Mr. Richard Yong WANG—Partner, Lawyer and patent attorney
Computer software is clearly defined as a copyrighted work in the Chinese Copyright Law, which includes computer programs and their related files. The computer program refers to a sequence of coded instructions executable on a computer, while the files are text materials and diagrams used to describe the content, composition, design, functional specifications, development, test results and usage methods of the program, such as program design specifications, flow charts and user manuals.
The rights enjoyed by a computer software copyright owner include, but not limited to, the right of publication, the right of authorship, the right of modification, the right of reproduction, the right of distribution, the right of rental, the right of information network dissemination and the right of translation. These rights allow him to control and manage his software, including deciding whether the software is made publicly accessible, how it is used, and how distributed.
In the judicial practice, there are such problems in computer software copyright infringement disputes as difficulty in collecting evidence, complicated and cumbersome infringement comparison, and considerable disputes over infringement determination. The "contact + substantial similarity" method, an important method widely used in the judicial practice to determine whether others’ computer software (hereinafter referred to as software) is used, is the premise and basis for determining whether an alleged act infringes software copyright, in which substantial similarity is a crucial part. This means that if a defendant had access to the plaintiff's software and there is a non-accidental similarity between the plaintiff's software and the defendant's software, it possibly constitutes infringement.
Although computer source code comparison is not a necessary process for determining software infringement, it is widely used in practice as a method for determining software similarity. As shown in the many judicial decisions rendered and published so far, the percentage of code similarity is considered to be a very important reference factor for determining substantial software similarity, but there are currently no laws, regulations or normative documents in China that specify on what proportion an allegedly infringing product and a copyrighted work are identical or substantially similar.
For example, Article 24, paragraph one, of the Regulations on the Protection of Computer Software stipulates that a person who reproduces or partially reproduces the copyright owner's software work without permission shall be civilly liable for ceasing and desisting from the infringement, eliminating the influence, making a formal apology, and damages. By "partial reproduction" is meant that 100% identicalness is not required for an infringement or crime to be constituted, but the specific proportion of determination is not specified.
Recently, the Intellectual Property Tribunal of the Supreme People's Court (SPC) concluded an appellant case of dispute over infringement of computer software copyright (Case No: (2022) Zui Gao Fa Zhi Min Zhong No. 1605), determining the so-called "partial reproduction" in computer software infringement cases and the associated liabilities. This SPC decision is of great guiding significance on how to determine the partial reproduction and the proportion of the reproduced part in the case of computer software infringement and the impact of the proportion of the reproduced part on the similarity.
I. The Case
In June 2017, Mr. Ye, Mr. Huang and Mr. Chen successively signed labor or employment contracts with a technology company in Shenzhen (hereinafter referred to as Company A). On December 11, 2018, the National Copyright Administration registered the computer software copyright of Company A's operation and management system for the goods involved in the case, and the registration certificate indicated the completion date of the software development as October 15, 2018. In May and June 2019, Ye, Huang, and Chen resigned from Company A. A technology company in Hangzhou (hereinafter referred to as Company B) was incorporated on May 14, 2019, and the shareholders of Company B at the time of its incorporation were related to Huang, Chen, and Ye. Company A alleged that the software used by Company B infringed its software copyright, and requested the court to order Company B, Huang, Chen, and Ye to immediately cease and desist from the infringement, and hold them jointly and severally liable for the damages of RMB 2 million yuan and for the reasonable expenses of RMB 100,000 yuan.
At the request of Company A and Company B, the court of first instance entrusted an appraisal agency to conduct a judicial appraisal, and the appraisal opinion showed that the business source code of the two parties was about 3.52+59.6KB (9 files) identical or substantially identical, and the identical or substantially identical part accounted for about 1.085% of the total business source code of Company A (i.e., the proportion of different code in the source codes of the two parties was about 98.915%).
The court of first instance concluded that only 9 files of the allegedly infringing software of Company B contained the identical or substantially similar code as the copyrighted software of Company A, and the identical code accounted for 1.085% of the copyrighted software, that is, the proportion of different source codes between the two parties was about 98.915%, and the identical code was extremely scattered. Therefore, it is determined that the allegedly infringing software and the copyrighted software are not identical, nor are they substantially similar. Accordingly, the first-instance decision dismissed all Company A's claims. Dissatisfied, Company A appealed to the SPC.
