A Gentleman's Code - The Copying of Software Code and Copyright

Computer programming, especially to the layman, can be both incredibly daunting and very confusing, as the languages, while logical, can be quite impenetrable. Since computers and computing have become near ubiquitous in modern society, so has programming become a part of our lives, even if not directly. Due to this, the value of code and programs can be substantial, especially for ones that are lucky enough to become standards, or just plain popular. Code and copyright rarely meet, but in the vein of the above, can code be construed as a copyright protected work, and if so, how much can you copy before you're infringing the rights attached to the code?

The case of IPC Global Pty Ltd v Pavetest Pty Ltd (No 3) dealt with equipment used to test asphalt and construction materials, built by IPC, which included custom programming to enable the user to test said materials and view results. This piece of software was installed on the users' computer. Two individuals, Con Sinadinos and Alan Feeley, worked at IPC (with the latter working as a consultant as a part of Alueta). The pair then resigned from IPC in 2012, establishing a competitor company, Pavetest, which launched competing testing products. Mr Feeley had in his possessions copies of IPC's programs on his computer that he took with him when leaving IPC. He then provided them for a programmer who made copies of the programs, leaving some parts of the Pavetest identical to that of IPC's programs. IPC then took Pavetest (and the individuals) for, among other claims, copyright infringement and breach of confidence.

Although Justice Moshinsky had a wide array of issues to decide, focus for the purposes of this article will remain on the question: "...did Pavetest infringe copyright in the UTS software by the creation of version 1 of the TestLab software? In particular, did version 1 of the TestLab software reproduce a substantial part of the UTS software?"

After discussing, at length, the companies and the development of the two competing pieces of software, the court focussed on the matter of copyright infringement.

Original code? Nah... (Source: xkcd)

The courts have struggled with defining what amounts to a 'substantial amount', as per section 14 of the Copyright Act 1968, which was discussed by the High Court of Australia in IceTV: "The case law does disclose that special difficulty has been encountered in considering the relationship between the phrase “a substantial part” in s 14(1) of the Act and the definition in s 10(1) of that species of “literary work” which is a “computer program”, being: “a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result.” (Emphasis added) The phrase emphasised suggests the importance of function, although this is usually encountered in patent and designs law, rather than in the “traditional” law of copyright respecting original literary works".

The courts have developed a test to determine whether a computer program has been infringed, there is ‘the need for some process of qualitative abstraction of the material features of the computer program in question’, and the copying of those features in the potentially infringing program (i.e. of a program calculates figures based on data, the program features of the calculation would be more important than the aesthetic function of the same under this context).

While the respondent conceded that the code is a copyright protected work, that substantial parts of the code were copied (but not to the degree of being a substantial part under section 14), and that this was done on behalf of Pavetest with the authorization of the individuals above, the court still had to consider whether the copying was indeed substantial under the law.

Due to the coder working for Pavetest to be able to rewrite the code so as the new version didn't infringe IPC's copyright, there clearly was a wide margin of expression in how the code could be implemented, while still having the same functionality. The writing of the code therefore included a degree of choice and judgment, making the expression of that functionality original under copyright. While some parts of the code would not be essential, Justice Moshinsky still upheld that they were original works equally to those parts that were essential. Finally, the amount of code, albeit a small amount (roughly 10,000 lines of code from about 250,000 lines), the copying was substantial, according to the judge, due to its necessity to achieve the desired functionality, rather than just simply through a quantitive measure. Pavetest had subsequently infringed the rights in the code.

The case is a very interesting one, and highlights a need for anyone copying others' code (which seems to be an industry standard, albeit only in parts of programming) to be cautious, and to rewrite anything that could be deemed to be a substantial copying. Software creation is incredibly complex and difficult, and one can appreciate the adoption of shortcuts, but the courts will clearly combat any abuses of others copyright works, even if it's just 'meaningless' code.

Source:  IP Whiteboard

All Wrapped Up - Canadian Federal Court Decides on the Sharing of Pay-walled Copyright Works

While the European landscape has changed and clarified itself to a great degree in relation to the use of copyright protected content online (see more for example here, here and here), the rest of the world, comparatively at least, has stayed relatively quiet. One issue in particular, meaning the accessing of pay-walled or otherwise restricted content through sharing of that content to others without access to is is legal or not, has trickled through more than others. Many would argue that, while not definitive, the EU is quite established itself on where it stands on this, but our cousins across the pond in Canada have yet to fully cement themselves in this question, as can be illustrated by this recent decision in the Federal Court of Ontario.

