Computer Chronicles Revisited 86 — Lotus HAL, What'sBest!, VP-Planner, Javelin Plus, and Silk

In 1978, Harvard Business School student Dan Bricklin started thinking about creating an electronic spreadsheet program. That summer, Bricklin decided to try and make his idea a reality. He developed a prototype on an Apple II that he borrowed from Dan Fylstra, who had received his own Harvard MBA the year before and founded a company called Personal Software.

After completing the prototype and showing it to Fylstra, Personal Software agreed to publish the program. Bricklin and a fellow programmer, Bob Frankston, formed their own company, Software Arts, to serve as the developer. Personal Software would then handle marketing and sales and pay royalties to Software Arts.

Bricklin initially named his spreadsheet program Calcu-ledger. Fylstra decided that VisiCalc was a better name. In May 1979, Fylstra ran the very first ad for the new program–actually, a teaser–in Byte magazine, where he had been one of the original editors. That same month, Personal Software held the first public demonstrations of VisiCalc at Jim Warren’s West Coast Computer Faire in San Francisco.

VisiCalc quickly emerged as the first system-selling app for the Apple II platform, although it was later ported to other machines. This got the attention of IBM. As Computer Chronicles regular George Morrow later wrote, “IBM came into the personal computer market when Apple threatened their base–when they saw Apple start selling into business, into the corporate environment, especially to run VisiCalc.”

Bolstered by VisiCalc’s success, Personal Software renamed itself VisiCorp and expanded the brand to cover additional software products, including VisiOn, the subject of the second-ever Chronicles episode broadcast in 1983. But around this time, the relationship between VisiCorp and Software Arts soured and ended up in litigation. To make a long story short, the litigation ended up destroying both companies and VisiCalc. VisiCorp merged into Paladin Software Corporation in late 1984, with the surviving entity retaining the Paladin name. Meanwhile, Software Arts ended up selling its assets to Lotus Development Corporation in 1985.

The Age of 1-2-3

Lotus, of course, published Lotus 1-2-3, which in the mid-1980s superseded VisiCalc as the dominant computer spreadsheet program. Mitch Kapor, the founder of Lotus Development, had actually worked for VisiCorp. In fact, Dan Bricklin and Bob Frankston referred Kapor to VisiCorp to publish Tiny Troll, a statistical analysis program that Kapor wrote for the Apple II.

Much like Bricklin and Frankston, however, Kapor’s relationship with VisiCorp eventually went south. At least Kapor managed to get a $1.8 million buyout of his contract for his efforts. That money helped him start Lotus Development, which released the first version of 1-2-3 for the IBM PC in the fall of 1982.

Kapor later recalled that the immediate success of 1-2-3 “came as an enormous surprise.” In 1983, Lotus reported sales of $53 million. The following year, that figure nearly tripled to $156 million. The company itself grew from 20 to 750 employees during that two-year period.

By March 1987, when this next Computer Chronicles episode aired, 1-2-3 was the undisputed king of the business software market. This particular episode was the second in a four-part series on business applications and the first of two shows focused on spreadsheets. Stewart Cheifet opened the program by showing Gary Kildall a copy of the late, lamented VisiCalc running on an Apple IIc. He asked Kildall how Lotus 1-2-3 came to replace VisiCalc as the dominant spreadsheet program. Kildall said the Apple II was always accepted in education and VisiCalc brought it into the business market as well. Lotus 1-2-3 came out right after the launch of the IBM PC and used the power of that machine to improve the spreadsheet model and added graphics and database functionality. So it really became the standard on the PC before the competition hit. As a result, a number of third-party developers started making 1-2-3 add-ons.

Moving 4Word with Lotus Add-Ins

Wendy Woods presented her lone remote segment for the week from the San Mateo, California, office of the investment firm Dean Witter Reynolds. Woods said that Dean Witter’s brokers relied on computers for a variety of tasks, from transmitting exchange-floor trades to managing financial portfolios. Over some B-roll footage, Woods explained that investment counselor David Huggins used Lotus 1-2-3 to manage his clients’ accounts.

