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Software emulation copyright case bumped to ECJ

SAS provisionally pwned

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A small software company did not infringe copyright in analytical software giant SAS's software by writing a program that emulated its functions, the High Court has provisionally ruled.

The Court has asked the European Court of Justice, though, to check that its interpretation of laws based on the EU's Software Directive and Information Society Directive is correct.

SAS makes programmes which enable customers to analyse data and write other programs within the SAS environment to carry out specific functions.

World Programming Limited (WPL) wrote a piece of software which would allow former SAS users to execute programs written in SAS's language without continuing to pay SAS for the use of its systems.

WPL's software emulated the SAS system in an attempt to ensure that computer code written in the SAS system would behave in the same way in its system, which WPL said is cheaper than SAS's.

SAS claimed that WPL's software infringed its copyright, broke the terms of its software licence with WPL itself and that WPL infringed its copyright by copying and reusing sections of its manuals and guides.

The High Court said that while copyright law protected the source code of software programs, it did not prevent one company writing software that emulated the functionality of other software.

"There is no suggestion that in doing so WPL had access to the source code of the SAS Components or that WPL have copied any of the text of the source code of the SAS Components or that WPL have copied any of the structural design of the source code of the SAS Components," said Mr Justice Arnold in his ruling.

"According to two previous decisions of the courts in this country, it is not an infringement of the copyright in the source code of a computer program for a competitor of the copyright owner to study how the program functions and then to write its own program to emulate that functionality," he said.

In a case involving a developer called Navitaire and the budget airline easyJet, Mr Justice Pumfrey ruled in a High Court decision in 2004 that the EU's Software Directive meant that copyright in computer programs did not protect programming languages, interfaces or functionality.

SAS argued that this was an incorrect interpretation of the Directive. Mr Justice Arnold did not agree but said that there was enough doubt, as expressed by Mr Justice Pumfrey in 2004, that the ECJ should be asked to clarify the law.

"I also agree with Pumfrey J, however, that the correct interpretation of Article 1(2) of the Software Directive on this point is not 'acte clair' [free of doubt] and that a reference to the ECJ is required in order to determine it," he said. "Furthermore, as the evidence in this case demonstrates, even if Pumfrey J is right that programming languages are not protectable, there is room for debate as to how broadly the concept of a programming language should be interpreted in this context."

Mr Justice Arnold came to the same conclusion in relation to the law as it applies to software's interfaces and functionality. In each case he said that he was not convinced that Mr Justice Pumfrey had made an error, but wanted the ECJ to rule on the issue.

On the basis of that judge's earlier rulings, though, he said that WPL's software did not infringe SAS's copyright.

"On the assumption that Pumfrey J's interpretation of Article 1(2) of the Software Directive was correct, WPL has not infringed SAS Institute's copyrights in the SAS Components by producing WPS [its software]," he said.

Mr Justice Arnold did definitively rule that WPL's development of the software was outside the scope of its licence from SAS and did not infringe it.

He also ruled that WPL infringed some of SAS's copyright in its documentation and manuals outlining how its software should be used.

The companies reacted with very different interpretations of the ruling.

"We have clearly established the validity of WPS as a legitimate and lawful alternative to SAS," said WPL's Oliver Robinson in a statement which described the law suit as a "David v Goliath" battle. "We are looking forward to competing with SAS Institute in the expanding market for data analytics."

"WPL issued a press release contending that they ‘secured a major legal victory’ in this case," countered SAS general counsel John Boswell. "This announcement was surprising in that the decisions the court handed down were related to the violation of SAS’ copyright on its manuals. Other decisions have not been made. They raise uncertain questions of law and have therefore been referred to the ECJ."

Copyright © 2010, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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