The case of Ontario Ltd (Blacklock's Reporter) v. Canada (Attorney General) dealt with an online news agency, Blacklock's Reporter, which specializes in news surrounding, predominantly, the Canadian government. The Department of Finance, a part of the Canadian government, distributed two articles from Blacklock' within the Department without seeking consent. The contents of the article are largely irrelevant to the case, but Blacklock's does keep all of its contents behind a paywall, with a DOF employee accessing the relevant articles through a single subscription, subsequently sharing them internally within the DOF. Blacklock's then took the DOF to court over copyright infringement.

The Federal Court had to assess whether the rights in those works had been infringed, and if that use then was protected by fair dealing.

The court did not dispute the copyright in the works under section 29 of the Canadian Copyright Act (nor did the parties), but did raise questions as to whether Blacklock's assertion of their rights could amount to an abuse of those rights. The question therefore focussed on the aspect of fair dealing.

Canadian fair dealing covers only a narrow set of exceptions in section 29, particularly for research, private study, education, parody or satire. The DOF argued that their use was for research purposes and didn't therefore infringe Blaclock's rights.

Section 29 was further expanded on in the milestone case of CCH (discussed more here), which set a two-part test on whether a use was protected by fair dealing: 1. Whether the dealing is for the purpose of “research” or “private study”, also known as an allowable purpose; and 2. Whether the dealing is “fair”. The latter, whether a particular use is fair, involved certain factors that the courts ought to consider:

"1. The purpose of the dealing, where an objective assessment is made of the “real purpose or motive” behind using the copyrighted work, such as for commercial purposes versus charitable purposes; 2. The character of the dealing, examining how the works were dealt with, such as whether multiple copies of works are being widely distributed, or whether a single copy of a work is used for a legitimate purpose; 3. The quantity or amount of the dealing, including the importance of the work allegedly infringed; 4. Alternatives to the dealing, such as whether there is a non-copyrighted equivalent of the work that could have been used instead; 5.  The nature of the work, such as whether the work has been published or is confidential; and 6. The effect of the dealing on the work, such as whether a reproduced work is likely to compete with the market of the original work."

While the above two categories relate more directly to the research exception put forth by, a more nuanced approach has been adopted for research in the SOCAN case, which were distilled by the court in the case at hand:

Research can be more 'challenging' than you'd expect

"Research does not need to be undertaken for the purpose of the user engaging in its own act of authorship or creativity; Research is not limited to creative purposes but can be “piecemeal, informal, exploratory, or confirmatory”, and can be undertaken for no purpose except personal interest; The first step in the fair dealing analysis is a relatively low threshold and does not require the creation of a new work; and The analysis should be undertaken from the perspective of the user or consumer’s purpose". Here the court gives a very wide definition of research, potentially including mere personal interests, even if not 'academic' research, which can include much of the information used to support the purpose. This writer is encouraged by this finding, since a more narrow, limiting definition would deter private researchers (such as this 'researcher') and the potential sharing of that knowledge with others.

The Court quickly, without giving the above much consideration, determined that the DOF's use was indeed fair dealing. This included the fact that, for example, the materials were acquired legally through a licence, the use was for legitimate business reasons internally in the DOF, no commercial advantage was sought and that it was limited to only 6 individuals. Even though the terms and conditions were breached as a result, the court rejected that this would prohibit or prevent fair dealing from applying in those instances. They, however, have to be brought to the attention of the subscriber, which Blacklock's had not done (albeit the terms did exist, but were never formally accepted by the individuals signing up). The defendant was therefore never aware of the terms, and of their own breach as a result.

Judge Barnes determined that fair dealing did apply in this case, and noted that "...Absent consent, subscribers and downstream users are subject to the obligations imposed on them by the Act. But at the same time they enjoy the considerable protection afforded to them under the statutory fair dealing provisions". He further highlighted that, as contested by Blacklock's, that subscriber services like this would suffer very little detriment to their business model, but it does not allow for a carte blanche for users to share the content, which is restricted to genuine fair dealing either way.

The case shows that, provided the uses are legitimate, fair dealing should be afforded a broad and inclusive definition, especially when it comes to research. One can agree with this, since a strict interpretation would act counter-intuitively to the sharing and dissemination of information. The decision also highlights a potential need for the UK to adopt a similar 'fair use' policy, which broadens and protects legitimate uses in a more effective way than restrictive categories.