II. SPC Opinions
In the second instance, the SPC held that, except for fair use as provided for in the laws and regulations, a person who reproduces or partially reproduces the software of the copyright owner without permission shall be held civilly liable for infringement according to the circumstances. The laws, regulations and judicial interpretations do not further explain or define the "partial reproduction" that constitutes infringement. In principle, any software content that can reflect the original expression of the copyright owner and is relatively independent is protected by the software copyright. Normally, a single code file implements relatively independent functions in the whole software, which is an expression of originality. The quantity or proportion of reproduced software does not automatically affect the determination of the nature of the infringement; however as it directly affects the consequences of damage and reflects the degree of subjective fault of the infringer, different quantities or proportions of infringing reproduction will affect the determination of the infringement liability.
According to the appraisal opinions involved in this case, 9 files in the allegedly infringing software have code identical or substantially similar to the copyrighted software. On the issue of infringement determination, firstly, the evidence provided by Company B could not prove that the code files in the aforesaid allegedly infringing software were similar to the copyrighted software due to the limited number of expressions available or derived from open source software, which overturned the above-mentioned appraisal opinions, and there was no evidence to overturn the originality of the corresponding code of the copyrighted software. Secondly, it is common for a single code file to implement relatively independent functions throughout the software, and is named according to the relevant functions it implements. In the absence of evidence to the contrary, the 9 code files in the aforesaid software can achieve relatively independent functions in the entire software. The court of first instance has ascertained that some of the employees of Company B and the relatives of the shareholders at the time of incorporation are former employees of Company A, and it is possible for them to have access to the copyrighted software, and based on the evidence in the case, it could be determined that Company B partially reproduced the copyrighted software without the permission of Company A, and Company B should bear corresponding legal liabilities for its partial reproduction of the copyrighted software under the law. Company A's appellant claims were partially sustained, so the judgment was made to revoke the first-instance judgment and ordered Company B to immediately cease and desist from infringing Company A’s copyright in the computer software involved in the case, that is, to immediately delete or rewrite the source code in the allegedly infringing software that was identical or substantially similar to the 9 code files in the software involved in the case, and to pay Company A a total of RMB 250,000 yuan for the damages and for the reasonable expenses.
III. Analysis and Conclusions
Based on the above-mentioned facts and judgments, an overview of the special issues in the software copyright infringement determination from these aspects is presented in the following.
1. How to Compare Copyrighted Computer Software Codes
In the computer software development industry, when developing computer software for specific application requirements, it is usually necessary to conduct a requirement analysis, clarify the goals and requirements of the application, determine the functional and non-functional requirements (such as performance, security, and accessibility), and select the appropriate programming language according to the project requirements; mature frameworks and libraries are chosen to accelerate development; integrated development environments (IDEs), and automated tools are usually used for code building, testing, and deployment.
For this purpose, when writing computer programs, software developers often use a variety of public code resources to speed up their program development, such as: 1) open-source code repositories, such as GitHub, GitLab, and BitBucket, which allow developers to share, use, and modify code; 2) public documentation and tutorials; 3) official documentation, as most popular programming languages and frameworks have official documentation, such as the ECMAScript specification for Python and JavaScript; 4) APIs and libraries since many online services provide APIs, such as Google Maps, Twitter, etc., and there are many open-source libraries on the Internet that can help developers build applications quickly. Therefore, it is inevitable that the developed software will contain some public or open source codes.
Based on the above-mentioned realities of the software development industry, it is necessary to identify and exclude publicly known source code or open source code when comparing source code. In this case, the judicial appraisal made a specific comparison and analysis of the system architecture and coding files of the source code files provided by the two parties, and concluded that the software of the two parties was similar in business functions and business operations, and there was no substantial difference between the system design and the traditional e-commerce system, and the technical architecture of the system adopted a general three-tier architecture and MVC model, so the business source code of the two parties was about 3.52+59.6kb (9) files that are identical or substantially identical, excluding the public knowledge source code of the web system framework BOOTSTRAP, and the identical part accounts for about 1.085% of the total source code of Company A's copyrighted software. After further exclusion and filtering out the code that Company B claims to be from open source, the code in the above 9 files still has the exactly identical parts.
