AG Opinion in SAS v WPL: A note of caution for software developers
This article first appeared on Computers & Law (online), 13 Dec 2011
SAS Institute Inc v World Programming Limited (C-406/10) raises fundamental questions about the scope of copyright protection afforded to computer programs. Advocate General Bot's Opinion, issued on 29 November 2011, clarifies that programming languages and the functionality of a computer program (or what Pumfrey J in Navitaire v (1) Easyjet and (2) Bulletproof called "business logic") are not eligible for copyright protection. This is consistent with Navitaire and the Court of Appeal decision in Nova Productions v Mazooma. But the Advocate General goes further, exploring where, in the software context, the courts might draw the dividing line between ideas and their expression. Copyright protects the source code and object code of a computer program; but, says the Advocate General, applying the Court of Justice of the European Union ("CJEU") preliminary ruling in Infopaq, these are not the only forms of expression of a computer program that are eligible for copyright protection. If the CJEU follows the Advocate General's reasoning, then software developers, in the UK at least, will lose some of the shelter that they have enjoyed up to now from the Navitaire ruling, and must adopt a cautious approach when replicating the functionality of software, even if they do not access or copy another program's source code.
SAS Institute is a leading developer of analytics software and solutions. The "SAS System" comprises a core, software environment called Base SAS that enables users to write and run applications in "SAS Language". Users can bolt on additional SAS components to extend the functionality of the system to meet their requirements. The SAS System has an extensive user community that has used Base SAS to write thousands of applications in SAS Language.
SAS brought a claim for copyright infringement against a small UK developer – World Programming Limited ("WPL"). WPL had developed a system – the World Programming System ("WPS") - to compete with the SAS System. Before the development of WPS, SAS users were effectively tied to taking a licence from SAS, as there was no alternative system that could execute their applications. If users wanted to switch to an alternative platform, they would have to re-write their SAS applications in a new language. In creating WPS, WPL's developers strove to emulate the functionality of the SAS system as closely as possible, making WPS a direct substitute for the SAS System. WPS could execute applications written in SAS Language, and when presented with the same inputs, delivered substantially the same outputs. WPL's developers did not have access to or copy the SAS source code. Instead they studied and observed a limited version of the SAS System referred to as the "Learning Edition". They also referred closely to the SAS Manuals, effectively, treating them as a functional specification for WPS. The SAS Manuals contained exhaustive details of the SAS functionality and its external behaviour including details of the necessary inputs and expected outputs. The SAS Manuals did not describe the internal behaviour of the SAS System.
SAS claimed that WPL had infringed copyright by replicating a large part of the functionality of the SAS System in WPS, and that it had done so firstly, by copying the SAS Manuals into the source code of WPS and secondly, by indirectly copying the SAS System through its use of the SAS Manuals and the Learning Edition.
Functionality – idea v expression
Copyright law distinguishes between ideas and the expression of ideas, protecting the latter but not the former. That distinction is well-established under English law, and is reflected in TRIPS, the WIPO Copyright Treaty, and the Software Directive Article 1(2), which says that copyright applies to the expression in any form of a computer program and not to the ideas and principles which underlie any element of the program. The question, in the context of computer programs, is where does the dividing line between ideas and their expression fall?
The two leading UK cases on the application of this principle to computer programs are the High Court decision in Navitaire and the Court of Appeal decision in Nova Productions. In Navitaire, Pumfrey J concluded that the "business logic" of Navitaire's airline reservation fell on the "ideas" side of the line. The skill and labour expended creating the business logic of the reservations system was not the right kind of skill and labour to qualify for copyright protection, since the business logic was determined and defined by the function of the system. Accordingly, studying how a program functions and then writing a program that emulates the functionality of the original program was not, the court said, copyright infringement and this was affirmed by the Court of Appeal in Nova Productions. Although Arnold J, in SAS v WPL expressed confidence in these earlier decisions, he nonetheless felt that there was sufficient room for doubt to require a referral to the CJEU.
Advocate General Bot's Opinion confirms that the "functionalities" of a computer program (which he defines as "the service which the user expects from [the program]") are ideas, and that irrespective of the amount of skill, labour or judgement expended in their development, they are not eligible for copyright protection. He then goes on to clarify where the dividing line between ideas and the expression of ideas might lie, drawing on the preliminary ruling of the CJEU in Infopaq. Here, the Advocate-General's Opinion goes beyond the literal, source-code focused approach seen in Navitaire.
In Infopaq, the CJEU established firstly that a work is original if it is the "author's own intellectual creation", and secondly, that part of a work will be protected by copyright if it contains elements which are the author's own intellectual creation. It is this second point that leads Advocate General Bot to conclude that:
"The protection of a computer program is not therefore confined to the literal elements of that program, that is to say, the source code and the object code, but extends to any other element expressing the creativity of its author."
