SAS Institute Inc. v World Programming Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 22 November 2010 |
| Neutral Citation | [2010] EWHC 1829 (Ch) |
| Docket Number | Case No: HC09C03293 |
| Court | Chancery Division |
| Date | 22 November 2010 |
[2010] EWHC 1829 (Ch)
Before: THE HON MR JUSTICE ARNOLD
Case No: HC09C03293
IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION
Henry Carr QC, Michael Hicks and Guy Hollingworth (instructed by Bristows) for the Claimant
Martin Howe QC, Robert Onslow and Isabel Jamal (instructed by Speechly Bircham LLP) for the Defendant
Hearing dates: 10–11, 14–18, 21, 23, 28–29 June 2010
MR. JUSTICE ARNOLD:
Contents
| Topic | Para |
| Introduction | 1–6 |
| Case management | 7–10 |
| The witnesses | 11–28 |
| Factual witnesses | 11–12 |
| Expert witnesses | 13–28 |
| The facts in outline | 29–75 |
| SAS Institute | 29–30 |
| The SAS System | 31–33 |
| The SAS Components | 34 |
| The SAS Language | 35–46 |
| Is the SAS Language a programming language? | 47–56 |
| Copyright in the SAS Components | 57 |
| The SAS Manuals | 58–63 |
| Copyright in the SAS Manuals | 64 |
| WPL | 65 |
| WPS | 66–74 |
| WPS documentation | 75 |
| The 31 examples of similarities between WPS and the SAS | 76–134 |
| Manuals | |
| Copying of formulae and descriptions of formulae in the SAS Manuals | 77–100 |
| PROC UNIVARIATE parser – reproduction of keywords | 101–103 |
| Reproduction of names for procedures, functions, etc | 104–106 |
| Reproduction of default values | 107–109 |
| Copying of output text | 110–116 |
| Comments in the WPS source code | 117–120 |
| Use of SAS Manuals as the source of optimising information for WPS | 121–127 |
| Use of SAS data file formats | 128–129 |
| Use of SAS test scripts from the SAS Manuals | 130–134 |
| The 51 examples of similarities between the WPS Manual and the SAS Manuals | 135–148 |
| The legal context | 149–195 |
| International treaties | 150–154 |
| Berne Convention | 150 |
| TRIPS | 151 |
| WIPO Copyright Treaty | 152–154 |
| European directives | 155–159 |
| 155–157 | |
| 158–159 | |
| Domestic legislation | 160–162 |
| Interpretation of domestic legislation in the context of European directives | 163 |
| Interpretation of domestic legislation in the context of international treaties | 164 |
| Interpretation of European directives | 165–168 |
| Domestic case law concerning copyright in literary works other than computer programs | 169–173 |
| Domestic case law concerning copyright in computer programs | 174–191 |
| Domestic case law on fair dealing for the purposes of criticism or review | 192 |
| European Union case law on copyright in literary works | 193–195 |
| 196–250 | |
| Computer programs as literary works | 197–198 |
| Ideas, procedures, methods of operation and mathematical concepts | 199–207 |
| Relevance of Article 9(2) of TRIPS and Article 2 of the WIPO Copyright Treaty to domestic law | 200–203 |
| The correct approach to interpretation of Article 9(2) of TRIPS and Article 2 of the WIPO Copyright Treaty | 204 |
| Effect on domestic law | 205 |
| The distinction | 206–207 |
| Copyright protection for programming languages, interfaces and functionality | 208–238 |
| Programming languages | 211–218 |
| Interfaces | 219–227 |
| Functionality | 228–238 |
| Reproduction of a substantial part | 239–244 |
| Application of these principles to the present case | 245–250 |
| SAS Institute's claim that WPS infringes the copyrights in the SAS Manuals | 251–267 |
| WPL's use of SAS test scripts | 262–267 |
| SAS Institute's claims in respect of the Learning Edition | 268–315 |
| Construction | 276–286 |
| Customer | 280–283 |
| Non-production purposes | 284–286 |
| SAS Institute's allegations of breach | 287–290 |
| Articles 5(3) and 9(1) of the Software Directive | 291–315 |
| SAS Institute's claims that the WPS Manual and the WPS | 316–329 |
| Guides infringe the copyrights in the SAS Manuals | |
| WPS Manual | 317–319 |
| WPS Guides | 320–321 |
| Reproduction of a substantial part | 322 |
| Fair dealing for the purpose of criticism or review | 323–329 |
| Reference to the Court of Justice | 330–331 |
| Conclusions | 332–333 |
Introduction
The Claimant, SAS Institute Inc (“SAS Institute”), is a developer of analytical software known as SAS (referred to in these proceedings as “the SAS System”). The SAS System is an integrated set of programs which enables users to carry out a wide range of data processing and analysis tasks, and in particular statistical analysis. The core component of the SAS System is Base SAS, which enables users to write and run application programs (also known as “scripts”) to manipulate data. Such applications are written in a language known as the SAS Language. The functionality of Base SAS may be extended by the use of additional components, including three which are relevant to these proceedings called SAS/ACCESS, SAS/GRAPH and SAS/STAT (the four components being collectively referred to as “the SAS Components”). The SAS System has been developed over a period of 35 years. It is a very valuable asset, producing revenue for SAS Institute of $2.3 billion in 2009.
