer code in question was a necessary components if one was looking to make a compatible computer system.
Some of the copied code did not contain any copyright message.
It took more than a year, but the case was argued March 17, 1983, with Franklin prevailing. Apple won on appeal on August 30, 1983, which became a landmark case in copyright law, establishing the precedent that computer software can indeed be copyrighted. Franklin received an injunction allowing it to continue selling computers, but a downturn in the home computer market forced Franklin into bankruptcy in 1984. The company re-emerged in 1985, but three years later, Apple forced its computers off the market. Franklin reinvented itself as a maker of specialty handheld computers.
Why Apple v. Franklin had little effect on IBM-compatible PCs
Ultimately, Apple was able to force Franklin to remove its machines from the market in 1988, including a line of IBM-compatible PCs Franklin introduced after 1985. This left the Laser 128 as the only remaining Apple compatible computer on the market in the United States.
But if anything, the number of IBM clones exploded after August 1983, exactly the opposite of what happened to Apple II clones.
IBM was no less aggressive than Apple in protecting its claimed copyrights. The difference was none of the IBM cases went to court. This was because unlike Franklin, clone makers like Eagle Computer reverse engineered the IBM ROMs in a clean room and their code had visible differences. They knew it. IBM knew it. Rather than go to court, they settled.
And when it came to the operating system, they were free and clear. Microsoft had the right to sell MS-DOS to anyone.
Then, after 1984, companies like Phoenix and Award started selling an IBM-compatible BIOS. They also reverse engineered it in a clean room and took out insurance policies to protect their customers. Buying theirs was cheaper than creating your own. And that meant anyone who wanted to clone IBM could buy an off-the-shelf equivalent for everything inside an IBM PC. Including the copyrighted ROM.
What about Apple Macintosh clones?
Apple v. Franklin is also the reason you so rarely saw Macintosh clones prior to Apple’s mid-1990s experiment allowing clones. They did exist, but they got around Apple v. Franklin by making the consumer provide the Apple ROMs. Those ROMs weren’t easy to get, so it was very much a specialty market. It’s a misconception that no Apple Macintosh clones existed, but if you don’t remember ever seeing one or even reading about one, I believe you. Not many sold and even fewer survived the ensuing decades.
David Farquhar is a computer security professional, entrepreneur, and author. He has written professionally about computers since 1991, so he was writing about retro computers when they were still new. He has been working in IT professionally since 1994 and has specialized in vulnerability management since 2013. He holds Security+ and CISSP certifications. Today he blogs five times a week, mostly about retro computers and retro gaming covering the time period from 1975 to 2000.