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Code or Functionality – What Can Copyright Law Protect? (December 2010)

Copyright protects an artistic or literary work, and for copyright purposes that includes software. Copyright is said to protect not the original idea, but only the actual expression of that idea in the work itself. (Generally speaking to protect an idea requires a patent, and software can only be patented in limited situations). If a rival copies software code directly there will clearly be an infringement of copyright. But what if the rival creates a new system that can be substituted for the original system, providing the same functionality, but using independently created code?

That issue came before the courts in SAS Institute Inc v World Programming Limited. SAS had a well-established statistical analysis application (‘SAS’). World Programming Limited developed its own application (‘WPS’) which offered functionality almost identical to a significant part of SAS. WPS was designed to work with application programs written in SAS’s programming language, so that former SAS customers with such applications could continue to use them. SAS brought proceedings for infringement of its copyright. It was accepted that WPL had not had access to the SAS source code, and had not copied the text or structural design of that source code.

The facts and law are complicated, but in effect SAS raised four basic arguments.

(1) That the WPS application infringed SAS’s copyright in the SAS application.
(2) That the WPS application infringed SAS’s copyright in the SAS manuals
(3) That the WPS manuals infringed SAS’s copyright in the SAS manuals.
(4) That WPS had learned about the SAS application by examining a limited use learning version of the SAS application and its manuals that WPS had purchased, and that this was a breach of the licence for use of the learning version.

SAS effectively argued that the SAS manuals were so detailed that to design a system to provide the functionality described in the manual inevitably resulted in a copy of a significant part of the code (so-called ‘indirect copying’).

Harmonisation of intellectual property rights across the European Union means that copyright law has to be interpreted in accordance with the European Software Directive. In an earlier case an English court had interpreted the European Software Directive to mean that copyright protection did not extend to programming languages, interfaces or functionality, and the Court of Appeal had subsequently confirmed this. In the SAS case, Mr. Justice Arnold said that he was not persuaded that the earlier case was wrong (he had been the barrister on the winning side in the earlier case), but felt that the wording of the relevant provisions of the Software Directive was not entirely clear. Accordingly he referred the matter to the European Court of Justice for a definitive ruling on the interpretation of the Software Directive.

On the allegation that WPL had breached the licence for the learning version of SAS, Mr. Justice Arnold thought that the relevant restrictions in the licence for the learning version were contrary to the Software Directive, which states that a program may be observed, studied or tested in order to determine the ideas and principles underlying it, and that any contractual restrictions on that right are void. However, he again referred the issue to the European Court of Justice.

The delay seems frustrating, but the judge pointed out that the matter was likely to go to the Court of Appeal in any event, which would itself refer the matter to the European Court of Justice.

Only one issue was resolved outright. Mr. Justice Arnold held that the WPS manuals infringed SAS’s copyright in the SAS manuals, even though WPL had taken steps to ensure that the manual writers did not copy the SAS manuals directly and the judge accepted this. Clearly if the functionality being described is the same it is likely that similar language will be used to describe it. However, the judge held that the similarity between the two manuals went beyond this. Accordingly WPL will have to re-write parts of the WPS manual.

And the moral is? Until we have the ruling from the European Court of Justice there will be some uncertainty, but unless it interprets the Software Directive differently than the UK courts have done in the past it should still be possible to produce a new system that offers the same functionality as a rival, with equivalent interfaces to other applications. However, extreme care will have to be taken in creating the manual for the new system to ensure that it does not infringe the copyright in the manual for the rival system.