COMPUTER SOFTWARE COMPATIBILITY ENCOURAGED BY POWERFLEX'S VICTORY IN THE HIGH COURT OF AUSTRALIA
On September 30, 1999 the High Court of Australia in a unanimous decision
(Gleeson CJ, Mc Hugh, Gummow , and Hayne JJ and with a separate judgment by
Gaudron J ) [1999] HCA 49 rejected the appeal of Data Access Corporation against the decision
made by the Full Court of the Federal Court of Australia on June 4, 1997 (Powerflex Services Pty Ltd v Data Access Corporation (no2) [1997] 75 FCR 108).
The Powerflex decision in the High Court of Australia is likely to be regarded as
the most important computer software case that the High Court has dealt with to
date.
The High Court accepted the reasoning of the lower Appeal Court and found that
the reserved command words of the Dataflex language were not in isolation or in
collection computer programs within the definition of section 10 of the Australian Copyright Act 1968. The High Court also rejected the appeal by Data Access
alleging that macros were also a computer program which had been infringed.
The High Court was required to determine the meaning of the definition of
computer program contained in the Copyright Act. The trial judge Justice Jenkinson had determined that each of the reserved words of the Dataflex language was itself a computer program and therefore protected by the Copyright Act (Data Access Corporation v Powerflex Services Pty Ltd [1996] 63 FCR 336). The Full Court
reversed this decision and determined that each of the reserved words was nothing
more than a cipher to the underlying set of instructions which ultimately would
cause the computer to execute particular functions.
Thus the Full Court of the Federal Court of Australia drew attention to the
governing principle of Copyright Law that protection is given not for ideas but
only for the form of expression and applied these principles to the definition of a
computer program contained in the Copyright Act.
The High Court of Australia indicated that it was of extreme importance to identify
the relevant "set of instructions" which might attract protection under the
provision of the Copyright Act.
The High Court stated at paragraph 54 "It is the particular selection ordering combination
and arrangement of instructions within a computer program which provides its expression. A
computer program in a particular language may be relatively inefficient because it uses many
instructions to achieve the function that a single instruction could achieve... It is the skill of
the programmer in a particular language which determines the expression of the program in that
language. The High Court determined that in this instance each reserved word of the Dataflex
language comprised but a single instruction in that language and that therefore each word alone
cannot be a set of instructions in that language and therefore cannot be a computer program
expressed in the Dataflex language."
The High Court also rejected the argument that the collection of the words
amounted to a set of instructions because the source code underlying each of the
corresponding commands in Dataflex and PFX Plus was different and on the High
Court's analysis could not have been an infringement.
The High Court reviewed the earlier leading cases of Autodesk No. 1 (Autodesk Inc v Dyason (no1) [1992] 173 CLR 333) and
Autodesk No. 2 (Autodesk Inc v Dyason (no2) [1993] 176 CLR 300).
The High Court criticised the "but for" essentiality test which was adopted by the
majority in Autodesk No. 2 and preferred the dissenting view of the former Chief
Justice Mason, who in Autodesk No. 2 preferred to applying a test of substantiality
determined by quality rather than quantity in determining whether there had been
an infringement of a substantial part of a literary work, in that case a computer
program.
The present High Court (other than Justice Gaudron) determined that the view
taken by the majority in Autodesk No. 2 was wrong and that the present Court
would have decided Autodesk No. 2 differently stating at paragraph 86: "That being
so a person who does no more than reproduce those parts of a program which are "data" or
"related information" and which are irrelevant to its structure, choice of commands and
combination and sequencing of commands will be unlikely to have reproduced a substantial part of
the computer program. We say "unlikely" and not "impossible because it is conceivable that the
data considered alone could be sufficiently original to be a substantial part of the computer
program."
The effect of the High Court's view is to prevent the principles in Autodesk being
applied in later cases. Accordingly the effect of the Autodesk cases is quarantined
and should not be regarded in the future as relevant law.
A cross-appeal by Powerflex in relation to the Huffman Compression Table which
had been determined by the lower Court and the Full Federal Court of Australia to
be an infringement of the copyright of Data Access was rejected.
In rejecting the cross-appeal the High Court determined that the Huffman Table
was protected as a separate literary work under the provisions of the Copyright Act
and accordingly it was not necessary to establish that the Huffman Table was in
itself a substantial part of a computer program. However, the High Court seemed
uneasy about this finding and indicated that such a finding might interfere with
compatibility of computer programs and that this should be addressed by
Parliament. The majority stated at paragraph 125: "The finding that the respondents
infringed the appellant's copyright in the Huffman Table embedded in the Dataflex program may
well have considerable act or consequences. Not only may the finding affect the relations between
the parties to these proceedings, it may also have wider ramifications for any one who seeks to
produce a computer program that is compatible with a program produced by others. These are
however matters that can be resolved only by the legislature reconsidering and if it thinks necessary
or desirable re-writing the whole of the provision that deal with copyright in computer programs."
There have been significant amendments to the Copyright Act introduced by the
Copyright (Digital Agenda) Act which received Royal assent also on September 30,
1999.
The law relating to copyright applied to computer programs is under constant
review by the Copyright Law Review Committee.
It is believed that the decision of the High Court of Australia in the Powerflex case
has been greatly welcomed by Australian software industry and software developers
as it encourages creativity in the design of compatible software and encourages
software systems which are inter-operable.
October 8th, 1999.
The above is a personal commentary on the main issues of this case. I would be pleased to provide more detailed information to anyone wishing to research this area of the law.
JOHN VINCENT SINISGALLI
Accredited Commercial Litigation Specialist
A partner of Trumble Szanto Lawyers, who acted for
Powerflex Corporation in successfully defending this
appeal in the High Court of Australia.
