Court of Justice of the European Union (CJEU) provided an answer to the following question: The breach of a software license agreement represents a copyright infringement?
Key items:
–Software license agreement
-Unauthorized modification of the source code of a computer program by a licensee in breach of the license agreement
-Action for infringement brought by the author of the program against the licensee
– Nature of the applicable liability regime
CJEU answer: Yes, CJEU has decided that modifying the source code of a software package falls within the copyright of a computer program for which the Software Directive provides protection.
Extract from CJEU decision: The breach of a clause in a license agreement for a computer program relating to the intellectual property rights of the owner of the copyright of that program falls within the concept of ‘infringement of intellectual property rights, within the meaning of Directive 2004/48 (IP Enforcement Directive), and that, therefore, that owner must be able to benefit from the guarantees provided for by that directive, regardless of the liability regime applicable under national law.
The context:
CJEU has decided on the interpretation of:
- IP Enforcement Directive – Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights.
- Software Directive –Directive 2009/24/EC of the European Parliament and of the Council of 23 April 2009 on the legal protection of computer programs.
The case: IT Development versus Free Mobile
A software licensor brought court proceedings in France against its mobile phone operator licensee for infringement of copyright. The licensee has modified the software’s source code in breach of the license.
In this case, the Court of Appeal of Paris has referred the following preliminary question to CJEU:
“Does a software licensee’s non-compliance with the terms of a software license agreement (by the expiry of a trial period, by exceeding the number of authorized users or some other limit, such as the number of processors which may be used to execute the software instructions, or by modifying the source code of the software where the license reserves that right to the initial rightholder) constitute:
– an infringement (for the purposes of Directive 2004/48 of 29 April 2004) of a right of the author of the software which is reserved by Article 4 of Directive 2009/24/EC of 23 April 2009 on the legal protection of computer program
– or may it comply with a separate system of legal rules, such as the system of rules on contractual liability under ordinary law?”.
Comment:
Unfortunately, the CJEU has decided only on the condition that a software license clause “relates to intellectual property rights”.
According to the CJEU decision, a clause including a prohibition to modify the source code of a software package fulfills this condition, but the Court of Appeal of Paris has also mentioned other possible forms of a breach of a software license agreement, such as a software licensee (i) not complying with the expiry of a trial period or (ii) exceeding the number of authorized users or some other limit, such as the number of processors used to execute the software instructions.
These above-mentioned forms of a breach of a software license agreement have not been considered by CJEU, although these forms are mainly related to the “use”, to which the copyright protection extends.