Has my software been copied? – the legal test

There is an urban myth that something can be copied and changed by 20% or so and then there is no copyright infringement.   Rightly or wrongly this is simply untrue.  In the case of IPC Global Pty Ltd v Pavetest Pty Ltd (No 3) [2017] FCA 82 (IPC Global), a former employee of the applicant copied source code and passed it to a developer.  It was subsequently alleged that in doing so, the respondent had breached a contractual obligation of confidence and had also breached the applicant’s copyright.

Background to the dispute about copyright in the source code

In IPC Global, source code from a dynamic-link library (DLL) and a number of test modules, which were used in its version of the software, were copied by Pavetest.  Expert evidence adduced by IPC showed that around 800 lines of code in Pavetest’s software was “identical or similar[1] from 250,000 lines of code in IPC’s original application.  However the argument was made by the applicant that between 10,000 and 20,000 lines were physically copied.  Much of this code represented a duplication of the same code across seven (7) test modules of IPC.  Pavetest, through the acts of its employee in copying the DLL and test modules, had infringed IPC’s copyright by copying a substantial part of their software.  So what’s a substantial part?

Why does copyright subsist in computer code?

Copyright law protects the original expression of ideas.  In Australia section 10(1) of the Copyright Act 1968 (Cth) (Act) provides that a “literary work” includes a computer program or compilation of computer programs. The expression “computer program” is defined in the same section as meaning “a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result”.

A breach of copyright, with respect to literary work including computer code, occurs pursuant to section 36 of the Act when the work is reproduced in a ‘material form’.  It is unnecessary that the work is reproduced in full because ‘material form’ is defined to include a substantial part of the work – section 10 of the Act.

What is the legal test for a “substantial reproduction”?

The test for substantial reproduction has been widely discussed in case law.  In the context of copyright infringement, the test focuses on the expression of the part of the work reproduced.[2]  The case law does show that special difficulty has been encountered in considering the relationship between the phrase “a substantial part” in section 14(1) of the Act and the definition of “literary work” set out in section 10(1) of the Act.

The test to establish whether there was a “substantial reproduction” of computer code was considered by the High Court in Data Access v Powerflex [1999] HCA 49 (Data Access).  Gleeson CJ, McHugh, Gummow and Hayne JJ observed that:

in determining whether something is a reproduction of a substantial part of a computer program, the ‘essential or material features’ should be ascertained by considering the originality of the part allegedly taken’, quoting Mason CJ in Autodesk Inc v Dyason (No 2) [1993] HCA 6.”

Since the statutory definition of a computer program is a “set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result”, it follows that in determining whether there has been substantial reproduction, it is necessary to examine:

  • what was allegedly taken;
  • the set of statements or instructions comprehended by what was taken; and
  • compare it with the original;

as part of the enquiry of originality for the purposes of infringement.

In IceTV Pty Ltd v Nine Network Australia Pty Ltd [2009] HCA 14, French CJ, Crennan and Kiefel JJ noted :

the need for some process of qualitative abstraction of the material features of the computer program in question in order to determine any issue of substantiality under section 14(1) of the Act”.  This test was reaffirmed by Bennett J in CA Inc v ISI Pty Ltd [2012] FCA 35.

The test was also considered in JR Consulting & Drafting Pty Ltd v Cummings [2016] FCAFC 20.  In that case, Bennett, Greenwood and Besanko JJ said in relation to copyright infringement that any analysis as to substantial reproduction “engages a consideration of the quality of the part of the work alleged to have been reproduced. 

 The Court held that in this context, the question surrounds the degree of originality in the expression of the work reproduced.

The fact that a part reproduced originates from the author of that part does not, of itself, mean that it is a substantial part of the whole work because, when giving attention to the quality of the part taken, it may be there has been reproduction of something that is largely unoriginal”.

In IPC Global, Moshinsky J said that although the quantum of code reproduced was small relative to the total size of the UTS software, “the cases make clear that the emphasis is on a qualitative rather than quantitative assessment of substantiality”.[3]  His Honour therefore held that the quantity of copied source code was sufficient to constitute substantial reproduction.

