INT , 6 November 2006 Anne-Catherine LORRAIN Legal Adviser PhD Candidate in Intellectual property & ICT law CERDI (Centre d’Etudes et de Recherche en Droit de l’Immatériel), Universities Paris I Sorbonne / Paris Sud aclorrain@gmail.com Master in management International business law # Law for Communication and Information Technology Legal protection of computer programs and of databases

Legal protection of computer programs Legal protection of databases Today’s framework

Legal protection of computer programs

Legal protection of databases

Introduction : IP law and new technologies Constant adaptation of IP law to technology Alleged ‘legal void’ Legal action possible (competition law…) before creation of specific IP protection

Constant adaptation of IP law to technology

Alleged ‘legal void’

Legal action possible (competition law…) before creation of specific IP protection

Legal protection of computer programs (Software)

True or false? Software is protected by copyright Software can be patented in Europe I can make a copy of a software program for private use

Software is protected by copyright

Software can be patented in Europe

I can make a copy of a software program for private use

Software protection Legal definition of a computer program No definition in EC Software Directive France : ‘ logiciel’ = computer program + related documentation, preparatory material

Legal definition of a computer program

No definition in EC Software Directive

France : ‘ logiciel’ = computer program + related documentation, preparatory material

Software protection (2) European Directive on computer programs protection Directive of 14 May 1991 (‘Sotware Directive’) Context Patent protection not always appropriate Need of new specific rights Need of European harmonization Implementation in EU Member States Grant of protection to computer programs as literary works (France: Since Act of 3 July 1985, Directive implementation Act of 10 May 1994)

European Directive on computer programs protection

Directive of 14 May 1991 (‘Sotware Directive’)

Context

Patent protection not always appropriate

Need of new specific rights

Need of European harmonization

Implementation in EU Member States

Grant of protection to computer programs as literary works

(France: Since Act of 3 July 1985, Directive implementation Act of 10 May 1994)

Software protection (3) Copyright protection ‘ Authorship’ of computer programs (EC Software Directive, art. 2) What is ‘originality’ for a computer program? Judges choose patent (‘anteriority’, ‘novelty’) or copyright terminology (but different from classic court requirements for literary works: ‘intellectual contribution‘, cf. French Cour de cassation, 1986, Pachot ) Specific copyright protection Reduced moral rights Specific licensing rules: Context of software creation: working contract (EC Software Directive, art. 2.3) Rights ownership to employer

Copyright protection

‘ Authorship’ of computer programs (EC Software Directive, art. 2)

What is ‘originality’ for a computer program?

Judges choose patent (‘anteriority’, ‘novelty’) or copyright terminology (but different from classic court requirements for literary works: ‘intellectual contribution‘, cf. French Cour de cassation, 1986, Pachot )

Specific copyright protection

Reduced moral rights

Specific licensing rules:

Context of software creation: working contract (EC Software Directive, art. 2.3)

Rights ownership to employer

Software protection (4) Exclusive rights of software rightholders (EC Software Directive, art. 4) Right of reproduction Right of distribution Right of translation, adaptation, arrangement and any other alteration of computer program

Exclusive rights of software rightholders

(EC Software Directive, art. 4)

Right of reproduction

Right of distribution

Right of translation, adaptation, arrangement and any other alteration of computer program

Software protection (5) Exceptions to exclusive rights No private copying exception Back-up copy ‘ The making of a back-up copy by a person having a right to use the computer program may not be prevented by contract insofar as it is necessary for that use .’ (Art. 5.2 of Software Directive) ie: There must be a license The copy must be necessary for the legitimate use of software Restrictive interpretation: only one copy may be allowed (Fr) French law prohibits private copy other than ‘back-up copy’ Analysis The legitimate software user has the right ‘ 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 ’ . (Art. 5.3) ‘ Decompilation’ (‘reverse engineering’) The software reproduction is allowed where this ‘ reproduction of the code and translation (...) are indispensable to obtain the information necessary to achieve the interoperability of an independently created computer program with other programs ’ . (Art. 6)

