Case T-19/07

Systran SA and

Systran Luxembourg SA

v

European Commission

(Non-contractual liability – Invitation to tender for the maintenance and linguistic enhancement of the Commission’s machine translation service – Source codes of a marketed computer program – Infringement of copyright – Unauthorised disclosure of know-how – Actions for damages – Non-contractual dispute – Admissibility – Real and certain damage – Causal link – Lump-sum evaluation of the damage)

Summary of the Judgment

1. Actions for damages – Subject-matter – Claim for damages against the Union on the basis of Article 288 EC, second paragraph – Exclusive jurisdiction of the Union judicature – Assessment of whether liability incurred is contractual or non-contractual – Criteria

(Arts 235 EC, 238 EC, 240 EC and 288, second para., EC; Rules of Procedure of the General Court, Art. 113)

2. Actions for damages – Subject-matter – Compensation for damage resulting from an alleged infringement on the part of the Commission of its duty to protect the confidentiality of know-how – Non-contractual basis – Jurisdiction of the Union judicature

(Arts 235 EC, 287 EC and 288, second para., EC; Charter of Fundamental Rights, Art. 41)

3. Procedure – Application initiating proceedings – Formal requirements

(Statute of the Court of Justice, Arts 21, first para., and 53, first para.; Rules of Procedure of the General Court, Art. 44(1)(c))

4. Actions for damages – Jurisdiction of the Union judicature – Jurisdiction to adjudicate on a claim that the Commission has infringed copyright – Conditions

(Arts 235 EC and 288, second para., EC)

5. Actions for damages – Jurisdiction of the Union judicature – Order that the Union make good any damage in accordance with the general principles common to the law of the Member States in the case of non-contractual liability

(Art. 235 EC and 288, second para., EC)

6. Non-contractual liability – Conditions – Sufficiently serious breach of a rule of law intended to confer rights on individuals – Actual and certain damage – Causal link

(Art. 288, second para., EC)

7. Approximation of laws – Copyright and related rights – Directive 91/250 – Legal protection of computer programs – Restricted acts – Exceptions – Scope

(Council Directive 91/250, Arts 4 and 5)

8. Non-contractual liability – Conditions – Sufficiently serious breach of a rule of law intended to confer rights on individuals

(Art. 288, second para., EC)

1. As regards contractual liability, it is only in the presence of an arbitration clause within the meaning of Article 238 EC that the Union judicature has jurisdiction. In the absence of such a clause, the General Court cannot, on the basis of Article 235 EC, adjudicate on the basis of what is in reality an action for contractual damages. To do so would be to extend its jurisdiction beyond the limits placed by Article 240 EC on the disputes of which it may take cognisance, since that article specifically gives national courts general jurisdiction over disputes to which the Union is a party. The jurisdiction of the Union judicature in contractual matters derogates from the ordinary rules of law and must therefore be construed narrowly, so that the General Court may hear and determine only claims arising from the contract or that are directly connected with the obligations arising from that contract.

On the other hand, as regards non-contractual liability, the Union judicature has jurisdiction without there being any need for the parties to the dispute to express their consent. In order to determine its jurisdiction under Article 235 EC, the General Court must examine, by reference to the various relevant matters in the file, whether an applicant’s claim for compensation is objectively and globally based on obligations of a contractual or non-contractual nature on the basis of which the contractual or non-contractual nature of the dispute can be characterised. Those matters may be inferred, in particular, from an examination of the parties’ claims, of the fact giving rise to the damage in respect of which compensation is claimed and of the content of the contractual or non-contractual provisions relied on in order to settle the point at issue. Where it acts with respect to non-contractual liability, the General Court is therefore perfectly entitled to examine the content of a contract, as it does with respect to any document on which a party relies in support of its arguments, in order to ascertain whether the document in question is of such a kind as to call in question the jurisdiction expressly conferred on it by Article 235 EC. That examination forms part of the assessment of the facts relied on in order to establish the General Court’s jurisdiction, the absence of which is an absolute bar to proceeding within the meaning of Article 113 of the Rules of Procedure.

(see paras 58-62)

2. The principle that undertakings are entitled to protection of their business secrets, which finds expression in Article 287 EC, is a general principle of Union law. Article 41 of the Charter of Fundamental Rights also refers to the need for the administration to respect the legitimate interests of confidentiality and of professional and business secrecy.

Business secrets are information of which not only disclosure to the public but also mere transmission to a person other than the one that provided the information may seriously harm the latter’s interests. In order that technical information be of the kind to fall within the scope of Article 287 EC, it is necessary, first of all, that it be known only to a limited number of persons. It must then be information whose disclosure is liable to cause serious harm to the person who has provided it or to third parties. Last, the interests liable to be harmed by disclosure of the information must be objectively worthy of protection.

Where it is a question, in a particular case, of assessing the allegedly wrongful and harmful nature of the Commission’s disclosure, without the express authorisation of the owner, to a third party of information protected by copyright or know-how in the light of the general principles common to the laws of the Member States applicable in such matters and not of contractual provisions set out in agreements entered into in the past on questions which do not relate to the applicant’s copyright and know-how, the dispute is of a non-contractual nature.

(see paras 79-80, 103)

3. All applications must indicate the subject‑matter of the dispute and contain a summary of the pleas in law on which the application is based. That statement must be sufficiently clear and precise to enable the defendant to prepare its defence and the Union judicature to exercise its power of review. In order to guarantee legal certainty and the sound administration of justice, it is necessary that the basic legal and factual particulars relied on be indicated, at least in summary form, coherently and intelligibly in the application itself. In order to satisfy those requirements, an application seeking compensation for damage caused by a Union institution must state the evidence from which the conduct alleged against it can be identified.

(see paras 107-108)

4. Where, in the context of an action alleging non-contractual liability, the concept of infringement of copyright is relied on in conjunction with the concept of protection of the confidentiality of know-how for the sole purpose of characterising the Commission’s conduct as unlawful, the assessment of the unlawful nature of the conduct in question is carried out by reference to the general principles common to the laws of the Member States and does not require a previous decision of a competent national authority.

Consequently, in view of the jurisdiction conferred on the Union judicature by Article 235 EC and the second paragraph of Article 288 EC in matters of non-contractual liability, and in the absence of any national remedy that could lead to the Commission making reparation for the damage allegedly suffered by an applicant as a result of the alleged infringement, there is nothing to preclude the concept of infringement used by the applicant being taken into consideration for the purpose of characterising the Commission’s conduct as unlawful in the context of a claim for damages.

The concept of infringement used by an applicant in the context of an action for damages is to be interpreted solely in the light of the general principles common to the laws of the Member States, which, so far as computer programs are concerned, are reproduced or laid down in a number of harmonisation directives. The General Court thus has jurisdiction to make a finding of infringement in the sense that might be given to that word by a competent national authority of a Member State in application of the law of that State in an action for damages.

(see paras 115-117)

5. It follows from the second paragraph of Article 288 EC and from Article 235 EC that the Union judicature has the power to impose on the Union any form of reparation that accords with the general principles of non-contractual liability common to the laws of the Member States, including, if it accords with those principles, compensation in kind, if necessary in the form of an injunction to do or not to do something. Consequently, the Union cannot, as a matter of principle, be excluded from a corresponding procedural measure on the part of the Courts of the Union, as the latter have exclusive jurisdiction to hear actions seeking compensation for damage attributable to the Union.

