It's far from clear if the Crown use provisions in the Copyright Act apply to computer programs.
A case scheduled for hearing in the Federal Court later this year will test whether the Commonwealth and State Governments can use software without a licence agreement.
Working Systems Software, a subsidiary of Global Health, commenced court action against the South Australian Government when it continued using the CHIRON patent administration system after its licence agreement ended. Global Health claims the SA Government infringed its copyright in the CHIRON system and is seeking damages and an injunction to prevent continued use of the system. The SA Government admits it continued using the system after the licence agreement ended, but says it can rely on the Crown use provisions in the Copyright Act to keep using the software.
Crown use under the Copyright Act for computer programs: clear as mud?
So, do the Crown use provisions in the Copyright Act apply to computer programs? Because of some peculiar drafting in the Act, the answer is far from clear.
The Crown use provisions allow the Commonwealth and States (but not local governments) to use copyright works for the services of the Commonwealth or State without permission from the copyright owner. The specific section in the Copyright Act that deals with this, section 183, states that copyright in a literary work (which ordinarily would include a computer program) is not infringed by the Commonwealth or a State where the copyright is used for the services of the Commonwealth or State.
Where a government relies on the Crown use provisions, it has to notify the copyright owner and pay a reasonable licence fee. However, importantly, the government cannot be ordered to stop using the copyright work and will not be liable for damages (which might otherwise include punitive or aggravated compensatory damages).
On the face of it, this is seems fairly straightforward. There is nothing in the text of section 183 that excludes computer programs. However, confusion arises from the heading of section 183, which is: "Use of copyright material for the services of the Crown" [my emphasis]. The term "copyright material" is defined elsewhere in the Copyright Act in a way that excludes computer programs. So, the heading of section 183 seems to exclude computer programs, but the text of section 183 does not. This appears to have caused at least one leading Australian commentator to conclude that the Crown use provisions do not apply to computer programs.
What will this mean for government use of software?
Without wishing to pre-empt the Federal Court's decision, we think Global Health has a difficult road ahead. The inconsistency between the heading and text of section 183 appears to have arisen from amendments made to the Copyright Act in 1998, and it is fairly clear (to us at least) from the background material that those amendments were not intended to exclude computer programs from the Crown use provisions.
Many software licences are perpetual, so a time-based licensing issue like in this case will be less common. However, most software licences contain use limitations (for example, a limit on the number of named or concurrent users). If the Crown use provisions apply to computer programs, then the Commonwealth and States can exceed these use limitations and pay a reasonable licence fee. This is a good position to be in where a software vendor refuses to increase the use limitations or insists on unreasonable terms.
Government agencies should remember that while the Crown use provisions might allow them to use software without a licence agreement, they will not entitle them to vendor support. That said, using unsupported software may be a far better outcome than not being able to use it at all.