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Adobe Systems Inc Case Study




What tactics should adobe use to combat Microsoft and to establish PDFas a de-facto ebook standard?

“It was unclear how standards in the eBook market would evolve” 


As research by Shapiro and Varian has shown winning this war for the next eBook standard depends onthe ownership of seven strategic key assets.


Accordingly, the key to a new successful eBook-PDF era is that Adobe needs to lead that disruptioninstead of getting disrupted by competition.


Network Effects

Adobe is facing serious and aggressively moving competition.



However, Adobe already inherits anadvantageous position as leading provider of formatting technology and already established PDF as de-facto standard for formatted content on the web. In order to win this rival evolution standard waragainst a highly powerful player like Microsoft, Adobe needs to forge alliances and combine externalresources with their own. Strong alliance partners function as complementors who help to establishPDF as de-facto eBook standard. Joint ventures, acquisitions (glassbook), simple contracts as well asvertical integration (The eBook Value System) are essential tactics to positively influence the value chainaround the PDF format. Adobe needs to take advantage of indirect network effects and usecomplementary products (eBooks , eReaders, third party PDF software) to increase the value of the PDFformat for all parties involved.Adobe needs critical mass and to surpass a tipping point which moves users further away fromalternative formats. The value of this network for all its users is then further increased with the numberof users.


This point presents a highly challenging task for Adobe which is facing the dilemma of a two sidedplatform, this time only with more key players(The eBook Value System) which need to be fullyconvinced that PDF will be the new standard that prevails.


See Adobe case p580.


Shapiro, C. and Varian, H. R. (1999). “The art of standards wars.” California Management Review, 41(2), 8—



See Table 1 for a detailed analysis of 


standard war enablers.


See Table 2 for a comparison of their advantages.


See Exhibit 12 of the Adobe case.


Katz, M. L. and Shapiro, C. (1994). “Systems competition and network effects.” The Journal of Economic Perspectiv

es, 8(2),93


Adobe Systems, Inc. v. Southern Software, Inc.
United States District Court for the Northern District of California
Full case nameAdobe Systems, Inc. v. Southern Software, Inc.
Date decidedJanuary 30, 1998
CitationsNo. C 95-20710 RMW (docket)
1998 WL 104303, 1998 U.S.Dist. LEXIS 1941, 45 U.S.P.Q.2d 1827 (N.D. Cal. Feb. 2, 1998)
Judge sittingRonald M. Whyte
Case holding
The court held that Adobe's font program was protectable expression, and Southern Software's font was substantially similar and infringing.
Typeface, United States copyright law

Adobe Systems, Inc. v. Southern Software, Inc. was a case in the United States District Court for the Northern District of California regarding the copyrightability of digitized typefaces (computer fonts). The case is notable since typeface designs in general are not protected under United States copyright law, as determined in Eltra Corp. v. Ringer. Since that case, the United States Copyright Office has published policy decisions acknowledging the registration of computer programs that generate typefaces. In this case, the court held that Adobe's Utopiafont was protectable under copyright and Southern Software, Inc.'s Veracity font was substantially similar and infringing.[1]


Eltra Corp. v. Ringer[edit]

In 1979, The United States Court of Appeals for the Fourth Circuit held in Eltra Corp. v. Ringer that typefaces are industrial designs which cannot exist independently as works of art.[2]

1988: Policy Decision On Copyrightability Of Digitized Typefaces[edit]

In 1988, the U.S. Copyright Office published a policy decision specifically addressing attempts to register fonts. The Copyright Office stated that the representation of a glyph as pixels was not protectable expression, since the raw source typeface design was not protectable, and no original authorship occurred in the conversion process.[3]

The policy decision described the digitization of typefaces as bitmap images, which was the leading format for fonts at the time. A limitation of this format is that different sizes of the font must have different bitmap representations.

1992: Registrability Of Computer Programs That Generate Typefaces[edit]

Having received applications to register copyrights for computer programs that generated typefaces using "typeface in digitized form",[4] the Copyright Office revisited the 1988 Policy Decision in 1992. The Office was concerned that the claims indicated a significant technological advance since the previous policy decision. One advance was scalable font representations (Bézier curves). This format can output a font at any resolution, and stores its data as control points rather than pixels. The Office acknowledged that these fonts might involve original computer instructions to generate typefaces, and thus be protectable as computer programs, but ended saying that "The scope of the copyright will be, as in the past, a matter for the courts to determine."[4]

Case background[edit]

Adobe filed suit against Southern Software in multiple complaints between 1995 and 1997. Adobe's allegations were:

  • Copyright infringement related to SSI's Key Fonts Pro products 1555 ('Veracity'), 2002 and 2003;
  • Copyright infringement on intermediate copying;
  • Patent infringement on Adobe's design patents.