Source: Barry Sookman

Pirates Uncovered - Dallas Buyers Club's Landmark Case in Australia

Piracy is considered by many in the entertainment industry to be the plight of the 21st century creative minds and pockets (and the pockets' of many shareholders, one would think). What ever your thoughts on copyright piracy, the topic remains a hot-button issue, and the courts have been, and will undoubtedly continue to, battle with for years to come. With this in mind, the enforcement of rights online has proven difficult, especially when a user, either downloading or sharing said infringing content, is effectively hidden behind a single Internet Protocol (IP) number, which does not accurately identify the given user (as discussed here in some manner relating to the US). The battle between Internet Service Providers (ISPs) and copyright holders has been an active one regarding this, and a recent decision in Australia seems to have opened the door to potentially combating this issue on the copyright holders' end, at least for now.

The case in question was Dallas Buyers Club LLC v iiNet Limited, which dealt with the very successful movie Dallas Buyers Club that was, among other things, nominated for 6 Oscars in its year of release. Due to the movie's immense success, it was promptly shared online, and in an action for preliminary discovery, the movies' rights holder Dallas Buyers Club LLC sought to identify the individuals behind all 4726 unique IP addresses associated with sharing the movie online through the 6 respondent ISPs in the action. The ISPs contested this application on several grounds, but the first instance decision lay with the Federal Court of Australia.

Although the respondents actively contested the ownership of the copyright in the work (decided as being held by Dallas Buyers Club LLC, with very little resistance from the Court), and other matters underpinning the case at hand, the meat of the discussion lay in the possible allowance of discovery in relation to the aforementioned IP addresses.

The secret life of a copyright infriger (Source: Bizarro Comics)

Under the Australian Federal Court Rules 2011 a party can seek for the identification of an unknown party should they have a cause of action against that person under certain requirements: "(a) there may be a right for the prospective applicant to obtain relief against a prospective respondent; and (b) the prospective applicant is unable to ascertain the description of the prospective respondent; and (c) another person (the other person): (i) knows or is likely to know the prospective respondent’s description; or (ii) has, or is likely to have, or has had, or is likely to have had, control of a document that would help ascertain the prospective respondent’s description." Clearly, as the individuals sharing the movie are behind an IP address, and therefore hard to identify without information from the ISP as to who is behind said IP address, Dallas Buyers Club, at least prima facie, had a case to find out who these people are under the Act.

Regardless of the ISPs' rejection of Dallas Buyers Club's assertions under the three requirements of the Act, the Court saw that they had fulfilled the requirements and were therefore entitled to disclosure as to the users' identities. They had a right to seek relief as to a potential breach of their copyright; they could not identify the individuals committing that infringement; and the ISPs knew or were likely to know who they were, or at least would be in possession of their subscriber details based on fixed IP addresses.

Even though Justice Perram allowed the disclosure of the users' information to Dallas Buyers Club, he did however set certain restrictions on it, which will be set by the parties later in the process. Dallas Buyers Club have indicated that they want the details disclosed by May 6th, but the letter that will be sent out will be determined on a later note as well.

Although the case is an important landmark in the fight against piracy, the disclosure of individuals' details in relation to copyright infringement is nothing wholly new. In Canada, under the Federal Court Rules, the disclosure of such information is very similar to the Australian provision; and Voltage LLC, the parent company of Dallas Buyers Club, has successfully used the provision to gain such information in Canada in the case of Voltage Pictures LLC v John Doe. Similarly, in the UK, a Norwich order (the equivalent of the Australian provision's application) was issued for copyright infringement through which subscribers' details were disclosed to the copyright holder in Golden Eye (International) Ltd & Anor v Telefonica UK Ltd. Both cases also discuss the restrictions needed in the event of such disclosure, such as: "[p]utting safeguards in place so that alleged infringers receiving any “demand” letter from a party obtaining an order under Rule 238 or a Norwich Order not be intimidated into making a payment without the benefit of understanding their legal rights and obligations... [s]pecific warnings regarding the obtaining of legal advice or the like should be included in any correspondence to individuals who are identified by the Norwich Order... [l]imiting the information provided by the third party by releasing only the name and residential address but not telephone numbers and e-mail addresses... [and] [r]equiring the party obtaining the order to provide a copy of any proposed “demand” letter to all parties on the motion and to the Court prior to such letter being sent to the alleged infringers". These, among others, will undoubtedly be considered by the Australian courts in their application of such orders in the future, and in this case specifically.

As one could imagine, the case has spawned a huge amount of discussion, especially relating to Voltage Pictures' previous strong-arm tactics in their letters to infringers. Nevertheless, the cold application of the law, at least to this writer, seems to be quite accurate, and individuals who engage in such activities need to understand the risks associated with illegal copying of media online. The Dallas Buyers Club case clearly sets the stage for more direct, stronger enforcement of copyright within Australia, and it remains to be seen how the provision will be utilized in the future, and what restrictions the courts ultimately put on the disclosure of subscribers' details and the usage thereof.