Since numbers could be added or changed by more than one person, Woods said, Huggins installed a notation program called Note-It, which attached notepad windows to individual spreadsheet cells. The notes could add details or clarify changes made by other users.

Note-It was part of a group of programs commonly called “add-ins,” Woods said, which operated within the spreadsheet environment. Add-in developers claimed these enhancements were different from pop-up, memory resident programs because they were developed in cooperation with the original software developer–in this case Lotus.

Woods said the add-in concept could be seen as a new approach to “integrated software”: Instead of writing a word processor with math functions, why not give a spreadsheet the ability to manipulate text? Along with Note-It, the Dean Witter office also installed 4Word, a word processing add-in. Calling up 4Word shipped you to a word processing screen, with the added function of integrating numbers right off the spreadsheet. Changes made to the spreadsheet were then ported to the 4Word document as well.

One of the newest additions to the add-in category, Woods continued, was the spelling checker, which helped you weed out embarrassing errors, although it wouldn’t correct your math.

Add-ins may not have all the features of your favorite software package, Woods concluded, but as alternatives to a library of uncooperative programs, they offered a clever way to add functions to your existing software at a very modest price.

Could 1-2-3 Handle Natural Language and Applied Mathematics?

Larry Gross and Sam Savage joined Cheifet and Kildall for the next segment. Gross was a software consultant with Lotus Development and co-developer of a 1-2-3 add-on called HAL. Savage was chairman of Illinois-based General Optimization, the publisher of another 1-2-3 add-on called What’sBest! (Yes, that’s how it’s spelled.)

Kildall opened by asking for a definition of an “add-on.” Gross said it was a product that enhanced the functionality of 1-2-3. Kildall asked if these were considered “terminate and stay resident” (TSR or RAM-resident) programs. Gross said HAL was not a TSR program. Rather, when you loaded HAL , it also loaded 1-2-3. Similarly, when you closed HAL, you also closed 1-2-3.

Kildall asked for a demonstration of HAL. Gross pulled up a blank 1-2-3 worksheet. With HAL, you could push the backlash key to pull up a request box. In that box, the user could type English phrases to perform operations. So if you typed get quotas, HAL would retrieve a file called quotas. In that file, you could then ask for a column total by simply typing total this column. HAL also included an undo function activated by pressing the backspace key. (This worked on both HAL and native 1-2-3 commands.) Gross said you could also produce a graph by typing graph this, and HAL figured out all of the ranges and axis labels automatically. Cheifet asked if the program followed some set of default parameters. Gross said yes.

Gross then showed how you could perform a database operation using HAL. He pulled up a sample database of baseball players and their statistics. If you wanted to find out which players had more than 30 home runs, you could just type who has more than 30 hr into HAL. You could also use it to conduct a simple search. For instance, typing find 11 would show the first occurrence of the number 11 in the database.

Kildall, always skeptical of this sort of thing, clarified that HAL didn’t take just any natural language. The queries had to be made in a specific format. Gross said yes, there was some syntax the user had to learn. But it was easy to pick up since it was very “English-like.” He added that HAL could also be used to build worksheets from scratch. For example, you could type put months across and HAL created a row with the names of each month from January to December. (Gross provided several more examples of this feature, which I won’t recount here.)

Cheifet turned to Savage and asked about his program, What’sBest! What did it do? Savage said the program took the mathematical concept of linear programming and applied it to solving particular business problems using 1-2-3. He pulled up a sample. In this case, a police department had a “non-uniform” staffing requirement. That is, the department needed 180 people on Monday, 160 people on Tuesday, and so forth. In addition, the police had to be hired on a five-day basis, so if you hired 180 police on Monday, they worked straight through until Friday. But then you were short 10 people on Friday, and 130 people on Saturday. But this in turn meant you’d be overstaffed the following week. You could use Lotus to sort all this out, Savage said, but it was like playing a Rubik’s Cube on the screen. Instead, using What’sBest! could help you create an appropriate staffing model.