In a case in which the Commission is alleged to have committed an infringement of copyright, for the damage caused to be fully compensated, the right of the owner of the copyright must be re-established intact, which, irrespective of any damages to be assessed, requires at the very least the immediate cessation of the infringement of his right. The reparation in full of the damage in such cases may also take the form of the confiscation or destruction of the result of an infringement, or of publication of the General Court’s decision at the Commission’s expense.

(see paras 120-123)

6. For the Union to incur non-contractual liability within the meaning of the second paragraph of Article 288 EC, a series of conditions must be met, namely the conduct of which the institutions are accused must have been unlawful, the damage must be real and a causal connection must exist between that conduct and the damage in question.

The unlawful conduct alleged against a Union institution must consist of a sufficiently serious breach of a rule of law intended to confer rights on individuals. Where the institution criticised has only considerably reduced, or even no, discretion, the mere infringement of Union law may be sufficient to establish the existence of a sufficiently serious breach of a rule of law.

The damage for which compensation is sought must be actual and certain and there must be a sufficiently direct causal link between the conduct of the institution and the damage.

(see paras 126-127, 268)

7. The legal exception provided for in Article 5 of Directive 91/250, on the legal protection of computer programs, to acts coming with the exclusive right of the author of the program and defined in Article 4 of that directive is intended to apply only to works carried out by the legitimate acquirer of a computer program and not to works entrusted to a third party by that acquirer. That exception is also limited to the acts necessary to enable the legitimate acquirer to use the computer program in a manner consistent with its purpose, including to correct errors.

(see para. 225)

8. There is a sufficiently serious infringement of an undertaking’s copyright and know-how in software – an infringement which is such as to give rise to non-contractual liability on the part of the Union – where the Commission grants itself the right to carry out works that necessarily entail the modification of the elements relating to that software, such as, for example, the source codes, without having first obtained the undertaking’s consent.

(see paras 250, 261)

JUDGMENT OF THE GENERAL COURT (Third Chamber)

16 December 2010 ( )

(Non-contractual liability – Invitation to tender for the maintenance and linguistic enhancement of the Commission’s machine translation service – Source codes of a marketed computer program – Infringement of copyright – Unauthorised disclosure of know-how – Actions for damages – Non-contractual dispute – Admissibility – Real and certain damage – Causal link – Lump-sum evaluation of the damage)

In Case T‑19/07,

Systran SA, established in Paris (France),

Systran Luxembourg SA, established in Luxembourg (Luxembourg),

represented by J.-P. Spitzer and E. De Boissieu, lawyers,

applicants,

v

European Commission, represented initially by E. Montaguti and F. Benyon, and subsequently by E. Traversa and E. Montaguti, acting as Agents, with A. Berenboom and M. Isgour, lawyers,

defendant,

APPLICATION for compensation for the damage allegedly suffered by the applicants owing to illegalities following an invitation to tender by the Commission relating to the maintenance and linguistic enhancement of its machine translation system,

THE GENERAL COURT (Third Chamber),

composed of J. Azizi, President, E. Cremona and S. Frimodt Nielsen (Rapporteur), Judges,

Registrar: T. Weiler, Administrator,

having regard to the written procedure and further to the hearing on 27 October 2009,

gives the following

Judgment

Facts of the case

I – The different versions of the Systran software

1 Four versions of the Systran machine translation software (also known as ‘the Systran system’) must be distinguished:

– the initial version (‘Systran Mainframe’), created in 1968 by Mr Toma and marketed by the Californian company World Translation Center, Inc. (WTC) and other associated companies (together ‘the WTC group’);

– the version initially used by the European Commission (‘EC-Systran Mainframe’), which formed the subject-matter of a series of contracts entered into between 1975 and 1987 by the WTC group and the Commission, a series of contracts between the Commission and service providers and a series of contract between the Systran group (which took over the WTC group) and the Commission;

– the new version (‘Systran Unix’), which was created by the first applicant, Systran SA (‘Systran’), following the acquisition of the WTC group in 1986, to operate in the Unix and Windows environments; this version was developed by the Systran group beginning in 1993;

– the new version used by the Commission (‘EC-Systran Unix’), which formed the subject-matter of a contract entered into in 1997 between the second applicant, Systran Luxembourg SA (‘Systran Luxembourg’), and the Commission.

II – History of the relations between the parties

2 The history of the contractual relations between the parties, the WTC group and its acquirer, the Systran group, on the one hand, and the Commission, on the other, is necessary in order to be able to define the extent of the property and user rights relating to the different versions of the Systran software used by the Commission, namely EC-Systran Mainframe and then EC-Systran Unix. The Commission relies on that history to support its assertion that the present action has a contractual basis, whereas the applicants observe that none of those contracts, on which, moreover, it does not rely, has any impact on the applicants’ intellectual property rights or the action.

A – First period: from Systran Mainframe to EC-Systran Mainframe

3 The parties agree in recognising that the creator of the Systran machine translation software is Mr Toma and that the companies in the WTC group were the sole owners of the Systran Mainframe version of that software.

1. Initial contracts between WTC (and other companies) and the Commission

4 On 22 December 1975 WTC and the Commission signed a contract relating, first, to the installation and development of the English-French SYSTRAN machine translation system and, second, to the initial development of the French-English Systran machine translation system (‘the initial contract).

5 The first paragraph of Article 1 of the initial contract, entitled ‘Subject’, is worded as follows:

‘The Contractor shall undertake, on behalf of the Commission, the further development of its SYSTRAN English-French machine translation system (hereinafter called “the Basic System”) and the initial development of a SYSTRAN French-English machine translation system.’.

6 Article 3 of the initial contract, entitled ‘Remuneration’, states:

‘In consideration of the work provided for by this contract the Commission shall pay to the Contractor the sum of [USD] 161 800 as follows:

…

These payments include compensation for granting the right to use the Basic System throughout the contract period. They cover all expenditure incurred by the Contractor in the performance of the contract, inclusive of cost of labour, computer time, travel and material supplies.’

7 Article 4 of the initial contract, entitled ‘System use after contract completion’, is worded as follows:

‘(a) It is agreed that rights in the system as existing at the date of expiration of the contract (hereinafter called “the Modified System”) and the relevant documentation are granted by the Contractor to the Commission on a limited basis, i.e. exclusively for the Commission’s own needs and for similar needs of Government agencies of the Member States of the Community, and for English-French and French/English translation only, but with no limitation in time. …

(b) Should the Commission, after termination of the present contract, wish to develop further the Modified System by application of another pair of languages of the Community, in house or by a third party, the Commission shall pay the contractor a fixed sum not exceeding [USD] 100 000 for the first such pair and [USD] 80 000 for each other pair, or [USD] 200 000 per combination involving a new language. These amounts cover the right for the Commission to use the further developed Modified System on an exclusive basis for all purposes as it sees fit and with no limitation in time

Alternatively, should the Commission, after termination of the present contract, wish to order further development of the Modified System from the Contractor by application to any other pair of languages, the Commission will pay the Contractor a fixed sum of no more than [USD] 25 000 for the first such pair, and [USD] 20 000 each for any other pair, or [USD] 50 000 for any combination involving a new language,

(c) The Contractor shall have the right to use on his own account and for his own purposes the Modified System as developed under the present contract and contracts for further development by application to other pairs of languages, as specified under 4(b), second paragraph, with the exception of those vocabularies specifically developed for the Commission. Access to these vocabularies will be given to the Contractor on a case-by-case basis, for annual rental not exceeding 20% of the cost price; they will be made available to the Contractor free of charge for demonstration purposes only.’

