Form Over Function – The ECJ Rules On Software Copyright

By Cobus Jooste

Seldom does a fact bear repeating as frequently as the maxim, “There is no copyright in ideas”. And despite the regularity with which this fundamental principle of copyright law is cited, its application remains a bone of contention.

Since the Statute of Anne (1710), the common antecedent of modern copyright law, this creature of statute exists exclusively for the protection of the material expression of ideas, and not the underlying ideas, facts or discoveries contained in the work.

For this reason, copyright protection vests at the moment a work is recorded in physical form, and only to the extent that it is recorded. As a result, an author will hold the exclusive rights to reproduce and distribute his/her novel while the ideas that inspired the storyline (the general plot, setting and timeline) may be lawfully reproduced by another.

However, in some cases the material expression and its underlying ideas will become enmeshed to the extent that a reproduction of the idea will necessarily borrow from the material expression of that idea, resulting in copyright infringement. The consequential difficulty in separating unprotected ideas from protected expression is known as the idea/expression dichotomy.

In an attempt to provide legal certainty, the “sweat of the brow” doctrine provides that an author is entitled to protection for, and to the extent of, his intellectual efforts at creating the work. In other words, an author may draw upon copyright protection as the basis for rewarding his intellectual investment in the work to the extent that it embodies his own labour, skill and judgment.

However, copyright law has seen renewed challenges to the idea/expression dichotomy from the software industry, most notably with regard to the protection of the non-literal elements of computer programs. This refers to those parts or manifestations of a computer program that are not directly represented in the source code, such as the user interface or screen display produced by the program and, more importantly, the functionality of the program.

Considering the vast financial investment in software development, not to mention the commercial gains that may be derived from a successful product, the software industry has consistently lobbied for the expansion of copyright protection beyond the source code. In order to achieve a competitive edge, many software houses have resorted to copyright litigation based on the functions their program can perform. By doing so, third-party developers were obliged to obtain a license for the use of the ostensibly protected software in order to build upon its functions and create compatible applications.

Of course this utility-based approach to copyright protection is at odds with the nature of copyright law, contrary to its underlying ideology and considered a dangerous precedent for the future development of intellectual property law.

As a result, copyright in software functionality became the apple of discord in many jurisdictions between those who control a particular market segment and those who offer (or wish to create) an application that performs the same function. Consequently, copyright litigation based on functionality joined the established tradition (in software matters) of an indefinite to-and-fro between the courts and deliberate forum-shopping. As a result, either party may succeed in the court of first instance of one jurisdiction, lose in another and respectively succeed and fail on appeal in the same two jurisdictions based on precisely the same facts within months of each other. While this trend is unprecedented in other areas of law, to those in software copyright (and even more so in patents) it is old news.

It is, therefore, not surprising that the European Court of Justice in SAS Institute Inc v World Programming Ltd C-406/10 (2 May 2012) was asked to advise on the application of two EU Directives (91/250 and 2001/29) that deals with copyright. This highly anticipated decision was set to be a watershed moment in modern copyright law as many predicted that it would build upon the established anti-functionality trend in the UK and USA and finally indicate a point of no return.

The facts in this matter before the High Court of Justice of England and Wales ([2010] EWHC 1829 (Ch) (23 July 2010)) so closely resembled the essence of every copyright functionality case before it that, even before the case was set down by the ECJ, this matter was earmarked as a decisive battle.

The dispute arose after World Programming Ltd (WPL) published a statistical analysis program called World Programming System (WPS). WPL admitted that this program was created specifically to mimic the functionality of the SAS Institute’s software (known as Base SAS). According to the English High court, “this was so as to ensure that WPL’s customers’ application programs executed in the same manner when run on WPS as on the SAS Components” [3]. Consequently, the need to obtain a license from SAS was removed, while the third party’s programs remained compatible with all SAS-based applications.

However, WPS did not reproduce the protected source code of the SAS programs but merely imitate its functions as closely as possible by studying the manner in which it executed a particular command.

SAS took issue with this and argued that the use of their software in this manner exceeded the scope of the license held by WPL, that WPL reproduced the specific compilation of syntax, keywords and commands found in the SAS software manual and that WPL infringed copyright in the Base SAS application by reproducing its functionality.

On 29 November 2011 Advocate-General Yves Bot gave his opinion, which was substantially confirmed in the full judgment.

The ECJ (Grand Chamber) held that:
Use of a computer program under license for the purpose of observing and studying the operation of the program in order to discover its functionality, underlying ideas or principles does not exceed the scope of a copyright license.
The functionality of a computer program does not constitute a form of expression that may be the subject of copyright protection in terms of article 1(2) of Council Directive 91/250/EEC of 14 May 1991.
The same applies to the programming language (itself) and the format of data files used to achieve a specific function.
Copyright may subsist in the user manuals of a computer program and such copyright would be infringed if, in the judgment of the national court, a reproduction of the intellectual creation of the author occurred.

The matter is now referred back to the English High Court for judgment in light of the principles set out by the ECJ.

Clearly, WPL has been vindicated and the likelihood, however small, that the High Court may yet find that WPL infringed copyright by reproducing the Base SAS user manual, will not dampen the spirits.

However, the interpretation of EU law set out by the ECJ in this case heralds a return to the fundamentalist approach to software copyright and will not find favour with many of the current software giants.

On the flip side, this decision will certainly bolster the efforts of the smaller competitor attempting to break the functionality stronghold. It is also likely to increase the amount of competition between market rivals, which, in turn, should lower the cost of software licenses.

For this reason the ECJ decision is considered a victory against needless software monopoly and hailed as a significant stimulus to future innovation.

But is it really? The decision of the ECJ is sound and, in principle, a welcome one for establishing legal certainty. However, in the wake of celebrations it appears that no one has yet considered the impact of this decision on software patenting.

It is an interesting (albeit somewhat worrying) question whether the ECJ will have the final say on this matter. It is, however, beyond doubt that many software creators still seeking to protect the functionality of their programs will now look to patent law for protection. Not only will this lead to a scramble for more, wider and increasingly vague software patents, but also perpetuate the global chaos that reigns in software patent litigation and its stifling grip on innovation.

Regardless, in the ephemeral world of software copyright there is nothing that cannot be changed. But in the mean time, at least for a while, form will once again rule over function in copyright law.

This article first appeared at www.sun.ac.za/iplaw, here.

Cobus Jooste is a lecturer and fellow of the Chair of Intellectual Property, at the Faculty of Law of Stellenbosch University, South Africa.