Savage pulled up What’sBest! by hitting the asterisk key. This brought up a help menu over the 1-2-3 interface. What’sBest! took over the 10 function keys on the PC and effectively contained all of the program’s commands. Hitting F1 would “optimize” the worksheet. This basically meant exporting the Lotus worksheet into What’sBest!, which then applied a linear programming technique.

Perhaps as confused as the rest of us, Cheifet asked what exactly was being “optimized”. What was the program trying to accomplish? In this case, Savage said, the program was trying to minimize the total cost of staffing. Here, What’sBest! found a way to reduce the staffing cost from $64,000 to $44,000. Cheifet pushed for more information on the “underlying theory” used by the software. Savage said it was based on 40 years of applied mathematics research that you really didn’t want to know about. It was very technical stuff that the program tried to hide from the user.

Why Have a Spreadsheet When You Can Have a Multidimensional Database?

Adam Osborne joined Cheifet and Kildall for the next segment. Osborne–a prior Chronicles guest–was the president of Paperback Software International (PSI), which published VP-Planner, a low-cost spreadsheet program that competed with 1-2-3.

Kildall noted that everyone had seemingly accepted Lotus as the standard spreadsheet. And VP-Planner was similar to Lotus. He asked Osborne to explain the program. Osborne said that VP-Planner was a multidimensional database with dBASE file capabilities. The spreadsheet portion of VP-Planner was the user interface. And it happened to be a “Lotus work-alike,” so if you had any Lotus 1-2-3 templates, worksheets, or macros, it would run under the VP-Planner spreadsheet. That said, VP-Planner also had its own powerful and unique database capabilities.

Osborne that provided a demonstration of VP-Planner, using a multidimensional database for a hypothetical computer store. In this example, the store kept its accounting information by time and divided by product and salesperson. He said you didn’t have to limit the database to just “dumb entry” of data. You could also program the database’s logic and equations. This meant you could consolidate information–say totaling up quarterly sales figures for the year–within the database and not have to use the spreadsheet. So if you used VP-Planner, you never would have to worry about linking spreadsheets or run into problems with large spreadsheets. Osborne noted that Lotus really didn’t have a database. The only data in 1-2-3 was what was in the spreadsheet. But with VP-Planner, you kept data in a multidimensional database on the disk. You could then write spreadsheets to perform specific tasks using the database. Osborne said you could also use VP-Planner to create dBASE-compatible database files.

Cheifet pointed out the retail price of VP-Planner was just $100. How could Osborne sell this product for $100 when the competing products were $500 or more. Osborne said the best programmers worked for themselves and not other companies. PSI did not develop VP-Planner. Outside authors brought the product to him and he paid them a royalty. PSI’s role was simply writing the manual and refining the user interface. The authors then used their royalties to keep updating and improving the software in the future. Using this business model, Osborne said PSI only ran on 35 employees while the competition–I assume he meant Lotus Development–had 1,000.

Competitors Cut Prices to Compete with Lotus

For the final segment, Robert Firmin and Eric Gaer joined Cheifet and Kildall. Firmin was chairman and CEO of Javelin Software, which produced Javelin Plus. Gaer was vice president of marketing with Daybreak Technologies, Inc., which produced Silk.

Kildall noted that Firmin’s company recently had an “unusual price change” with respect to its spreadsheet program, Javelin Plus. The price went from $700 to $100 and then back up to $200. What was the background of that? Firmin said that the biggest marketing obstacle that Javelin faced was the entrenched Lotu 1-2-3 user base. To get around that, Javelin decided to “cede” the market at $100 for two-and-a-half months. He said that worked exceedingly well and now Javelin had one of the larger worldwide install bases. So now they’d settled on $200 as a longer-term price.

