Court of Justice of the European Union 2 May 2012, C-406/10 (SAS Institute Inc./World Programming Ltd.)
The Court of Justice of the European Union was requested to give an opinion on the precise scope of the copyright that protects computer programs. This question led to a particularly fascinating judgment which will hopefully provide direction in this awkward domain. The problem lies in the abstract nature of software. Software is rather technical and contains mostly methods, which seem to be more eligible for patent protection. However, the EU opted for protecting software on the basis of copyright: the copyright on computer programs. The question was which parts of software are actually protected?
Since the Softwarova judgment we know that copyright in computer programs relate to what is 'under the hood'. The graphic representation on the computer screen is protected by 'ordinary' copyright. This new judgment elaborates on the scope of these copyrights: the Court of Justice had to rule which parts do and which parts do not fall under the copyright in computer programs.
This case was instituted by business software producer SAS. SAS offers an ingenious system that runs scripts based on a programming language developed by SAS. These scripts perform tasks that are tailored to SAS's business customers. Therefore this software is not your average out of the box application. In order to run these scripts it is necessary to use SAS's core component, which requires a paid license. A competitor, World Programming, discovered that it could develop its own core component that could process the SAS scripts and the SAS programming language. SAS was not happy with this; it saw its customers switch to a cheaper alternative, while still using scripts that were based on the system it had developed. SAS took the matter to the British court and argued that World Programming's core component was infringing its copyrights. The component of World Programming had to be equal to its own core component, because this component was able to process the SAS scripts. SAS, however, did not have the source code of World Programming and could only substantiate its argument by relying on the compatibility with SAS scripts. World Programming argued that its source code was unique and that it had developed its own core component by examining the functionality of SAS.
The British court doubted what to do and posed questions to the Court of Justice about the precise scope of protection of the copyright in computer programs. Does this concern the source code or the functionality? This is a very interesting question, which is all the more important because in essence this case concerned interoperability. In order to be compatible, computer programs often have to copy each other's methods.
The Court of Justice concluded that the copyright in computer programs does not relate to the functionality, but only to the specific elaboration of this functionality in the form of a source code. Hence, only this source code is protected. The Court of Justice even decided that the SAS programming language was part of this functionality, thus rendering the programming language developed by SAS unprotected as well. In practice this will mean that a copyright infringement of a computer program can only be established if it is proven that the source code has actually been reproduced. It does not suffice to argue that an application is functioning the same way. Therefore, in this case SAS got the short end of the stick.
First published in the Kennedy Van der Laan newsletter - May 2012
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