February 6, 2014

Is your software safe?

The case of SAS Institute v World Programme Limited looked at some of these issues:
The software that SAS Institute (SAS) created was licensed to World Programming Limited (WPL). WPL then went on to create a similar programme.

• SAS claimed that WPL had infringed its copyright in the programme by creating a programme which replicated its functionality.
• SAS also claimed that WPL infringed its copyright by copying its user manuals.
• SAS further claimed WPL had breached the terms of its licence by allowing unlicensed staff access to the software.

However, all three claims failed.

What does the case tell us about copyright infringement?
It is not copyright infringement to emulate the functionality of a computer programme. You would need to prove that a third party has had access to and copied your source code. There is no copyright infringement when a company with no access to the source code of a programme studies, observes, and tests that programme to create another programme with the same functionality.

Surely copying the manual must lead to copyright infringement?
In short, it doesn’t necessarily. SAS claimed that WPL had copied a substantial part of the manual to create their manual and thereby infringed copyright. It was found that there had been “linguistic reproduction” in the WPL manual. However, since the WPL manual was created by observing the original programme (not the manual) it meant that copyright in the SAS manual had not been infringed.

Will the licence be enough to protect you?
It was concluded that WPL had breached two terms of the licence, granted by SAS by allowing unauthorised use and access to the programme. However, under the provisions of the Software Directive these terms were not enforceable. This is because the Software Directive permits a licencee to observe, study or test the functioning of a computer programme in order to determine its underlying principles. As these terms were not enforceable, WPL were not actually in breach of the licence.

Time to review your licences?
These outcomes could certainly result in software owners being unable to prevent their rivals from developing competing software. This case may mean that software developers and houses may have to change the way in which they produce, protect and market software products. More importantly, one should know to whom one is licensing products. If SAS had not licensed its software to its competitor, it may have been more difficult for WPL to emulate its functionality.

We suggest that software licensors review their licences to ensure they do not contain ineffective provisions which may leave the business exposed. If you require advice on effective licensing and protection of your software products please do not hesitate to contact members of our Technology & Media team.

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