8 According to Article 5(f) of the initial contract, the contract was to be governed by Luxembourg law and the appropriate Luxembourg courts were to have exclusive jurisdiction in any disputes between the contracting parties.

9 Following the initial contract, between 1976 and 1987 the Commission entered into a large number of contracts with companies in the WTC group in order to improve the Systran system and also to develop new pairs of languages (nine pairs of languages in all).

10 In addition, the Commission entered into a number of contracts with various companies outside the WTC group, which were not parties to the contract, authorising them to use the Systran system for the benefit of the government agencies of the Member States and the Community institutions. In one of those contracts, entitled ‘Technical cooperation framework agreement’, concluded on 18 January 1985 with a French company, Gachot SA, the Commission stated that ‘the Systran system, software and dictionaries, continue[d] to be the property of the Commission’ (Article 4, ‘Rights of use’). Under that framework agreement, the Commission authorised Gachot SA to use ‘its Systran machine translation system for the benefit of bodies in the European public sector’ and, in return, Gachot SA provided the Commission with information on the quality of the translations produced, enabling it to improve the performance of the system (Article 1, ‘Subject’). The cooperation between the Commission and Gachot SA was made without financial support (Article 3, ‘Expenses’).

2. Collaboration contract between the Systran group and the Commission

11 By a series of contracts concluded from September 1985, Gachot SA acquired the companies of the WTC group, which owned the Systran technology and the Systran Mainframe version, and following that acquisition became Systran.

12 By letter of 2 February 1987 from the Director General of the Directorate-General (DG) ‘Telecommunications, information industry and innovation’, the Commission requested Gachot SA to answer a number of questions; the answers were given in a letter of 5 February 1987:

‘Question 1: Can Mr Gachot prove that he (or [Gachot SA] …) is indeed the owner or majority shareholder of the companies WTC and Systran Institut and that he accepts all liabilities incurred towards the Commission by his companies?’

‘Answer: My company did indeed buy all [Mr] Toma’s shares in WTC and Latsec and 76% of the shares of Systran Institut. I am therefore perfectly entitled to speak on behalf of the entire Group and to represent it with the Commission.’

‘Question 2: What will become of those liabilities if Mr Gachot (or [Gachot SA]) ceases to be the owner (or the majority shareholder) of those companies? Does Mr Gachot undertake to ensure compliance with those liabilities by any purchasers?’

‘Answer: No assignment is contemplated. On the contrary, our Group has a policy of permanent development in that area. Nor has the Commission any cause for concern in that area, as the contracts are between WTC and the Commission, that is to say, between legal persons, and any change that might come about in the ownership of the shares in those companies cannot affect the contracts entered into.’

‘Question 3: Can Mr Gachot confirm that following the conclusion of the various contracts with WTC and Systran Institut the Commission has non-exclusive operating rights for the European public sector covering [new] language versions of Systran?’

‘Answer: It is clear from the contracts between WTC and the Commission …, that the Commission has non-exclusive user rights for its own needs and also for the needs of Government agencies of the Member States of the Community, for the language versions of Systran II in the [pairs of] languages acquired by it …’

‘Question 8: Does Mr. Gachot still agree to authorise inter-governmental agencies whose territory exceeds that of the Community to use the Systran [software], in return for royalties to be paid to him?’

‘Answer: [Gachot SA] of course envisages that the Systran system will be made available to international bodies whose territory exceeds that of the Community, under various agreements to be concluded between [Gachot SA] and such bodies …’

‘Question 14: Would WTC be prepared to assign to the Commission the operating rights, on the same terms as previously, for a Spanish-English Systran system? Would the price be of the same order as that offered for the German-English system?’

‘Answer: WTC is perfectly prepared to assign to the Commission a non-exclusive user licence for Spanish-English, and possibly also for Italian-English and Portuguese-English. The price and terms will essentially depend on the state of advancement of the systems at the time when the Commission acquires them.’

‘Question 15: Would WTC be prepared to develop new systems including Danish and Greek as target languages and assign them to the Commission with (non‑exclusive) operating rights for the public and private sectors?’

‘Answer: WTC is perfectly prepared to develop any system involving pairs of European languages and also other systems which the Commission might need.’

‘Question 16: Would Mr Gachot be interested in converting the Systran system into C, operating in Unix, which would make it more portable? Would he be prepared to finance all or part of the required investment (which is probably in the region of [ECU 1 million)?’

‘Answer: The conversion of the Systran system into C operating in Unix is a project which we have envisaged. Initially, however, it seemed much more important to focus our efforts on improving translation quality and unifying the different versions of the Systran [system]. While the conversion of the Systran [system] to Unix is very interesting, it depends on the financial means being available …’

13 By fax of 5 March 1987 from an official of DG ‘Telecommunications, information industry and innovation’ to Gachot SA, the Commission described the terms of the ‘Systran agreement’, currently under negotiation, as follows:

‘Rights, objectives and obligations

Within the framework of the Agreement, the rights acquired by both parties are perfectly balanced.

The Systran Group is the owner of the basic software and the Commission’s right to use its nine [pairs of] languages extends only to the Community institutions and the official agencies of the Member States.

On the other hand, the Commission is the owner of the dictionaries which it has updated since 1975.

Each of the parties has invested around ECU 8 million in order to acquire its rights and therefore seeks to ensure that its investment yields a profit.

The Commission is under a moral obligation to ensure that the Community economy benefits from the investment funded by its taxpayers, while the Systran Group wishes the system to be marketed in Europe without delay.

Those two objectives are perfectly compatible and can be reconciled within the framework of the proposed Agreement.

In addition, the Commission and the Systran Group have an interest in making [the] Systran [software] an effective instrument by means of the harmonisation of the software and dictionaries …’

14 On 4 August 1987 the Systran group and the Commission signed an agreement for the joint organisation of the development and improvement of the Systran translation system for the present and future official languages of the Community and also for its implementation (‘the collaboration agreement’).

15 The collaboration agreement stated, in a ‘preamble’:

‘1. The Systran system, designed by WTC, is a machine translation system consisting of a basic software, linguistic and peripheral software and different bilingual dictionaries.

2. On 22 September 1975 the Commission entered into an agreement with WTC for the use of the Systran system by the Commission and the initial development of that system by WTC.

The Commission and WTC subsequently entered into other agreements with a view to the improvement of the existing system and the development of systems for [new pairs] of languages.

Those contracts, concluded between 1976 and 1985, had as their subject-matter the development and improvement of the translation software and the basic dictionaries for the languages concerned.

3. The maintenance and subsequent development of the systems was provided for in another series of agreements between the Commission and service companies. Those contracts were for the purposes of the Commission’s own needs and purposes.

4. Since 1985 the Commission has entered into contracts with various companies under which those companies are authorised to use the Systran system for the benefit of State agencies and the European Community institutions, in return for information which would allow the Commission to improve the performance of the system.

5. The parties therefore declare that the Commission has a licence to use the basic systems and the improvements … made by WTC, limited to use on the territory of the European Communities in the sectors specified in [paragraph] 4 above.

6. The improvements and developments of the Systran system by the Commission and its contractors [referred to in paragraph 3 above], especially the dictionaries, are the exclusive property of the Commission.

7. The parties consider that their interest and the interest of users of Systran is that the system should be constantly improved. They have therefore decided to enter into the present collaboration agreement in order to combine their efforts and thus to continue to improve the system.

With that aim in mind, the parties mutually recognise a right to use the Systran system, capable of evolving by the implementation of the improvements which will be achieved owing to the use of the system in both the private and the public sector.’