Exceptions to exclusive rights

No private copying exception

Back-up copy

‘ The making of a back-up copy by a person having a right to use the computer program may not be prevented by contract insofar as it is necessary for that use .’ (Art. 5.2 of Software Directive)

ie:

There must be a license

The copy must be necessary for the legitimate use of software

Restrictive interpretation: only one copy may be allowed (Fr)

French law prohibits private copy other than ‘back-up copy’

Analysis

The legitimate software user has the right ‘ 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 ’ . (Art. 5.3)

‘ Decompilation’ (‘reverse engineering’)

The software reproduction is allowed where this ‘ reproduction of the code and translation (...) are indispensable to obtain the information necessary to achieve the interoperability of an independently created computer program with other programs ’ . (Art. 6)

Software protection (6) Decompilation exception (‘reverse engineering’) Context: controversy, political compromise Decompilation as such is not allowed Conditions for application of decompilation right (Art. 6 of Software Directive) : The acts are made by the licensee or by any person having a right to use a copy of a program The information necessary to achieve interoperability has not previously been readily available These acts are confined to the parts of the original program which are necessary to achieve interoperability The information obtained shall not be used for goals other than to achieve the interoperability of the independently created computer program The information obtained shall not be given to others, except when necessary for the interoperability The information obtained shall not be used for the development, production or marketing of a computer program substantially similar in its expression, or for any other act which infringes copyright Shows complexity of software ‘special’ copyright protection Rare case law

Decompilation exception

(‘reverse engineering’)

Context: controversy, political compromise

Decompilation as such is not allowed

Conditions for application of decompilation right (Art. 6 of Software Directive) :

The acts are made by the licensee or by any person having a right to use a copy of a program

The information necessary to achieve interoperability has not previously been readily available

These acts are confined to the parts of the original program which are necessary to achieve interoperability

The information obtained shall not be used for goals other than to achieve the interoperability of the independently created computer program

The information obtained shall not be given to others, except when necessary for the interoperability

The information obtained shall not be used for the development, production or marketing of a computer program substantially similar in its expression, or for any other act which infringes copyright

Shows complexity of software ‘special’ copyright protection

Rare case law

Software protection (7) ‘ Interoperability’ What is ‘interoperability’? EC Software Directive defines interoperability as ‘ the ability to exchange information and mutually to use the information which has been exchanged ‘. Beyond software protection? Copyright protection technical measures must not prevent from implementation of interoperability (Cf. French Copyright Act) Case: ‘ DVD Jon’ cracked iTunes & iPod’s technical protections for interoperability, allegedly without obstructing application of technical protection measures (ie limitation of number of copies…)

‘ Interoperability’

What is ‘interoperability’?

EC Software Directive defines interoperability as ‘ the ability to exchange information and mutually to use the information which has been exchanged ‘.

Beyond software protection?

Copyright protection technical measures must not prevent from implementation of interoperability (Cf. French Copyright Act)

Case:

‘ DVD Jon’ cracked iTunes & iPod’s technical protections for interoperability, allegedly without obstructing application of technical protection measures (ie limitation of number of copies…)

Software protection (8) Copyright vs patent debate Old debate European Patent Convention (EPC) of 1973 Exclusion of patentability for computer programs ‘as such’ But possibilities for patent protection of computer programs Debate updated with the Proposal for a Directive on the patentability of computer-implemented inventions Brief legislative history: Draft Directive presented by European Commission on 20 February 2002 7 March 2005: EU Council adopted its common position on draft Directive (approval of draft Directive without debate) 6 July 2005: European Parliament rejected Council common position and legislative procedure was closed

Copyright vs patent debate

Old debate

European Patent Convention (EPC) of 1973

Exclusion of patentability for computer programs ‘as such’

But possibilities for patent protection of computer programs

Debate updated with the Proposal for a Directive on the patentability of computer-implemented inventions

Brief legislative history:

Draft Directive presented by European Commission on 20 February 2002

7 March 2005: EU Council adopted its common position on draft Directive (approval of draft Directive without debate)

6 July 2005: European Parliament rejected Council common position and legislative procedure was closed

Software protection (9) Copyright vs patent debate Why a draft Directive on patentability of computer-implemented inventions? Limits of copyright protection Need of harmonization of patent law: No unifying structure with binding effect on national courts European Patent Office has granted some 30,000 patents for computer implemented inventions Compliance with ( WTO ) TRIPs Agreement (Art. 27.1) Rebuttal arguments: Patent protection can go too far ( patentability of ’business methods’...) Influence on competition (risk of ‘patent war’ EU/US) Patents can be a burden for enterprises

Copyright vs patent debate

Why a draft Directive on patentability of computer-implemented inventions?

