JURIST Guest Columnist Virginia Keyder of the State University of New York at Binghamton and Sabanci University in Istanbul, Turkey, says that the recent decisions in EU case law shows a trend towards viewing intellectual property as a way to benefit society, rather than corporations, in contrast to the trends in the US seen in recent legislative proposals…

While the top story out of the EU in recent months has been whether or not the euro and/or the EU itself will survive its current crisis, the European Court of Justice (ECJ) has been handing down decisions that illustrate the degree to which EU law is imbedded in the law of the member states. Come what may, the legal structures of the 27 members have been irreversibly altered and “supranationalized.” Another important message in a selection of these cases is that intellectual property (IP), the hegemonic ideology that has saturated the globe for the past two decades, has perhaps hit its peak. EU brakes on the excesses of IP have played out across the spectrum: in copyright, trademark and even patent law. Discussed below are two decisions regarding copyright, and its purpose and limitations under EU law.

To the outsider, the question arises as to how IP, an area of law overwhelmingly national in its structure and effects, comes before the ECJ, whose jurisdiction extends only to interpretation of EU law and not that of individual nations. The answer is that where national legislation is enacted in compliance with EU directives, those provisions in the national law can only be interpreted by the ECJ. Two recent copyright cases may be seen as indicative of a trend to interpret IP law through the lens of its original purpose — the benefit to society at large rather than corporate monopoly.

On November 24, 2011, in Case C-70/10, (Scarlet Extended SA v Société belge des auteurs, compositeurs et éditeurs SCRL [SABAM]), the ECJ held that IP rights holders may apply to the Court for an injunction against intermediaries such as Internet Service Providers (ISPs), “whose services are being used by a third party to infringe their rights.” However, they could not obtain an injunction requiring an ISP to install a filtering system “which is capable of identifying on that provider’s network the movement of electronic files containing a musical, cinematographic or audio-visual work in respect of which the applicant claims to hold intellectual property rights, with a view to blocking the transfer of files the sharing of which infringes copyright.” This decision was based on their interpretation of five European Commission (EC) Directives and the relevant case law, and construed in light of Articles 8 and 10 of the European Convention on the Protection of Human Rights and Fundamental Freedoms.

The Court cited Article 15 of Directive 2000/31 (on electronic commerce) which states:

No general obligation to monitor:

1. Member States shall not impose a general obligation on providers, when providing the services covered by Articles 12, 13 and 14, to monitor the information which they transmit or store, nor a general obligation actively to seek facts or circumstances indicating illegal activity.

2. Member States may establish obligations for information society service providers promptly to inform the competent public authorities of alleged illegal activities undertaken or information provided by recipients of their service or obligations to communicate to the competent authorities, at their request, information enabling the identification of recipients of their service with whom they have storage agreements.

Noting that “protection of the right to intellectual property is indeed enshrined in Article 17(2) of the Charter of Fundamental Rights of the European Union, the judge stated that “There is, however, nothing whatsoever in the wording of that provision or in the Court’s case-law to suggest that that right is inviolable and must for that reason be absolutely protected,” (paragraph 43) and that “the protection of the fundamental right to property, which includes the rights linked to intellectual property, must be balanced against the protection of other fundamental rights.” (Paragraph 44)

The Court found that “such an injunction would result in a serious infringement of the freedom of the ISP concerned to conduct its business since it would require that ISP to install a complicated, costly, permanent computer system at its own expense” contrary to Article 3(1) of Directive 2004/48, which requires that measures to protect IP rights not be unnecessarily complicated or costly. (Paragraph 48)

Such an injunction would also infringe the fundamental rights of the ISP’s customers to protection of their personal data and their freedom to receive or impart information as protected in the Charter of Fundamental Rights. (Paragraph 50)

Installation of the filtering system “would involve a systematic analysis of all content and the collection and identification of users’ IP addresses from which unlawful content on the network is sent. Those addresses are protected personal data because they allow those users to be precisely identified.” (Paragraph 51)

Such an injunction “could potentially undermine freedom of information since that system might not distinguish adequately between unlawful content and lawful content, with the result that its introduction could lead to the blocking of lawful communications.” (Paragraph 52)

“[I]n adopting the injunction requiring the ISP to install the contested filtering system, the national court concerned would not be respecting the requirement that a fair balance be struck between the right to intellectual property, on the one hand, and the freedom to conduct business, the right to protection of personal data and the freedom to receive or impart information, on the other.” (Paragraph 53)

Therefore, a national court is precluded from enjoining an ISP to install such a filtering system.