16 Article 4 of the collaboration agreement, on ‘[p]roperty rights’, states:

‘The different language versions of Systran and their components continue to belong to the partners to which they belonged on the date of signature.

The companies of the Systran group undertake not to assign their property rights until they have informed the Commission and obtained its consent. The assignee will be required to assume the rights and obligations which those companies have under the present collaboration agreement.’

17 The introduction to Annex I to the collaboration agreement states:

‘Whereas the Commission has always owned the dictionaries and other components which it has developed for various versions of Systran, the property rights in the basic software had been shared between a number of companies and the Commission had entered into agreements and contracts relating to the use of the system and its improvement and development, notably with [WTC] and Systran Institut.

As Gachot SA has been the main shareholder in those companies since the beginning of 1986, the present global agreement on the development and use of Systran has been concluded between all the interested parties …’

18 Article 4 bis of the collaboration agreement, on ‘[i]mprovements and royalties, states:

‘Any development and any improvement of the system resulting from its exploitation by the Systran group shall be immediately communicated to and made available to the Commission.

Any development and any improvement of the system resulting from its exploitation by the Commission shall be immediately communicated to and made available to the Systran group.

Any modification to the system not arising from its exploitation in the strict sense shall be the subject of negotiation between the parties.

For an initial period of two years, each party shall be entitled to use the developments and improvements made by the other party without payment of royalties for doing so.

Following that period, and in the light of the experience acquired, the Commission and the Systran Group shall define the contractual arrangements for their future collaboration.’

19 Article 5 of the collaboration agreement, on ‘[r]ights of use’, states:

‘(a) The Commission shall have the right to use in the public sector on the territory of the Community the common system in its most developed version and to assign licences to use that system to the national and international public bodies established on the territory of the Community as defined in [paragraph] 4 of the preamble.

(b) …

(c) The companies of the Systran [g]roup undertake to allow any private body to use the system on terms consistent with commercial uses.’

20 According to Articles 11 and 12 of the collaboration agreement, the law applicable to the contract was Belgian law and any dispute between the parties concerning the interpretation, performance or non-performance of the contract was subject to arbitration.

21 Between 1988 and 1989 the Commission entered into four agreements with Gachot SA in order to obtain a licence to use the Systran software for the following pairs of languages: German-English, German-French, English-Greek, Spanish-English and Spanish-French.

22 By registered letter of 11 December 1991 the Commission terminated the collaboration agreement in accordance with Article 8 thereof, giving six months’ notice. Under Article 8, it was provided that upon the expiry of a period of three years each party would have the Systran system available in the state which it had reached for each of them. According to the Commission, that termination was justified by the fact that Systran had not complied with its contractual obligations and intended to claim payment for the developments relating to two pairs of languages (French-Italian and French-Spanish) which had been carried out by the Commission and made available to Systran under the collaboration agreement. On the date on which the collaboration agreement ended, the EC-Systran Mainframe version consisted of 16 language versions.

23 The Systran group subsequently created and marketed a new version of the Systran software capable of operating in the Unix and Windows operation systems (Systran Unix), while the Commission developed the EC-Systran Mainframe version, covering the 16 pairs of languages referred to above, together with the Greek-French pair of languages developed with the assistance of an outside contractor, which operated in the Mainframe operating system, which is incompatible with the Unix and Windows operating systems.

B – Second period: from Systran Unix to EC‑Systran Unix

24 In order to enable the EC-Systran Mainframe version to operated in the Unix and Windows environments, four contracts were concluded between Systran Luxembourg and the Commission (‘the migration agreements’).

25 On 19 December 1997, before the first migration agreement was signed, the Commission wrote to Systran seeking its agreement on a number of points, including the following two:

‘1. Use of the name Systran

In presentations and also in documentation or correspondence, we frequently refer to the “Commission’s machine translation system”. Since that system is based on the Systran system, it would be more logical to use the name Systran or … EC Version of Systran on such occasions.

2. Principle of the reciprocal use of the systems of [the company] Systran … and … of the Commission

The Commission will be able to use the products of the company Systran … on its server. The company Systran will, for its part, be able to use the Commission’s system.

The company Systran … and its subsidiaries hereby undertake not to make any pecuniary claim arising under the agreements concluded in the past between “the Systran group” and the Commission.’

26 On 22 December 1997, the date on which the first migration agreement was signed, Systran responded to the Commission’s request in the following terms:

‘1. Use of the name Systran

We confirm that we agree that the Commission may use the trade mark SYSTRAN. Its use must be systematic for any machine translation system deriving from the original Systran system. Consequently, we assign you the right to use the SYSTRAN trade mark for the sole purposes of the dissemination or supply of the Systran machine translation system.

2. Principle of the reciprocal use of the systems of [the company] Systran … and … of the Commission

We confirm that we agree that the Commission may use Systran products in the Unix and/or the Windows environment for its internal purposes.

The company Systran undertakes not to make any financial claim arising from the performance of the agreements concluded in the past between the Systran group and the Commission.’

27 Article 2 of the first migration agreement, between Systran Luxembourg and the Commission, gives the following definition of ‘the Commission’s machine translation system’:

‘The Commission’s machine translation system, or “Systran EC version”, designates a specific version of the Systran machine translation system originally developed by the World Translation Center, La Jolla, USA, which since 1976 has been further developed by the European Commission for internal purposes. The Commission’s machine translation system is distinct from the “Systran Original Version”, which refers to the machine translation system developed and commercialised by Systran S.A. of France and its subsidiaries.’

28 Article 13 of the first migration agreement, entitled ‘Patents, utility certificates (utility models), trade marks, designs and industrial models, industrial and intellectual property rights, provides:

‘1. Any results or patent obtained by the Contractor [namely Systran Luxembourg] in performance of this contract shall be immediately reported to the Commission and shall be the property of the European Communities, which may use them as they see fit, except where industrial or intellectual property rights already exist.

2. The Commission’s machine translation system, together with all its components shall, whether modified or not in the course of the contract, remain the property of the Commission, except where industrial or intellectual property rights already exist.

…

5. At the first sign of proceedings by a third party, in particular of a claim, even after completion of the contract, the party involved shall notify the other party as soon as possible and the two parties shall then act in unison and provide each other with all the information and evidence that they possess or obtain.’

29 According to Articles 15 and 16 of the first migration agreement, the law applicable to the agreement was the law of Luxembourg and any dispute between the Community and Systran Luxembourg relating to the contract came within the jurisdiction of the Luxembourg courts.

30 Furthermore, the first recital to the fourth migration agreement fixed the end of the contract at 15 March 2002 and specified that, on that date, ‘the Contractor undert[ook] to carry out for 15 March 2002 all the tasks forming the subject-matter of the agreement, in particular: up-to-date proof of all rights (trade marks, patents, intellectual and industrial property rights, copyright, etc.) claimed by the Systran group and connected with the Systran machine translation system’. According to the Commission, Systran Luxembourg did not communicate that information to it.

C – Third period: after the invitation to tender of 4 October 2003

31 On 4 October 2003 the Commission launched an invitation to tender for the maintenance and linguistic enhancement of the Commission’s machine translation service. Following that invitation to tender, two of the 10 lots making up the contract were awarded to Gosselies; these were the lots using English or French as the source language.

32 By letter of 31 October 2003 Systran informed the Commission:

‘We have become aware of the invitation to tender issued on 4 October 2003 … Upon reading that document, it is apparent that the work which you propose to undertake is likely to infringe this company’s intellectual property rights. Wishing to maintain the climate of constructive cooperation between this company and the Commission, we should welcome your observations on that point. For the reasons set out above, you will understand that we are unable to respond to that invitation to tender.’

