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License to kill (software) bugs: CJEU issues landmark decision in C‑13/20

Oct 7, 2021

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    Mariella Massaro

    Debugging software failures requires a significant amount of time, namely 620 developer hours a year, at a cost of approximately $61 billion, according to a recent report published by Undo in collaboration with a Cambridge Judge Business School MBA venture.

    The correction of software errors should be managed properly not only from a technical point of view, but also from a legal standpoint, in order to avoid a breach of contractual and/or legal provisions of the European Union.

    The long-awaited decision of the Court of Justice of the European Union (“CJEU”) in Top System SA v Belgian State (Case C‑13/20) issued on 6 October 2021 provides us with helpful clarity on the rights and obligations of the software licensor and licensee or, more generally, the right holder and the acquirer. In other words, who has the license to kill (software) bugs?

    As the Advocate General highlighted in his prior opinion, “the question of whether and, potentially, to what extent the user of a computer program is entitled to translate the object code of that program into source code (this process is known as ‘decompilation’) in order to learn its content lies precisely at the heart of this case”. For an in-depth analysis of the opinion delivered by Advocate General Szpunar in this case, please see our previous article here.

    Background of the case

    Top System, a Belgian company that develops computer programs, is the author of a number of applications developed at the request of Selor, the entity responsible for selecting staff for public authorities in Belgium. These applications include on one hand, ‘tailor-made’ components specifically intended to meet Selor’s needs and requirements and, on the other, components taken from a program authored by Top System, called the Top System Framework (‘TSF’). Top System granted a license to Selor to use such applications.

    As a consequence of certain persistent software malfunctions that Top System was unable to fix, Selor decompiled part of the TSF licensed software in order to disable the faulty function, as the licensee admitted before the Court of Appeal of Brussels. In the Appeal proceedings, Top System claimed that, outside the contractual framework, the decompilation of a computer program is permitted only for the purpose of interoperability of independent software and not of error correction under Article 6 of the Directive on the legal protection of computer programs (Council Directive 91/250/EEC, “the Directive”).

    The Court of Appeal stayed the proceedings and referred two questions to the CJEU (case C-13/20) related to the interpretation of the Directive.

    First question referred to the CJEU: the right to decompile a computer program

    First, the referring court asked the CJEU whether and to what extent the lawful acquirer of a computer program has the right to decompile the program where such decompilation is necessary to enable correction of errors affecting the operation of the program. In the instant case, the correction consisted in disabling a function that affects the proper operation of the application of which the program forms a part.

    Article 4 of the Directive lists the author’s exclusive rights, including reproduction, translation, adaptation, arrangement and any other alteration of a computer program,

    Decompilation as such is not expressly included in the activities mentioned by article 4 of the Directive. However, the Court of Justice noted that decompilation “constitutes an operation of transforming the form of the code of a program involving a reproduction, at least partial and temporary, of such code, as well as a translation of the form thereof” and, consequently, “the decompilation of a computer program involves the performance of acts, namely the reproduction of the code of that program and the translation of the form of that code, which actually fall within the exclusive rights of the author, as defined in Article 4 (a) and (b) of Directive 91/250”.

    Articles 5 and 6 of the Directive provides certain exceptions to the rightholder’s monopoly. Namely, Article 5 of the Directive provides that, in the absence of specific contractual provisions, the acts referred to in article 4(a) and (b) (i.e., reproduction and modification of a computer program) shall not require authorization by the rightholder where they are necessary for the use of the computer program by the lawful acquirer in accordance with its intended purpose, including for error correction.

    With respect to the scope of Article 5, the Court of Justice stated that “It therefore follows from the foregoing considerations that Article 5 (1) of Directive 91/250 must be interpreted as meaning that the legitimate purchaser of a program is entitled to decompile that program in order to correct errors affecting its operation”. In addition, the Court affirmed that “this interpretation is not called into question by Article 6 of Directive 91/250 which, contrary to what Top System maintains, cannot be interpreted as meaning that the possibility of decompiling a computer program would only be permitted in so far as it is carried out for interoperability purposes”.

    Article 6 of the Directive, which is entitled “Decompilation”, provides that reproduction of the code and translation of its form, necessary for decompilation, may be carried out without the rightholder’s authorization only in order to ensure the interoperability of programs and only under certain conditions.

    At paragraph 49 of the decision, the Court concluded that “while Article 6 of Directive 91/250 concerns the acts necessary to ensure the interoperability of programs created independently, Article 5 (1) thereof seeks to allow the legitimate purchaser of a program to use it in a manner consistent with its intended purpose. These two provisions therefore have different purposes”.