Turning to Gaer, Kildall asked about his company’s product, Silk, which was another “Lotus-like” spreadsheet. Could Gaer explain his product? Gaer said that Silk recognized the dominance of Lotus in the marketplace and its large installed base. Silk therefore used a similar user interface and performed about 99 percent of the same functions as 1-2-3. But Silk also added some advanced features.

Cheifet asked for a demonstration of Silk. Savage said Silk was a straightforward spreadsheet, and the most common application was the time-series model–i.e., analyzing a sequence of data points in time order. Users could build a time-series model in Silk using “essentially” four keystrokes. These commands defined the period and the fields. The fields could be defined in English, and all of the relationships were automatically linked. Silk also had an integrated help system that “followed” the user around as they worked on their spreadsheet–a feature that Savage claimed no other help system possessed. Additionally, there was a way to validate the spreadsheet, so if you changed a cell, the worksheet would alert the user to any problems. The help system would then explain the problem and how to fix it. Cheifet said it was similar to a spelling checker in a word processor.

Cheifet asked about the “recovery” function in Silk. Savage explained that the program logged and kept track of each keystroke made. So if unsaved data was lost–due to say a power outage or a sudden reboot–the user could recover those keystrokes.

Turning back to Gaer, Cheifet asked about his program, Javelin Plus. Gaer said the premise of Javelin was that the most important thing in any business analysis was not calculating numbers, but rather being unable to understand your business and communicating your analysis to someone else. To illustrate, Gaer pulled up a sample Javelin screen. On the top of the screen there was a spreadsheet table showing the cash and cash balances for a hypothetical business. On the bottom, there was a graph, which was automatically updated as the user selected different cells on the spreadsheet. He then switched to a “diagram” view, which showed how cash flowed into the business over a period of several months. There was also a “chart” view that allowed the user to change the shape of the graph directly. This meant the user could effectively add data without typing in any formulas. Gaer added that Javelin also had the capability to build as many dynamically linked worksheets as the user needed. And each worksheet required very little memory.

Microsoft, Borland Join PC Spreadsheet Wars

Stewart Cheifet presented this week’s “Random Access.” Although this episode had an original airdate in March 1987, the program uploaded to the Internet Archive was a rerun from October 1987, so that is the date for these items.

  • Microsoft released a PC version of Excel, its spreadsheet program originally written for the Macintosh. The PC Excel had a graphical user interface that took advantage of the new graphics capabilities of IBM’s PS/2 computers. Cheifet noted that some critics said the PC version of Excel was slower and less robust than the original Macintosh version.
  • In response to Microsoft, Lotus Development said it would release a Macintosh version of Lotus 1-2-3 in early 1988, with more details forthcoming at the January 1988 Macworld Expo in San Francisco.
  • Lotus also announced an “enhancement” called Speed Up for 1-2-3 that promised to “speed up” the time needed for spreadsheets to recalculate numbers. Cheifet said this move was in response to Borland’s Quattro spreadsheet, which critics said was a faster program. Users could get Speed Up for free for some dealers, or directly from Lotus for $20.
  • Cheifet noted that despite the new competition in the spreadsheet market, one longtime 1-2-3 user said that for a new program to replace Lotus, it would have to “cure cancer, taste like chocolate, and sell for a dollar.”
  • Despite what Cheifet described as a “shaky reception,” sales of the IBM PS/2 computers were doing well, and that IBM would ship the one millionth unit this month. But while IBM said PC sales were up 40 percent from 1987, analysts noted Big Blue’s share of the overall market was still falling due to the “continuing assault of the clones.”
  • Epson re-entered the laptop market with the Equity LT, a 640KB DOS machine with a backlit screen that would retail for $1,895 (or $2,995 with a hard disk).
  • Paul Schindler reviewed TimeSlips (North Edge Software Corporation, $100), a program for time-based billing. Schindler called it the “best, cheapest professional time billing program we’ve seen.” He also noted its use of color.
  • The U.S. House of Representatives telecommunications subcommittee began hearings on a Federal Communications Commission proposal to raise telephone access charges for users of online services. FCC Commissioner Dennis Patrick testified in favor of the rate hike, saying online users would simply be paying the same rates as long-distance telephone callers. But Massachusetts Rep. Ed Markey testified against the hike, saying it would inhibit the growth of online services so that only the wealthy could access them.
  • October 1987 was “Computer Learning Month,” a Software Publishers Association-backed celebration of the use of computers in the classroom.
  • A new “decision support software” called “Ask God” was purportedly an artificial intelligence program that used the text of the King James Bible to give users advice on their moral conduct.

