• Judgment of the Court of 3 July 2012, C-128/11, UsedSoft

Oracle develops and markets computer software. It is the proprietor of the exclusive user rights under copyright law in those programs. It is also the proprietor of the German and Community word marks Oracle, which are registered inter alia for computer software. Oracle distributes the software at issue, namely databank software, in 85% of cases by downloading from the internet. The customer downloads a copy of the software directly to his computer from Oracle’s website. The software is what is known as ‘client-server-software’. The user right for such a program, which is granted by a licence agreement, includes the right to store a copy of the program permanently on a server and to allow a certain number of users to access it by downloading it to the main memory of their work-station computers. On the basis of a maintenance agreement, updated versions of the software (‘updates’) and programs for correcting faults (‘patches’) can be downloaded from Oracle’s website. At the customer’s request, the programs are also supplied on CD‑ROM or DVD. Oracle offers group licences for the software at issue for a minimum of 25 users each. An undertaking requiring licences for 27 users thus has to acquire two licences. Oracle’s licence agreements for the software at issue in the main proceedings contain the following term, under the heading ‘Grant of rights’: ‘With the payment for services you receive, exclusively for your internal business purposes, for an unlimited period a non-exclusive non-transferable user right free of charge for everything that Oracle develops and makes available to you on the basis of this agreement.’ UsedSoft markets used software licences, including user licences for the Oracle computer programs at issue in the main proceedings. For that purpose UsedSoft acquires from customers of Oracle such user licences, or parts of them, where the original licences relate to a greater number of users than required by the first acquirer. In October 2005 UsedSoft promoted an ‘Oracle Special Offer’ in which it offered for sale ‘already used’ licences for the Oracle programs at issue in the main proceedings. In doing so it pointed out that the licences were all ‘current’ in the sense that the maintenance agreement concluded between the original licence holder and Oracle was still in force, and that the lawfulness of the original sale was confirmed by a notarial certificate. Customers of UsedSoft who are not yet in possession of the Oracle software in question download a copy of the program directly from Oracle’s website, after acquiring such a used licence. Customers who already have that software and then purchase further licences for additional users are induced by UsedSoft to copy the program to the work stations of those users. Oracle brought proceedings in the Landgericht München I (Regional Court, Munich I) seeking an order that UsedSoft cease the practices described in paragraphs 24 to 26 above. That court allowed Oracle’s application. UsedSoft’s appeal against the decision was dismissed. UsedSoft thereupon appealed on a point of law to the Bundesgerichtshof (Federal Court of Justice).

The referring court essentially seeks to know whether and under what conditions the downloading from the internet of a copy of a computer program, authorised by the copyright holder, can give rise to exhaustion of the right of distribution of that copy in the European Union within the meaning of Article 4(2) of Directive 2009/24. Furthermore, the referring court seeks essentially to know whether, and under what conditions, an acquirer of used licences for computer programs, such as those sold by UsedSoft, may, as a result of the exhaustion of the distribution right under Article 4(2) of Directive 2009/24, be regarded as a ‘lawful acquirer’ within the meaning of Article 5(1) of Directive 2009/24 who, in accordance with that provision, enjoys the right of reproduction of the program concerned in order to enable him to use the program in accordance with its intended purpose.

The Court ruled that Article 4(2) of Directive 2009/24/EC of the European Parliament and of the Council of 23 April 2009 on the legal protection of computer programs must be interpreted as meaning that the right of distribution of a copy of a computer program is exhausted if the copyright holder who has authorised, even free of charge, the downloading of that copy from the internet onto a data carrier has also conferred, in return for payment of a fee intended to enable him to obtain a remuneration corresponding to the economic value of the copy of the work of which he is the proprietor, a right to use that copy for an unlimited period. Furthermore, the Court concluded that articles 4(2) and 5(1) of Directive 2009/24 must be interpreted as meaning that, in the event of the resale of a user licence entailing the resale of a copy of a computer program downloaded from the copyright holder’s website, that licence having originally been granted by that rightholder to the first acquirer for an unlimited period in return for payment of a fee intended to enable the rightholder to obtain a remuneration corresponding to the economic value of that copy of his work, the second acquirer of the licence, as well as any subsequent acquirer of it, will be able to rely on the exhaustion of the distribution right under Article 4(2) of that directive, and hence be regarded as lawful acquirers of a copy of a computer program within the meaning of Article 5(1) of that directive and benefit from the right of reproduction provided for in that provision.

Judgment of 3 Jul 2012, C-128/11 (UsedSoft)

A Czech organisation called the Security Software Association (BSA) wanted to set up a collective licensing scheme for computer software which included the right to transmit works by cable television.

