The Italian Supreme Court provides guidance on the conditions and limits of software protection under the Italian Copyright Laws, no. 633/1941 | #itsecurity | #infosec


On 15 July 2021, the Italian Supreme Court issued an interesting decision (no. 20250/2021) concerning software, siding with the company HP Enterprise Services Italia S.r.l. (“HP ESI”) in a dispute initiated by a company based in Rome, which had accused HP ESI of software infringement.

Background

This decision concludes legal proceedings that had been pending for several years, concerning an electronic scrutiny procedure for voting practices and the related software application that was developed by Ales S.r.l. (“Ales”), a company operating in the IT sector, and filed with the S.I.A.E. in 2001. Specifically, this product made it possible to identify a voter, certify their right to vote, manage the counting of the ballot papers independently, process the data and then transmit the results electronically.  

On the occasion of the European elections of 2004, Ales entered into a license agreement with Electronic Data System Italia S.p.A., today part of HP group, having as its object 1250 licenses for the use of the software “Seggio Elettorale Elettronico e-voto”. The agreement provided, inter alia, a prohibition on the exploitation or imitation of the software, except for specific agreed-upon permissions, including those provided by article 3.2, a clause that allowed HP ESI to make changes to the software under certain circumstances. HP ESI then proceeded to introduce changes to the software, and Ales objected.

In the first instance proceedings, Ales sought, inter alia, reasonable compensation for the alleged damages suffered as a result of HP ESI’s conduct, namely for having unlawfully appropriated the procedure and then assigning, to the public purchaser, the rights to use the software for an unlimited number of licenses and for an indefinite period of time. In support of its arguments, Ales also claimed a violation of Article 64-quater of the Italian Copyright Law, No. 633/1941 (“ICL”), which states that the licensee may use the information obtained by decompiling the software only to achieve interoperability with other programs of an original software created independently, whereas, in this case, HP ESI had merely created a reworking of the original structure created by Ales.

In turn, HP ESI pointed out, among other things, that the software it had developed was completely different from the one created by Ales and that, according to art. 3.2 of the agreement, HP ESI was allowed to make changes to the program.

During this lengthy case, HP ESI was successful in the first two instances of the proceedings. In particular, the decisions of the Court of First Instance and the Court of Appeal of Rome held that HP’s software did not infringe Ales’ software, due to the differences between the programs in question in terms of their formal expression, namely the source codes.

Ales then appealed to the Supreme Court, claiming, inter alia, a violation and/or misapplication of (i) art. 64-quater of the ICL, as the decision failed to examine the factual circumstances relating to the violation of this provision, and the fact that the licensee is prohibited from using the information obtained through decompilation, as well as (ii) art. 2598 of the Civil Code relating to acts of unfair competition.

The ruling of the Italian Supreme Court

The Supreme Court upheld the decision on the merits. In particular, the Supreme Court stated that in the case at issue the software developed by HP ESI does not represent the “core of the protected work that makes the reproductive activity of others punishable, indeed lacking the expressive identity between the two compared programs, because of which it can be considered that the second one is a cleverly disguised reproduction (Cass, I, 27/1/2005, no. 20925) of the previous one and not rather a way of interpreting the same electronic subject in an original manner”.

In addition, in the Court’s view, since the protection provided by art. 64-quater of the ICL can be invoked only if the reproduction of the software by the licensee results in the creation of a product that is “similar in its expressive form”, no infringement occurred in the present case.

Therefore, according to the Supreme Court’s July 15 decision, the Ales and HP ESI software, although pursuing the same purposes, adopt different source codes, and, thus, there is no infringement.

With regard to the alleged anticompetitive practices, the Supreme Court, though deeming the plea to be on the borderline of admissibility, clarified that slavish imitation may occur with the mere reproduction of external forms that individualize the competing product, but not those made necessary by the functional characteristics of the product.

In the light of the above, the Court rejected Ales’ appeal.

Conclusions

Overall, this decision highlights some important principles on copyright protection for software, and clarifies how differences in software architecture and in the programming languages are relevant under copyright law.

In particular, starting from the fact that, under Art. 2(8) of the ICL, the ideas and principles behind a computer program are not protected, the procedure for the use of a software program – in the present case, by way of example, the identification of the voter and the acquisition of the vote by scanning the bar code – does not constitute an original work likely to be protected.

In other words, the purpose of a program, as well as the set of its functionalities and interfaces, does not enjoy the protection of copyright law, which, by contrast, protects the sequence of indications that the operator gives to the machine in order to allow the functioning of the program, namely the source code. In this sense, the creation of a software characterized by a new and original source code is to be considered lawful, even when it has similar or even identical functionalities to those of a competing software.

Finally, the diversity of two or more computer programs, under the profiles above, excludes the applicability of art. 64-quater of the ICL, which refers only to cases in which licensed software is modified.

 

 

 



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