In its embryonic stage every computer program was just an idea. There are many stories of creative geniuses who not only came up with the idea for a given software but also turned that idea themselves into a successful product that was eventually placed on the market. However, quite often what happens in reality has a bit more of a utilitarian taste – a business enterprise identifies the need for a certain functionality and then commissions the development of a computer program that performs that functionality.
Before arriving at the final software product there are usually intermediary steps. At the beginning, it is the idea and the desired functionality. Both of these are not protected under the copyright regime and are thus free for everyone to re-use or replicate. After that, certain preparatory materials are created such as the design and the specifications of the future product. At this point there is no actual code created yet. It is the next step to develop the source code based on the design and specifications. Ultimately, the source code will be compiled into object code at which stage we will have the final software product that is capable to control the functioning of a computer and perform the desired functionality.
Both these expressions in code form – source code and object code, are protected under the copyright regime. We can see this explicitly mentioned in the TRIPS Agreement. Article 10, paragraph 1 reads that “computer programs, whether in source or object code, shall be protected as literary works under the Berne Convention (1971)”. The position is also reconfirmed by the Court of Justice of the European Union (CJEU) in several decisions – case C-406/10 (SAS Institute Inc. v World Programming Ltd) and case C-393/09 (Bezpecnostni softwarova asociace v Ministerstvo kultury). Then the question arises what is the fate in terms of copyright protection for the mentioned intermediary materials developed as preparatory steps on the road to the final software product?
This question is formally answered in the text of Directive 2009/24/EC of the European Parliament and of the Council on the legal protection of computer programs (Software Directive). Recital 7 of the Directive postulates that “the term ‘computer program’ shall include programs in any form, including those which are incorporated into hardware. This term also includes preparatory design work leading to the development of a computer program provided that the nature of the preparatory work is such that a computer program can result from it at a later stage.” It is reiterated in Article 1, paragraph 1 of the Directive that “for the purposes of this Directive, the term ‘computer programs’ shall include their preparatory design material.” Therefore, the position of the EU legislator is that there is one requirement for the protection of the preparatory design work as a computer program under copyright – its nature must be such that a computer program can result from it at a later stage. But what exactly is a preparatory design work?
Usually, the term “preparatory design work” involves design materials and specifications that set the ground for the future steps of the actual software programming. The preparatory design work itself is not code and it cannot be compiled so that it governs the functioning of a computer. It can describe the need that led to the creation of the software and also how the software is supposed to solve that particular problem. Also it can describe what would be the exact steps to create the solution and how would that solution look like in terms of internal architecture and design choices (examples are organigrams, flow-charts, graphs). Apparently, some of those preparatory materials will be protected under copyright as ordinary literary works of non-fiction while others will be protected under copyright as computer programs. The decisive factor would be whether they are capable to result in a computer program at a later stage.
Descriptive material that merely explains the problem that the computer program solves and the way it is solved will be protected as a standard literary work of non-fiction. However, there are other preparatory design works that will act as a basis for the set of instructions that are to be developed in order to perform the functionality of the software. For example, we can observe a situation where the specifications for a computer program are developed in such a formalistic way (you could call it “quasi-coding”) that leaves very little creative freedom for the programmer who is to create the source code. In such a case the mentioned preparatory materials will be protected under copyright as a computer program. Needless to say, the applicability of such a hypothesis can only be established on a case-by-case basis and after employing an expert assessment.
An interesting clarification to the general question about the protected expressions of a computer program was brought by the CJEU in its decision on Case C-393/09 (Bezpecnostni softwarova asociace v Ministerstvo kultury). In my view however, this development is also capable to lead to confusion when it comes to the requirements for protection of the preparatory design works.
In his opinion on Case C-393/09 (paragraphs 60-64) Advocate General Bot stated the following: “… a computer program forms the expression of a set of instructions the purpose of which is to enable a computer to perform a task or a particular function.
Thus, I believe that, whatever the form of expression of a computer program, that form must be protected from the moment when its reproduction would engender the reproduction of the computer program itself, thus enabling the computer to perform its task. In my opinion, that is the meaning which the European Union legislature intended to give to Article 1(2) of Directive 91/250.
Furthermore, it is the reason why the preparatory design work, where it leads to the creation of such a program, is also protected by copyright applicable to computer programs.
That design work can include, for example, a structure or organisational chart developed by the programmer which is liable to be re-transcribed in source code and object code, thus enabling the machine to execute the computer program. That organisational chart developed by the programmer could be compared to the scenario of a film.
Accordingly, I consider that the concept of any form of expression of a computer program refers to those forms of expression which, once used, enable the computer program to perform the task for which it was created.”