What sort of elements does Advocate General Bot have in mind? Although both TRIPS and the WIPO Copyright Treaty exclude ideas, procedures, methods of operation or mathematical concepts "as such" from copyright protection (for example, mathematical formulae, algorithms, statistical operations and commands) Bot's view is that the choice, sequence, arrangement or combination of these and similar elements could amount to the expression of the author's own intellectual creation and, if so, will be protected by copyright. He finds support for his view in the original Commission Proposal for the Software Directive. That Proposal outlined the preparatory steps typically taken by a developer in the creation of a computer program and acknowledged that elements of creativity, skill and inventiveness manifest themselves in the way that the program is put together. Further, the CJEU's preliminary ruling in Bezpecnostini softwarova asociace ("BSA") established that "any form of expression of a computer program must be protected from the moment when its reproduction would engender the reproduction of the computer program itself, thus enabling the computer to perform its function". The BSA ruling defines the level of abstraction that must be present in the "expression" of the computer program, if it is to be copyright-protected. High level designs will not be copyright-protected as computer programs, although they might qualify for copyright protection as a different category of "work". Detailed designs, preparatory materials or manuals from which the developer can proceed to develop the source code or object code would meet the BSA threshold, and be eligible for copyright protection as computer programs.
On that basis, the act of copying preparatory materials, user manuals or functional specifications are all in principle capable of constituting copyright infringement, provided that the material that is copied satisfies both the Infopaq originality threshold, and the BSA test that the protected material must be a single step away from enabling the computer program to be reproduced.
The Advocate General's confirmation that copyright does not extend to the functionality of a computer program is welcome. The opposite outcome would have impacted widely-used development practices and arguably stifled innovation and competition. Nonetheless, software developers should be cautious. If the CJEU follows Advocate General Bot's opinion, then a developer who copies the functionality of rival software without accessing the source code will not be immune to an infringement claim. Software developers should be mindful that the courts will examine what has been copied, other than the functionality, to determine whether any of the copied elements qualify for copyright protection and should devise their development processes accordingly.
The Advocate General also disagreed with Pumfrey J's conclusion in Navitaire that there is no copyright in interfaces.
SAS claimed copyright protection over the format of SAS data files. By observing the SAS System, WPL had worked out the format of the SAS data files enabling it to write source code which could read and write data files in the same format. In this way, WPL achieved interoperability between the SAS System and WPS.
Advocate General Bot noted that, although Article 1(2) of the Software Directive excludes copyright protection for "ideas and principles which underlie any aspect of a computer program, including those which underlie its interfaces", this was not the same thing as saying that interfaces were not copyright protected. The interface constituted part of the computer program as a whole. If, applying Infopaq, the expression of the interface amounted to a substantial part of the computer program, then it would be eligible for copyright protection under the Software Directive.
The Advocate General's view that interfaces are eligible for copyright protection could present obstacles to developers who rely on the ability to manipulate interface information freely to create interoperable products. Developers can still rely on the exception under Article 6 of the Software Directive – the "decompilation" exception – that allows code to be copied or translated for the purposes of enabling an independently created program to interoperate with another program; but the exception is narrow and subject to stringent conditions.
Observing, studying and testing the functioning of a computer program
Article 5(3) of the Software Directive permits a licensee of a computer program to observe, study and test the functioning of the program to determine the ideas and principles that underlie it. However, Article 5(3) goes on to limit this right so that observing, studying and testing may be carried out only in the course of performing acts which the licensee is entitled to do. The Advocate General's view is that the "acts which the licensee is entitled to do" are:
- Loading and running the software in order to use the program for its intended purpose. (Article 5(1) of the Software Directive states that the rights-holder's authorisation is not required for this purpose); and
- Any other act of loading, displaying, running, transmitting or storing the program authorised by the rights-holder, for example, under the terms of the relevant software licence.
The Advocate General goes on to say that Article 5(3) does not permit the licensee to access information protected by copyright, such as the source code or object code.
This interpretation of Article 5(3) strikes an appropriate balance, allowing software licensors to continue to control the particular acts that licensees may perform in relation to the licensor's software, but at the same time ensuring that licence terms are not used as a back-door mechanism for protecting elements of computer programs that are not copyright protected. Licensors cannot use their licence terms to exclude the licensee's Article 5(3) rights. Developers who wish to study and observe the functioning of a rival software program must ensure that they hold a valid licence to use the software and that they strictly observe the terms of the licence, or risk losing the protection afforded by Article 5(3).
  EWHC 1725 Ch
  EWCA Civ 219
 Infopaq International A/S v Danske Dagblades Forening (C-5/08)
 In interpreting national laws implementing the Software Directive, national courts must take into account the wording and purpose of TRIPS and the WIPO Copyright Treaty.
 Article 9
 Article 2
 Bezpecnostní softwarová asociace – Svaz softwarové ochrany v Ministerstvo kultury (C-393/09)