Protection of Computer Programs by Copyright in South Africa; How to Obtain Copyright in a Computer Program
What is Copyright?
Copyright is a sub-species of intellectual property law, the other sub-species being patents, designs and trade marks. Over and above these intellectual property rights there are also certain common law rights which grant certain protection namely:
- Passing off
- Trade secrets and know-how
- Unlawful competition
- The code of the Advertising Standards Authority
The underlying rationale behind all intellectual property rights is a quid pro quo - the State gives the creator of intellectual property a limited monopoly to exploit his rights subject to various conditions. In the case of copyright law this means that after a certain period the work falls in the public domain and may be freely exploited by others. This is of largely academic interest in relation to computer programs as the duration of copyright in a computer program is fifty years from the end of the year in which the work was first made available to the public. WINDOWS ´95 might be the buzz-word today but it is hard to believe that it will be of any relevance to anyone in the year 2045 when the copyright in the program falls in the public domain.
The underlying principles behind intellectual property law can also be described by reference to the United States Constitution which states:
"To promote the progress of science and useful arts, by securing for limited time to authors and inventors the exclusive right to their respective writings and discoveries"
While the interim South African Constitution does not contain a similar clause it is generally accepted that, following the US model, the South African Constitution will continue to recognise and respect intellectual property rights despite the fact that they do grant monopolistic rights.
Copyright can best be defined as the exclusive right in relation to a work embodying intellectual property i.e. the product of the intellect, to do or to authorise others to do certain acts in relation to that work, which acts represent in the case of each type of work the manners in which that work can be exploited for personal gain or profit.
A computer program is clearly the product of the intellect whether it is a program written by a school boy to keep track of his pocket money or WINDOWS ´95 with the countless man hours that went into its production.
Subsistence of Copyright in a Computer Program
Copyright is a technical subject and is regulated entirely by the Copyright Act No. 98 of 1978. In the circumstances, in order to ascertain how one obtains copyright in a computer program it is necessary to make reference to the Act.
The Copyright Act designates which works are eligible for copyright and, apart from obvious works such as literary, musical and artistic works, it specifically states that computer programs are works eligible for copyright. A computer program is defined as:
"A set of instructions fixed or stored in any manner and which, when used directly or indirectly in a computer, directs its operation to bring about a result"
What this means is that any code which can be used to operate a computer qualifies as a computer program and would be protected by the law of copyright.
The further criteria that must be met before copyright will subsist in a work are that it must be:
- exist in a material form
- created by a qualified person
Originality in copyright law is different to originality in other intellectual property law such as patent law and design law and simply means that the work must not be copied from another source. Our courts have typically considered the question of originality against the background of the skill and effort which has gone into creating the work. I believe that it is safe to say that any computer program which is not a mere copy of an existing computer program will meet the relatively low criteria required for originality.
The requirement that the work must be reduced to material form is also straightforward in relation to computer programs. Simply put, something which simply exists in the mind of the author and has never been recorded would not be eligible for copyright. As soon as it has been reduced to a material form, which would include the RAM of a computer, a floppy disk or any other electronic storage media, this criterion will be met. This criterion has also been addressed by the statement that copyright does not exist in ideas but only in the material expression of the idea.
The last criterion relating to a qualified person is inspired by the underlying reciprocity principle behind copyright laws world wide as regulated by the Berne Convention of which South Africa is a member. Simply put it means that South African copyright law will only recognise copyrighted works created by nationals of other countries which, in turn, recognise works created by South Africans. From a practical point of view this means that any computer programs created by the main trading partners of South Africa would be protected by copyright, the noticeable exception being Taiwan. If the aforementioned criteria are met then copyright protection in a computer program will be obtained. There is no need to register the copyright and, in fact, there is no mechanism whereby one can register copyright in a computer program.
Now that we have established that copyright subsists in a computer program the next issue to address is who the owner of the copyright might be.
Who Owns the Copyright in a Computer Program?
The general rule is that the author of a copyrighted work is the first copyright owner.
According to the definition section of the Copyright Act the author of a computer program is the person who exercises control over the making of the computer program. This can be distinguished from the author of a book who is the person who first makes or creates the work.
Using the example of the school boy writing a computer program to keep track of his pocket money, he is clearly the author and accordingly, the first owner of copyright in the computer program. In the case of WINDOWS ´95, on the other hand, the person who exercised control over the making of the computer program was clearly Microsoft Corporation and the company is accordingly both the author and first owner of copyright in the computer program.
I should caution that prior to 15 July 1992 (when computer programs were first recognised as a separate category of works) the author of a computer program was the same as the author of a book i.e. the person who actually created the work. In such circumstances, however, where the author acted in the course and scope of his employment, the employer would be the first copyright owner.
Copyright can be assigned freely from one party to another, the only requirement being that the assignment must be in writing. Thus, if the consequences of first ownership of copyright regulated by the Act do not meet the requirements of the individuals involved, they can be met by means of a separate deed of assignment.
