IP ALERT by DLA Piper UK LLP and DLA Piper Scotland LLP
In a much-awaited judgment, the CJEU has confirmed that software copyright will not be infringed by the emulation of functionality. This judgment provides helpful clarification of a fundamental issue for the software industry. While some software licensors such as SAS would have liked to be able to prevent competitors from imitating functionality of their products, this would have led copyright law into the uncertain realm of protecting ideas, and arguably been an unwarranted hindrance to innovation and competition. The decision accords with the approach previously taken by the English courts in the Navitaire and Nova cases.
The software at stake
SAS developed analytical software known as the SAS System, an integrated set of programs, used for data processing and analysis tasks, particularly statistical analysis. The core component of the SAS System is known as Base SAS. It enables users to write and run application programs which can process their data, in a language known as the SAS Language.
The Defendant, WPL, wrote an alternative program to the SAS System which enabled users to run application programs which such users had written in SAS Language. WPL freely admitted that its intention was to emulate much of the functionality of the SAS components as closely as possible. There was no suggestion that WPL had access to, or copied, the text or structural design of the source code of the SAS System. Nor had WPL decompiled SAS’s object code. Rather, it observed and tested the SAS System, accessed a manual describing the functionality of the SAS System, and then reproduced its functionality.
The road to Luxembourg
SAS sued WPL for copyright infringement in the English High Court, alleging that WPL’s emulation of its SAS System software infringed copyright in both the software itself, and in the manual which WPL had access to. Arnold J referred 9 questions to the CJEU.
Advocate General Bot delivered his non-binding opinion last November (see our note here), which came down firmly on the side of WPL.
The Court’s ruling
The Court very much endorsed the AG opinion that the main issue turned on the idea/ expression dichotomy. This general copyright law principle is reflected in Article 1(2) of the Software Directive[1], which states that ideas and principles which underlie a computer program are not protected under that Directive. The court concluded that “neither the functionality nor the programming language and the format of data files used in the program in order to exploit certain of its functions constitute a form of expression”.
As to programming language, the court stated that the building blocks of such language (keywords, syntax, commands, etc) are not in isolation intellectual creations of the programmer. It is only “through the choice, sequence and combination” of those building blocks that the programmer may create a copyright-protected work.
It followed that the issue of whether WPL’s program infringed SAS’s manual depended on whether WPL’s program reproduced the expression of the intellectual creation of the author of SAS’s manual.
The Court was also asked to consider the defence under Article 5(3) of the Software Directive. This permits a person with a right to use a program 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’ in certain circumstances. The Court held that this provision could be relied on by third party programmers seeking to emulate the software’s functionality. Any contractual provision seeking to prevent such use would be null and void.
Follow-up
It is now for the English court to apply the judgment to the facts. However, it appears likely that the provisional conclusions reached by Arnold J in his 2010 judgment (that WPL did not infringe, other than to the extent its manual reproduced a substantial part of the SAS manual) will be confirmed.
[1] Originally Directive 91/250/EEC, now amended and codified as Directive 2009/24, see Art 1(2)