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TTLF Working Papers Stanford – Vienna Transatlantic Technology Law Forum A joint initiative of Stanford Law School and the University of Vienna School of Law TTLF Working Papers No. 1 A Status Report from the Software Decompilation Battle: A Source of Sores for Software Copyright Owners in the United States and the European Union? Petra Heindl 2008 TTLF Working Papers About the TTLF Working Papers TTLF’s Working Paper Series presents original research on technology, and business-related law and policy issues of the European Union and the US. The objective of TTLF’s Working Paper Series is to share “work in progress”. The authors of the papers are solely responsible for the content of their contributions. The TTLF Working Papers can be found at http://ttlf.stanford.edu. Please also visit this website to learn more about TTLF’s mission and activities. If you should have any questions regarding the TTLF’s Working Paper Series, please contact Vienna Law Professor Siegfried Fina, Stanford Law Professor Mark Lemley or Stanford LST Executive Director Roland Vogl at the Transatlantic Technology Law Forum http://ttlf.stanford.edu Stanford Law School University of Vienna School of Law Crown Quadrangle Department of Business Law 559 Nathan Abbott Way Schottenbastei 10-16 Stanford, CA 94305-8610 1010 Vienna, Austria Sponsors This project was co-sponsored by the Stanford-Vienna Transatlantic Technology Law Forum (Stanford Law School/University of Vienna School of Law), the Stanford Center for E-Commerce, and the Forum on Contemporary Europe at the Freeman Spogli Institute for International Studies at Stanford University. About the Author Petra Heindl received her Mag.iur. [JD] from the University of Vienna School of Law in Austria. After graduating from the Vienna Law School, she completed an LL.M. in European Union law at the Danube University Krems in Austria. In addition, she earned an LL.M. in U.S. Law from Santa Clara University School of Law. Petra Heindl is a Fellow of the Stanford-Vienna Transatlantic Technology Law Forum as well as a PhD candidate of the Vienna Technology Law Program at the University of Vienna School of Law, Austria. Her research work is also connected with the Forum on Contemporary Europe at Stanford University’s Freeman Spogli Institute for International Studies. She works as an associate with Wolf Theiss Attorneys at Law in Vienna, Austria. Her research focuses on European and international business and technology law. General Note about the Content The opinions expressed in this paper are those of the author and not necessarily those of the Transatlantic Technology Law Forum or any of its partner institutions, or the sponsors of this research project Suggested Citation This TTLF Working Paper should be cited as: Petra Heindl, A Status Report from the Software Decompilation Battle: A Source of Sores for Software Copyright Owners in the United States and the European Union?, TTLF Working Paper No. 1, http://www.law.stanford.edu/program/ centers/ttlf/papers/heindl_wp1.pdf. Copyright © 2008 Petra Heindl Abstract For traditional media, such as novels, copyright represents a “bargain” between the individual author and the general public: the author has an exclusive right to make and sell copies, but anyone can look at the novel, learn from its ideas, and use those ideas as a stimulus for the creation and a reward for the publication of new works. However, computer code by its unique nature, to wit, its invisibility, its not readily accessibility, makes it a quite unconventional subject matter for enjoying copyright protection all around the world. Thus, for software, which is generally available only as object code, the “bargain” is one-sided: the author gets a monopoly, but the public does not have access to even the uncopyrightable ideas contained in the code. Unless an explicit exception recognizes otherwise, copying of source code would violate the copyright holder's exclusive rights, even if the person who decompiled the code only used it as an interim step in gaining access to the program’s functionality or developing a new, independent computer program. Given the vast profitability of computer software reverse engineering in general, and decompilation in particular, has evolved to a battle over the right of competitors to reverse engineer, including the necessity of intermediate copies of an original computer software. In the wake of establishing an identity in the global computing world, especially to be able to form a counterpart to the U.S. dominance in the market, the European Communities adopted the 1991 Directive on the Legal Protection of Computer Programs. With its decompilation exception the Directive manifests Europe’s position in the overall reverse engineering battle, as one towards “open