## Facts

- MAI Systems Corporation manufactured computers and developed operating-system software required to run programs on its machines.
- MAI distributed the operating system to customers under license terms permitting customer use but restricting copying and third-party use.
- Peak Computer, an independent maintenance company, serviced MAI computers for many customers; servicing commonly required turning on the machines, which loaded MAI’s operating system from disk into RAM, and at times running MAI diagnostic software.
- MAI alleged Peak infringed its copyrights by causing the operating system and diagnostic software to be loaded into RAM during maintenance despite Peak not being an authorized user under MAI’s licenses.
- MAI also alleged Peak kept unlicensed copies of MAI software at its facility and loaned computers containing MAI’s operating system to customers without authorization.
- The district court entered a temporary restraining order, then a preliminary injunction barring infringement and use/copying of specified MAI software packages, later granting partial summary judgment and entering a permanent injunction.
- Peak and two individual defendants appealed the preliminary and permanent injunction orders.

## Issues

1. Whether loading a copyrighted computer program from a storage device into RAM creates a “copy” that is “fixed” under the Copyright Act, implicating the reproduction right.
2. Whether 17 U.S.C. § 117’s “essential step” privilege applied to RAM loading occurring during third-party maintenance.
3. Whether MAI customers were “owners of a copy” of the software for § 117 purposes, or merely licensees who could not authorize Peak’s use.

## Decision

- The Ninth Circuit affirmed the injunctions and the partial summary judgment on the copyright infringement theory relevant to RAM loading and unauthorized software copies.
- The court held that loading MAI’s operating system into RAM creates a “copy” because the RAM embodiment is sufficiently stable to be perceived or reproduced for more than a transitory duration.
- The court rejected Peak’s reliance on § 117, concluding the statutory privilege did not apply because MAI’s customers were licensees rather than “owners of a copy,” and Peak was not a licensee.
- The court also treated evidence of unlicensed copies at Peak’s facility and loaned machines containing MAI software as additional grounds supporting infringement and injunctive relief.

## Legal Principles

- A computer program loaded into RAM may constitute a “copy” for purposes of the Copyright Act’s reproduction right when the RAM embodiment is “fixed” for more than a transitory duration.
- The § 117 “essential step” defense is limited to the “owner of a copy” of a computer program; restrictive licensing arrangements may mean the user is a licensee rather than an owner for § 117 purposes.
- A third-party maintenance provider that is not authorized under the software license may infringe by operating the software in a manner that requires creating RAM-resident copies and by possessing or distributing unlicensed stored copies.
- Injunctive relief is an appropriate remedy to prevent continued infringement where unauthorized copying and use are shown.

## Conclusion

The Ninth Circuit held that routine loading of copyrighted software into RAM during servicing can be infringing copying and that § 117 did not excuse the conduct where the software was licensed such that customers were not “owners of a copy,” supporting injunctions against an independent maintenance provider’s unauthorized use and possession of MAI software.


MAI Sys. Corp. v. Peak Comput., Inc., 991 F.2d 511 (9th Cir. 1993)