SAS Institute Inc v World Programming Limited [2010] EWHC 1829 (Ch)

20 December 2010

Claire Chapman

The scope of copyright protection given to computer programs is again under scrutiny following the recent referral of nine questions to the CJEU by Mr Justice Arnold in the dispute between SAS Institute Inc. (“SAS”) and World Programming Ltd (“WPL”).

Background

The case was brought by SAS, a developer of analytical software which allows users to write and run their own application programs to manipulate data. Application programs are written in SAS's proprietary language (the "SAS Language"). To run existing application programs or create new ones, customers either required a licence from SAS or had to face the cost of rewriting applications in the language of a competitor's software.

The defendant, WPL, created a product (known as World Programming System, “WPS”) which could execute application programs written in the SAS Language. To appeal to SAS's customers, WPL sought to emulate the functionality of SAS's software as closely as possible so that the same inputs would produce the same outputs. WPL created WPS by studying the published SAS manuals (which describe the SAS Language and the functionality of SAS’s software) and by observing the behavior of a learning edition of SAS's software. It was agreed that WPL never had access to or decompiled SAS's source code.

SAS claimed WPL infringed its copyright:

  • in the SAS manuals, by copying the SAS manuals when creating WPS;

  • indirectly in SAS’s software, by copying the SAS manuals when creating WPS;

  • in the SAS learning edition, by using the SAS learning edition in contravention of the terms of the licence, thereby acting in breach of contract and infringing copyright; and

  • in the SAS manuals, by creating its own documentation, namely a manual and some quick reference guides.

The High Court’s findings

The Software Directive grants copyright protection to the expression in any form of a computer program but such protection does not extend to the ideas and principles underlying any element of a computer program including its interfaces (Article 1(2) Software Directive).

Arnold J held that the Software Directive is to be interpreted in accordance with Article 9(2) of TRIPS and Article 2 of the WIPO Copyright Treaty, which requires the protection of “expressions” and not “ideas, procedures, methods of operation or mathematical concepts as such”. The distinction between the two results from the different kinds of skill, judgement and labour involved: the skill, judgement and labour in devising the form of expression, i.e. the design and source code of a computer program, are protected by copyright in a literary work but the skill, judgement and labour in devising ideas, procedures, methods of operation and mathematical concepts in a computer program are not protected.

Arnold J accepted the Software Directive did not apply to the SAS manuals as these were ordinary literary works. However, he held that Article 2(a) of the Information Society Directive, which does apply to literary works, must also be interpreted in the same way as the Software Directive, i.e. in conformity with Article 9(2) of TRIPS and Article 2 of the WIPO Copyright Treaty.

In order to decide the case, Arnold J elected to refer questions on the interpretation of the Software Directive and the Information Society Directive to the CJEU (discussed below). He did, however, express his preferred view and its application to the present case.

Arnold J’s view

Not convinced that Pumfrey J’s conclusions in Navitaire v easyJet [2004] EWHC 1725 (Ch) were wrong, Arnold J concluded that on the true interpretation of Article 1(2) of the Software Directive, copyright in computer programs does not protect from being copied: programming languages; interfaces (where this can be achieved without decompiling the object code); and the functionality of computer programs, on the basis that these constitute ideas and principles. Accordingly, in respect of SAS’s second claim, WPL, by reproducing the functionality of SAS’s software, elements of the SAS Language and the SAS data file formats (which Arnold J found to be interfaces), had not infringed copyright in SAS’s software.

In respect of the first claim, Arnold J concluded that if there was no infringement of copyright in a computer program where its functions are replicated without copying its source code or design, likewise, there was no infringement of the copyright in a manual describing those functions, by using the manual as a specification of the functions to be replicated and, to that extent, reproducing the manual in the source code of the new program.

On the third claim, Arnold J found that although WPL’s activities were outside the terms of its licence, they fell within the scope of Article 5(3) of the Software Directive on his preferred interpretation; that providing the user was doing the acts he was entitled to do under the licence he could not be prevented from doing these acts for the purposes of observing, studying or testing the functioning of the computer program.   

