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Wednesday Law Report: Computer-programs copyright infringement

5 May 1999 Cantor Fitzgerald International and another v Tradition (UK) Ltd and others Chancery Division (Mr Justice Pumfrey) 15 April 1999
THE COPYING of algorithms or sequences of operations from a computer program might be sufficient to amount to infringement of copyright in the program in the same way as the copying of the plot of a novel or a play might be so sufficient.

The court allowed in part a claim for infringement of copyright in certain computer programs which formed part of a bond-broking system, and for breach of confidence in relation to those programs.

The plaintiffs ("CFI") and the first and second defendants ("Tradition") carried on business as inter-dealer brokers ("IDB") in bonds in London. An IDB facilitated trading between clients who wished to sell or to purchase financial instruments.

Mr Howard, the third defendant, was effectively dismissed by CFI. On his dismissal he cast around for employment and met Mr Adler, who was effectively in control of Tradition. Mr Howard proposed that he should set up an IDB business for Tradition in London. He recruited Mr Harland, the fourth defendant, then head of the systems department at CFI.

Roger Wyand QC and Robert Onslow (Norton Rose) for the plaintiffs; Peter Prescott QC and James Mellor (Wilde Sapte) for the first, second and fourth defendants; George Hamer (Warner Cranston) for the third defendant.

Mr Justice Pumfrey said that copyright protection was conferred on computer programs as literary works. In Ibcos Computers Ltd v Barclays Mercantile Highland Finance Ltd [1994] FSR 275, Jacob J had said that a claim in copyright was to be tested as follows: what was the work or works in which the plaintiff claimed copyright?; was each such work original?; had there been copying from that work?; and, if there had been copying, had a substantial part of that work been reproduced?

There was however, a real risk of making an error if the court adapted well-known principles which had been developed in the context of literary works addressed to humans, and applied them uncritically to literary works whose only purpose was to make a machine operate in a certain manner.

In the present case, the interrelationship of the originality of the work (the prerequisite for the subsistence of copyright) and substantiality of the part of the work copied (the prerequisite for infringement) was of considerable importance.

So far as English law was concerned the correct approach to substantiality was straightforward. It was the function of copyright to protect the relevant skill and labour expended by the author of the work. It followed that a copyist infringed if he appropriated a part of the work upon which a substantial part of the author's skill and labour had been expended.

The statement of principle in Catnic Components v Hill & Smith [1982] RPC 182, at 223, could not be applied directly to infringement of literary copyrights in general or literary copyrights subsisting in computer programs in particular, but it none the less reflected the approach the court considered appropriate.

In the general case, it was well established that a substantial part of the author's skill and labour resided in the plot of a novel or a play, and that to take that plot without taking any part of the particular manner of its expression might be sufficient to amount to copyright infringement.

The closest analogy to a plot in a computer program lay in the algorithms or sequences of operations decided on by the programmer to achieve his object. Moreover, it was generally accepted that the "architecture" of a computer program was capable of protection if a substantial part of the programmer's skill, labour and judgement had gone into it.

Applying that approach to the present case, the allegations of infringement of copyright and breach of confidence succeeded in part: the claims against Mr Howard and Mr Harland as joint tortfeasers succeeded, Tradition's claim for an indemnity against Mr Howard succeeded, and Mr Howard's claim for an indemnity failed.