The point in issue was whether the broadcast of the graphical user interface of a computer program could infringe copyright (and would therefore require licensing).

The questions referred to the Court were the following:

  By its first question, the national court asks, in essence, whether the graphic user interface of a computer program is a form of expression of that program within the meaning of Article 1(2) of Directive 91/250 and is thus protected by copyright as a computer program under that directive

By its second question, the national court asks, in essence, whether television broadcasting of a graphic user interface constitutes communication to the public of a work protected by copyright within the meaning of Article 3(1) of Directive 2001/29.

The Court ruled as follows:

Computer interface does not constitute a form of expression of a computer program within the meaning of Article 1(2) of Directive 91/250 and that, consequently, it cannot be protected specifically by copyright in computer programs by virtue of that directive.

However, the graphic user interface can, as a work, be protected by copyright (Directive 2001/29) if it is its author’s own intellectual creation. It is for the national court to ascertain this. When making that assessment, the national court must take account, inter alia, of the specific arrangement or configuration of all the components which form part of the graphic user interface in order to determine which meet the criterion of originality. In that regard, that criterion cannot be met by components of the graphic user interface which are differentiated only by their technical function.

The answer to the first question referred is that a graphic user interface is not a form of expression of that program within the meaning of Article 1(2) of Directive 91/250 and thus is not protected by copyright as a computer program under that directive. Nevertheless, such an interface can be protected by copyright as a work by Directive 2001/29 if that interface is its author’s own intellectual creation.

Answering to the second question the Court decided that television broadcasting of a graphic user interface does not constitute communication to the public of a work protected by copyright within the meaning of Article 3(1) of Directive 2001/29.

Judgment of 2 May 2012, C-406/10 (SAS Institute)

SAS Institute Inc. has developed the SAS System, an integrated set of programs which enables users to carry out data processing and analysis tasks, in particular statistical analysis. The core component of the SAS System is called Base SAS. It enables users to write and execute application programs (also known as ‘scripts’) written in the SAS programming language for data processing. SAS Institute developed a set of computer programs used for data analysis.

WPL (World Programming Ltd) developed and marketed a competing program with the same functionalities as the one belonging to SAS Institute  and capable of executing application programs written in the SAS Language. It obtained a license to the “Learning Edition” of the SAS program and manuals, which it studied, but did not access or copy the SAS source code. The WPL is written in the SAS Language, and is designed to allow the use of Scripts originally written for the SAS System into WPL.

SAS Institute brought an action before the High Court in the UK, accusing WPL of having copied the SAS System manuals and components, thus infringing its copyright and the terms of the Learning Edition licence. In that context, the High Court has put questions to the Court of Justice regarding 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 Court recalls, first, that the Directive on the legal protection of computer programs extends copyright protection to the expression in any form of an intellectual creation of the author of a computer program. However, ideas and principles which underlie any element of a computer program, including those which underlie its interfaces, are not protected by copyright under that directive. Only the expression of those ideas and principles is protected by copyright. In this context neither the functionality of a computer program nor the programming language and the format of data files used in a computer program in order to exploit certain of its functions constitute a form of expression. Accordingly, they do not enjoy copyright protection.

Second, the Court observes that, according to the Directive, the purchaser of a software licence has the right to observe, study or test the functioning of that software in order to determine the ideas and principles which underlie any element of the program. Any contractual provisions contrary to that right are null and void. Furthermore, the determination of those ideas and principles may be carried out within the framework of the acts permitted by the licence.

According to the Court, there is no copyright infringement where, as in the present case, the lawful acquirer of the licence did not have access to the source code of the computer program but merely studied, observed and tested that program in order to reproduce its functionality in a second program.

Lastly, the Court holds 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 protected by copyright is capable of constituting an infringement of the copyright in the latter manual if that reproduction constitutes the expression of the intellectual creation of the author of the manual.

In this respect, the Court takes the view that, in the present case, the keywords, syntax, commands and combinations of commands, options, defaults and iterations consist of words, figures or mathematical concepts, considered in isolation, are not, as such, an intellectual creation of the author of that program. It is only through the choice, sequence and combination of those words, figures or mathematical concepts that the author expresses his creativity in an original manner.

Judgment of 12 Oct 2016, C-166/15 (Ranks and Vasiļevičs)

In Latvia, criminal proceedings have been brought against Mr Aleksandrs Ranks and Mr Jurijs Vasiļevičs, who are charged with the unlawful sale of objects protected by copyright and intentional unlawful use of another person’s trade mark and more particularly for selling copyright-protected computer programs published by Microsoft.