33 In its response of 17 November 2003, the Commission stated:

‘Your letter of 31 October last has come to my attention. It does not appear to us that the work which we propose to undertake is likely to infringe intellectual property rights. I share your desire to main good working relations, in compliance with the Commission’s procedures.’

34 Following that exchange of letters, further correspondence was exchanged between Systran and the Commission and meetings were held by the Commission in order to obtain further details of Systran’s claims.

35 In the context of those contacts, the applicants relied on the following elements:

– the Systran group owns machine translating software called ‘Systran’ (of ‘the Systran system’) and develops the various versions of that software;

– at the end of a succession of agreements between the Systran group and the Commission, Systran adapted its software in order to create a version called ‘EC-Systran’;

– between 1999 and 2002 the Systran group ensured the migration of the EC‑Systran version in order to enable it to run on Unix; in order to do so the Systran group used Systran’s pre-existing rights on the original software and the kernel of the Systran system under Unix, which was completely rewritten by the Systran group in 1993 for its own needs.

36 In response, the Commission stated that those elements, like the technical documentation submitted by the applicants’ IT expert on 6 January 2005, did not constitute ‘proof of the intellectual property rights’ which the Systran claimed in the Systran software. In the absence of ‘probative documents’ in that regard, the Commission contended that the Systran group was not entitled to oppose the work carried out by the company which won the tender in issue.

37 In short, the Systran group was unable to rely on the rights which it held in the Systran software, the Systran Unix of which it markets, in order to prohibit what it considers to be the infringement of that software by the Commission.

Procedure and forms of order sought by the parties

38 By application lodged at the Court Registry on 25 January 2007, the applicants brought the present action.

39 In the context of the measures of organisation of procedure, the parties were requested on 1 December 2008 to answer a series of questions relating to the contractual or non-contractual basis of the action (‘the first series of questions’).

40 The parties answered the first series of questions on 30 January and 2 February 2009.

41 Upon hearing the report of the Judge-Rapporteur, the Court (Third Chamber) decided to open the oral procedure and, in the context of the measures of organisation of procedure, requested the parties to answer a new series of questions relating to the Systran Unix version, user rights, the nature of the interventions requested in respect of the contract in issue and the activities of Gosselies in regard to the design and marketing of translation software (‘the second series of questions’).

42 The parties answered the second series of questions on 14 October 2009.

43 The parties presented oral argument and answered the questions put by the Court at the hearing on 27 October 2009.

44 At that hearing, the parties were invited by the Court to attend an informal conciliation meeting. Following that meeting, the parties stated that they would inform the Court of the terms of their compromise should it be reached before the date of delivery of this judgment. No communication to that effect has reached the Court.

45 In the minutes of the hearing, the principal elements to emerge from the hearing concerning the contractual or non-contractual nature of the action, the unlawful conduct in which the Commission was alleged to have engaged and the evaluation of the damage claimed by the applicants were recalled. Those minutes and the minutes of the informal meeting were notified to the parties.

46 By order of 26 March 2010 the Court (Third Chamber) ordered that the oral procedure be re-opened so that the parties could be requested to answer, in the context of the measures of organisation of procedure, a series of questions on the elements to be taken into consideration in the evaluation of the damage (‘the third series of questions’).

47 The parties answered the third series of questions on 4 and 5 May 2010.

48 In the light of those answers, and in the context of the measures of organisation of procedure, the applicants and the Commission were each requested to comment on the other party’s answers to the third series of questions. The Court also wished to obtain further details of a number of matters raised by the parties in their answers (‘the fourth series of questions’).

49 The parties submitted their comments and answered the fourth series of questions on 11 June 2010. The oral procedure was then closed.

50 The applicants claim that the Court should:

– order the immediate cessation of the acts of infringement and disclosure committed by the Commission;

– order the confiscation of all the support material held by the Commission and by Gosselies on which the IT developments made by Gosselies on the basis of the EC-Systran Unix and Systran Unix versions are reproduced in breach of the applicants’ rights and the delivery of such support material to Systran or, at least, its destruction under supervision;

– order the Commission to pay a minimum sum of EUR 1 170 328 to Systran Luxembourg and of EUR 48 804 000, to be re-evaluated, to Systran;

– order that the Court’s decision be published, at the Commission’s expense, in specialist journals, specialist reviews and on specialist Internet sites to be chosen by Systran;

– in any event, order the Commission to pay the costs.

51 The Commission contends that the Court should:

– declare the action inadmissible;

– failing that, declare the action unfounded;

– order the applicants to pay the costs.

Law

I – Admissibility

A – The head of claim under which the applicants claim that the Court should order the Commission to pay compensation for the alleged damage

52 The Commission puts forward three grounds of inadmissibility with respect to the third head of claim, whereby the applicants claim that the Commission should be ordered to pay compensation for the damage which they allege. First, it maintains that that claim for compensation is inadmissible owing to its contractual basis, in so far as the Court could evaluate the allegations of infringement of copyright and disclosure of know-how only on the basis of the various contracts between the Systran group and the Commission, which contain no arbitration clause designating the Court. Second, the claim for compensation is also inadmissible owing to the lack of clarity of the application, since it gives no details of the legal provisions alleged to have been breached by the Commission and provides few details about the acts of infringement and of disclosure of know-how alleged by the applicants. Third, the Court has no jurisdiction to adjudicate on infringement in the context of an action for compensation, as was decided in the order in Case T‑295/05 Document Security Systems v ECB [2007] ECR II‑2835; ‘the order in Document Security Systems’).

1. The substance of the action

a) Arguments of the parties

53 The Commission contends that the Court cannot evaluate the existence of the infringement and the wrongful nature of the disclosure without taking as its basis the various contracts governing relations between the Systran group and the Commission between 1975 and 2002. Any liability that the Commission might incur on account of the exploitation of the EC-Systran Unix and Systran Unix versions of the Systran software is of a contractual nature. It is thus necessary to refer to the first paragraph of Article 288 EC, which provides that ‘[t]he contractual liability of the Community shall be governed by the law applicable to the contract in question’. In the absence of an arbitration clause within the meaning of Article 238 EC, the Court therefore manifestly lacks jurisdiction.

54 In answer to a question from the Court requesting the Commission to identify the contractual provisions on the basis of which it considers that it was entitled to proceed as it did in the context of the contract at issue without obtaining the applicants’ permission, the Commission claimed, first, that it expresses doubts as to the fact that the applicants are the holders of intellectual property rights in the Systran Unix version of the Systran software and, second, that it ‘categorically disputes that the applicants are the holders of rights in the EC-Systran Unix software’. In particular, the Commission maintains that it has ‘exclusive property rights’ with respect to the ‘source codes of the linguistic parts of the software’ under various contracts entered into between 1975 and 2002 and because of the work of its services in the development of those parts. Under those contracts, the Commission has the right, both before and after the migration, to have the EC‑Systran Unix developed in cooperation with third-party contractors. On this point, the Commission refers to Article 4 of the technical cooperation agreement protocol, paragraph 6 of the preamble to the collaboration contract and Article 13(1) and (2) of the migration agreements entered into with Systran Luxembourg, under which the Commission’s machine translation system would remain its property.

55 The applicants observe, in substance, that the Court has jurisdiction under the second paragraph of Article 288 EC. In the present case, the present action is based on the fact that the Commission made or caused to be had made unauthorised, and therefore non-contractual, modifications to the Systran Unix software or its EC-Systran Unix version, when it had no rights permitting it to modify it, still less to cause it to be modified, without the applicants’ authorisation.

