SAS Institute Inc ("SAS") claimed that World Programming Ltd ("WPL") infringed copyright in SAS' software (the "SAS System"), by creating a software program called the World Programming System ("WPS") which enabled users to run application programs written in the SAS language. (For further details of the case, click here.)
When developing WPS, WPL sought to emulate much of the functionality of the SAS software because it wanted to ensure that its applications worked in the same way, whether running on WPS or SAS components. WPL did not have access to the source code. Instead, WPL used copies of SAS's Learning Edition software manuals (which documented functionality) to examine functionality of the software, and observed SAS's "Learning Edition" product itself. SAS claimed such actions were in breach of SAS's licence agreement with WPL. The High Court held that WPL was entitled to the benefit of the defence set out in Article 5(3) of the Software Directive (91/250/EEC):
"The person having a right to use a copy of a computer program shall be entitled, without the authorisation of the rightholder, 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 if he does so while performing any of the acts of loading, displaying, running, transmitting or storing the program which he is entitled to do."
The court said that even if WPL's use of SAS's Learning Edition fell outside the terms of WPL's licence agreement, there was no infringement of copyright in Learning Edition when use by WPL was for the purposes of ascertaining functionality.
The Court of Appeal upheld Arnold J's ruling, saying that functionality of a computer program is not a form of expression but is more of an idea (and not protectable by copyright). In addition the terms of the licence were invalid to the extent they prohibited WPL from doing what WPL had done. WPL was entitled to the benefit of Article 5(3); use of software outside the terms of a licence does not preclude a user relying on the defence provided in Article 5(3). It was contrary to the terms of the Software Directive and Information Society Directice (2001/29/EC) for SAS to secure copyright protection for the functionality of software via a manual which explains functionality.
New regulations reforming existing copyright laws will come into force on 6 April 2014 The Department for Business Innovation and Skills (BIS) has announced that regulations reforming the existing copyright exceptions will come into force on 6 April 2014. This follows IPO consultations on the draft regulations published in 2013 (for further information, click here).
BIS anticipates that businesses will save more than £25 million as a result of the changes to exceptions and that the new regulations "will give users of copyright works new basic rights, while continuing to provide necessary protections for copyright owners".
The legislation will pass through parliament before coming into force, but even now (mid-March 2014) the final form of the regulations, and thus their impact, is not yet known.
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