The area where this is most likely to take place is where a company commissions a third party to write a computer program for it. Surprisingly, as many commissioners find to their detriment at a later stage, the mere commissioning of a computer program does not result in the transfer of ownership of the underlying copyright in the computer program. Whenever a commissioner wants to obtain the copyright in the computer program he has commissioned, it is imperative for him to enter into a separate written agreement with the commissionee transferring ownership of copyright in the computer program.
To summarise, the two most important issues in response to the question "How to obtain copyright in a program" are:
- There is no need to register the copyright as it subsists automatically as long as certain criteria are met;
- Where you yourself (either as an individual or a company through your employees) are not the author of the computer program i.e. where it is a commissioned work, it is imperative to obtain a separate written deed confirming the transfer of ownership of copyright.
The Rights Obtained by the Individual on Purchasing a Computer Software Package Introduction
The individual who purchases a copy of a typical application software package, such as WINDOWS ´95, obtains the following rights:
- A licence to use the computer program (intellectual property)
- Ownership of the physical material such as the disks, manuals etcetera (physical property)
It is important to draw a distinction in this case between the physical property and the intellectual property.
It is important to stress that the purchaser of a computer software package does not acquire any rights in the nature of copyright. All he acquires is a licence to use the computer program. As the use of the computer program will, at least, require one copy of the program to be made when the floppy/hard disk or CD purchased is loaded on the user´s computer program it is clear that the licence authorises the purchaser to make at least that copy.
The purchaser does not, however, in the absence of other factors, have the right to make further copies, for example because he wants to use the computer program on his home computer as well.
However, many publishers of computer programs allow a copy to be made on one´s home computer. This is generally subject to the condition that the copies are not used simultaneously i.e. one would breach the condition if, for example, one´s wife were to be using the computer program at home while the original purchaser of the computer program were to be using it in the office.
The Copyright Act makes specific provision for the making of back-up copies by stating that:
"The copyright in a computer program shall not be infringed by a person who is in lawful possession of that computer program, or an unauthorised copy thereof, if:
- he makes copies thereof to the extent reasonably necessary for backup purposes;
- A copy so made is intended exclusively for personal or private purposes; and
- Such copy is destroyed when the possession of the computer program in question, or an authorised copy thereof, ceases to be lawful."
In short, as long as the individual still retains the ownership of the computer program he is entitled to make and keep a backup copy thereof. If he sells or gives his computer program to a third party he may no longer retain the backup copy which, at that stage, would no longer be a legitimate back up copy but an infringing copy. He may also not loan the back-up copy to his friend’s etcetera.
Multiple User Licences
Many software publishers sell a multiple user licence. All this means is that the purchase of a single physical package allows multiple copies of the computer programs to be made i.e. that the computer programs may be used by a specified maximum number of users. If, at any time, the number of users exceeds the number of authorised licences then such additional copies would constitute infringing copies.
Many software publishers sell upgrade products which, as far as the physical property is concerned, is inevitably identical or nearly identical to the full product. The intellectual property is, however, different, as the licence granted is conditional on the purchaser being a licensed user of a previous version of the computer program in question. If you own a BMW 325i and relish the prospect of owning the 328i, the only way in which you can do this is to trade in your earlier model and purchase a new model. This is because the full value of the product lies in the physical property. The situation with computer programs is entirely different as the bulk of the value lies in the licence to use the computer program and the proportional cost of the manuals and disks is low. In the circumstances once a "new model" comes out the physical property relating to the old model can simply be discarded and all that is required is the purchaser to obtain the physical property relating to the new model (i.e. the disks and manuals etcetera) and a licence to use the computer program. The upgrade licence which is granted is, however, conditional on the upgrade criteria being met. If, therefore, a first time user obtains an upgrade product as a full product, he will not obtain a valid licence and will accordingly be infringing copyright.
Shrink Wrap Licences
Most computer software packages are sold with license documents contained therein which purport to bind the purchaser even though the purchaser does not himself actually sign the licence agreement.
As far as the enforceability of shrink wrap agreements is concerned, there is no precedent in South Africa of a shrink wrap licence agreement having been enforced.
Applying the general principles of the law of contract, however, there is no reason in principle why shrink wrap licence agreements should not be enforceable.
The two most important criteria being:
- It must be obvious to the licensee that he is being bound by the licence i.e. it must not be concealed in any manner.
- The terms and conditions must be fair and reasonable given the nature of the product.
Accordingly, a shrink-wrap agreement which purports to deny the purchaser the right to make back-up copies, where the Copyright Act specifically grants that right, would not be enforceable. Copyright infringement only constitutes acts done without the licence of the copyright owner, any licence granted in a shrink wrap licence could be used by the purchaser as a defence, perhaps the simplest example being where a shrink wrap licence permits home use. It is important to stress, however, that if the home use goes beyond the terms of the shrink wrap licence, such use would inevitably constitute infringement.
How to Protect Your Computer Program from Piracy Blocking Measures
The only effective way to protect a computer program from piracy is to make it impossible to copy. Towards achieving this end certain publishers of computer programs use a dongle (a hardware security device) to protect their programs from copying. Such systems are, however, far from fool proof. Likewise, whenever a particular code is included in a computer program to deter copying, there is inevitably a programming wizz kid who is capable of nullifying the code.
