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Exit, pursued by a bear.

It wasn't a cheerful way to wrap up the year. On December 11, a federal judge threw out Ashton-Tate's suit against Fox Software and trashed the company's dbase copyrights, accusing Tate of "repeatedly" and "knowingly" concealing that the dbase product line was derived from a mainframe language called JPLDIS. Wall Street promptly reacted by chopping $36 million (18% of the company's total worth) off the value of Ashton-Tate's stock. And a week later, the mail brought a class action suit alleging that, because Tate's copyrights were flawed, dBase buyers are now entitled to hefty refunds.

All this sound and fury makes great courtroom drama, of course, but does it transform the legal landscape for anyone besides Ashton-Tate? Probably not. The important issue in the Fox case was whether AshtonTate was entitled to copyright a computer language and file format. Judge Hatter's one-page decision doesn't even pretend to explore this thorny question, so his order has virtually no impact on the ongoing debate over intellectual property rights. In fact, Ashton-Tate's dBase rivals already assumed--probably correctly--that they were free to create their own implementations of the dbase language; dbase customers are unlikely to take the judge's decision as a license to start pumping out thousands of pirate copies of dBase III+ and IV.

Meanwhile, Ashton-Tate's lawyers are trying to pick up the pieces. with any luck, they'll find a higher court to reverse judge Hatter's order-- or, worst case, they'll convince the Copyright Office to overrule the judge. But what's really at stake is Ashton-Tate's credibility. Bill Lyons and the rest of the company's new management have done a remarkable job of rebuilding the company they took over from the Esber gang. Now, they've got fresh egg on their faces.

In retrospect, it's clear that Lyons should have scuttled the Fox lawsuit the first week he took over Ed Esber's job. That action would have given Ashton-Tate a graceful and generous exit from a scene that even company insiders thought was an embarrassment. Instead, Ashton-Tate has now learned a painful lesson: No matter how much muscle you bring into a courtroom, the judge is always the ultimate tough guy.
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Title Annotation:Ashton-Tate and Fox Software
Date:Dec 28, 1990
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