The fourth claim did not concern interpretation of the Software Directive as it involved an allegation of direct copying from one ordinary literary work to another. Arnold J held WPL had infringed the copyright in the SAS manuals by substantially reproducing the language of the SAS manuals in their own manual. There was no copyright infringement of the SAS manuals in relation to WPL’s quick reference guides.

References to the CJEU: interpretation of the Software Directive

Questions 1-5 concern the scope of copyright protection afforded to computer programs under Article 1(2) of the Software Directive. In general terms these questions are as follows.

Functionality

The first two questions are concerned with whether reproduction of the functionality of a computer program (“the First Program”) in another program (“the Second Program”), without access to the source code either directly or via decompilation of the object code, is an infringement of the copyright in the First Program and whether the answer to this is affected by:

  • the nature and/or extent of the functionality of the First Program;

  • the nature and/or extent of the skill, judgement and labour expended by the author of the First Program in devising its functionality;

  • level of detail to which the functionality of the First Program has been reproduced in the Second Program;

  • reproduction of aspects of the source code of the First Program in the Second Program to an extent which goes beyond that which was strictly necessary in order to produce the same functionality as the First Program.

Programming language

The third question asks, where the First Program interprets and executes application programs written in a programming language comprising keywords and a syntax devised by the author of the First Program, whether the Second Program, written to interpret and execute such application programs using the same keywords and syntax, infringes copyright in the First Program.

Interfaces

The fourth question asks, where the First Program reads from and writes to data files in a format devised by the author of the First Program, whether the Second Program, written to read from and write to data files in the same format, infringes copyright in the First Program.

The fifth question asks generally whether it makes a difference to the answers to the questions on reproducing functionality, programming language and interfaces (questions 1, 3 and 4) if the Second Program was created by: (a) observing, studying and testing the functioning of the First Program; or (b) reading a manual created and published by the author of the First Program which describes the functions of the First Program; or (c) both (a) and (b).

Observation, study or testing of the functioning of a computer program

Questions 6 and 7 concern the scope of Article 5(3) of the Software Directive, which permits observation, study or testing of the functioning of a computer program in order to determine the ideas and principles underlying it.

Question 6 asks whether Article 5(3) entitles a licensee of the First Program, without the authorisation of the rightholder, to perform acts of loading, running and storing the program in order to observe, test or study the functioning of the First Program so as to determine the ideas and principles underlying any element of it, if the licence permits the licensee to perform acts of loading, running and storing the First Program when using it for the particular purpose permitted by the licence, but the acts done in order to observe, study or test the First Program extend outside the scope of the purpose permitted by the licence. Question 7 asks whether a range of listed acts are to be regarded as determining the ideas or principles which underlie any element of the First Program.

References to the CJEU: interpretation of the Information Society Directive

Questions 8 and 9 concern the interpretation of the reproduction right of authors under Article 2(a) of the Information Society Directive.

Question 8 is concerned with whether it is an infringement of the copyright in a manual to reproduce or substantially reproduce in the Second Program the matters listed in the question and which are described in the manual. Question 9 asks whether it is an infringement of the copyright in a manual to reproduce or substantially reproduce in a manual describing the Second Program the keywords and syntax recognised by the First Program.

The questions in full are listed on the IPO’s website and can be accessed at http://www.ipo.gov.uk/pro-policy/policy-information/ecj/ecj-2010/ecj-2010-c40610.htm.

Conclusion

Although likely to be a few years yet, guidance from the CJEU will be anxiously awaited by the software industry; should the CJEU differ from Mr Justice Arnold’s view and find certain of these elements of computer programs to be protectable as expressions, this would have a huge impact on current practices within the industry and future competition. For example, a finding by the CJEU that the Software Directive protects programming languages would create a monopoly on those languages. Protection for functionality of computer programs under the Software Directive would prevent creation of competitor products of the kind like WPS. Or, if the CJEU finds that reproducing functionality described in a manual is copyright infringement as the manual is an ordinary literary work not covered by the Software Directive, then this would likely have the effect of circumventing the Software Directive, as functionality of computer programs could be effectively protected by describing it in detail in accompanying literature.