In its judgement of 22 December 2010 (paragraphs 37-38), the CJEU agreed with the position expressed by Advocate General Bot
“…the object of protection under Directive 91/250 includes the forms of expression of a computer program and the preparatory design work capable of leading, respectively, to the reproduction or the subsequent creation of such a program.
As the Advocate General states in Point 61 of his Opinion, any form of expression of a computer program must be protected from the moment when its reproduction would engender the reproduction of the computer program itself, thus enabling the computer to perform its task.”
In my view, the decision on Case C-393/09 does not introduce a second requirement for the protection of preparatory design works in the sense that they can only be protected if they are capable to lead to the reproduction of the computer program. Instead, I posit that the position in the judgement refers to two separate scenarios – one for the protection of preparatory design works and one for the protection of the expressions of the computer program. This can be seen from the linguistic phrasing – the use of the word “respectively” and the alternative “or” in order to distinguish between the two scenarios. Additionally, this is also substantiated by the fact that the preparatory works are not an expression of the computer program – they are a step that exists before the actual materialization of the computer program. Hence, from a purely logical stance there can be no expression of something that does not yet exist. Accordingly, in my view the position of the CJEU should be interpreted in the following way: i) the requirement for protection of the expression of a computer program is that its reproduction can lead to the reproduction of the computer program; ii) the requirement for protection of a preparatory design work is that it can lead to the subsequent creation of a program.
An interesting case on the topic of limitations for the copyright protection of preparatory design works was decided by the Dutch Supreme Court back in 2019 (ECLI:NL:HR:2018:56). The dispute arose between the company DC SA (DC) and several natural persons who later founded or worked for the company Forax NV (Forax). The natural persons who were software engineers performed work for DC from 2009 to 2010 on the basis of employment contracts or contracts for performance of services in view of the development of a software product called DF Card. Later in 2010 the agreements between the developers and DC were terminated and they founded their own company Forax. DC accused them of using some of the preparatory design materials to the DF Card – in particular, the functional design specifications (DC Functional Design), without authorization. Those functional specifications were developed by a third party provider – Atos but were ultimately owned by DC as a result of transfer of the IP rights. DC alleged that the natural persons who left the company were illicitly using the functional specifications in their own business for a similar competing product that they launched.
The second instance to the case – the Court of Appeal postulated on the basis of recital 7 in the preamble to the Software Directive and the case law of the CJEU that only a preparatory material that is of such a nature that it can later result in a computer program is protected under copyright. Accordingly, if there is a further programming phase with creative steps that still have to be made to get from the preparatory material to the computer program, one cannot speak of a preparatory material that is of such a nature that it can result in a computer program. In the case at hand, it was the position of the Court of Appeal that in order to turn the DC Functional Design into a computer program, another separate programming phase with multiple creative choices with regard to the tools, techniques and implementation methods to be used in the computer program must be made. This effectively means that the DC Functional Design cannot be regarded as preparatory material that is (at this specific point of its development) of such a nature that it can result in a computer program.
The Dutch Supreme Court fully confirmed the position of the second instance. It explained that it would be erroneous to think that all products produced in the process of developing a computer program are preparatory materials within the meaning of the Software Directive. The Court of Appeal was correct in ruling that there is no preparatory design work in the event that another programming phase with many creative steps is required in order to turn the developed material into a computer program. In reaching this decision the Court of Appeal also relied on expert statements from two experts and it deduced on that basis that there was not yet any preparatory design work that could lead to the creation or the reproduction of a computer program. In its appeal DC claimed that the conversion of the developed material to a computer program was no more than a technical translation and required a small step in which no or hardly any creative choices are made. Based on the provided expert reports however, the Court found that position of DC not to be substantiated.
It has to be noted that despite the fact that from a legal perspective the decision of the Dutch Supreme Court was well substantiated, the court still referred in its argumentation to one point which in my view was unnecessary. This was the stance that the developed material cannot be treated as preparatory design work in the sense of the Copyright Directive if it cannot lead to the creation or the reproduction of the computer program. As already clarified above, referring to the reproduction would make sense if the analysis is related to an expression of a computer program that already exists and not to potential preparatory design work. The other conclusion of the court that there can be no question of ‘preparatory material’ within the meaning of the Software Directive in the event that another programming phase with many creative steps is required to turn the material into a computer program is far more relevant and useful in determining the actual scope of copyright protection. It points out to the outcome that for some courts the mere abstract and generalized capacity of a preparatory design work to lead to the creation of a computer program after a long subsequent creative process would not be enough. Instead, the nature of the preparatory work should be such as to demonstrate (based on a technical expert assessment) sufficient specific development and creative choices that are already performed so that it could warrant copyright protection.
Finally, it must be highlighted that it would be a prudent choice for every company to protect such developed preparatory materials as the mentioned DC Functional Design as trade secrets and to use confidentiality clauses or non-disclosure agreements to properly shield its rights and interests in similar situations.