In short, for every blocking anti-piracy measure there is a counter measure and the only benefit gained by introducing such a measure is to delay the pirate. Unfortunately for the publishers of computer programs, such security measures tend also to alienate their customers as they can make it difficult for the legitimate customer to operate the computer program efficiently.
In the circumstances the most effective means to stop computer piracy is to take action against computer pirates.It is accordingly the deterrent factor which is paramount. We must, once again, look at the Copyright Act to see what ammunition the owner of copyright in a computer program has to use against pirates.
Copyright in a computer program vests the exclusive right to do or authorize the doing of any of the following acts in South Africa:
- Reproducing the computer program in any manner or form;
- Publishing the computer program if it was hitherto unpublished;
- Reproducing or publishing an adaptation of the program;
- Making an adaptation of the computer program;
- Letting, or offering or exposing for hire by way of trade, directly or indirectly, a copy of the computer program.
An adaptation of a computer program includes:
- A version of the program in a programming language, code or notation different from that of the program; or
- A fixation of the program in or on a medium different from the medium of fixation of the program.
Any person who does one of the aforementioned restricted acts without the licence of the copyright owner is infringing copyright. Lack of knowledge is no excuse.
The act also makes provision for what is known as secondary infringement which exists where a person deals in an infringing copy although he need not necessarily make the copy himself.
Of the aforementioned restricted acts, the most important is the reproduction of the computer programs in any manner or form. It is important to stress that the reproduction need not relate to the whole work, as making a copy of a substantial part of a work is also infringement. The test for what constitutes a substantial part is qualitative rather than quantative with the result that any module or section or code of a computer program which forms an essential part of the program as a whole is a substantive part of the work.
The most blatant form of piracy is the person who makes an unauthorised copy of a computer program and sells it. It is, however, not a prerequisite that the copyist must make a profit out of his copying before copyright infringement can occur. In particular, the Copyright Act has certain exemption provisions which state that, in relation to certain works, copying for the purposes of private study or personal and private use does not constitute infringement. These provisions do not, however, relate to computer programs.
The two most typical types of infringement that one comes across in normal commerce are what can be called dealer infringement and end user infringement.
- Dealer infringement
Dealer infringement typically occurs when a dealer in computer hardware loads unauthorised copies of computer programs onto the hardware he is selling. It is clear that such conduct constitutes copyright infringement, even in circumstances where the purchaser is innocent i.e. where he does not realise that he is obtaining an unauthorised copy of the computer program.
- End user infringement
As we have seen above, the principal right obtained by the individual on the purchase of a computer program is a licence to use the computer program. As the use of a computer program inevitably entails the copying thereof, for example from a floppy or hard disk onto a computer’s RAM, the licence includes the right to make copies under those circumstances.
What the licence does not include is the right to make additional copies i.e. if one obtains a five user licence one may only make five copies; the sixth and additional copies would clearly constitute infringing copies. This is even the case where one is dealing with LAN (local area network) and can come about very easily.
As we have seen above, the most important element in the protection of computer programs from piracy is the deterrent factor. The penalties afforded by the Copyright Act are quite severe and include the following:
- Civil penalties Anton Piller orders
When there is a suspicion that a company is using copied software a civil court can order that all of the company’s computers be inspected, without any advance notice to the company and that the copies may be seized.
The copyright owner may apply to the Supreme Court in order to obtain an interdict preventing the ongoing infringement of copyright; this would include the ongoing use of infringing copies of a computer program.
The copyright owner is entitled to recover damages from the infringer which damages include the loss of profit suffered by the copyright owners and can also be calculated on the basis of a reasonable royalty which the copyright owner would notionally have been entitled to claim. Depending on the flagrancy of the infringement the copyright owner may also claim punitive damages.
- Legal costs
As in all legal proceedings the successful litigant would be entitled to claim its legal costs. Civil copyright infringement proceedings are argued before the Supreme Court. The result of this is that the legal costs tend to be particularly high and, in many instances, would exceed the damages payable.
- Criminal penalties
The dealing in infringing copies of computer software constitutes a criminal offence in terms of the Copyright Act. The penalties on conviction are a fine of up to R5 000.00 or imprisonment for a period of up to 3 years, for each article to which the offence relates. These penalties are for a first conviction, the penalties for a second conviction being even higher. It is important to note that the fine or imprisonment relates to each infringing article. This means that, theoretically, if a first offender makes 200 copies of a particular software package, he could be fined R1 million.
Copyright is the most effective means by which to protect computer programs in South Africa and worldwide. A significant advantage is that no registration is required, as long as the conditions for subsistence of copyright are met. An added advantage is that the protection is not only limited to South Africa but would apply to all Berne Convention countries.
One must, however, be aware of its limitations. Copyright does not protect the underlying ideas behind a computer program - if ideas are to be protected reliance must be placed on the other areas of intellectual property law such as the protection of trade secrets and know how. Lastly, in the absence of copying there can be no copyright infringement. However, neither of these two disadvantages is usually a problem in the protection of computer programs as, in the vast majority of cases, one is dealing with an identical or near identical copy.
SPOOR & FISHER