Source: Sydney Morning Herald

Genes are Still Patentable in Australia, Says Full Federal Court

Since the US Supreme Court's decision in Association of Molecular Pathology v Myriad Genetics last year (more on which can be found on this very blog here and here), most of the general public and even the legal profession thought that the matter was done and dusted, and that genes, in the application created by Myriad Genetics, would be unpatentable. Even so the fight still lives on in the Land Down Under, and after a decision in the Federal Court of Australia last year the matter has gone further into the Full Federal Court of Australia on appeal, prompting yet a new analysis of the patentability of genes under Australian law.

The case in question is D’Arcy v Myriad Genetics Inc, which concerned the same patent (albeit its Australian counterpart) as was discussed in the US Myriad Genetics case; Australian Patent 686004. The patent itself relates to, in simple terms, the isolation of one specific gene; BRCA1. Analysis of this particular gene can identify a heightened risk of breast or ovarian cancer in the carrier, should a mutation exist in that gene. Yvonne D'Arcy, a former cancer patient herself, brought the case forward, challenging the patent, in an attempt to potentially lower the costs of testing the gene, having an impact on future testing and the amounts of women getting their genes analysed for that particular mutation. Currently in Australia the costs are upwards to 3000 dollars, clearly indicating a potential costs issue in the field.

As was the question in the previous case, the Full Federal Court would have to decide whether the invention would fall under the Statute of Monopolies 1623 as a 'manner of manufacture', and its interpretation in the NRDC case (more on which can be found here). The court extensively discussed the precedent and jurisprudential considerations which affect the case, yet left the application of those considerations quite brief. 

The appeal hinged on three arguments made by Ms. D'Arcy; that the artificial state of affairs in which the gene exists post isolation is not enough for it to fall under the Statute of Monopolies and be considered a 'manner of manufacture'; that the gene, even if isolated, is still the same as the one which exists in the human body; and that the patenting of a gene would be patenting a natural phenomenon, contravening the Patents Act 1990's exclusion of such matters from patentability.

Ms. D'Arcy argued that the isolation of the gene does not produce a product, which would leave the invention short from potentially being a manner of manufacture, as, in her mind, the isolation merely produces an end-effect, rather than a product. She further argued that the isolation of the gene does not produce an artificial state of affairs, as nothing is done to the gene aside from its removal from the genome for analysis, producing no artificial effect in itself bar from what occurs naturally as it exists within the genome. Even though she recognizes that this requires human intervention it still falls short from the word's definition in NRDC.

Gene isolation can be a good thing.

The court rejected this argument, stating that "[t]his submission fails to recognise that the High Court has made it clear that the principles discussed in NRDC are equally applicable to products. Further, the isolated nucleic acid is itself an artificial state of affairs. It is removed from the genome and from the cell. In order to determine whether an invention claimed is a relevant product, the question is whether it consists of an artificially created state of affairs, not whether it produces or fails to produce an artificial effect" (emphasis the court's). This writer for one would argue slightly against the court as an artificial state of affairs should consist of something which does not occur naturally, either through manifestation or through composition. The patent in question certainly does remove the gene from the genome, yet the gene still remains the same, both in what it contains and how it resides, but is merely taken out of its space like a Lego block. This, in my mind, is not enough. The court does qualify their position and agree that not all isolation can confer patentability; however this hinges largely on an economic benefit viewpoint rather than purely a scientific one. The court does draw on scientific facts and that the gene cannot code due to its removal, yet the argument seems flat and doesn't, to this writer at least, confer much logic. Take an engine as an example. Should the engine be removed from the car and all of its connections disconnected, it cannot move the car, yet one could logically argue the engine is still the same engine even without his capability. Although a simplified analogy it illustrates the folly in the court's argument.

The second argument brought forth is one which contends that the gene is the same as the one which occurs naturally in a human's genome. Ms. D'Arcy contended that even with the isolation factor the actual information within that gene is exactly same as in the one which has not been isolated from the aforementioned genome; a fact that the court and Myriad Genetics did acknowledge, albeit contended that this makes it identical to the one in the genome. This challenges the primary judge's notion of economic utility, which allows for the isolation to create an artificial state of affairs due to this utility. The court wholly rejected this, stating that "[the] [g]enomic DNA sequence does not exist outside the cell and in that sense it can be said that an isolated chemical is not the same as the chemical in situ. One difference is that the isolated chemical can be manipulated and utilised in ways that the other cannot. That is, they may have different uses or functions, including those set out in the specification. Treating the claim as one to chemical entities, they are not the same as the nucleic acid sequence encoding the BRCA1 polypeptide in situ. They have different beginnings and different ends". Again, this writer humbly disagrees with the court's notion of different utilization, and a clear emphasis on economic benefit in the gene's isolation. The gene still serves the same function as the one in the genome, yet cannot do so outside of the genome due to its isolation. This, and that its chemical composition is almost identical aside from the separated chemical bonds, clearly leaves the gene as the same as the one that occurs naturally and doesn't create an artificial state of affairs or a new invention.