Less than a week later, on November 29, 2011, Advocate General Yves Bot, on a reference from a UK court, issued a decision rejecting copyright protection for the functionality and programming language of a computer program. (While Advocate General decisions are not binding on the Court, most judges follow their findings. It is thus likely but not certain that this decision will be affirmed by the Court in the near future.) Case C-406/10 (SAS Institute) dealt with an interpretation of the scope of legal protection conferred by copyright on computer programs under Directive 91/250/EEC, and on works by Directive 2001/29/EC.

Article 5(3) of Directive 91/250 provides that the “person having a right to use a copy of a computer program shall be entitled, without the authorization of the rightholder, to observe, study or test the functioning of the program in order to determine the ideas and principles which underlie any element of the program if he does so while performing any of the acts of loading, displaying, running, transmitting or storing the program which he is entitled to do.”

Defining the functionality of a computer program as “the set of possibilities offered by a computer system, the actions specific to that program. In other words, the functionality of a computer program is the service which the user expects from it” (paragraph 52), Bot held that such functionalities cannot “form the object of copyright protection under Article 1(1) of Directive 91/250.” Citing the preparatory work for the Directive, he states that

the main advantage of protecting computer programs by copyright is that such protection covers only the individual expression of the work and thus leaves other authors the desired latitude to create similar or even identical programs provided that they refrain from copying. This is particularly important because the number of available algorithms on which computer programs are based is considerable but not unlimited.

Further, he says, “to accept that a functionality of a computer program can be protected as such would amount to making it possible to monopolise ideas, to the detriment of technological progress and industrial development.”

In finding programming language to fall outside the protection of copyright, he compares it “to the language used by the author of a novel … the means which permits expression to be given, not the expression itself.”

It should also be noted that he finds the format of data files to be

an integral part of its computer program. … As part of the computer program, the interface — here, the elements which create, write and read the format of SAS data files — is therefore expressed in source code in the program. Consequently, if the expression of the interface constitutes a substantial part of the expression of the computer program … it is eligible for copyright protection.

That being said, however, he finds

that the authorisation of the holder of copyright in a computer program is not to be required where reproduction of the code and translation of its form within the meaning of Article 4(a) and (b) of the directive are indispensable to obtain the information necessary to achieve the interoperability of an independently created computer program with other programs. This is known as decompilation.

As an exception, Bot holds that it must be strictly construed and it is up to the national court to decide whether the conditions are met for the exception to apply.

With regard to protecting the SAS Manual, acknowledging that the manual itself is protected by copyright, “keywords, syntax, commands and combinations of commands, options, defaults and iterations from the SAS Manuals … do not qualify for the protection conferred by copyright.”

He goes on to conclude that

reproduction, in a computer program or a user manual, of certain elements described in the manual for another computer program may constitute an infringement of the copyright in the latter manual if — a question which will be for the national court to determine — the elements reproduced in this way are the expression of their author’s own intellectual creation.

This limitation on the protectability of various aspects of computer programs would seem to mitigate against a warm reception in the EU to the notion of fully patentable software, which itself substantially limits the ability of rival entities to produce competing software.

While in the US, legislative activity in the area of IP in the controversial Stop Online Piracy Act (SOPA) currently winding its way through the Congress, seems to be going away from protection of fundamental rights, this decision would indicate that such rights may well take precedence over IP in the EU in the near future. At the level of international law, the Anti-Counterfeiting Trade Agreement (ACTA) may well conflict with current EU law as well.

Virginia Keyder is a Lecturer in EU law at Bogazici University and Sabanci University in Istanbul, Turkey, and IP and international law at the State University of New York at Binghamton. She has previously served as the Foreign Law Specialist at Mark Levy & Associates, and has served as a consultant on EU IP law. From 2000-2002, Keyder served as the Turkey Correspondent for JURIST.

Suggested citation: Virginia Keyder, Copyright and Its Limitations According to the ECJ, JURIST – Forum, Dec. 24, 2011, http://jurist.org/forum/2011/12/virginia-keyder-ecj-copyright.php.