The ECJ’s judgment in the case of SAS Institute Inc v World Programming Limited (C-406/10) (see here for full text of the judgment) was given on 2 May. It has followed the Advocate General’s Opinion in most respects. The ruling will be greeted with general relief by IT lawyers. While it must be remembered that the final High Court judgment is awaited, the ECJ’s conclusions seem to leave little room for doubt as to that final ruling.
The ECJ’s answers
The ECJ has answered the referred questions as follows:
1. Article 1(2) of Council Directive 91/250/EEC of 14 May 1991 on the legal protection of computer programs must be interpreted as meaning that neither the functionality of a computer program nor the programming language and the format of data files used in a computer program in order to exploit certain of its functions constitute a form of expression of that program and, as such, are not protected by copyright in computer programs for the purposes of that directive.
2. Article 5(3) of Directive 91/250 must be interpreted as meaning that a person who has obtained a copy of a computer program under a licence is entitled, without the authorisation of the owner of the copyright, to observe, study or test the functioning of that program so as to determine the ideas and principles which underlie any element of the program, in the case where that person carries out acts covered by that licence and acts of loading and running necessary for the use of the computer program, and on condition that that person does not infringe the exclusive rights of the owner of the copyright in that program.
3. Article 2(a) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society must be interpreted as meaning that the reproduction, in a computer program or a user manual for that program, of certain elements described in the user manual for another computer program protected by copyright is capable of constituting an infringement of the copyright in the latter manual if – this being a matter for the national court to ascertain – that reproduction constitutes the expression of the intellectual creation of the author of the user manual for the computer program protected by copyright.
Expert comment
Gareth Dickson and Akash Sachdeva, Edwards Wildman Palmer UK LLP
The CJEU’s ruling is a long way from the sort of judgment that would have brought some certainty to this complex and at times controversial area of law. Specifically, by indicating that those elements of a program which are not eligible for copyright protection under the Software Directive might be eligible under a different Directive, the Court has simply closed one door and unlocked another. The general direction of the Court’s jurisprudence, however, appears to be that copyright protection will not be permitted in anything other than a program’s lines of code.
The judgment also shows a potential misunderstanding of the law of copyright when the CJEU says, as the Advocate General had, that allowing copyright protection for functionality would permit IP owners to have a monopoly on ideas. While this may be true in the patent arena, it is plainly incorrect as regards copyright, where independent creation is a complete defence to a copyright infringement action.
The Court’s circular answer to the second question is equally unhelpful, and their answer to the third question arguably does no more than confirm what was already understood to be the law on this point.
The case now returns to London, where the High Court has the interesting task of applying the CJEU’s ruling to the dispute before it. A judgment is expected by the end of this year.
Toby Headdon, Senior Associate at Berwin Leighton Paisner LLP
The Court’s answers are likely to be greeted with a collective sigh of relief by many in the software industry as they confirm that neither the underlying functionality of a computer program, the programming language it is written in, nor the format of data files used in it are protected by copyright. It also confirms (in rather clumsy wording) that a licensee of software is entitled to reverse engineer the program provided that the source and object code is not reproduced and the acts are (1) covered by the licence (2) loading and running necessary for the use of the program. This entitlement cannot be excluded by contract.
David Cran, Partner, IP, Technology & Outsourcing, RPC
The CJEU condensed the nine detailed questions referred and provided three short answers, which can be summarised as follows:
1. The functionality of a computer program (and the programming language and format of data files) do not constitute forms of expression of that program, and so are not protected by copyright.
2. A person who uses a computer program in accordance with a licence is entitled, without the authorisation of the copyright owner, to observe, study or test the program functions to determine the underlying ideas and principles of that program.
3. Computer manuals (or parts of them) will be protected by copyright to the extent that they are the expression of the intellectual creation of the author. Keywords, syntax and commands are not, in isolation, protected by copyright; however, their choice, sequence and combination may amount to an intellectual creation and be protected by copyright (as in this case). It is for the English court to decide whether those elements have been reproduced and so copyright infringed.
In short, this is a significant setback for SAS and a major victory for WPL and other software developers who wish to create substitute programs that have the same functionality as more established programs. SAS may now be left only with a claim for infringement of the manuals, but without rights to prevent WPL exploiting its substitute programs.
Hamish Sandison, Partner in Field Fisher Waterhouse’s Technology and Outsourcing Group.
‘The Court’s confirmation that there is no copyright in the functionality of a computer program or in programming languages is welcome. This was already the position under English law since the Navitaire case. Had the court ruled differently, this would have stifled innovation and competition.
‘Software proprietors cannot prevent their licensees from observing and studying the licensed program in order to find out its underlying ideas and principles – i.e. what it does and how it works – provided the licensee observes the scope of the licence. This strikes the right balance. Developers must ensure that they hold a valid licence and that they observe the licence scope. The court’s ruling does not extend the rights of developers to decompile software. Developer’s rights to decompile are narrow. For example, they only allow code to be copied or translated for the purposes of enabling an independently created program to interoperate with another program, and are subject to stringent conditions.
