| Return to Contents Copyright And More: Oliver v ABN-AMRO Bank NV Simon Young As the one and only reported decisio on copyright law, and that being in relation to the rather narrow field of computer software, the decision in Oliver v ABN-AMRO Bank NV [1] is worthy of belated critical appraisal. In Oliver Hamon, Deputy Bailiff, held that the Copyright Act 1911 (the "1911 Act"), as applied to Jersey by the Loi (1913) au sujet des droits d'auteur, afforded statutory protection to the author of a computer program against the unauthorised production, reproduction or recording of the same. In other words the 1911 Act protected the author of a computer program from breach of copyright. It was held that a computer program was an original literary work as defined in the 1911 Act. The Facts Victor Hanby Associates ("VHA") were contracted by ABN-AMRO (the "Bank") in September 1986 to write a computer program to facilitate the "automated" handling of securities trading at the Bank (the "Program"). The Bank obtained from VHA the benefit of a licence for both the use and technical support of the Program. The plaintiff, Mr. Oliver, was at that time a partner of VHA. This association between Oliver and VHA ultimately terminated by way of litigation which was commenced in August 1988. One of the results of the litigation was a declaration of 12th December 1991 that copyright in the Program vested in Oliver. The Bank was not a party to that litigation or declaration. The Program had been developed on the Bank's computer system and the source, or development program, left on the system at the time when Oliver and VHA became embroiled in their dispute. In January 1989 the Program required both fixing and amending. The Bank contracted with the licensor of the Program, VHA, to provide an amendment to a price field which was hardcoded into the Program, to fix errors or "bugs" in the Program and further to effect an interface between the Program and a data source called EXTEL. In so doing it was necessary to copy the source program. The action was brought by Oliver on several bases, one being that the Bank had infringed his copyright in the Program by copying it onto floppy diskettes. The judgment relates only to the argument of two preliminary issues. The first was "whether the laws of the Island of Jersey make provision for the protection of a computer programmer's proprietary rights, if any, in a computer program written by him by virtue of copyright" and the second was "whether [Oliver's] alleged cause of action was prescribed by law." ABN succeeded on the prescription point but failed on the first point that the 1911 Act did not afford copyright protection to computer programs, the Deputy Bailiff holding that a computer program was an "original literary work" within the meaning of the 1911 Act. The Judgment The Deputy Bailiff recognised from the outset that Jersey has been left far behind its commonwealth neighbours in the development of its law relating to copyright. At page 279 line 15, the Deputy Bailiff recognised that in England and Wales it was considered necessary to enact new legislation, in the form of the Copyright (Computer Software) (Amendment) Act 1985 (the "1985 Act"), in order to afford the same protection given to literary works under the Copyright Act 1956 (the "1956 Act") to computer software. However, in the absence of such legislation in Jersey the Deputy Bailiff had to consider the 1911 Act and its applicability to computer software. Much consideration was given to legislation and case law, both English and Commonwealth, and to academic writings. However, whilst the Deputy Bailiff heeded the warning notes of the rapidly changing legislation in England and Wales he was not satisfied that the 1911 Act could not be construed, utilising the tools of both legislative intention and statutory interpretation, to cover computer software. At pages 289-291 of the judgment in Oliver the Deputy Bailiff made much of the expression "[works] reduced to some material form" and after due consideration concluded that the Program created by Oliver was a "literary work reproduced in a material form" and was, therefore, to be afforded protection against infringement of copyright under the 1911 Act. Whilst appearing in the 1956 Act and Commonwealth copyright acts based upon it, that form of words does not appear in the 1911 Act. Given the nature of the hearing no argument was advanced as to whether the actions of ABN had in fact infringed the copyright of Oliver. It is this exercise which, in the author's opinion, would have caused the Court considerable difficulty. Development of the law of copyright in Jersey Jersey has no indigenous law of copyright. The law of England has, since the Copyright Act 1911, developed considerably. The Copyright Act 1956, was introduced to afford copyright protection to, inter alia, sound recordings, broadcasting and educational material; the 1985 Amendment to the 1956 Act brought computer programs within the definition of original literary works; and the Copyright Designs and Patent Act 1988 ("CDPA 1988") and the Copyright (Computer Programs) Regulations 1992 were enacted in order to update and restate the appropriate laws. Having established in Jersey that the 1911 Act protects computer software it has then to be applied to situations where infringement is alleged to have occurred. Ironically, in seeking to protect a computer program from breach of copyright the Court may have prevented the user of the program from using it at all, as in running the program it will, by definition, have to be reproduced in one form or another! The constraints on usage of computer programs as contained in the 1911 Act are broad and unworkable. Section 2 of the 1911 Act provides that copyright is infringed by any person who does anything to the program, the sole right of which is vested in the owner of the copyright. In other words, by reference to Section 1(2) of the 1911 Act, copyright is infringed if anyone, other than the author or with his permission, produces, reproduces or copies the author's work. The issues What then of the situation where a programmer has developed a bespoke program for a company or individual? If the program contains a number of errors and the author is unwilling or unable to correct those errors, should he be allowed to hold the end-user to ransom by forcing him to retain the author's services or should the end-user be able to engage a third party to rectify the problem? In seeking to remedy the errors access to the source code is necessary and it will have to be both copied and altered. It is submitted that the principle on-derogation from grant would apply and, therefore, such copying and alteration must be allowed, see Mercer v Bower [2] . However, applying the 1911 Act, any copying of the source or object code will render the copier liable to damages for infringement of copyright. What then of the prudent IT manager who diligently