The EU's General Court has ordered the European Commission to pay damages of over €12 million for infringing the copyright in software owned by IT firm Systran.

Between 1997 and 2002, Systran Luxembourg developed a version of its Systran-Unix machine translation software for the European Commission, calling it EC-Systran-Unix. In 2003, the Commission published a call for tenders for the maintenance and linguistic enhancement of its machine translation systems, including conducting "enhancements, adaptations and additions….and system updates". Following the call for tenders, Systran contacted the Commission to inform it that the planned work appeared likely to infringe its intellectual property rights. The Commission disagreed and awarded the contract to the successful tenderer, who commenced work. Systran sued the Commission for illegally sharing its know-how with a third party and developing the software without authorisation, infringing its copyright.

The contract between the Commission and Systran did not deal with these issues but the General Court ruled that the Commission had a non-contractual liability. Systran had established sufficient similarity between Systran Unix and EC-Systran Unix and could therefore rely on the rights held in Systran Unix to object to the disclosure to a third party of the derivative EC-Systran Unix version. Furthermore, the adaptations requested required the alteration of elements of EC-Systran Unix taken from Systran Unix. By acting without Systran's consent, the Commission acted unlawfully, infringing the general principles common to the law of the Member States applicable to copyright and know-how.

The General Court held that liquidated damages and interest amounting to €12,001,000 must be paid by the Commission to Systran. It also considered that the publication of a press release detailing the judgment was also a form of non-pecuniary compensation for the non-material damage caused to Systran's reputation.

The case highlights the complexities of copyright issues in relation to derivative software developments. In order to try and avoid these types of software copyright issues, customers and suppliers should ensure that issues of intellectual property rights are adequately provided for in their contracts.

The press release is available here.