We have now received what should be the final instalment in this long-running case. Arnold J handed down his decision in SAS Institute Inc v World Programming Ltd [2013] EWHC 69 (Ch) on 25 January 2013, following the referral back to the English High Court from the Court of Justice of the European Union.
The key point is that Arnold J endorsed his initial judgment, which he felt had been supported by the CJEU. He rejected the majority of the claimant’s claims of copyright infringement, holding that the defendant, WPL, had infringed copyright in one instance only; that relating to the use of the SAS user manuals in creating the WPL user manuals.
A final judgment in this case is to be welcomed as bringing certainty to the IT industry that functionality in a computer program is not protected by copyright. Whilst this will almost certainly disadvantage suppliers of certain established software programs, it should encourage third-party innovation and, ultimately, customers should benefit from increased competition between suppliers.
Revisiting the background
SAS is the developer and owner of a long-standing set of integrated programs which enable users to perform analysis and processing, particularly statistical analysis (the SAS System).
The main element of the SAS System is Base SAS, which allows users to write and run their own programs so that they can use the SAS System with their own data inputs. The user programs need to be written in SAS’s proprietary computer language to function. This has meant that SAS customers have had no alternative but to license the SAS System to run their existing SAS language application programs, or in order to create new ones. If a customer wanted to switch to another supplier’s software, they would need to replace all their existing applications.
WPL is a competitor to SAS which developed a rival system by studying a Learning Edition of the SAS System, and by consulting an SAS user manual.
This system (the WPL System) recreated, as closely as possible, the functionality of the SAS System so that the same inputs into the SAS System and the WPL System would create the same outputs. This enabled users of the SAS System to run their own application programs on the WPL System with little or no change in functionality. As a result, users were free to discontinue their licences for the SAS System, without the onerous task of replacing all their programs in non-SAS computer language.
SAS brought a claim against WPL, alleging copyright infringement of both the functionality of their system and their user manuals.
The first High Court hearing
The case of SAS v WPL was heard at first instance in the English High Court by Arnold J, who handed down his initial judgment in July 2010 (see [2010] EWHC 1829 (Ch)).
Before the High Court, WPL freely admitted that the response of the WPL System was intended to be, and was, identical to the response of the SAS System. The parties also agreed that WPL had not had access to the SAS source code, nor had it copied any of the text or the structural design of SAS’s source code, when developing the WPL System.
Arnold J recognised that previous English decisions (Navitaire v easyJet [2004] EWHC 1725 (Ch) and Nova v Mazooma [2007] EWCA Civ 219) had held that it is not an infringement of copyright in the source code of a computer program for a developer to study how the system works and to then reproduce the functionality of the original program (provided the source code or object code has not been copied). Arnold J also recognised that this previous case law suggested that there is no copyright in the functionality of a program, nor in the programming language or data file formats used in that program.
SAS separately argued that WPL was also in breach of the licence agreement which it had taken out to use the “Learning Edition” of the SAS System because it had used this edition for purposes outside the scope of the licence.
SAS also contended that WPL had infringed the copyright in its user manuals, both in designing the software itself and in creating its own user manuals.
Arnold J decided one aspect definitively: that there had been literal copying of the user manuals by WPL in the preparation of its own user manuals. Regarding the other issues, Arnold J provisionally followed Navitaire and Nova and found that WPL had not infringed the intellectual property rights in the software applications of SAS, when it emulated the functionality of the SAS System in creating the WPL System. However, he considered that certain issues of European law were not acte clair.
As a result, Arnold J stayed the case and referred multiple questions to the CJEU in July 2010.
The CJEU decision in a nutshell
The CJEU’s judgment was handed down on 2 May 2012. In the main, the decision followed the recommendations of the Attorney General which were made in November 2011. In summary, the CJEU found that:
1. The functionality of a computer program, including the programming language and the format of data files, constitute the overarching ideas behind a program, rather than 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, in themselves, the expression of the intellectual creation of the author. For instance, in this case, although keywords, syntax and commands are not sufficient on their own to be protected by copyright, their choice, sequence and combination may amount to an intellectual creation and be protected as a literary work. It was left for the English court to decide whether a substantial part of those elements had been reproduced and so whether copyright had been infringed.
Referral back to the High Court
The case was then referred back to the English High Court, where Arnold J was required to apply the responses of the CJEU to the facts of the case, and decide whether WPL had infringed SAS’s copyright. In short, his decision was consistent with the first instance decision: WPL had not infringed copyright in the SAS System, except in relation to the SAS manuals.
Arnold J felt that the CJEU decision was an endorsement of the English courts’ previous interpretation of Article 1(2) of the Software Directive; that is copyright in a computer program does not protect the programming language in which it is written, nor its interfaces (such as data file formats) nor its functionality from being copied.