Javelin Failed to Rise Above Lotus’ Market Share

In the previous blog post, I said that you could divide the history of word processors into three distinct periods based on platform transitions: WordStar in the pre-IBM PC period, WordStar in the DOS period, and Microsoft Word in the Windows period. The spreadsheet market saw a similar pattern: VisiCalc in the pre-IBM PC period, Lotus 1-2-3 in the DOS period, and Microsoft Excel in the Windows period.

That said, Lotus 1-2-3 had a similar problem to WordStar, namely its complicated user interface. While WordStar relied on obscure text commands, 1-2-3 was all about the menus. (So many menus, in fact, that Stewart Cheifet even commented on it during a “Random Access” item announcing the launch of HAL.)

Lotus did not originally develop HAL. Larry Gross and his brother, Bill Gross, were CalTech graduates who started GNP Development corporation in November 1984. Previously they built a company that developed and sold loudspeakers in the Los Angeles area. After IBM introduced the PC, the Grosses pivoted into software consulting for professional accountants and small business customers looking to use Lotus 1-2-3.

This consulting work led to GNP. The Gross brothers decided to try and develop a simpler 1-2-3 interface that used English-language commands. GNP announced the final product–named HAL after the killer AI from 2001: A Space Odyssey–in October 1985. Two months later, Lotus Development acquired GNP and the Grosses continued their work under Lotus itself.

Media coverage of the deal suggested that Lotus acquired HAL, at least in part, due to competitive pressure from the recently released Javelin, which had received favorable reviews as a more modern spreadsheet than the aging 1-2-3. Indeed, Javelin president Stanley Kugell told the Boston Globe that he believed HAL would prove to be too little, too late:

The results of HAL in a demonstration look great, but natural-language products are just not flexible to handle real business problems. The problem is that Lotus 1-2-3 is based on seven-year-old technology and is near its limits. It’s like having a horse and needing something more powerful. Why get a bigger horse when you can buy a car?

Unfortunately for Kugell, fewer people were buying his shiny new car than Lotus’ decrepit old horse. Kugell co-founded Javelin Software Corporation with Robert Firmin in January 1983. Javelin initially grabbed headlines after making distribution deals with IBM and database giant Ashton-Tate. But Javelin as a product always faced an uphill climb.

For one thing, it was more expensive than Lotus 1-2-3. Javelin initially retailed for $695 at a time when 1-2-3 was just $495. This forced Javelin Software into trying a number of pricing strategies. In April 1986, Javelin released a “trial version” for $20. A month later, it announced large discounts on group licensing. And a few months after that, there was the gimmick that Gary Kildall mentioned–Javelin offered 10,000 copies at $99.95 before raising the price to $200.

None of this worked, at least in terms of gaining market share. By some estimates, Javelin had an installed base of only about 60,000 users at its peak. On top of that, Javelin Software had a disastrous 1987 in terms of obtaining new capital. That summer, the company announced a $7.5 million public offering of stock. But the sale was canceled in the aftermath of the October 19, 1987, stock market crash.

Firmin and Kugell then started looking for a buyer to take the sinking company off their hands. In February 1989, Information Resources Inc. (IRI), a Chicago-based company that developed software applications for consumer goods manufacturers, purchased Javelin Software. IRI apparently continued to sell Javelin in the United Kingdom for a short time before integrating the product into its own PC Express software package.

