Can a breach of a software license constitute a copyright infringement at the same time?

Wednesday, 18 of March of 2020

On 18 December 2019, the Court of Justice of the European Union (hereinafter CJE), in Case C-666/18, decided after a request for a preliminary ruling of the Paris’ Court of Appeal on the protection of the copyright holder arising from a computer program in the event of the licensee's infringement of the provisions of the license agreement.

The issue began after a dispute in which IT Development SAS (a ‘software for deployment and management of telecommunications infrastructure’ company) brought an action against Free Mobile SAS (telephony operator) for copyright infringement arising from the computer program licensed by the former to the second. The Court of First Instance of Paris held that the facts at issue constituted a breach of contract and not a copyright infringement. In that context, under French law, the principle of non-cumulation governs, so where contract between the parties exists, criminal liability is ruled out in favor of contractual liability. The foregoing led the Court to dismiss the lawsuit.

Once appealed by the claimant, the Appellate Court submitted a request to the CJEU, questioning whether, in the event of the breach by the licensee of the terms of a license agreement regarding a computer program, the provisions on IPR infringement under Directives 2004/48/EC and 2009/24/EC shall apply or whether it should be subject to a different regime, such as the system of contractual liability.

Firstly, the CJEU limited the assessment of the issue to cases of modification of the software's source code where the license agreement prevents the licensee from such modification. Secondly, it recalls that the modification of the source code of a computer program is an entitlement of the author, recognized and protected under Directive 2004/48/EC. Such protection is provided and guaranteed regardless of whether there is a contract between the parties or not. That is to say, the mentioned Directive applies where the author's right to modify the source code of the program is infringed and may be invoked by the holder in the event of the abovementioned fact, without any limitation even if the infringement arises on the occasion of a contractual relationship.

Having said that, the Judgment states that the determination of the liability regime applicable in the event of infringement of the copyright of a computer program by a licensee of that program falls within the competence of the Member States. Nonetheless, the application of a particular liability regime should in no way constitute an obstacle to the effective protection of the copyright holders.

Thus, in response to the Paris Court's consultation, the CJEU finds that the breach of a clause in a computer program license agreement might be included in the catalogue of infringements of intellectual property rights protected by Directive 2004/48/EC; so the guarantees provided for in the directive must assist that holder, regardless of the liability regime applicable under national law.