The programming language
SAS argued that, following the CJEU decision, the SAS language should be protected under the Information Society Directive as a separate copyright work, even if it would not be protectable under the Software Directive. Arnold J rejected this argument, and interpreted the CJEU’s decision (supported by Case C-393/09 Bezpecnostni softwarova asociace – Svaz softwarove ochrany v Ministerstvo kultury [2010] ECR L-13971), as meaning that, although the possibility of the SAS language being protected in such a way had not been dismissed, to decide that point would require an entirely separate analysis of subsistence of copyright in the SAS language as a copyright work, specifically under the Information Society Directive.
It was held that SAS could not go on to claim copyright in the SAS language under the Information Society Directive because they had not pleaded the SAS language as a distinct copyright work. Any such pleading would, said Arnold J at [26], require a further amendment to their pleaded case, which would raise “new factual and legal issues of considerable difficulty” and was therefore not justified at that late stage in proceedings. However, Arnold J did go on to discuss some of these factual and legal questions.
Arnold J stated that, if the question of subsistence were to be addressed in relation to a programming language, one would have to answer the question of what type of copyright work such a language could be (he commented that it would be likely to be a literary work). It would then be important to distinguish between the actual work in which copyright could subsist, and the particular fixation of that work. Although fixation is required for a copyright work to exist, the fixation itself is not proof of subsistence in itself.
Arnold J discussed how language is often the tool with which to create a work, as well as its evolutionary nature; and expressed his provisional view that a programming language would not be capable of being a copyright work.
In considering the question of originality of a programming language, Arnold J used the “intellectual creation” test, rather than the “skill, labour and judgement” test, which implies that this test, which has been applied previously only to computer programs, databases and photographs, may now apply to all works.
But he also went further in saying that, even if a programming language could be an intellectual creation, that did not mean that it would necessarily be a copyright work. Some cases decided by the CJEU have seemed to suggest that any work which is its author’s own intellectual creation should be a copyright work; Arnold J’s judgment seems to provide that this requirement is not of itself sufficient in the UK.
Data file formats
Arnold J commented that there was no evidence to suggest that the SAS data file formats were original, and nor had it been established that they were in fixed form in this case, so it followed that they were not copyright works in which copyright had been infringed.
The use of the Learning Edition and WPL’s licence
Arnold J found that WPL’s use of the Learning Edition to develop the WPL System fell within the exceptions to restricted acts found in Article 5(3) of the Software Directive. He also held that if such use, in line with the Software Directive, was contradictory to the licence terms between the parties then those terms would be null and void as a result of Article 9(1) of the Software Directive. As a result, WPL’s use of the SAS Learning Edition was not an infringement of copyright, nor a breach of licence.
Functionality of the computer program
Arnold J interpreted the CJEU responses to his questions as meaning that the functionality of a computer program does not constitute a form of expression of that program, and is therefore not protected by copyright.
It also followed that reproducing functionality of a program could not contribute to the copying of a substantial part of that computer program; there can only be a reproduction of a substantial part if the reproduction represents the expression of the intellectual creation of the author of the program (ie that the part reproduced is capable of copyright protection in and of itself).
The user manuals
In line with his first instance decision, Arnold J held that WPL had copied a substantial part of the SAS user manual when they created their own user manual, and so had infringed copyright in the SAS manual. Whilst this may not be regarded as the central part of the dispute, SAS have preserved protection for at least some (albeit marginal) aspects of the SAS System, representing a very limited victory.
Conclusion
Notwithstanding the limited victory for SAS in relation to the user manuals, WPL have succeeded in defending the majority, and the most far-reaching, of SAS’s claims. They are ultimately free to continue selling their competing WPL system.
The High Court decision is consistent with previous English decisions in Navitaire and Nova, which held that general ideas are not protected by copyright, it is only the expression of those ideas which can attract protection. It is also consistent with this previous English case law that recreating the functionality of a computer program does not in itself infringe copyright.
For the software industry as a whole, this final High Court judgment is likely to be welcomed as bringing certainty to the area of protecting computer programs with copyright.
Those looking to develop and protect proprietary systems will need to look to other barriers to entry, both commercial and legal. Literal copying of object or source code (other than within the narrow exceptions) remains an infringement; manuals and related materials may be protected by copyright; brand, additional developments and “value added” services may help promote or maintain customer loyalty. Asserting copyright over the outcomes of a program will not be available to developers as a deterrent to competitors.
For the customer, the result should be a positive one. Customers should be offered more choice as a by-product of the freedom of suppliers to compete with one another by creating programs with the same or similar functionalities. Developers will have the freedom to replicate certain functionalities without fear of reprisal under copyright law (provided that they do so within the bounds of permitted methods of observing, studying and testing the functionality of the original program).
David Cran is a Partner in the IP, Technology & Outsourcing Group at RPC. Louise Williams is an Associate there: www.rpc.co.uk