Osborne Fought Lotus in Court–and Lost Badly

Lotus may not have faced a serious threat from Javelin, but that did not mean the company took “work-alike” competitors like Adam Osborne’s VP-Planner lightly. To the contrary, Lotus pursued an aggressive litigation strategy against a number of its remaining competitors, all premised on the notion that the overly complex menu structure of 1-2-3 was itself a form of expression protected by copyright.

To be clear, Osborne didn’t necessarily set out to make a Lotus clone. Fresh off the demise of Osborne Computer Corporation, Adam Osborne decided to shift from hardware to software for his next startup. In September 1983, he incorporated E.V.E. Computer Corporation in California. He then waffled on the name, changing it first to Software Seed Capital Corporation and then Paperback Software International (PSI). PSI publicly announced its launch in March 1984.

Essentially, PSI’s business model was to sell discount software through non-traditional retailers, such as bookstores, that didn’t require employees to receive specialized training. As Osborne indicated on the program, PSI wouldn’t develop software but rather acquire it from individual programmers who would then receive royalties. (Osborne didn’t invent this model, mind you, as companies like Broderbund and Electronic Arts operated in a similar manner in its early days.)

In the case of VP-PlannerThe program originated with a programmer named James Stephenson. Much like Mitch Kapor with Lotus 1-2-3, Stephenson had seen the limitations of VisiCalc and set out to make his own spreadsheet program. Stephenson began work on his program in 1982 under the name FIPS (or “Financial Information and Planning System.”)

The original FIPS prototype used a menu and command structure that was substantially different from the 1-2-3 interface (which in turn borrowed heavily from the VisiCalc interface). By late 1983, Stephenson changed the name of his program from FIPS to VP-Planner and signed a publishing deal with PSI that December.

As development continued on VP-Planner in 1984, however, Stephenson and Osborne decided that in order to be commercially successful, it was necessary to “ensure that the arrangement and names of commands and menus in VP-Planner conformed to that of Lotus 1-2-3,” Stephenson later recalled. This basically meant turning VP-Planner into a 1-2-3 clone–or “work-alike” as Osborne called it on Chronicles. As Stepehson put it, his original interface was completely overhauled to ensure that the Lotus menus and macros would work exactly the same in VP-Planner.

In January 1987–a few weeks before this Chronicles episode first aired–Lotus Development sued PSI for copyright infringement. Lotus also sued Mosaic Software, Inc., a company that produced its own 1-2-3 work-alike called The Twin. Initially, there was a significant amount of backlash within the industry against Lotus. Jon A. Shirley, Microsoft’s president, told the New York Times that a Lotus victory would set a bad precedent for the entire software industry: “I would hate to feel that this would get to a point that everyone sues everyone.” Even Dan Bricklin, the original co-author of VisiCalc, told the Times that copying basic concepts was inherent in software development, noting, “We all borrow the best from others. That’s what progress is all about.”

Jim Manzi, who became Lotus Development’s CEO following founder Mitch Kapor’s sudden resignation in 1986, understandably didn’t share these concerns. He chastised his competitors for “imitating rather than innovating,” and insisted that adding new features on top of the 1-2-3 menu structure was akin to “plagiarizing Gone with the Wind and then merely adding a new concluding chapter.”

The reality, I suspect, was that Manzi was playing defense rather than offense. Lotus 1-2-3 was still the dominant spreadsheet on the PC platform in 1987. But Microsoft had already proven a GUI-based spreadsheet could work on the Macintosh. And as the PC market started to move into the era of machines based on the 32-bit Intel 386, it was only a matter of time before graphical interfaces and applications would render the byzantine command structure of 1-2-3 a historical relic. Time was not on Lotus’ side.

Of course, time is also the fire in which litigation burns very slowly. Lotus Development’s lawsuit against PSI did not go to trial until 1990. U.S. District Judge Robert Keeton of Massachusetts tried the case without a jury. The trial had been scheduled to take place in two phases. During phase one, which took place in February 1990, Keeton heard testimony and evidence regarding whether Lotus could assert copyright protection for the menu and command structure of 1-2-3, and if so, whether PSI had infringed said copyrights.