Limits of copyright protection

Need of harmonization of patent law:

No unifying structure with binding effect on national courts

European Patent Office has granted some 30,000 patents for computer implemented inventions

Compliance with ( WTO ) TRIPs Agreement (Art. 27.1)

Rebuttal arguments:

Patent protection can go too far ( patentability of ’business methods’...)

Influence on competition (risk of ‘patent war’ EU/US)

Patents can be a burden for enterprises

Database protection

True or false? Databases can be protected by copyright European database Directive does not grant protection to paper-databases I can make a copy of an electronic database for private use A database producer can limit database use with technical protection measures

Databases can be protected by copyright

European database Directive does not grant protection to paper-databases

I can make a copy of an electronic database for private use

A database producer can limit database use with technical protection measures

Database protection Instruments of database legal protection Copyright ‘ Quasi-copyright’ - Catalog rule in nordic countries’ law - Dutch protection of non-original writings Unfair competition, unjust enrichment Property rights (rare cases) ie: trespass, abuse of computer system , … Contract law Sui generis (database) right (EC Database Directive)

Instruments of database legal protection

Copyright

‘ Quasi-copyright’

- Catalog rule in nordic countries’ law

- Dutch protection of non-original writings

Unfair competition, unjust enrichment

Property rights (rare cases)

ie: trespass, abuse of computer system , …

Contract law

Sui generis (database) right (EC Database Directive)

Database protection (2) Copyright protection ‘ Work of authorship’? Facts and data per se are not protected by copyright… … but compilations can be copyrighted if they are original Originality? No protection of data per se Protection of ‘creative’ selection or arrangement (Europe and USA) Many limitations: Fair use (USA) Private copying, quotation, science and education

Copyright protection

‘ Work of authorship’?

Facts and data per se are not protected by copyright…

… but compilations can be copyrighted if they are original

Originality?

No protection of data per se

Protection of ‘creative’ selection or arrangement (Europe and USA)

Many limitations:

Fair use (USA)

Private copying, quotation, science and education

Database protection (3) European Directive on the legal protection databases Directive of 11 March 1996 (‘Database Directive’) Context Copyright protection non always appropriate Need of new specific rights Need of European harmonization Original proposal of Database Directive in 1992 Implementation in EU Member States Database right transposed into national law: as a neighbouring right (Ger, Fr, Sp, It) in seperate database legislation (NL, B) as an ‘upgrade’ of catalog rule (Fin, Swe, Den)

European Directive on the legal protection databases

Directive of 11 March 1996 (‘Database Directive’)

Context

Copyright protection non always appropriate

Need of new specific rights

Need of European harmonization

Original proposal of Database Directive in 1992

Implementation in EU Member States

Database right transposed into national law:

as a neighbouring right (Ger, Fr, Sp, It)

in seperate database legislation (NL, B)

as an ‘upgrade’ of catalog rule (Fin, Swe, Den)

Database Directive in a nutshell Broad definition of database: Electronic and non-electronic compilations (Art. 1.1): ‘ For the purposes of this Directive, 'database’ shall mean a collection of independent works, data or other materials arranged in a systematic or methodical way and individually accessible by electronic or other means. ’ Two-tier protection scheme: Copyright for original compilations and/or Sui generis ‘database right’ for ‘non original’ databases Database protection (4)

Database Directive in a nutshell

Broad definition of database:

Electronic and non-electronic compilations (Art. 1.1):

‘ For the purposes of this Directive, 'database’ shall mean a collection of independent works, data or other

materials arranged in a systematic or methodical way and individually accessible by electronic or other

means. ’

Two-tier protection scheme:

Copyright for original compilations

and/or

Sui generis ‘database right’ for ‘non original’ databases

Database protection (5) Who is a database rightowner? Database ‘maker’ = rightholder ‘ the person who takes the initiative and the risk of investing’ (Recital 41) Beneficiaries of database right EC nationals or residents EC may extend protection to third countries that offer ‘comparable protection’ (‘reciprocity’)

Who is a database rightowner?