The court also rejected Ms. D'Arcy's argument of Myriad Genetics patenting laws of nature, stating plainly that "The isolated DNA can be characterised as material derived from naturally occurring material. This is not excluded from patentability within the reasoning of NRDC. The use of a living organism to produce a substance such as an antibiotic is patentable. It is not a question whether there is any overlap between what occurs in nature and that which is claimed. If so, all biological material would be inherently unpatentable".

The court finally summarized its position:

"In our view the products the subject of claim 1 are different to the gene comprising the nucleic acid sequence as it exists in nature. It follows that the notice of contention based on this ground succeeds... The isolation of the nucleic acid also leads to an economically useful result – in this case, the treatment of breast and ovarian cancers. This is surely what was contemplated by a manner of new manufacture in the Statute of Monopolies."

The Federal Court also openly rejected the US Supreme Court's decision on the Myriad case: "With respect, the [US] Supreme Court’s emphasis on the similarity of ‘the location and order of the nucleotides’ existing within the nucleic acid in nature before Myriad found them is misplaced. It is the chemical changes in the isolated nucleic acid which are of critical importance, as this is what distinguishes the product as artificial and economically useful". Again, the Federal Court ignored the clear lack of differences in the gene and the one naturally occurring in the human genome, and places a heavy emphasis on economic utility rather than any differences which can be noted as marked.

Arguably the court has reached the wrong result, but one can imagine their potential rationale as to the economic benefit and a future marketplace for genetic and biological modification and analysis of humans in Australia. Yet the case seems flat in its reasoning and ignores the larger picture in its attempts to focus on the nuances of convalescent bonds. The case can be, and possibly will be, further appealed, and this writer for one cannot wait to see where the case is taken.

Source: IPWatchdog

The First Sale Doctrine takes a hit - you can't resell digital music

The anticipation of whether the Kirtsaeng v John Wiley and Sons would change the way in which we're allowed to resell our legally purchased goods (discussed on this very blog here) was huge, both in the legal world, and in the minds of consumers just aching to sell off that CD collection bought in Europe. Well, it looks like we've taken the first step towards the limitations of the First Sale doctrine.

A US Federal Court handed down its judgment in the case of Capitol Records v ReDigi Inc at the end of last month. The case concerned the resale of digital music bought on iTunes or other digital marketplaces through the service offered by ReDigi, where users could sell their legally acquired smash hits to others who are looking for said music - much like a digital flea market if you will. The company was then sued by Capitol Records for copyright infringement.

The case in itself presents and interesting view of whether the First Sale doctrine could be applied in a digital world. Kirtsaeng dealt with the resale of physical goods, i.e. books, whereas the resale of digital goods would require the transfer of a new copy from the original music file through ReDigi's service. This is the reason which felled ReDigi's argument in the eyes of the court. The US Copyright Act  mentions a 'specific' phonographic record (a fancy way of saying a music recording), and making a copy from the original would not be within the remit of the doctrine. In ReDigi's defense they did argue that "technological change has rendered its literal terms ambiguous...", which in this writer's mind would be a valid point. If the copy could be traced to a legitimate copy, that should surely allow for it to be sold regardless of it being in a physical medium or not. Alas ReDigi's argument was rejected, and from a lawyer's perspective that holds to be true. The Court further noted a provision in the Digital Millenium Act which effectively prevents the redistribution of digital works. The Judiciary is not in the place to change laws, but to merely interpret them, and the approach taken by the Federal Court seems to be right in this case.

Spending all that money on vinyl finally paid off!

Here the law perfectly illustrates its dated approach to copyright law, having been enacted well before a time where such transfers of music or any other digital medium were even possible. Discussion in most common law countries over needed changes to the law, as noted on this blog as well, has been very active in the last few years, and cases such as this do highlight this fact very well. Should we be able to sell the goods we legally buy regardless of their tangible or intangible nature? Of course, especially when more and more music is being sold digitally than ever before. As it has been said before the gauntlet has been thrown to the legislatures of most common law countries to modernize their approach to copyright in current times. Whether they will act on this call to action remains to be seen, but as more and more commercial interests shift to the digital arena, the pressure for them to act will grow and change should come.