Keeton issued his decision on June 28, 1990. He ruled in favor of Lotus on both counts. Keeton rejected PSI’s position that the 1-2-3 the user interface was purely “functional” and therefore not eligible for copyright protection. Citing the testimony of multiple expert witnesses at trial, Keeton wrote:

[T]he bulk of the creative work is in the conceptualization of a computer program and its user interface, rather than in its encoding, and that creating a suitable user interface is a more difficult intellectual task, requiring greater creativity, originality, and insight, than converting the user interface design into instructions to the machine.

Keeton reasoned that since a “menu command structure” could theoretically be expressed “in many if not an unlimited number of ways,” the particular arrangement of the 1-2-3 menu structure was an “original and nonobvious” form of expression entitled to copyright protection. And PSI had clearly copied the 1-2-3 menu structure. Keeton further rejected PSI’s argument that it had to mimic the Lotus structure to maintain functional compatibility:

[F]irst, as Excel has proved, a spreadsheet program did not have to be exactly compatible with 1-2-3 in order to be a commercial success. Second, copying the menu structure was not the only way to achieve aspects of this desired compatibility. For example, defendants could have instead added a macro conversion capability as the creators of Excel have successfully done (the Microsoft Excel Macro Translation Assistant), and could have provided an on-line help function that would show users the VP-Planner equivalent for 1-2-3 commands.

Given all this, Keeton said it was “indisputable” that PSI infringed Lotus Development’s copyright. The second phase of the trial was scheduled for November 1990 and would have determined the amount of damages that PSI owed Lotus. But PSI decided it wasn’t worth the effort. In October, the parties announced a settlement. PSI–well, its insurance company–agreed to pay Lotus $500,000 and remove all remaining copies of VP-Planner from the market.

The settlement effectively marked the end of PSI. Adam Osborne actually stepped down as the company’s president just before the trial began in February 1990. A couple years later, he moved back to his native India to live with his sister and, after a long period of declining health, died in March 2003 at the age of 64. As for PSI, it stopped filing corporate reports with the State of California after 1990 and appears to have gone defunct around 1993.

Borland Gives Lotus Its Comeuppance

Four days after Judge Keeton’s decision in the PSI lawsuit, Lotus continued its litigation rampage by suing Borland International, the developers of the spreadsheet Quattro Pro. (Stewart Cheifet briefly mentioned its predecessor, Quattro, which came onto the market in 1988.) Unlike VP-Planner, QuattroPro had seriously eaten into Lotus’ market share. But Jim Manzi and his lawyers believed that Judge Keeton’s decision in the PSI case would help defeat yet another competitor.

And it did, at first. This case was also assigned to Keeton. In July 1992, Keeton granted Lotus partial summary judgment on the issue of whether the Lotus menu command structure was copyrightable. Just as he found in the PSI lawsuit, he said it was. Keeton also held that Borland infringed this copyright because it was undisputed that Quattro Pro used many of the same menu commands and structures as 1-2-3. But he also found that Borland did not copy the entire 1-2-3 interface. As such, he reserved the question of the scope of Borland’s infringement for a jury trial.

In response to Keeton’s ruling, Borland removed the feature of Quattro Pro that emulated the Lotus menu structure. But Borland retained a separate feature known as a “Key Reader” that could read and understand some macros written for 1-2-3. Lotus maintained this still violated its copyright.

Keeton agreed. After a two-phase bench trial, he determined that the Key Reader still copied the 1-2-3 command structure, even though it no longer used the exact Lotus command names, only the first letters of each command. Accordingly, Keeton issued a permanent injunction against Borland.

Unlike PSI, Borland appealed–and won. In March 1995, a three-judge panel of the U.S. First Circuit Court of Appeals in Boston reversed Judge Keeton’s decision. More to the point, the appellate court rejected the very idea that the Lotus menu command structure was protected by copyright in the first place.

