Opinion ID: 1778976
Heading Depth: 2
Heading Rank: 2

Heading: Tangibility and IBM.

Text: The evidence in the present case does not support an attempt to classify the programs like those in Tres. IBM lists its programs in a Directory, and after the particular customer selects a program, existing canned programs may be modified to fit the particular customer's needs. Q: I got the impression from your testimony that you take, you have a book of an inventory of basic plan programs A: Yes. Q: from which a customer selects? You then look at your library card to find out the type of computer hardware that he has, all existent programs that he has stored in the computer, and then you tailor this pre-planned packaged inventory item so that it will operate in conjunction with this computer and his other program? A: That is correct. On the evidence before us, we can only conclude that modifications of cataloged software were minimal, if any. The Commissioner found the modifications were related to fitting programs together so that all programs would operate together and in synchronization with each other, and that modifications were not made to the basics of the program structure. There appears little similarity to the programs in Tres. The Commissioner also found the tapes to be the ultimate objects of the transactions, noting the crucial role the tapes play in the bargaining process. The tapes were ready to use to program the customer's machine, which is another difference from Tres. [8] The second point examined by the Commissioner was the alternative methods of delivery argumentthe possibility that this software could have been delivered to the customer via telephone lines. The alternative methods argument has been considered in several cases. See Maccabees, Central Computer, Bullock, and Tidwell, supra . It is questionable whether this issue is before us. IBM stipulated that the only manner by which the programs were delivered was by tapes, discs, diskettes or punched cards. None were delivered by telephone lines. While there was evidence that there were printed instructions on the tapes to the effect that they must be returned to IBM, the instructions also said for the customer to copy the tape and retain the copy as a backup. We see no distinction between keeping the original tape and copying the tape and returning the original copy. As a matter of fact, IBM conceded that it made no effort to enforce the return to IBM instruction. A decision of the Administrative Hearing Commission is to be upheld when authorized by law and supported by competent and substantial evidence upon the whole record. Daily Record Company v. James, 629 S.W.2d 348 (Mo. banc 1982). After reviewing the entire record we agree with the Commissioner that IBM failed to carry its burden of proof of establishing the software in question to be either customized or a service which would bring it within the holding of Tres. As the Commissioner noted: Despite the reference by the Tres court to the high degree of technology and complexity which surrounds any understanding of computer programs, there was no expert testimony or technical evidence of any kind offered by either party which would describe or define computer programs generally or the specific computer programs involved in this proceeding... Respondent called no witnesses and offered no exhibits. Petitioner's only witness testified not as to the design and formulation of a computer program but to its marketing and distribution. The judgment of the Administrative Hearing Commission is affirmed. BILLINGS, C.J., and BLACKMAR, RENDLEN, HIGGINS and COVINGTON, JJ., concur. ROBERTSON, J., concurs in result.