‘The Court has confirmed the Advocate General’s view that it could be an infringement if a developer reproduces in its software elements described in the user manual of rival software. This will depend on whether those elements are protected by copyright. The choice, sequence and combination of commands, combinations of commands, syntax, keywords, mathematical concepts could be copyright protected if they meet the court’s ‘originality’ test . SAS’s claim will now return to the High Court, which will have to decide whether any elements of the SAS manuals copied by WPL were copyright protected.’
Background and further detail
SAS Institute Inc. has developed the SAS System, an integrated set of programs which enables users to carry out data processing and analysis tasks, in particular statistical analysis. The core component of the SAS System is called Base SAS. It enables users to write and execute application programs (also known as ‘scripts’) written in the SAS programming language for data processing.
World Programming Ltd (WPL) perceived that there was a market demand for alternative software capable of executing application programs written in the SAS Language. WPL therefore produced the World Programming System (WPS). The latter emulates functionalities of the SAS components to a large extent in that, with a few minor exceptions, WPL attempted to ensure that the same inputs would produce the same outputs. This would enable users of the SAS System to run the scripts which they have developed for use with the SAS System on WPS.
In order to produce the WPS program, WPL lawfully acquired copies of the Learning Edition of the SAS System, which were supplied under licences limiting the rights of the licensee to non-production purposes. WPL used and studied those programs in order to understand their functioning but there is nothing to suggest that WPL had access to or copied the source code of the SAS components.
SAS Institute brought an action before the High Court in the UK, accusing WPL of having copied the SAS System manuals and components, thus infringing its copyright and the terms of the Learning Edition licence. In that context, the High Court has put questions to the Court of Justice regarding the scope of the legal protection conferred by EU law on computer programs and, in particular, whether that protection extends to programming functionality and language.
The Court recalls, first, that the Directive on the legal protection of computer programs extends copyright protection to the expression in any form of an intellectual creation of the author of a computer program. However, ideas and principles which underlie any element of a computer program, including those which underlie its interfaces, are not protected by copyright under that directive.
Thus, only the expression of those ideas and principles is protected by copyright. The object of the protection conferred by Directive 91/250 is the expression in any form of a computer program, such as the source code and the object code, which permits reproduction in different computer languages.
On the basis of those considerations, the Court holds that neither the functionality of a computer program nor the programming language and the format of data files used in a computer program in order to exploit certain of its functions constitute a form of expression. Accordingly, they do not enjoy copyright protection.
To accept that the functionality of a computer program can be protected by copyright would amount to making it possible to monopolise ideas, to the detriment of technological progress and industrial development.
In that context, the Court states that if a third party were to procure the part of the source code or object code relating to the programming language or to the format of data files used in a computer program, and if that party were to create, with the aid of that code, similar elements in its own computer program, that conduct would be liable to be prohibited by the author of the program. In the present case, it is apparent from the explanations of the national court that WPL did not have access to the source code of SAS Institute’s program and did not carry out any decompilation of the object code of that program. It was only by means of observing, studying and testing the behaviour of SAS Institute’s program that WPL reproduced the functionality of that program by using the same programming language and the same format of data files.
Second, the Court observes that, according to the Directive, the purchaser of a software licence has the right to observe, study or test the functioning of that software in order to determine the ideas and principles which underlie any element of the program. Any contractual provisions contrary to that right are null and void. Furthermore, the determination of those ideas and principles may be carried out within the framework of the acts permitted by the licence.
Consequently, the owner of the copyright in a computer program may not prevent, by relying on the licensing agreement, the purchaser of that licence from observing, studying or testing the functioning of that program so as to determine the ideas and principles which underlie all the elements of the program in the case where the purchaser carries out acts covered by that licence and the acts of loading and running necessary for the use of the program on condition that that purchaser does not infringe the exclusive rights of the owner of the copyright in that program.
In addition, according to the Court, there is no copyright infringement where, as in the present case, the lawful acquirer of the licence did not have access to the source code of the computer program but merely studied, observed and tested that program in order to reproduce its functionality in a second program.
Lastly, the Court holds that the reproduction, in a computer program or a user manual for that program, of certain elements described in the user manual for another computer program protected by copyright is capable of constituting an infringement of the copyright in the latter manual if that reproduction constitutes the expression of the intellectual creation of the author of the manual.
In this respect, the Court takes the view that, in the present case, the keywords, syntax, commands and combinations of commands, options, defaults and iterations consist of words, figures or mathematical concepts, considered in isolation, are not, as such, an intellectual creation of the author of that program. It is only through the choice, sequence and combination of those words, figures or mathematical concepts that the author expresses his creativity in an original manner.
It is for the national court to ascertain whether the reproduction alleged in the main proceedings constitutes the expression of the intellectual creation of the author of the user manual for the computer program protected by copyright.