The need for a qualitative assessment

In IceTV Pty Ltd v Nine Network Australia Pty Ltd [2009] HCA 14 (Ice TV) we have seen that is was said by Gummow, Hayne and Heydon JJ [159] that there is ‘the need for some process of qualitative abstraction of the material features of the computer program in question’.

This need for a qualitative assessment was further elaborated by Bennett J in CA, Inc. at [181] as:

“A qualitative assessment involves consideration of functionality, while a quantitative assessment involves consideration of textual similarity”.

Bennett J added at [184]:

“to engage in a qualitative assessment involving functionality, it is necessary for there to be evidence of all that Datacom does in order to understand the significance, in context, of what the CA URT Macros do.  This evidence has not been adduced.  Accordingly, I am unable to perform a qualitative assessment of substantial part.  CA has not discharged its onus of proof in this respect.”

(bold is our emphasis).

It was put another way at [196] as:

“The assessment of whether the ISI Replacement Macros reproduce a substantial part of the CA URT Macros involves a consideration of both qualitative and quantitative elements.  As stated earlier, a qualitative assessment involves consideration of functionality, while a quantitative assessment involves consideration of textual similarity.”

Takeaways

There are a number of things that a Court will take into account when determining what constitutes ‘substantial reproduction’.    In the case of computer code a purely textural (side by side) comparison is unlikely to be sufficient.   Ultimately, the Court will consider the ‘essential or material’ features of the work being reproduced with a view to a qualitative test of substantiality.  The use of even a single code library can be enough to constitute a substantial part of a computer program and be sufficient to constitute copyright infringement.

Cases on copyright infringement in computer code

Autodesk Inc v Dyason (No 2) [1993] HCA 6
CA Inc v ISI Pty Ltd [2012] FCA 35
Data Access v Powerflex [1999] HCA 49
IceTV Pty Ltd v Nine Network Australia Pty Ltd [2009] HCA 14
Intelmail Explorenet Pty Ltd v Vardanian (No 2) [2009] FCA 1018
IPC Global Pty Ltd v Pavetest Pty Ltd (No 3) [2017] FCA 82
JR Consulting & Drafting Pty Ltd v Cummings [2016] FCAFC 20
TICA Default Tenancy Control Pty Ltd v Datakatch Pty Ltd [2016] FCA 815

Legislation

Copyright Act 1968 (Cth)

Related articles by Dundas Lawyers

Software as a service contracts
Copyright infringement in computer code
Implied terms in software development contracts – the submarine in the code
Agile Software Development Contracts
Reverse engineering of software – what are the legal boundaries?

Further information

If you need assistance to with any litigious matter involving software and copyright infringement, please telephone me for an obligation free and confidential discussion.

Malcolm Burrows B.Bus.,MBA.,LL.B.,LL.M.,MQLS.
Legal Practice Director
Telephone: (07) 3221 0013
Mobile: 0419 726 535
e: mburrows@dundaslawyers.com.au

Disclaimer

This article contains general commentary only. You should not rely on the commentary as legal advice. Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.

Footnotes for those who are interested

[1] IPC Global Pty Ltd v Pavetest Pty Ltd (No 3) [2017] FCA 82, [162]

[2] IceTV Pty Ltd v Nine Network Australia Pty Ltd [2009] HCA 14, [40]

[3] IPC Global Pty Ltd v Pavetest Pty Ltd (No 3) [2017] FCA 82 [13]

[4] CA Inc v ISI Pty Ltd [2012] FCA 35 at 30 this may have to be in a separate affidavit to the experts…

[5] CA Inc v ISI Pty Ltd [2012] FCA 35 from 186 – “CA contends that Mr Melito’s approach to the comparison of the CA URT Macros and the ISI Replacement Macros is ‘fundamentally flawed’ because Mr Melito evaluates the form, function and differences between the two sets of macros, when instead he should have been focusing on the similarity between them”.

 [6] CA Inc v ISI Pty Ltd [2012] FCA 35 at 30 this may have to be in a separate affidavit to the experts…

[7] CA Inc v ISI Pty Ltd [2012] FCA 35 from 186 – “CA contends that Mr Melito’s approach to the comparison of the CA URT Macros and the ISI Replacement Macros is ‘fundamentally flawed’ because Mr Melito evaluates the form, function and differences between the two sets of macros, when instead he should have been focusing on the similarity between them”.

 

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