56 In their answer to the questions put by the Court, the applicants emphasise that the Commission was never authorised to supply the material at issue to any third party. In the absence of a contractual provision authorising it to use and disclose the applicants’ software in the way in which it did, the Commission, acting outside the framework determined by the agreements, incurred non-contractual liability, which comes within the exclusive jurisdiction of this Court.

b) Findings of the Court

Observations on contractual and non-contractual jurisdiction

57 The Court’s jurisdiction to hear and determine an action for damages differs according to the contractual or non-contractual nature of the liability involved. With respect to contractual liability, Article 238 EC states that the Court of Justice is to have jurisdiction to give judgment pursuant to any arbitration clause contained in a contract concluded by or on behalf of the Community, whether that contract be governed by public or private law. With respect to non-contractual liability, Article 235 EC provides that the Court of Justice is to have jurisdiction in disputes relating to compensation for damage provided for in the second paragraph of Article 288 EC, which refers to damage caused by the institutions or their servants in the performance of their duties.

58 Thus, as regards contractual liability, it is only in the presence of an arbitration clause within the meaning of Article 238 EC that this Court has jurisdiction. In the absence of such a clause, the Court cannot, on the basis of Article 235 EC, adjudicate on the basis of what is in reality an action for contractual damages. To do so would be to extend its jurisdiction beyond the limits placed by Article 240 EC on the disputes of which it may take cognisance, since that article specifically gives national courts general jurisdiction over disputes to which the Community is a party (see, to that effect, judgment of 20 May 2009 in Case C‑214/08 P Guigard v Commission, not published in the ECR, paragraphs 35 to 41; order in Case T‑44/96 Oleifici Italiani v Commission [1997] ECR II‑1331, paragraphs 35 and 38; and judgment in Case T‑154/01 Distilleria Palma v Commission [2004] ECR II‑1493, paragraph 50).

59 On the other hand, as regards non-contractual liability, the Court of Justice has jurisdiction without there being any need for the parties to the dispute to express their consent. The Court’s jurisdiction flows directly from Article 235 EC and the second paragraph of Article 288 EC for actions for compensation from the Community for the non-contractual damage caused by the Commission.

60 In order to determine its jurisdiction under Article 235 EC, the General Court must examine, by reference to the various relevant matters in the file, whether the applicants’ claim for compensation is objectively and globally based on obligations of a contractual or non-contractual nature on the basis of which the contractual or non-contractual nature of the dispute can be characterised. Those matters may be inferred, in particular, from an examination of the parties’ claims, of the fact giving rise to the damage in respect of which compensation is claimed and of the content of the contractual or non-contractual provisions relied on in order to settle the point at issue (see, to that effect, Guigard v Commission, paragraph 58 above, paragraphs 35 to 38).

61 In that regard, it must be borne in mind that the Court’s jurisdiction in contractual matters derogates from the ordinary rules of law and must therefore be construed narrowly, so that the Court may hear and determine only claims arising from the contract or that are directly connected with the obligations arising from that contract (see Case C‑114/94 IDE v Commission [1997] ECR I‑803, paragraph 82 and the case-law cited). That would be so, in particular, if it emerged from the factual background that the Commission was authorised by contract to entrust third parties to carry out the work provided for in the invitation to tender and if the subject-matter of the dispute constituted in reality, where the work in question was provided for in one or more contractual provisions, a claim for contractual damages (see, to that effect, Guigard v Commission, paragraph 58 above, paragraphs 35 and 36, as regards the relevance of the factual background, and paragraph 38, as regards the real subject-matter of the claim for compensation).

62 It should also be emphasised that, although, for the purpose of determining the merits of that line of argument, the Court must examine the content of the various contracts entered into between the WTC group/Systran and the Commission between 1975 and 2002, on which the Commission relies in support of its arguments, such an exercise forms part of the examination of jurisdiction and cannot have the consequence – as such – of altering the nature of the dispute by conferring a contractual basis on it. Were that not so, the nature of the dispute and, consequently, the court with jurisdiction to hear and determine it would be liable to change merely because the defendant asserts the existence of any contractual relationship whatsoever with the applicant, even where examination of the contracts relied on led to the finding that they had no impact in that regard. Where it acts with respect to non-contractual liability, the Court is therefore perfectly entitled to examine the content of a contract, as it does with respect to any document on which a party relies in support of its arguments, in order to ascertain whether the document in question is of such a kind as to call in question the jurisdiction expressly conferred on the Court by Article 235 EC. That examination forms part of the assessment of the facts relied on in order to establish the Court’s jurisdiction, the absence of which is an absolute bar to proceeding within the meaning of Article 113 of the Rules of Procedure.

63 By way of comparison, in a case relating to a claim for renewal of a contract where the applicant relied on the breach of obligations of contractual and non‑contractual origin, the Court of Justice held that mere reliance on legal rules which did not follow from that contract, but which were binding on the parties, could not have the consequence of altering the contractual nature of the dispute and of removing it from the court with jurisdiction to hear and determine it (Guigard v Commission, paragraph 58 above, paragraph 43). Thus, in a case relating to the consequences of an invitation to tender where the applicants rely merely on the breach of obligations of a non-contractual origin, the mere reliance by their contracting partner on obligations of a contractual origin which do not envisage the conduct at issue cannot have the consequence of altering the non‑contractual nature of the dispute and of removing it from the court with jurisdiction to hear and determine it.

64 Furthermore, as a general rule it is for the party alleging breach of an obligation to establish the content of that obligation and to show that it is applicable to the facts of the case. For that reason, the Court must examine the applicants’ arguments relating to the claim for compensation before it examines those put forward by the Commission relating to the existence of contractual authorisation to disclose to a third party information capable of being protected by copyright and know-how.

Examination of the applicants’ claim for compensation

65 In the present case, the applicants’ claim for compensation is based solely on Article 235 EC and the second paragraph of Article 288 EC. The applicants neither invoke nor rely on any contractual provisions entered into with the Commission. Those contractual provisions are relied on only by the Commission in support of its argument that it was entitled to do what it is criticised for having done in the present case.

66 In order to support their claim for compensation, the applicants rely on two instances of non-contractual unlawful and harmful conduct. In the first place, the Commission unlawfully disclosed Systran’s know-how to a third party, in so far as the provision of the services described in the invitation to tender necessarily entailed the unauthorised disclosure and modification of the source code of the Systran software, of which the applicants alone are the owners. In the second place, the Commission infringed the applicants’ rights when Gosselies made unauthorised developments of the EC-Systran Unix version, a version of the Systran software which was virtually identical to and therefore dependent on the Systran Unix version, developed and marketed by the Systran group, the sole owner of the corresponding intellectual property rights.

67 In the present case, the event giving rise to the alleged loss in respect of which compensation is claimed, that is to say, the allegedly wrongful conduct with which the applicants take issue, therefore consists in the Commission’s unauthorised disclosure to a third party, Gosselies, of the source codes which the Systran group claims to own and to be protected under the general principles common to the laws of the Member States on copyright and know-how.

68 More particularly, the applicants maintain that, as author of the Systran software and the Systran Unix version, they can oppose any use, modification, adaptation or improvement of the derivative work represented by EC-Systran Unix which is not authorised by the owner of the rights in the original software. The applicants thus have a legal ‘right of objection’ designed to ensure the protection of certain data which they own against use by the Commission or communication to a third party whom they have not authorised.