    Given the above, in response to the first question referred to the CJEU, the Court held that “Article 5 (1) of Directive 91/250 must be interpreted as meaning that the legitimate purchaser of a computer has the right to decompile all or part of it in order to correct errors affecting the operation of this program, including when the correction consists in deactivating a function that affects the proper functioning of the application which makes part of said program”.

    Second question referred to the CJEU: requirements for decompilation activities

    If the first question would be answered in the affirmative by the CJEU, the referring court asked whether the conditions referred to in article 6, related to decompilation, or any other conditions, also should be satisfied.

    Considering that article 5 and 6 of the Directive have different purposes, as mentioned above, the CJEU affirmed that “the requirements set out in this Article 6 are not, as such, applicable to the exception provided for in Article 5 (1) of that Directive”.

    However, from the wording, structure and purpose of Article 5(1) of the Directive, acts constituting decompilation are subject to certain requirements, namely these acts must be necessary to enable the legitimate purchaser to use the program concerned in a manner consistent with its intended purpose and, in particular, to correct "errors".

    In this regard, the Court noted that in most cases the correction of errors will require modification of the program code and, therefore, will require access to the original source code (or the decompiled source code). The CJEU specified also that “in the event that the source code is already legally or contractually accessible to the purchaser of the program concerned, it cannot be considered that it is "necessary" for the latter to decompile this program”.

    In addition, the Court highlighted that article 5(1) of the Directive permits correction of errors subject to "specific contractual provisions".

    The Court’s considerations that follow are particularly relevant for drafting software license agreements under the European Directive (and the law of European Member States implementing such Directive) that address the conditions of the legitimate user’s decompilation activities.

    First, the CJEU noted that, according to recital 18 of the Directive, it is not possible to contractually prohibit both the loading and unrolling operations necessary for the use of a copy of a legally acquired program and the correction of errors affecting the operation thereof. Thus, the Court affirmed that under article 5(1) of the Directive, interpreted in light of recital 18, “the parties cannot contractually exclude any possibility of making a correction of these errors”.

    However, the rightholder and the acquirer remain free to contractually set up the procedures for exercising the right of decompilation, for example, as the decision pointed out, the parties can agree that the rightholder must ensure corrective maintenance of the program concerned.

    On the other hand, in the absence of specific contractual provisions, the legitimate purchaser of a computer program is entitled to perform, without the prior consent of the rightholder, the acts listed in Article 4 (a) and (b) of the Directive 91/250 (i.e., reproduction and modification of a computer program), including decompiling the program, insofar as this proves to be necessary in order to correct errors affecting the operation of the program.

    Similar to what article 6 prescribes with respect to decompilation for interoperability purposes, the Court was very clear in affirming that “the legitimate purchaser of a computer program having decompiled this program with the aim of correcting errors affecting the operation of the latter cannot use the result of this decompilation for purposes other than correcting these errors”.

    In light of the foregoing, the CJEU concluded with respect to the second question referred by the Court of Appeal of Brussels that “Article 5 (1) of Directive 91/250 must be interpreted as meaning that the legitimate purchaser of a computer program wishing to decompile this program for the purpose of correcting errors affecting its operation is not required to meet the requirements provided for in Article 6 of this directive. However, the purchaser is only entitled to carry out such decompilation to the extent necessary for the correction and in compliance, where applicable, with the conditions provided for by contract with the holder of the copyright on said program”.

    Conclusion and Takeaways

    The rightholder / licensor and the legitimate user / licensee are advised by the Court of Justice to contractually address the procedure for correcting errors in order to limit disputes concerning decompilation of the licensed software.

    As the CJEU decision pointed out, parties cannot contractually exclude any possibility of correcting errors, but they can agree on the steps and the procedures that best suit them with respect to error correction management and related decompilation activities.

    In any event, it is clear from the C-13/20 decision that users / licensees cannot use the decompiled software for error correction purposes for any other reason.

    For the sake of completeness, it should be noted that this decision is based on the provisions of Directive 91/250, which has been repealed by Directive 2009/24/EC of the European Parliament and of the Council of 23 April 2009 on the legal protection of computer programs. The same considerations are applicable under the 2009 Directive where articles 4, 5 and 6 include the same provisions.

    * The English translation of all direct quotes in this article are provided by its author and should not

    Writers:
    Mariella Massaro - Certified Licensing Professional, IP Strategist, International Client Relations
    Robert Alderson - Partner, United States Patent Attorney and European Patent Attorney, International Client Relations

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