2. Determination That Part of the Code of the Allegedly Infringing Software Is Identical or Substantially Identical to the Code File of Company A
In this case, although the court of first instance accepted the appraisal opinion that part of the code of the allegedly infringing software was identical or substantially similar to the 9 code files of the copyrighted software, it held that the identical code accounted for a relatively low proportion of the copyrighted software and was extremely scattered, and concluded that the allegedly infringing software and the copyrighted software were not identical or substantially similar. It can be seen that the court of first instance held that the proportion of the identical code in the copyrighted software is a very important indicator for determining whether the allegedly infringing software constitutes software copyright infringement.
However, in the judgment of the second instance, the SPC rejected the above-mentioned views of the court of first instance, holding that "in principle, any relatively independent software content that can reflect the original expression of the copyright owner is within the scope of software copyright protection. Under normal circumstances, the amount or proportion of reproduced software does not affect the determination of the nature of infringement, but because it directly affects the consequences of damage and reflects the degree of subjective fault of the infringer, different amount or proportions of infringing reproduction will affect the determination of infringement liability."
The SPC decision illustrates three aspects related to the identicalness or substantial similarity determination:
1) Originality
In general, where there is originality, there is copyright and there should be copyright protection. The originality of a work can be shown in the work as a whole, such as a novel, a song and a painting, all of which are copyrighted as a whole; however, the originality of a work can also be reflected in the parts that make up the work as a whole, and as long as the expression of this part can reflect the author's thoughts and emotions, convey certain information and have originality, the expression of this part will generate copyright on account of originality.
In this case, after the publicly knowledge source code and part of the open source code involving the web system framework BOOTSTRAP were excluded from Company B's software, there are codes identical with Company A’s software and such identical code files were not due to the limited number of expressions available; hence the originality of the corresponding code of Company A's software was established,.
2) Independence
In the context of Copyright Law, when the "independent existence" of a work is mentioned, it usually means that a part or component of the work that can be identified and used as a whole, and has its own unique creativity and form of expression. For computer software, the meaning of "independent existence" can be understood from the following aspects: i) functional independence, i.e., the function implemented by the code file is independent, and it is capable of completing a specific task or solving a specific problem without relying on other parts of the software; ii) expression independence, i.e., the code file is independent in expression, and the code structure, logic and style it contains can be identified separately and is different from other code files; iii) independent use, i.e. the code file can be run alone or called by other programs, even if it is part of a larger software system; iv) legal independence, i.e., even if the code file is part of a larger software work, it can be used as a separate object to enforce rights under the Copyright Law, such as the right of reproduction, the right of distribution, to mention just a few.
For example, for a large graphics editing software, there is a module in it specially used for fuzzy processing of images. If the code of this fuzzing module is written independently, it implements unique image processing algorithms, and can be integrated into other software as a separate component, then the code of this module can be considered a "stand-alone" work. It is important to note that even if a code file can "stand on its own", and if it is part of a larger software work, then it is usually still protected by the copyright in the entire software work. Use of this code file alone would constitute infringement without the permission of the copyright owner of the entire software work. In the context of computer software copyright, "stand-alone use" usually refers to the fact that a certain component or code file of the software operates or implements a specific function without relying on other parts.
In this case, the SPC held that since "every single code file of the 9 code files determined substantially identical in the copyrighted software implements relatively independent function in the entire software and is named according to the relevant function it implements", it can be determined that the nine code files in the aforesaid software can implement relatively independent functions in the entire software, and can exist independently and be used independently.
Therefore, based on the above SPC view, it could be concluded that if a certain component or code file of a software can be identified and used as a whole, has independent functions, and has its own unique creativity and expression, they are protected separately even if these code files are part of a larger software system.