69 In support of that right, the applicants rely, by way of the general principles common to the laws of Member States, on the Berne Convention for the Protection of Literary and Artistic Works of 9 September 1886, as amended (‘the Berne Convention’), Council Directive 91/250/EEC of 14 May 1991 on the legal protection of computer programs (OJ 1991 L 122, p. 42) and Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights (corrected version published in OJ 2004 L 195, p. 16). Those provisions, which are capable, where appropriate, of giving rise to non-contractual obligations, such as that recognised by the Commission in answer to a question from the Court on that point at the hearing, are reproduced in the laws of the Member States. In substance, those provisions enshrine the following general principles: by the sole fact of having created it, the author of a computer program has an exclusive intellectual property right in that program which is enforceable against all other persons; the capacity of author belongs, in the absence of proof to the contrary, to the person or persons under whose name the computer program is disclosed; and, subject to certain exceptions, the author of a computer program has the exclusive right to produce that program and to authorise its reproduction, adaption or dissemination.

70 It must be considered that, in doing so, the applicants have put forward sufficient elements to support the conclusion, at this stage of the analysis, that the Systran group can rely on copyright in the Systran Unix version of the Systran software which it developed and which it markets under its own name.

71 On the contrary, in the absence of proof that the applicants are now the owners of the rights in issue, the Commission has manifestly failed to call the Court’s jurisdiction in question by challenging the copyright on which the Systran group relies with respect to that version of the Systran software.

72 In the first place, the doubts which the Commission expresses as to the applicants’ capacity as owners of intellectual property rights in the Systran Unix version of the Systran software (paragraph 54) is are insufficient. Such an argument does not satisfy the standard of proof necessary to call in question the possibility that the Systran group can rely on copyright in the Systran Unix version of the Systran software in the light of the general principles common to the Member States referred to above, since they rely on general arguments which are insufficiently precise in the light of the characteristics of the software concerned and the legal and technical expert reports submitted by the applicants.

73 In the second place, without prejudging the outcome of the discussion which goes to the substance of the dispute, it should be pointed out that the Court requested the Commission to explain the substance of its doubts as to the property rights claimed by the applicants and requested the applicants to comment. The experts presented by the applicants thus set out a series of legal and technical arguments in support of the existence the Systran group’s copyright in both rewritten software and the versions of that software which use its source code (opinion of Mr P. Sirinelli, a professor at the University of Panthéon-Sorbonne Paris-I, on the protection by copyright of rewritten software, ‘the second Sirinelli opinion’; and a technical note by Mr H. Bitan on the new and distinct nature, in terms of writing, composition and structure, of the Systran Unix software by comparison with the Systran Mainframe software and the EC-Systran Mainframe software, ‘the second Bitan technical note’). In particular, it follows that the Systran Unix version is not merely a portage of the pre-existing Systran Mainframe version, as the Commission attempts to assert, as it involved rewriting in C language all the programs initially written in assembly language, and that those versions are fundamentally different. Nor is it disputed that the Systran Unix version replaced the Systran Mainframe version, which had become obsolete with the passing of time.

74 In spite of being expressly requested to do so by the Court, the Commission was unable to adduce technical evidence capable of calling in question the existence of the Systran group’s copyright in the Systran Unix version of the Systran software or in the IT elements making up the program or constituting the operational source code, notably as regards the parts relating to the basic kernel and the linguistic programs of the software, while the applicants do not dispute the Commission’s property rights in the dictionaries compiled by its services to take account of the specific nature of the language used by that institution.

75 In the third place, as the contentious procedure continued, the Commission was induced to concede that the Systran group did in fact have intellectual property rights in that context. Thus, the Commission acknowledged at the rejoinder stage that it did not dispute that Systran was the owner of rights in the Systran Unix software marketed by Systran, stating at the same time that it is likely that the Systran group used the developments carried out for the Commission in the context of the EC-Systran Mainframe and EC-Systran Unix versions in order to integrate them in the Systran Unix version. More specifically, the Commission observed at the hearing that it did not actually dispute that Systran was the owner of rights in that software, whether the Mainframe version or clearly the Unix version, while none the less expressing some reservation as to the elements unlawfully incorporated in the initial version of Systran Unix following the agreements previously entered into with the Commission.

76 However, as indicated by the Court in the second series of questions and again at the hearing, it must be stated that the Systran Unix version precedes the EC‑Systran Unix version by several years. It is therefore highly unlikely that the Systran group was able to incorporate in the Systran Unix which it developed and marketed the developments subsequently made, in the context of the EC-Systran version, in order to satisfy the Commission’s own linguistic and terminological needs. The Commission was unable to substantiate its assertion in that regard.

77 Likewise, there is no material evidence to support the Commission’s argument that it is likely that elements of the EC-Systran Mainframe version, developed on the basis of the applicants’ Systran Mainframe version, were unlawfully incorporated in the initial version of Systran Unix. That argument is contradicted, moreover, so far as the source code of the software is concerned, and particularly so far as the kernel and related linguistic programs are concerned, by the explanations of the applicant’s technical expert that a program written in assembly language differs significantly from a program written in C (see the second Bitan technical note, notably the example of the treatment in assembly language and in C of the chain of characters ‘Hello world!’). That technical explanation is not called in question by the Commission.

78 As regards the protection claimed for know-how, the applicants submit that know‑how is generally defined as ‘a body of technical information which is secret, substantial and identified in any appropriate manner’. They maintain on that point that the Commission’s disclosure of such information to a third party, in the absence of any authorisation on the applicants’ part, is unlawful conduct capable of giving rise to non-contractual liability on the part of the Community, pursuant to the second paragraph of Article 288 EC.

79 In support of that argument, the applicants properly refer to Case 145/83 Adams v Commission [1985] ECR 3539, paragraph 34, where the Court of Justice recognised that the duty of confidentiality placed on the Commission and its staff by Article 287 EC was a general principle of law. The general principle that undertakings are entitled to protection of their business secrets, a principle which finds expression in Article 287 EC, was again reasserted in Case C‑36/92 SEP v Commission [1994] ECR I‑1911, paragraph 36. Article 41 of the Charter of Fundamental Rights, proclaimed on 7 December 2000 in Nice (OJ 2000 L 364, p. 1), also refers to the need for the administration to respect ‘the legitimate interests of confidentiality and of professional and business secrecy’.

80 Business secrets are information of which not only disclosure to the public but also mere transmission to a person other than the one that provided the information may seriously harm the latter’s interests (see, to that effect, Case T‑353/94 Postbank v Commission [1996] ECR II‑921, paragraph 87). In order that technical information be of the kind to fall within the ambit of the obligation of professional secrecy, it is necessary, first of all, that it be known only to a limited number of persons. It must then be information whose disclosure is liable to cause serious harm to the person who has provided it or to third parties. Last, the interests liable to be harmed by disclosure of the information must be objectively worthy of protection (Case T‑198/03 Bank Austria Creditanstalt v Commission [2006] ECR II‑1429, paragraph 71, and Case T‑474/04 Pergan Hilfsstoffe für industrielle Prozesse v Commission [2007] ECR II‑4225, paragraph 65).

81 In the present case, it must therefore be considered that technical information which forms part of a undertaking’s business secrets and which has been communicated to the Commission for specific purposes cannot be disclosed to a third party for other purposes without the authorisation of the undertaking concerned.