systems.” Yet the U.S. Copyright Act of 1976 does not contain any express provision on legitimizing intermediate copying in the course of software decompilation. Consequently, the U.S. legislatures left it up to the judiciary to define the policy on the subject. More recent case law, as well as the Digital Millennium Copyright Act indicates a shift in U.S. copyright law toward a “closed” proprietary model of software development. In the face of EC case law, such as Magill, IMS Health and Microsoft, there is a perception that the European Commission considers the protection afforded by national copyright laws to go beyond the legitimate reward for the software author’s creative and financial efforts. It is in cases involving intellectual property rights where there is the greatest danger of misuse of an essential facility. While U.S. software providers may invoke the copyright misuse defense, European case law – devoid of a copyright misuse doctrine or alike – refers to the essential facility doctrine for software providers to apply in cases where national copyright laws provide for near-monopoly protection up to an anti-competitive extent. Under European law, it is competition law that may oblige a dominant owner of the essential facility, including computer code, to cooperate with its competitors on competition grounds. In so doing, courts have relied on basic principles of antitrust economics of the impact of refusal to deal. A similar balancing test, which is yet neither undisputed nor uniformly applied by U.S. judges, has been established under U.S. case law when referring to the doctrine of copyright misuse. To date, the misuse defense has not been codified in the Copyright Act; neither has the U.S. Supreme Court yet clarified the existence and scope of copyright misuse. This reluctance indicates another concession to enhanced protection of software copyright owners in opposition to reverse engineering, and thereby continues to pursue a “closed source code” model. By responding to the refusal of access to uncopyrightable interface information contained in copyrighted computer software with a compulsory licensing order the European Court of First Instance in the Microsoft case has recently given further direction to an “open software” model in Europe. With the background of copyright policy considerations and the current legal treatment of software decompilation in both the EC and the United States, this research paper will not only re-consider Europe’s position recently expressed in the Microsoft case but also point out possible ramifications of the compulsory licensing order imposed on Microsoft regarding its Window’s interface information for the legal status of decompiling computer software in Europe as well as in the United States. To My Mom and Dad REFERENCES I. Books Abrams, Howard B., The Law of Copyright, Egan, MN: Thomson/West, 2002. Albors-Llorens, Albertina. EC Competition Law and Policy, Cullompton, Portland: Willan Publishing, 2002. Anderman, Steven D., & Kallaugher, John. Technology Transfer and the New EU Competition Rules: Intellectual Property Licensing after Modernisation, Oxford: University Press, 2006. Bainbridge, David I. Software Copyright Law, London: Pitman Publishing (1992). Bandey, Brian. International Copyright in Computer Program Technology, Birmingham: CLT Professional Publishing, 1996. Bishop, Simon, & Walker, Mike. The Economics of EC Competition Law: Concepts, Application and Measurement, London: Sweet & Maxwell Ltd., 2002 (2nd ed.). Broder, Douglas F. A Guide to US Antitrust Law, London: Sweet & Maxwell, 2005. Chisum, Donald S., Chisum on Patents: A Treatise on the Law of Patentability, Validity and Infringement, New York, NY: M. Bender, 1978 –. Cotter, Thomas F. “Intellectual Property and the Essential Facilities Doctrine” in The Economics of Intellectual Property, Towse, Ruth, & Holzhauer, Rudi (eds.), Celtenham, UK; Northampton, USA: Edward Elgar Publishing, 2002 (Volume IV). Czarnota, Bridget, & Hart, Robert J. Legal Protection of Computer Programs in Europe—A Guide to the EC Directive, London, Dublin, Edinburgh, Munich: Butterworths, 1991. Drexl, Josef. What is protected in a Computer Program?: Copyright Protection in the United States and Europe, Weinheim, New York: VCH, 1994. Gellhorn, Ernest, & Kovacic, William E., & Calkins, Stephen, Antitrust Law and Economics in a Nutshell, St. Paul, MN: Thomson/West, 2004 (5th ed.). Goldstein, Paul. Goldstein on Copyright, New York, NY: Aspen Publishers, 2007 (3rd ed.). I Haberstumpf, Helmut. “Der urheberrechtliche Schutz von Computerprogrammen“ in Rechtsschutz und Verwertung von Computerprogrammen, Lehmann, Michael (ed.), Köln: Verlag Dr. Otto Schmidt KG, 1993 (2nd ed.), at 69 et seq. Hildebrand, Doris. The Role of Economic Analysis in the
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