In this article, we take a look in brief at the latest copyright decisions which have been handed down by the Court of Justice of the European Union ("CJEU").
Phonographic Performance (Ireland) Ltd v Ireland and Ors Case
In response to questions referred by the Irish Commercial Court, in a case taken by Phonograph Performance (Ireland) Ltd (“PPI”) against the State, the CJEU issued a landmark decision on 15 March 2012. PPI is a copyright collecting society which collects royalties on behalf of record companies. The CJEU held that a hotel that provides customers with televisions and radios in guest bedrooms, to which it distributes a broadcasting signal, is deemed to be making a communication to the public and must, therefore, pay equitable remuneration for the communication of such sound recordings to the public, i.e., to performers and record producers. The CJEU also held that a hotel that provides in its hotel bedrooms other apparatus or phonograms, for example, CDs or CD players, in physical or digital form, must also pay equitable remuneration in respect of the transmission of those phonograms. The CJEU also held that Ireland’s interpretation of Article 10(1)(a) of Directive 2006/115 which provides for a limitation to the right to equitable remuneration, based on ‘private use’, provided for by Article 8(2) of that directive, does not allow Member States to exempt hotels from having to pay equitable remuneration for the communication of sound recordings to the public. The case has been referred back to the Irish Commercial Court.
SAS Institute v World Programming Ltd (Case C-406/10)
On 2 May 2012, the CJEU held that the functionality of a computer program and the programming language cannot be protected by copyright on the basis that they do not constitute a form of expression of an intellectual creation by an author of a computer program. The CJEU also pointed out that the purchaser of a licence for a program is entitled, as a rule, to observe, study or test its functioning as to determine the ideas and principles which underlie that program. The case was referred by the UK High Court which asked the CJEU to clarify the scope of the legal protection conferred by EU law on computer programs and, in particular, whether that protection extends to programming functionality and language.
The case arose when SAS Institute Inc. (“SAS”) brought a copyright infringement claim against World Programming Ltd (“WPL”). SAS developed the SAS System which enabled users to write and execute application programs written in SAS programming language for data processing. WPL were of the view that there was a market demand for alternative software capable of executing application programs written in SAS language and lawfully acquired copies of the SAS System Learning Edition. There was no evidence adduced that WPL had access to or copied the source code of the SAS System components. SAS, however, accused WPL of copying the SAS System manuals and components and the terms of the Learning Edition Licence. This resulted in the UK High Court referring various questions to the CJEU on, amongst other things, whether copyright protection extends to programming functionality and language. The CJEU held that there is no copyright infringement in circumstances where an individual lawfully acquires a licence but does not have access to the source code of the computer program and merely studies, observes and tests it in order to reproduce its functionality in a second program. The CJEU further held that the reproduction in a computer program or a user manual for that program of certain elements described in the user manual for another computer program which is protected by copyright is capable of infringing the copyright in the latter manual if that reproduction constitutes the expression of the intellectual creation of the author of the manual. It will be for the national court to decide on whether the reproduction alleged in the main proceedings constitutes the expression of the intellectual creation of the author of the user manual for the computer program protected by copyright.
UsedSoft GmbH v Oracle International Corp. (Case C-128/11)
On 3 July 2012, the CJEU held that “an author of software cannot oppose the resale of his ‘used’ licences allowing the use of his programs downloaded from the internet” and that the exclusive right of distribution of a copy of a computer program covered by such a licence is exhausted on its first sale. Oracle develops and distributes computer programs which customers download from Oracle’s website. The user is granted a licence to use the program which includes the right to store a copy of the program permanently on the user’s hard drive and allow up to 25 users to access it by downloading copies of the program to their own computer hard drives. UserSoft, a German company began reselling licences to use copies of the downloaded software from the Oracle website. Whilst the software program licences granted by Oracle specified that they were “nontransferable” and “personal” to Oracle’s customers UserSoft sought to rely on the exemption set out in Directive 2009/24/ EC on the legal protection of computer programs which provides that an owner of copyright in a computer program cannot prevent the resale of copies of that computer program if those copies have been sold within the EU with the copyright owner’s consent.
Oracle sued UserSoft for copyright infringement in the German courts which referred the case to the CJEU to consider whether a copy of a computer program is “sold” when it has been downloaded by a customer directly to his hard drive and whether further copies of the software can be made for onward sale. The CJEU gave a broad interpretation of “sale” and held that Oracle had transferred its ownership of the copy of the software to the customer despite expressly stating that the licence was to be both “personal” to the customer and “non-transferable”. The CJEU dismissed Oracle’s argument that the Directive excluded online services from the operation of the doctrine of exhaustion and that a resale right only arose in respect of programs originally sold on physical media and that downloads did not, therefore, exhaust Oracle’s distribution rights. The CJEU noted that a person who wishes to resell his copy of the downloaded software can make a further copy of it in order to avoid having to sell the hardware in which the program is installed. The CJEU, however, stressed that in order to avail of this he must make his own copy of the program “unusable” at the time of resale.