SAS Institute Inc v World Programming Ltd

Copyright in a computer program protects its expression, including its design and source code, but not its functionality, programming language, interfaces, or the ideas, procedures, methods of operation and mathematical concepts underlying it. The same distinction applies to a manual describing software functionality. Reproducing functionality, including to achieve interoperability, is therefore not ordinarily reproduction of a substantial part of the copyright work. Substantiality depends on the quality of what is reproduced and whether it expresses the author’s intellectual creation, while cumulative effects must also be considered. A software licence cannot contract out of the statutory protection for observing, studying and testing a program if Article 5(3) of the Software Directive applies. A manual may nevertheless be infringed where its original wording is substantially reproduced.

SAS Institute developed the SAS System, including computer programs, a programming language and extensive manuals. World Programming Ltd developed WPS, intended to execute SAS application programs and reproduce much of their functionality. WPL used the SAS Manuals and the SAS Learning Edition to determine functionality, outputs, file formats and testing requirements.

SAS Institute alleged copyright infringement in the SAS Components, the SAS Manuals and the Learning Edition, and breach of the Learning Edition licences. The principal issues were whether functionality, programming languages, interfaces and mathematical material were protected; whether WPL had reproduced substantial parts of the SAS works; whether the licence restrictions were effective; and whether WPS documentation was protected by fair dealing. The court also considered whether questions should be referred to the Court of Justice.

1. Copyright scope. Computer programs are protected as literary works, but protection remains confined to expression. Under Article 9(2) of TRIPS and Article 2 of the WIPO Copyright Treaty, implemented through the Copyright, Designs and Patents Act 1988, copyright does not protect ideas, procedures, methods of operation or mathematical concepts as such. The relevant distinction concerns the kind of skill, judgment and labour involved: skill in devising the form of expression is protected, while skill in devising functionality is not.
2. The SAS Language was a programming language. Its syntax and keywords were not protected by copyright in the SAS Components. SAS data-file formats were interfaces, and reproducing them to achieve interoperability did not itself infringe copyright. Replicating functionality, even where some additional elements were copied, did not infringe because WPL had not reproduced the design or source code of the SAS Components.
3. Applying Navitaire Inc v easyJet Airline Co Ltd and Nova Productions Ltd v Mazooma Games Ltd, the court held that the reasoning excluding functionality, interfaces and programming languages was persuasive, but that the interpretation of Article 1(2) of the Software Directive was not acte clair. A reference to the Court of Justice was required.
4. For substantiality, the court applied the quality-based approach in Ladbroke (Football) Ltd v William Hill (Football) Ltd, Designers Guild Ltd v Russell Williams (Textiles) Ltd and Infopaq International A/S v Danske Dagblades Forening. The relevant question was whether the material reproduced expressed the intellectual creation of the authors. The short SAS test scripts did not do so and were also covered by an implied licence permitting users to run examples for verification.
5. The Learning Edition licences were construed as personal licences for the individual Customer and for learning rather than production use. WPL’s use to replicate functionality, test WPS, compare performance, determine outputs and inspect file formats fell outside the licence terms. However, on the court’s provisional interpretation of Article 5(3) of the Software Directive, those terms were void to the extent that they prevented lawful observation, study and testing to determine underlying ideas and principles.
6. The WPS Manual substantially reproduced the language of the SAS Manuals and infringed their copyright. The WPS Guides did not reproduce a substantial part; alternatively, their keyword comparison was fair dealing for review, although the acknowledgement requirement would have defeated the defence.
7. The court referred questions concerning Articles 1(2) and 5(3) of the Software Directive and Article 2(a) of the Information Society Directive to the Court of Justice. The precise questions and consequential orders were reserved.

First-instance judgment. The court directed that questions concerning the interpretation of European copyright legislation be referred to the Court of Justice and reserved the precise formulation and further orders.