Circuit Judge Norman H. Stahl, writing for the panel, agreed with Borland that the menu structure was a “method of operation,” which was not eligible for copyright protection. Stahl rejected Keeton’s characterization of the “expressive choices” made by the Lotus developers in creating their menus as barring any other spreadsheet publisher from making similar choices in their own designs:

The fact that Lotus developers could have designed the Lotus menu command hierarchy differently is immaterial to the question of whether it is a “method of operation.” In other words, our initial inquiry is not whether the Lotus menu command hierarchy incorporates any expression. Rather, our initial inquiry is whether the Lotus menu command hierarchy is a “method of operation.” Concluding, as we do, that users operate Lotus 1-2-3 by using the Lotus menu command hierarchy, and that the entire Lotus menu command hierarchy is essential to operating Lotus 1-2-3, we do not inquire further whether that method of operation could have been designed differently. The “expressive” choices of what to name the command terms and how to arrange them do not magically change the uncopyrightable menu command hierarchy into copyrightable subject matter.

Lotus–which was acquired by IBM a few months after the First Circuit’s ruling–appealed to the United States Supreme Court. The Supreme Court agreed to hear the case and held oral arguments on January 8, 1996. Eight days later, the justices disposed of the case with a one-sentence order: “The judgment of the United States Court of Appeals for the First Circuit is affirmed by an equally divided Court.” Justice John Paul Stevens recused himself from the case for reasons he did not explain, and the remaining justices split 4-4. (We don’t know which justices voted on which side.) This left the First Circuit’s decision intact but did not set a nationwide precedent.

Notes from the Random Access File

  • This episode is available from the Internet Archive and was originally broadcast in March 1987. As noted above, the Archive’s recording is a rerun from October 1987.
  • Larry Gross’s post-Lotus career included a four-year stint in the 1990s as president of Knowledge Adventure, an educational software company that he started with his brother. CUC International acquired Knowledge Adventure in 1996 as part of a software company buying spree that included Davidson & Associates and Sierra Online. Gross stayed on with CUC until 1999 and served as president of Davidson & Associates. The Gross brothers then co-founded Idealab, a technology incubator, which led to the creation of, a startup they later sold for $640 million. Since the early 2000s, Larry Gross has continued to work in venture capital, serving as co-founder and managing partner of Structural Capital since 2003.
  • Following the sale of Javelin in 1988, Robert Firmin continued to work in software development into the 2010s. But he’s become more well-known in recent years for his work as a designer of historical public sculptures. He co-founded Daub & Firmin in 2006, now known as Artworks Foundry, which produces and restores bronze sculptures and monuments.
  • Sam Savage’s General Optimization–now known as Lindo Systems Inc.–is still in business. The company continues to develop What’sBest!–now an add-in for Excel–with version 18 released in December 2022. Savage also serves as executive director of Probability Management, a nonprofit organization “dedicated to making uncertainty actionable through tools, standards, applications, and training.”
  • Eric Gaer had stints as CEO of a number of small tech companies between 1995 and 2012. He started a management consulting firm, Arroyo Development Corporation, in 1998, and in recent years has also moved into real estate sales.
  • Gaer’s former company, Daybreak Technologies, Inc., didn’t have a long life on the market. Founded by Sheng A. Tsao and Lawrence V. Corsaro in 1984, Daybreak’s initial product was the Silk spreadsheet. It never gained much traction in the market, especially after Borland’s Quattro copied Silk’s recovery function. Daybreak tried to market a standalone program called Cocoon that extended this keystroke logging ability to other PC applications, including 1-2-3. But it appears the company ran out of money in mid-1988 and filed for bankruptcy.
  • Lotus Development’s advertising for HAL credited Steve Klein and Dave Rolfe of Singular Solutions Engineering as the original developers of the program. I assume that Singular acted as a subcontractor for the Gross brothers and GNP Development. But I can’t be certain as to the exact relationship.