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Legal protection under the Software Directive

September 2010

The extent to which copyright should protect the interface, language and architecture of software programs (over and above underlying source code) has been much debated. The recent Navitaire and Nova Productions cases clarified the English court’s view. Now, in SAS Institute v World Programming Ltd, Mr Justice Arnold in the English High Court has referred a number of questions to the European Court of Justice (“ECJ”) regarding the extent of copyright protection conferred on computer programs under the Software Directive[1] and the Information Society Directive[2] .

Facts of the Case

The claimant (SAS Institute) developed analytical software, which enables users to carry out a wide range of data processing tasks, particularly statistical analysis. The core component of this software allows users to write and run their own analytical application programs to manipulate data in a programming language called SAS Language. Any user who wrote applications in the SAS Language had to license the SAS software from the claimant. If the user wanted to use analytical software from another supplier instead, they would need to rewrite their existing program in a different processing language.

The defendant (WPL) decided to create their own software (World Programming System or WPS) that could compete with the claimant’s product by executing applications written in the SAS Language. The defendant admitted that they studied closely the Learned Edition (training version) and Full Edition of the claimant’s software as well as their manuals in an attempt to emulate as much of the functionality as possible.

SAS Institute claimed that WPS had infringed its copyright. In particular they alleged that:
1. copyright in the manuals for the SAS system (the “SAS manuals”) was infringed:
a. by creating WPS; and
b. by WPL creating their own manual (“WPS manual”) and quick reference guides (“WPS guides”); and
2. copyright in the SAS software was infringed by:
a. indirectly by copying the SAS manuals; and
b. directly by using the Learning Edition product in breach of its licence terms.

Idea / Expression Dichotomy

An impediment to SAS Institute’s claim was that the defendant did not have access to, and did not copy, the source code. In the previous case of Navitaire Inc v Easyjet Airline Company[3], Pumfrey J held that the copyright in a computer program is only infringed if the source code is copied, rather than if the functionality, interfaces or programming language of the program are reproduced. This decision was based on article 1(2) of the Software Directive, which states that:

“[i]deas and principles which underlie any element of a computer program, including those which underlie its interfaces, are not protected by copyright under this Directive.”

Pumfrey J in Navitaire judged that functionality, interfaces and programming language all fell the wrong side of the idea/expression dichotomy, whereas the source code reflected the expression of those ideas and was therefore protected by copyright. Citing the recitals to the Software Directive, SAS attempted to persuade Arnold J that Pumfrey J had been wrong to exclude functionality, interfaces and programming languages from the scope of copyright. Arnold J rejected their arguments and agreed with the previous ruling in Navitaire. Nevertheless he held that the matter was not acte clair and decided to refer the issue to the ECJ. In particular he highlighted that there was debate over how broadly the concept of a programming language should be interpreted.

Despite the reference, Arnold J decided to consider the facts in this case in light of previous decisions. Firstly he held that the SAS Language was a programming language. WPS had reproduced elements of it, but in light of his conclusion that programming languages were not protected by copyright, there was no infringement. Secondly, Arnold J considered that the SAS data file formats were interfaces, and as such did not fall within the scope of the copyright in SAS Institute’s computer program. Accordingly, the files WPS wrote in this format were not infringing. Thirdly, despite the fact that WPS reproduced a lot of the functionality of the SAS software, this had not involved taking a substantial part of the source code and therefore there was no infringement on that front either.

As regards functionality, the claimant had argued that the fact that the definition of a computer program in article 1 of the Software Directive includes “preparatory design material” suggests that functionality is protected. Arnold J held that whilst the design of a computer program was protected, the design was not the same as the functionality of a program: it was perfectly possible to create a program that replicated the functionality of an existing program but whose design was different. The claimant had also attempted to draw an analogy to cases in which the copyright in a novel or play extended to the underlying plot, however, Arnold J maintained Pumfrey J’s rejection of this argument in Navitaire. Arnold J also felt he was bound by the Court of Appeal’s decision in Nova Productions Ltd v Mazooma Games Ltd[4], which reemphasised that functionality did not form part of the copyright of a computer program.

Copyright in the SAS Manuals

The claimant also believed that this case could be distinguished from Navitaire in that the defendants had indirectly copied substantial parts of the SAS manuals by creating the WPS system. In rejecting this argument, Arnold J ruled that assuming Pumfrey J’s reasoning was correct that there was no infringement in copying the functionality of a computer program without copying its source code or design, then it could not be infringement of the copyright in the manual to use the manual as a specification of that functionality. However, again Arnold J did not believe that this interpretation of article 2(a) of the Information Society Directive was acte clair and consequently chose to refer another question to the ECJ.

The only successful copyright infringement claim, according to Arnold J’s analysis, was that the SAS manuals had been substantially reproduced by WPS in its own manual (WPS manual). Arnold J used the test for infringement laid down in Infopaq International A/S v Danske Dagblades Forening[5] and held that the parts taken by the defendant expressed the intellectual creation of the authors of the SAS manuals and therefore infringed the copyright in them.
Article 5(3) Defence

The claimant had also claimed that WPL’s use of the Learning Edition software breached the terms of its licence (e.g. by comparing the performance of the Learning Edition against their own software) and this amounted to copyright infringement. However, the defendant sought to rely on Article 5(3) of the Software Directive as a defence, which states that:

“[t]he person having a right to use a copy of a computer program shall be entitled, without the authorization of the rightholder, to observe, study or test the functioning of the program in order to determine the ideas and principles which underlie any element of the program if he does so while performing any of the acts of loading, displaying, running, transmitting or storing the program which he is entitled to so.”

Arnold J pointed out that there was an important public interest underlying this defence, and therefore, it should not be possible to override it by contract; indeed Article 9(1) of the Software Directive prohibits any contracting out of the Article 5(3) defence. Therefore Arnold J held that the licence terms for the Learning Edition product were null and void to the extent that they make it an infringement to observe, study and test the Learning Edition in order to determine the ideas and principles underlying it. However, he decided once again that the interpretation of article 5(3) was not acte clair and therefore resolved to refer a question on its interpretation.

Conclusion

Given the significance of these issues to the software sector, it is unsurprising that Arnold J decided to refer questions to the ECJ. Although the English court has made a number of recent attempts to clarify this issue, it seems clear guidance from the ECJ would be welcomed by those in the software industry as well as customers looking to migrate to alternative products.

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Paul Garland

[1] Council Directive 91/250/EEC of 14 May 1991

[2] Council Directive 2001/29/EC of 22 May 2001

[3] [2004] EWHC 1725 (Ch)

[4] [2007] EWCA Civ 219

[5] Case C-5/08, 16 July 2009T