Database ‘maker’ = rightholder

‘ the person who takes the initiative and the risk of investing’ (Recital 41)

Beneficiaries of database right

EC nationals or residents

EC may extend protection to third countries that offer ‘comparable protection’ (‘reciprocity’)

Database protection (6) Database Directive main provisions No protection of data per se Requirements for protection under database right: Compilation must meet database definition Making of database has required ‘substantial investment’

Database Directive main provisions

No protection of data per se

Requirements for protection under database right:

Compilation must meet database definition

Making of database has required ‘substantial investment’

Database protection (7) ‘ Database’ definition Three criteria Collection of ‘independent (…) materials’… ie data must have independent meaning; materials must be separable from one another without their informative, literary, artistic, musical or other value being affected … ‘ arranged in a systematic or methodical way’… ie not necessary for materials to have been physically stored in an organized manner; virtual ‘arrangement’ (ie through database software) is sufficient … ‘ individually accessible’. Database must be fully searchable, but rapid retrieval is not required See European Court of Justice (ECJ) jurisprudence of 9 November 2004 (4 decisions), narrowing the scope of database definition

‘ Database’ definition

Three criteria

Collection of ‘independent (…) materials’…

ie data must have independent meaning;

materials must be separable from one another without their informative, literary, artistic, musical or other value being affected

… ‘ arranged in a systematic or methodical way’…

ie not necessary for materials to have been physically stored in an organized manner;

virtual ‘arrangement’ (ie through database software) is sufficient

… ‘ individually accessible’.

Database must be fully searchable, but rapid retrieval is not required

See European Court of Justice (ECJ) jurisprudence of 9 November 2004 (4 decisions), narrowing the scope of database definition

Database protection (8) What is a ‘database’? Examples from case law Website Telephone directory TV program listing Bibliographic database Medical lexicon Online recruitment Exhibition catalogue Horse racing information List of hyperlinks Newspaper ads … No ‘database’: MIDI files Criticism: ECJ’s case law comes close to protecting basic information

Website

Telephone directory

TV program listing

Bibliographic database

Medical lexicon

Online recruitment

Exhibition catalogue

Horse racing information

List of hyperlinks

Newspaper ads

…

No ‘database’:

MIDI files

Database protection (9) Database right General considerations Nature of database right: sui generis intellectual property right Initial proposal: species of unfair competition law Term of protection: 15 years (from production/publication) Database right grants independant protection ‘ without prejudice’ to rights existing in respect of database’s contents (copyright, …) Databases can be protected by technical measures (under copyright or database right)

Database right

General considerations

Nature of database right: sui generis intellectual property right

Initial proposal: species of unfair competition law

Term of protection: 15 years (from production/publication)

Database right grants independant protection

‘ without prejudice’ to rights existing in respect of database’s contents (copyright, …)

Databases can be protected by technical measures (under copyright or database right)

Database protection (10) Database right ( Article 7 of Database Directive) Prerequisite: ‘ qualitatively and/or quantitatively substantial investment in obtaining, verification or presentation of the contents ’ Exclusive rights: ‘ right to prevent the unauthorized extraction and/or reutilization of a substantial part of the contents of a database’ Right of ‘extraction’ (ie copying, downloading) Right of ‘reutilization’ (ie exploitation, making available)

Database right

( Article 7 of Database Directive)

Prerequisite:

‘ qualitatively and/or quantitatively substantial investment in obtaining, verification or presentation of the contents ’

Exclusive rights:

‘ right to prevent the unauthorized extraction and/or reutilization of a substantial part of the contents of a database’

