World Programming Ltd (WPL), a relatively small player in the world of data management and business analytics software, and SAS, a veritable giant in that field, have conflicting views on the significance of a judgment handed down on 23 July in the High Court. The case of SAS Institute Inc v World Programming Limited [2010] EWHC 1829 (Ch) has left WPL claiming ‘a major legal victory’; they describe the judgment as ‘heralding the end of SAS Institute’s 30 year monopoly in platforms for SAS language applications’. SAS has said that claim is false; SAS General Counsel John Boswell said, ‘WPL issued a press release contending that they “secured a major legal victory” in this case. This announcement was surprising in that the decisions the court handed down were related to the violation of SAS’ copyright on its manuals. Other decisions have not been made. They raise uncertain questions of law and have therefore been referred to the ECJ.’
The truth is that, even after reading 333 paragraphs of the judgment of Mr Justice Arnold (amplified by a number of graphics), the position is a little cloudy. It is worth pointing out though that Mr Justice Arnold was quite clear that his judgment would have been appealed by SAS had he not himself referred the various matters to the Court of Justice. On the major issue, the breach of copyright in the SAS software, WPL won – for the time being at least.
SAS Institute had claimed that WPL’s use of the SAS Learning Edition product when developing its own World Programming System (WPS) language interpreter software was a breach of terms of use and infringed its copyright. The court also found that WPL acted outside the scope of its license agreement for SAS Learning Edition software by using that product to develop the WPS software but took the view that the Software Directive protected WPL from an action for breach of SAS’s licence terms where WPL used the SAS Learning Edition to observe, study and test its programming functions when it developed WPS. Mr Justice Arnold reasoned that copyright protects the source code of the SAS system as a literary work which WPL had not copied and that replicating the functions of software, however complex and at whatever level of detail, is not an infringement of copyright.
Customers who have legacy programs written in the SAS Language will now be able to choose whether to continue with the SAS system or elect for an alternative which provides the required functionality.
Mr Justice Arnold ruled that the wording of one of the WPS user manuals was too close to the wording of SAS’s user manuals. WPL will now withdraw and re-write that manual in the light of the findings in the judgment, but say that this has no impact on WPL’s customers or on WPL’s ability to supply WPS or support its customers.
Alexander Carter-Silk, head of IP, Technology and Commercial at Speechly Bircham who led the WPL legal defence team said: ‘By expediting this hearing and controlling procedural devices, the courts have provided WPL with access to justice. The levels of complexity and arguments developed during the case were exceptionally challenging but I have no doubt at all that the right result was achieved.’
Mr Justice Arnold made extensive reference to the judgment of Pumfrey J in Navitaire v easyJet [2004] EWHC 1725 (Ch) and was not convinced by the submissions from SAS that that judgment was wrong in any material way.
The SAS v WPL judgment will now be referred to the Court of Justice for that court to confirm the High Court’s interpretation of the EU Software Directive. This may take three years.
