European copyright ruling good for IT innovation, say lawyers

The European Court of Justice (ECJ) ruling that the functionality of a computer program and the programming language it is written in cannot be protected by copyright is good news for innovation, say lawyers.

In its ruling on a case brought by SAS Institute against the UK-based World Programming Limited (WPL), the court said: "The purchaser of a licence for a program is entitled, as a rule, to observe, study or test its functioning so as to determine the ideas and principles which underlie that program."

On this basis, the court said WPL did not infringe copyright laws when designing a computer system that was developed using SAS company manuals.

The ruling, which now applies to all European Union member states, comes after the case was referred to the ECJ by the UK High Court.

The case is pivotal for Europe's computer industry as it seeks to define how software makers can create products that can work with rival services without breaching copyright rules, according to the Wall Street Journal.  

The court said WPL had lawfully used and studied SAS programs to understand their functioning but said: "There is nothing to suggest that WPL had access to or copied the source code of the SAS components."

In its statement, ECJ said: "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."

SAS took legal action against WPL in 2009, accusing it of copying the SAS System manuals and components, thereby infringing its copyright and the terms of the Learning Edition licence.

Guy Wilmot, solicitor at legal firm Russell-Cooke, said the ruling should assist innovation in the software and ICT sector, as developers can reverse-engineer functionality or concepts from competitors and improve them or integrate them with other technologies.

Hamish Sandison, partner at legal firm Field Fisher Waterhouse, said the ruling was welcome because, had the court ruled differently, it would have stifled innovation and competition.

The ruling means software proprietors cannot prevent their licensees from observing and studying the licensed program to find out what it does and how it works, provided the licensee observes the scope of the licence.

This strikes the right balance, said Sandison, but developers must ensure they hold a valid licence and they observe the scope of the licence. 

But Sandison warned that the court's ruling does not extend the rights of developers to decompile software. "Developer's rights to decompile are narrow," said Sandison.

These rights allow code to be copied or translated only for the purposes of enabling an independently created program to interoperate with another program and are subject to stringent conditions, he said.

The ECJ also confirmed 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," said Sandison. The choice, sequence and combination of commands, syntax, keywords and mathematical concepts could be copyright protected if they meet the court's originality test, he said.

Wilmot said the ECJ ruling also means that those who hold established software properties will be at much greater risk of upstart competitors copying functionality.

"Although not protected by copyright, functionality in software can be protected by national patents fairly easily in the US, but with great difficulty in most of Europe," he said.

According to Wilmot, one risk of the ECJ decision is that, in an increasingly international software and app market, established businesses will try and protect their software by obtaining software patents in the US.

"This might restrict competition even in Europe, as most European developers will not be interested in developing software they can’t sell in the world's biggest software market,” he said.

The SAS Institute's claim will now return to the UK High Court, which will have to decide whether any elements of the SAS manuals copied by WPL were copyright protected.