The Criminal Law Division of the Riga Regional Court, Latvia asks the Court of Justice whether EU Law must be interpreted as meaning that the acquirer of a back-up copy of a computer program, stored on a non-original material medium, may, under the rule of exhaustion of the rightholder’s distribution right laid down in an EU Directive, resell that copy where (i) the original material medium of that program, acquired by the initial acquirer, has been damaged and (ii) that initial acquirer has erased his copy or ceased to use it.

The Court notes that the directive grants the holder of the copyright in a computer program the exclusive right to do or to authorise the permanent or temporary reproduction of that program by any means and in any form, in part or in whole, subject to the specific exceptions laid down in the directive. The lawful acquirer of a copy of a computer program, placed on the market by the rightholder or with his consent, may therefore resell that copy, provided that that sale does not adversely affect the rightholder’s exclusive reproduction right and that any acts of reproduction of that program are authorised by that rightholder or are covered by the exceptions laid down in the directive.

The Court points out that the directive provides that the making of a back-up copy by a person having a right to use the computer program may not be prevented by contract in so far as it is necessary for that use and it may not be provided differently in a contractThe exception is applicable under the condition that copy must (i) be made by a person having a right to use that program and (ii) be necessary for that use. The exception must be interpreted strictly.

A back-up copy of a computer program may be made and used only to meet the sole needs of the person having the right to use that program and that, accordingly, that person cannot — even though he may have damaged, destroyed or lost the original material medium — use that copy in order to resell that program to a third party.

The Court therefore ruled that the directive must be interpreted as meaning that, although the initial acquirer of a copy of a computer program accompanied by an unlimited user licence is entitled to resell that copy and his licence to a new acquirer, he may not, however, in the case where the original material medium of the copy that was initially delivered to him has been damaged, destroyed or lost, provide his back-up copy of that program to that new acquirer without the authorisation of the rightholder.

• Judgment of 22 December 2010, C-393/09, Bezpečnostní softwarová asociace – Svaz softwarové ochrany v. Ministerstvo kultury

On 9 April 2001, BSA, as an association, applied to the Ministerstvo kultury for authorisation for the collective administration of copyrights to computer programs, under Paragraph 98 of the Copyright Law. BSA defined the extent of those rights in a letter dated 12 June 2001.That application was refused, and the administrative action brought against that refusal was dismissed. BSA then brought a legal action against those decisions before the Vrchní soud v Praze (High Court, Prague). Following the setting aside of those two rejection decisions by the Nejvyšší správní soud (Supreme Administrative Court), to which the case was referred, on 14 April 2004 the Ministerstvo kultury adopted a fresh decision by which it again dismissed BSA’s application. BSA therefore brought an administrative appeal before the Ministerstvo kultury, which annulled that rejection decision. On 27 January 2005, the Ministerstvo kultury adopted a new decision, by which it rejected BSA’s application yet again on the ground, firstly, in particular, that the Copyright Law protects only the object code and the source code of a computer program, but not the result of the display of the program on the computer screen, since the graphic user interface was protected only against unfair competition. Secondly, it stated that the collective administration of computer programs was indeed possible in theory, but that mandatory collective administration was not an option and that voluntary collective administration served no purpose. BSA lodged an appeal against that decision, which was dismissed on 6 June 2005 by a decision of the Ministerstvo kultury. The association then challenged the latter decision before the Městský Soud v Praze (Regional Court, Prague). In its action, BSA submitted that the definition of a computer program in Paragraph 2(2) of the Copyright Law also covers the user interface. In its submission, a computer program can be perceived at the level both of the source or object code and of the method of communication (communication interface). The Mĕstský soud v Praze having dismissed its action, BSA appealed on a point of law before the Nejvyšší správní soud. BSA takes the view that a computer program is used when it is shown in a display on user screens and that, consequently, such use must be protected by copyright. As regards the interpretation of the provisions of Directives 91/250 and 2001/29, the Nejvyšší správní soud decided to stay the proceedings and refer the following questions to the Court for a preliminary ruling:

The national court asks, in essence, whether the graphic user interface of a computer program is a form of expression of that program within the meaning of Article 1(2) of Directive 91/250 and is thus protected by copyright as a computer program under that directive.

The Court hereby rules that a graphic user interface is not a form of expression of a computer program within the meaning of Article 1(2) of Council Directive 91/250/EEC of 14 May 1991 on the legal protection of computer programs and cannot be protected by copyright as a computer program under that directive. Nevertheless, such an interface can be protected by copyright as a work by Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society if that interface is its author’s own intellectual creation.