Over the years SAS Institute's customers have written, or had written on their behalf, thousands of application programs in the SAS Language. These can range from fairly short and simple programs to large and complex programs which involve many man years of effort to create. Prior to the events giving rise to this dispute, SAS Institute's customers had no alternative to continuing to license use of the necessary components in the SAS System in order to be able to run their existing SAS Language application programs, as well to create new ones. While there are many other suppliers of analytical software which compete with SAS Institute, a customer who wanted to change over to another supplier's software would be faced with re-writing its existing application programs in a different language.
The Defendant, World Programming Ltd (“WPL”), perceived that there would be a market demand for alternative software which would be able to execute application programs written in the SAS Language. WPL therefore created a product called World Programming System or WPS to do this. In developing WPS, WPL sought to emulate much of the functionality of the SAS Components as closely as possible in the sense that, subject to only a few minor exceptions, it tried to ensure that the same inputs would produce the same outputs. This was so as to ensure that WPL's customers’ application programs executed in the same manner when run on WPS as on the SAS Components. There is no suggestion that in doing so WPL had access to the source code of the SAS Components or that WPL have copied any of the text of the source code of the SAS Components or that WPL have copied any of the structural design of the source code of the SAS Components.
According to two previous decisions of the courts in this country, it is not an infringement of the copyright in the source code of a computer program for a competitor of the copyright owner to study how the program functions and then to write its own program to emulate that functionality. SAS Institute challenges this view of the law. Even if it is correct, however, SAS Institute contends that WPL has both committed a series of infringements of copyright and acted in breach of contract in creating WPS and its accompanying documentation as a result of the way in which WPL has gone about those tasks.
SAS Institute's principal claims are as follows:
i) A claim that WPL has copied the manuals for the SAS System published by SAS Institute (“the SAS Manuals”) when creating WPS and thereby infringed the copyright in the SAS Manuals.
ii) A claim that, by copying the SAS manuals when creating WPS, WPL has indirectly copied the programs comprising the SAS Components and thereby infringed the copyright in the SAS Components.
iii) A claim that WPL has used a version of the SAS System known as the Learning Edition in contravention of the terms of its licences, and thereby both acted in breach of the relevant contracts and infringed the copyright in the Learning Edition.
iv) A claim that WPL has infringed the copyright in the SAS Manuals in creating its own documentation, namely a manual (“the WPS Manual”) and some “quick reference” guides (“the WPS Guides”).
SAS Institute also advances another claim concerning use of the Full Edition of the SAS System which has been ordered to be tried on a later occasion.
Case management
The claim was commenced by SAS Institute on 14 September 2009. At that time the only claim advanced by SAS Institute was the third claim listed in paragraph 5 above. Subsequently WPL applied for a speedy trial and SAS Institute applied to expand its claims. On 16 December 2009 Philip Marshall QC sitting as a Deputy High Court Judge gave directions which both gave SAS Institute permission to amend its Claim Form and Particulars of Claim and expedited the trial to the first available date after 28 May 2010. Subsequently the trial was fixed for the second week of June 2010.
On 16 April 2010 Lewison J made a case management order to enable that trial date to be adhered to. Among other things, that order limited SAS Institute to (a) 31 specific examples of similarities between WPS on the one hand and the SAS Manuals or the SAS Components on the other hand and (b) 51 specific examples of similarities between the WPS Manual and the SAS Manuals. By virtue of the order, such similarities are to be taken to be representative samples of the similarities between the respective systems and manuals. Apart from one similarity which had already been identified, the order required SAS Institute to identify the other 30 similarities between WPS and SAS as soon as possible and in any event by 14 May 2010. It also required SAS Institute to serve its expert's report by 14 May 2010 and WPL to serve its expert's report by 21 May 2010.
In the event the other 30...
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