Reverse Engineering: Unfair Competition or Catalyst for Innovation?

Reverse engineering is ‘a process almost as old as man-made artefacts them-selves.’ People of all ages have been curious to find out how things work. As long as the object of human curiosity is nature itself, society esteems the curious person as a scientist whose work benefits the common good. As soon, however, as a technician takes apart a machine made by someone else there is less unanimity about whether this activity is commendable or whether it is an act of piracy which the law should enjoin. While in the US ‘reverse engineering has a long history as an accepted practice’, German courts and most commentators still follow a judgment handed down by the Reichsgericht (Supreme Court until 1945) in which the court regarded the reverse engineering of a complex product as unfair competition.

In an era of globalized research this fundamental difference is astonishing for at least two reasons. First, restrictions on reverse engineering sit uneasily with one of the patent system's main objectives, namely the disclosure of technical information. Secondly, reverse engineering seems to be common practice in many fields of engineering. Nevertheless surprisingly little research on reverse engineering has been done in Europe. Around 1990 the Commission's proposal for a Directive on the Protection of Computer Programs sparked some discussion about the conditions on which the decompilation of programs should be permitted. This debate, however, remained restricted to the software field, did not treat reverse engineering as a matter of principle and quickly died down after the adoption of the directive. In the US, arguably the issue of federal pre-emption has helped to uncover potential conflicts between patent law and trade secrets law. Several Supreme Court judgments and other decisions have shed some light on this issue and have given rise to academic work on the law and the economics of reverse engineering.