Right of ‘extraction’ (ie copying, downloading)

Right of ‘reutilization’ (ie exploitation, making available)

Database protection (11) Database right What is ‘substantial investment’ ? See ECJ, 9 Nov. 2004 ‘ Quantitative’ Money, ‘sweat’, ‘effort’ ‘ Qualitative’ Know-how, expertise ‘ Investment’ in what? Art. 7 Database Directive: In ‘obtaining’ (gathering and collecting) In ‘verification’ (error checking, pudating) In ‘presentation’ (conversion into digital form, user interface, thesaurus, index) Example of national transposition: French law did not transpose the ‘quantitative’ and ‘qualitative’ terms: ‘ substantial financial, technical or human investment ‘ (Art. L. 341-1 CPI) Judge has to assess whether investment is ‘substantial’; varied case law (Fr: Cadremploi vs Keljob )

Database right

What is ‘substantial investment’ ?

See ECJ, 9 Nov. 2004

‘ Quantitative’

Money, ‘sweat’, ‘effort’

‘ Qualitative’

Know-how, expertise

‘ Investment’ in what?

Art. 7 Database Directive:

In ‘obtaining’ (gathering and collecting)

In ‘verification’ (error checking, pudating)

In ‘presentation’ (conversion into digital form, user interface, thesaurus, index)

Example of national transposition:

French law did not transpose the ‘quantitative’ and ‘qualitative’ terms:

‘ substantial financial, technical or human investment ‘ (Art. L. 341-1 CPI)

Judge has to assess whether investment is ‘substantial’; varied case law (Fr: Cadremploi vs Keljob )

Database protection (12) Scope of database right Extraction (copying, downloading) and reutilization (making available) Of ‘entire or substantial part of database’ ‘ repeated and systematic extraction and/or reutilization of in substantial parts of the contents of the database’ ie use of search engines What is ‘substantial part’ of database contents? ECJ, 9 Nov. 2004, British Horseracing Board vs William Hill : ‘ core data’ from large database are not ‘substantial part’, because do not reflect substantial investment

Scope of database right

Extraction (copying, downloading) and reutilization (making available)

Of ‘entire or substantial part of database’

‘ repeated and systematic extraction and/or reutilization of in substantial parts of the contents of the database’

ie use of search engines

What is ‘substantial part’ of database contents?

ECJ, 9 Nov. 2004, British Horseracing Board vs William Hill :

‘ core data’ from large database are not ‘substantial part’, because do not reflect substantial investment

Database protection (13) Exceptions to database right (Article 9 of Database Directive) Lawful users of a database shall have the right to extract or reutilize a substantial part of a database contents: ‘ Extraction for private purposes of the contents of a non-electronic database’ Prohibition of private copying for electronic databases Justification: ‘ in particular in view of the ease with which they can be reproduced ‘ (Common position of the Council of 10 July 1995) ’ For the purposes of illustration for teaching or scientific research’ ‘ For the purposes of public security or the proper performance of an administrative or judicial procedure’ Rights existing in respect of database’s contents must be granted (copyright…) Ex: when database is protected by technical measures under database right, copyright and exceptions to copyright must be granted

Exceptions to database right

(Article 9 of Database Directive)

Lawful users of a database shall have the right to extract or reutilize a substantial part of a database contents:

‘ Extraction for private purposes of the contents of a non-electronic database’

Prohibition of private copying for electronic databases

Justification: ‘ in particular in view of the ease with which they can be reproduced ‘

(Common position of the Council of 10 July 1995)

’ For the purposes of illustration for teaching or scientific research’

‘ For the purposes of public security or the proper performance of an administrative or judicial procedure’

Rights existing in respect of database’s contents must be granted (copyright…)

Ex: when database is protected by technical measures under database right, copyright and exceptions to copyright must be granted

Database protection (14) Overview Copyright vs Database right Legal protection: No protection of data per se Protection of ‘creative’ selection, ordering Reutilization of data allowed Term: 70 years after author’s death Many limitations Legal protection: No protection of data per se Substantial investment Reutilization of data not allowed Term: 15 years Few limitations

Legal protection:

No protection of data per se

Protection of ‘creative’ selection, ordering

Reutilization of data allowed

Term: 70 years after author’s death

Many limitations

Legal protection:

No protection of data per se

Substantial investment

Reutilization of data not allowed

Term: 15 years

Few limitations

Database protection (15) Databases and search engines Simple hyperlinks always permitted ‘ Deep’ linking ‘ Framing’ not permitted Copyright infringement, unfair competition (misleading) Use of search engines Past case law: use of search engine does not cause harm (Germany: Paperboy ) But how about Google ?

