Altai hired an ex-employee of Computer Associates. In the course of his work at Altai the employee used code owned by Computer Associates. During a lawsuit brought by Computer Associates, it was found that the code written by employee consisted of 30% of code taken from his previous employer. Altai had the program rewritten by programmers who had never seen the infringing code (a clean room rewrite). Computer Associates sued Altai again on the basis that the second version of the code infringed their original code.
The Court held that there was no infringement in the second version. A new test for substantial similarity, known as the "abstraction/filtration/comparison" test, was developed that was largely based on the reasoning in Nichols v. Universal Pictures Co.. The filtration test first examines the allegedly infringed program and excludes from consideration design elements made for efficiency, elements dictated by external factors, and elements taken from the public domain. Anything left over is protectable. In this case, Altai successfully defended against the copyright claim because everything CA claimed was filtered out.
The case also established that a lay observer's opinion of infringement is not relevant to complicated subjects like computer software.