Adobe's fonts under dispute were created from previously digitized font files in bitmap form.[1] Such bitmap images are not protectable under copyright, as addressed by the 1988 Policy Decision. These were imported into a program where an Adobe editor dragged control points to best match the outline of the bitmap image. When finished, these control points were translated into computer instructions to create the final font file.

Paul King, the sole employee of Southern Software, Inc. altered Adobe's Utopia Font using the commercially available tools FontMonger and Fontographer. He produced three new fonts which differed trivially from the original font. These font editing programs extracted the control points from Adobe's font files and made them available for manipulation and saving to a new font file. He had scaled the coordinates of the fonts by 101% on the vertical axis in order to slightly change the fonts. Adobe also alleged that King modified the font editing tools in order to remove Adobe's copyright notices. In total, King was accused of infringing Adobe's copyrights on more than 1100 fonts.


The central issue of the case was whether or not Adobe's font program was protectable under copyright. That the output of the computer program is not protectable does not affect whether the program itself is protectable.[5]

Application of Policy Decisions and Regulations[edit]

King contended that the Regulation of 1992 was only a clarification of 1988's Policy Decision.[1] The regulation stated that it "does not represent a substantive change in the rights of copyright claimants."[3] Adobe contended that the 1992 Regulation's consideration of programs that generate typefaces covered its fonts.

Substantial similarity[edit]

King argued that after application of the Abstraction-Filtration-Comparison test to Adobe's font, there could not be any remaining protectable expression, since both the input to and output of the program was unprotectable. Adobe argued that each rendering of a character by the program was the result of an editor's choices, and thus were a result of original authorship.

Functional concerns[edit]

King contended that the selection of control points in glyph outlines was determined by efficiency, namely, the minimization of control points. Adobe contended that the outlines only determined some of the control points, and that there was creativity involved in picking the rest. One glyph may be expressed identically in a variety of ways with different numbers of control points.

Protection under patent[edit]

Typeface designs may be protectable by a design patent under United States patent law.[6] The requirements are more strict than those for copyright.[7] Term of protection is 14 years from filing date. SSI claimed that the six design patents Adobe held related to its fonts were invalid since they did not disclose any article of manufacture. They also claimed that the designs lacked the required novelty and nonobviousness to be valid. Adobe's response was that the computer program was a sufficient article of manufacture. A previous case, before the U.S. Patent and Trademark Office's Board of Patent Appeals and Interferences, had held that novel and non-obvious typefaces designs could be subject to a design patent.[8] Adobe used the deposition of the font's designer to attempt to show that the font was novel and non-obvious.

Analysis and holdings[edit]

The court held that Adobe's Utopia font was protectable expression, and that King infringed upon Adobe's copyright.[1] Essentially, the court determined that the choice of control points by the font editor was a work of original authorship. The facts that the court used to reach this conclusion were that:

  • Creativity was involved in the selection of control points, since two independent font editors could begin with the same images and produce indistinguishable output, yet have few control points in common.
  • King's modifications to Adobe's fonts were mechanical and did not eliminate copyright infringement. Since the font editing programs extracted control points from Adobe's fonts, use of those programs constituted copying of literal expression. Thus, King also infringed on Adobe's copyright through intermediate copying into RAM.

Finally, the court denied Adobe's motion on patent infringement, stating that the novelty and non-obviousness in Adobe's fonts was a "genuine issue of material fact."[1]

See also[edit]


Further reading[edit]

Utopia, the font allegedly copied by SSI.
  1. ^ abcdeAdobe Systems, Inc. v. Southern Software, Inc.Archived 2010-05-22 at the Wayback Machine., No. C 95-20710 1998 U.S. Dist. LEXIS 1941 (N.D. Cal. Feb. 2, 1998).
  2. ^Eltra Corp. v. RingerArchived September 27, 2007, at the Wayback Machine., 579 F.2d 294 (9th Cir. 1978).
  3. ^ ab"Policy Decision on Copyrightability of Digitized Typefaces", 53 Fed. Reg. 38110 (Sept. 29, 1988), reproduced in U.S. Copyright Office announcement ML-393
  4. ^ ab"Registrability of Computer Programs that Generate Typefaces", 57 Fed. Reg. 6201 (Feb. 21, 1992), reproduced in U.S. Copyright Office announcement ML-443
  5. ^Apple Computer, Inc., v. Formula International, Inc., 725 F.2d 521 (9th Cir. 1984)
  6. ^35 U.S.C. § 171
  7. ^35 U.S.C. § 103
  8. ^ex parte TayamaArchived June 12, 2011, at the Wayback Machine., 24 U.S.P.Q.2D (BNA) 1614, 1616 (Bd. Pat. App. & Int. 1992)

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