makes back up copies of all source and object programs on a monthly basis for security purposes? On a strict interpretation of the 1911 Act he too will be liable in damages for infringing copyright. What of the end-user who has paid for the development of a program, acknowledges that copyright vests in the author thereof, but then wishes to interface that program with another? The original programmer may be too expensive to use or his expertise may be in a different field of programming. He may be unwilling again to work for the end-user. Should the end-user be prevented from obtaining such an interface from a third party because to do so would inevitably risk infringement of copyright? If the answer to the above questions were in the affirmative it would so distort competition and the economic freedom of the end-user so as to negate any beneficial effect the 1911 Act was supposed to have. These few problems clearly demonstrate that the term "original literary work" and the statutory protection afforded by the 1911 Act against infringement of copyright in computer programs are in practice unworkable. It is for the above reasons that the Copyright (Computer Programs) Regulations 1992 (the "Regulations") were introduced in England and Wales, giving effect to Directive 91/250/EEC of the Council of the European Communities. These Regulations amended the appropriate sections of the CDPA 1988 to allow for the making of backup copies of programs, "bug" fixing, the engineering of interfaces and effecting the inter-operability of different programs from different sources without infringing copyright. However, even the Regulations mselves are not without their problems. In construing the same to deal with the development of competing software David Bainbridge [3] cites the example of Section 50B of the CDPA 1988 which allows a user to decompile a program lawfully obtained ("Program A") in order to construct another program ("Program B") to be compatible with it, the "permitted objective". However, if, thereafter, one wishes to build a suite of programs around Program B, one of which competes with the original Program A, then this may well constitute an infringement of the copyright of the author of Program A because such development is not in accordance with the "permitted objective." Whilst the effect of this article is arguably to create a monopoly on certain products in favour of the owner of the original program this was surely not the intention of the legislature or the European Council. Moreover, what of deciding whether one program has infringed the copyright subsisting in another? At present there is no certainty as to which of two tests may be applied: the abstraction and st in John Richardson Computers Ltd v Flanders [4] or the classic copyright test as formulated in Ibcos Computers arclays Mercantile Highland Finance Ltd. [5] where what is required is the copying of a substantial part of the original work. From the above it can be readily seen that computer software is, unfortunately, not analogous to other "written" literary works. Quite simply the mechanism by which computer programs run and interact with each other is a world away from those literary works envisaged in 1911. Any arguments as to implied licence or non-derogation from grant may ultimately be successful but what is really required in Jersey is a new copyright law designed to cater for the above situations in order that certainty may prevail. The solution In order properly to safeguard the rights of owners of computer software developed or situate in Jersey, a minimum strategy requires the adoption of the CDPA 1988, as amended. The effect of this would be twofold. Firstly it would place Jersey on an even footing with the UK with respect to the protection of copyright for, inter alia, computer software, sound recordings and broadcasting. Jersey has for too long lagged behind England and Wales with respect to the latter and in so doing has undoubtedly lost investment opportunities from which other offshore jurisdictions are now benefiting. Secondly it would allow Jersey the opportunity further to develop its attraction as an offshore centre of excellence having at its core an internationally recognised statute. However, to adopt the CDPA 1988 without more would be merely to repeat the actions of 1913. The spectre of the "information superhighway" is ever present and the problems of international copyright, trademarks, patents and confidentiality are legion, as identified in the European Green Paper on "Copyright and Related Rights". The related laws of trademarks, patents, confidentiality and defamation also require to be brought up to date. Jersey ought also to seek extension of the Universal Copyright Convention and/or the Berne Convention in order more easily to facilitate the bringing of actions for breach of copyright in Jersey in other co-signatory countries. Ideally what is really required is the removal of the computer program from classification as an original literary work. The computer program, and associated hardware, require protection of a different sort to that of the play or the book and are deserving of their own set of rules. The ease with which copyright and related rights may be infringed on the "information superhighway" will ultimately call for truly global rights as opposed to merely national rights. In order for Jersey to benefit from such internationalisation it first needs to bring itself at least on to the playing field. At present we are sadly lacking in this particular arena. Judiciary v legislature On a final point and returning to Oliver it is submitted that where there is so obviously a requirement for up to date legislation it is of little or no assistance to either the litigant, the judiciary or to the public as a whole to try to make an old hat fit a new head. To quote Lord Scarman illi [6] case: "the reform needed is not the substitution of a new principle... for an existing one but a detailed set of provisions to replace existing statute law"; by any other means the judiciary will end up having to apply a statute that was never intended to cover a situation neither conceived nor imagined at the time of its promulgation. To hold that the 1911 Act affords adequate protection to the owners of computer programs against the infringement of their copyright, is, it is submitted, unlikely to convince those who have witnessed the growth of legislation elsewhere to vest intellectual property rights in offshore vehicles situate in Jersey. The courts are in the best position to know when and for what purpose a new statute is required and are also best placed to exert pressure on the legislature to bring forward such new legislation. Let us hope that proper advantage of this position is more utilised in the future. Simon Young is an advocate of the Royal Court of Jersey with Messrs. Bedell & Cristin, P.O. Box 75, One The Forum, Grenville Street, St. Helier, Jersey JE4 8PP |