As we all know, copyright law has a key role in the software industry. It provides useful guidance to the thorny questions of 'how can I stop competitors copying my products' and 'to what extent can I lawfully restrict the activities of my licensees?'
The recent case of SAS Institute v World Programming Limited (WPL) is the latest in a long line of cases to tackle these questions.
Idea versus form
It is worth touching on the 'idea v form' principle first: the rule that copyright protects the expressions of ideas but not the ideas themselves. In the context of software, the distinction is between the code and outputs, which generally are protected, and the underlying business logic or functionality, which is generally not. EU law (the Software Directive 2009/24/EC) tells us that 'ideas and principles which underlie any elements of a computer program … are not protected by copyright', and this position has been fairly consistently confirmed in court cases over the years.
SAS V WPL
This case started in the High Court in 2010, worked its way to the Court of Justice of the EU (CJEU) in 2012, whose ruling was implemented by the High Court in January this year.
WPL was set up with the specific aim of emulating the business function of the software of SAS Institute, a very large software business but without actually copying the software code (and indeed without access to the code). WPL did this by obtaining a limited licence of SAS’s software and associated user manuals, and then studying how it worked in order to create its own very similar software, written from scratch – so-called 'non-literal copying'. SAS sued WPL for infringing its copyright in both its software and its user manuals, and for being in breach of its licence terms. The High Court, with whom the CJEU agreed, however, largely rejected SAS’s claims.
The position confirmed by this case is that the copyright that exists in software code does not protect programming languages, interfaces or the underlying functionality of the program.
Activities of licensees
One other interesting aspect of this case was that WPL undertook much of the work whilst a licensee of SAS software. The court considered the extent to which WPL was entitled, as a licensee, to observe, study or test the functioning of SAS’s software in order to determine the ideas and principles underlying it. Such a right is indeed embedded in the legislation, although it has rarely been the subject of much judicial discussion before now. Following direction from the CJEU, the High Court allowed WPL to rely on this in defence of some of the claims made against it.