Databases and search engines

Simple hyperlinks always permitted

‘ Deep’ linking

‘ Framing’ not permitted

Copyright infringement, unfair competition (misleading)

Use of search engines

Past case law: use of search engine does not cause harm (Germany: Paperboy )

But how about Google ?

Case Google News (Belgium) Court of first instance of Brussels, 5 Sept. 2006, COPIEPRESSE vs Google (See decision) Appeal, 22 Sept. 2006 Discussion : Is Google (Google’s cash/Google News) legal when caching and indexing pages of news websites? Should exploitation of content by search engines lead to fair compensation to copyright owners? Parties’ arguments : Copiepresse : ‘ Google should obtain permission before indexing pages that carry copyright notices ‘ ‘ Google damages publishers’ ad revenue by bypassing their homepages ‘ Google : ‘ we offer a simple way to prevent a page being cached (robot exclusion standard). Websites cannot ignore it. If they do not use robot exclusion standard, they know their pages are cached ’. = Opt-out system, implied licence argument. Ruling : Google infringed copyright and breached database rules because Copiepresse members had not been asked for permission . Database protection (16)

Case

Google News (Belgium)

Court of first instance of Brussels, 5 Sept. 2006, COPIEPRESSE vs Google (See decision)

Appeal, 22 Sept. 2006

Discussion :

Is Google (Google’s cash/Google News) legal when caching and indexing pages of news websites?

Should exploitation of content by search engines lead to fair compensation to copyright owners?

Parties’ arguments :

Copiepresse :

‘ Google should obtain permission before indexing pages that carry copyright notices ‘

‘ Google damages publishers’ ad revenue by bypassing their homepages ‘

Google : ‘ we offer a simple way to prevent a page being cached (robot exclusion standard). Websites cannot ignore it. If they do not use robot exclusion standard, they know their pages are cached ’. = Opt-out system, implied licence argument.

Ruling :

Google infringed copyright and breached database rules because Copiepresse members had not been asked for permission .

Database protection (17) Evaluation of Database Directive Are legislative changes needed? Report on Database Directive was published by European Commission on 12 December 2005 Report’s basis : Online survey addressed to the European database industry Gale Directory of Databases (‘GDD’), which is the largest existing database directory and contains statistics indicating the growth of the global database industry since the 1970s Report’s criticism : Vague terms used in Directive to define ‘sui generis’ right have caused considerable legal uncertainty Scope of ‘sui generis’ right was severely curtailed in a series of judgments rendered by ECJ in November 2004 (see decisions) Economic impact of ‘sui generis’ right on database production is unproven Open consultation will be concluded with final assessment by European Commission

Evaluation of Database Directive

Are legislative changes needed?

Report on Database Directive was published by European Commission on 12 December 2005

Report’s basis :

Online survey addressed to the European database industry

Gale Directory of Databases (‘GDD’), which is the largest existing database directory and contains statistics indicating the growth of the global database industry since the 1970s

Report’s criticism :

Vague terms used in Directive to define ‘sui generis’ right have caused considerable legal uncertainty

Scope of ‘sui generis’ right was severely curtailed in a series of judgments rendered by ECJ in November 2004 (see decisions)

Economic impact of ‘sui generis’ right on database production is unproven

Open consultation will be concluded with final assessment by European Commission

Conference on interoperability Faculté Jean Monnet, Sceaux Université Paris Sud 10 November 2006 (from 9 a.m. to 5 p.m.) Registration at colloque@ interoperabilite .net