3) Partial Reproduction and Software Copyright Infringement
The development of technology has made it easier to copy or reproduce software, and because the act of complete software reproduction is easier to track and detect, infringers often choose the more hidden method of partial reproduction to avoid legal risks. On the other hand, with the constant progress of software technology and the increasingly efficient and intelligent development methods, software developers usually reuse and use a large number of software code or code packages and standard routines that have been completed and tested by themselves or others, and often innovate and improve on the basis of existing software to meet specific market needs or add new functions, so they may copy part of the code and modify it. At the same time, the popularity of open source software allows developers to freely use and modify the source code, and quickly benefit from existing successful software without having to invest a lot of resources in the entire process of development and testing. Correspondingly, infringers will also use these programming tools and techniques to deliberately avoid full reproduction, seeking to avoid legal liability for direct reproduction. By modifying parts of a code, they could try to create the illusion of "incomplete reproduction" in order to evade or mitigate legal liability. The infringement of partial reproduction would involve the core algorithm or key functions of the software, and is not easy to detect, but will impact the commercial value and market competitiveness of the original software.
Therefore, in the judicial practice, if the infringement is simply and mechanically defined according to the proportion of the copied reproduced part, it would not be possible to pursue the legal liability of the infringer for many software infringement cases today.
In this case, the SPC has made it clear that "under normal circumstances, the amount or proportion of copied or reproduced software does not affect the determination of the nature of infringement", that is, so long as the infringer copies or reproduces the original and fixed program files that can implement certain functions into its own software products, it constitutes software infringement, and the amount of copied software or the proportion of the entire software product shall not affect the determination of the nature.
3. Partial Reproduction and Damages Scope
In this case, although the SPC concluded that "under normal circumstances, the amount or proportion of reproduced software does not affect the determination of the nature of infringement", when considering the harm or damage to the infringee, it held that "because it directly affects the consequences of the damage and reflects the degree of subjective fault of the infringer, different amount or proportions of infringing reproduction will affect the determination of infringement liability", that is, although different amount or proportions of infringing reproduction do not affect the determination of the nature of infringement, it would impact the consequences of the damage or reflect the degree of subjective fault of the infringer, thus affecting the determination of the size of the damages.
In this case, when it was difficult for the evidence in the case to prove the actual losses suffered by Company A as a result of the infringement and the benefits obtained by Company B as a result of the infringement, the SPC held that "Company A is an e-commerce platform with a certain scale and market prospects, and the copyrighted software is the commodity operation management system of the e-commerce platform, which is the key to the good operation of the e-commerce platform, so the value of the copyrighted software is relatively high", but considering that the proportion of unauthorized reproduction of the copyrighted software is low, that is, 1.085%, it is necessary to "comprehensively consider the type, value and nature of the software infringement," infringement consequences and other factors", it was determined that the Hangzhou-based company should be held liable for the economic damages of RMB 200,000 yuan, which keeps a better balance between the harm or damage done and the damages and relief awarded.
VI. Revelations
The SPC decision in this case corrected the erroneous view of the court of first instance on the issue of "partial reproduction" in the computer software copyright infringement dispute, and clarified that the amount and proportion of reproduction acts do not automatically affect the nature of the infringement, but only impact the determination of infringement liability. This case has a good reference value for clarifying the application of law in the computer software copyright infringement determination, and provides clear guidance for the protection of computer software copyright, highlighting that even a part of the software should be protected by law as long as it is original and relatively independent. This means that even if it is a partial reproduction, the infringer will be held liable for the legal consequences as long as the infringement could be proven. This is an important protection for software developers, ensuring that the intellectual achievements of software developers should not be illegally reproduced and used, thus making it possible to more effectively protect the copyright of software developers and the market advantages and commercial interests their software brings.
Author’s Profile
Mr. Richard Yong WANG
Mr. Wang received his bachelor's degree in 1991 from the computer science department of East China Normal University, his master's degree from the Institute of Computing Technology of the Chinese Academy of Sciences in 1994, and also the degree of master of laws from Renmin University of China in 2005. Mr. Wang joined Panawell in 2007. In the past years, Mr. Wang has handled thousands of patent applications for both domestic and foreign clients, and he has extensive experiences in patent application drafting, prosecution, reexamination, invalidation, administrative litigation, infringement litigation, software registration, and layout designs of integrated circuit.