82 It must be concluded that the applicants assert, to the requisite legal standard to substantiate the jurisdiction conferred on the Court under Article 235 EC, the Commission’s breach of obligations of a non-contractual origin relating to copyright and know-how concerning the Systran Unix version of the Systran software.

83 The Commission has been unable to call that conclusion in question and the Court must examine the second part of its argument, that it has authorisation of a contractual nature entitling it to do what it is criticised for having done in the present case.

Examination of the matters relied on by the Commission in support of the existence of contractual authorisation to disclose to a third party information capable of being protected by copyright and know-how

84 In the present case, the unlawful and harmful conduct supposedly committed by the Commission consists, in particular, in the alleged disclosure to a third party, Gosselies, without the applicants’ consent, of information capable of being protected by the Systran group’s copyright and know-how.

85 There is no evidence in the file on which it might be found that the Commission was authorised by contract to communicate the information relating to and the know-how applicable to the Systran Unix version to Gosselies.

86 In the first place, no contract signed by the parties expressly concerns the question of the allocation of any work relating to the EC-Systran Unix version to a third party. When Systran contacted the Commission concerning that question, the Commission merely denied that Systran held rights in the Systran Unix version of the Systran software and considered that the Systran group was not entitled to object to the work entrusted to Gosselies (see paragraphs 31 to 37 above).

87 In the second place, in answer to a question from the Court on this point, the Commission referred to three contractual provisions to support its contention that it could enlist Gosselies’ services in order to have the EC-Systran Unix version of the Systran software developed without the Systran group being able to object by invoking copyright and know-how relating to the Systran Unix version of that software (see paragraph 53 above).

88 First, the Commission invokes Article 4, ‘User rights’, of the draft agreement on technical cooperation entered into on 18 January 1985 with Gachot SA before that company acquired the WTC group and became Systran, which states, in particular, that ‘the Systran system, software and dictionaries, remains the Commission’s property’.

89 It must be held that that provision does not establish that the present dispute is of a contractual nature. First of all, the provision cannot be raised against the applicants, whose property rights in the Systran software, and in particular the Systran Mainframe version, do not rely on the protocol signed on 18 January 1985 by the Commission with Gachot SA (see paragraph 10 above). The Systran group’s property rights in the Systran software and its Systran Mainframe version came into being when the WTC group was acquired by Gachot SA at a later date (see paragraph 11 above and the documents submitted as Annexes 5 to 7 to the reply). Next, although no one disputes that on 18 January 1985 Gachot SA did not have the slightest property right in the Systran system, it is equally impossible to infer from the provision referred to above that the Commission may, as from that date and as a result of that protocol, claim whole and entire ownership of the Systran system and its software, including its basic kernel and its source codes. Such a conclusion would amount to a breach of the property rights in the Systran system, and in particular the Systran Mainframe version, then held by the WTC group, which are not disputed by the Commission (see paragraph 3 above), rights which were subsequently to be assigned to Gachot SA, which was to become Systran. Last, it must be observed that, in any event, the present case does not concern rights held by the Systran group in the Systran Mainframe version, a version which has become obsolete, but rights held by the Systran group in the Systran Unix version, which succeeded that version and is written in a different langage in order to operate in a new computing environment.

90 Second, the Commission relies on paragraph 6 of the preamble to the collaboration agreement signed between the Commission and the Systran group (or at the time WTC Inc., Latasec SA, Systran Institut SA and Gachot SA), which states that ‘[t]he improvements and developments made to the Systran system by the Commission and its contractors [referred to at paragraph 3], especially the dictionaries, are the exclusive property of the Commission’. That provision must be read in conjunction with paragraph 3 of that preamble, according to which:

‘The maintenance and subsequent development of the systems were carried out under another series of contracts between the Commission and service companies. Those contracts related to the Commission’s own needs and purposes.’

91 Those provisions, too, are incapable of establishing that the present dispute is of a contractual nature. Under those two paragraphs of the preamble, the improvements and developments made to the Systran system by the Commission and its outside contractors before the collaboration agreement of 4 August 1987 was signed, notably as regards the dictionaries, are the exclusive property of the Commission. That exclusive ownership is not disputed by the applicants, whose pleadings do not claim any property rights in the dictionaries, the improvements and developments specifically carried out by or on behalf of the Commission in order to satisfy its terminological requirements. The rights which the applicants claim are based on the basic system, namely the essential of the kernel and the linguistic routines of which the Systran group is the author and for which it has the know-how.

92 Furthermore, other paragraphs of the same preamble make it possible to define the relationship between the Commission and the companies of the Systran group and to evaluate the rights that could have been claimed by that group in the Systran system at a time when only versions compatible with the Mainframe environment existed. Thus, according to the words of the preamble:

‘1. The Systran system, conceived by … WTC [Inc.], is a machine translation system which consists of basic software, linguistic software and various bilingual dictionaries.

2. On 22 September 1975 the Commission entered into a contract with … WTC [Inc.] relating to the use of the Systran system by the Commission and the initial development of that system by WTC.

The Commission and … WTC [Inc.] subsequently entered into other contracts aimed at, first, the improvement of the existing system and, second, the development of systems for [new pairs] of languages.

Those contracts, entered into between 1976 and 1985, had as their subject-matter the development and improvement of the translation software and the basic dictionaries for the languages concerned.

…

5. The parties therefore declare that the Commission has a licence to use the basic system and improvements … made by WTC, limited to the use on the territory of the European Communities in the sector specified in [paragraph] 4 above.

…

7. The parties consider that it is in their interest and the interest of users of Systran that the system be improved on an ongoing basis. They have decided to enter into the present collaboration agreement in order to combine their efforts and thus to seek improvements.

With that in mind, the parties mutually recognise a right to use the Systran system, capable of evolving by the introduction of improvements which will come about as a result of the system’s being used in both the private sector and the public sector.’

93 It follows from those provisions, which envisage the contractual relationship existing at that time between the Commission and the Systran group, first, that the Systran group’s role in creating the Systran system and in its initial and subsequent development for the Commission is expressly recognised and, second, that only user rights conferred by the Systran group on the Commission are referred to, not property rights, a fortiori exclusive property rights, in the entire system. In any event, those provisions make no reference to intervention by a third party for the purpose of modifying that system without such modifications being authorised in advance by the Systran group.

94 Last, just as for Article 4 of the draft technical cooperation agreement, it must be observed that the present case does not concern rights held by the Systran group in the Systran Mainframe group, a version which has become obsolete, but rights held by that group in the Systran Unix version which succeeded it and which is written in a different language in order to operate in a new computing environment.

95 Third, the Commission relies on paragraphs 1 and 2 of Article 13 of the migration agreements, entitled ‘Patents, utility certificates (utility models), trade marks, designs and industrial models, industrial and intellectual property rights’, under which the Commission’s machine translation system would remain its property. In the present case, it must be observed that those two paragraphs read as follows in the first migration agreement:

‘1. The Commission shall be immediately informed of any result or of any patent obtained by the Contractor [namely Systran Luxembourg] in the performance of the present contract; this result or patent shall belong to the European Communities, which may dispose thereof freely, with the exception of cases in which industrial or intellectual property rights already exist.

2. The Commission’s machine translation system, including its components, even where modified in the performance of the contract, remains the property of the Commission, with the exception of cases in which industrial or intellectual property rights already exist.’

96 Article 13(1) and (2) of the first migration agreement thus expressly reserves the question of pre-existing intellectual or industrial property rights. The Commission cannot therefore rely on that provision in order to claim that it is clear that the applicants waived their copyright and their know-how relating to the Systran system. Those rights, and most particularly the rights concerning the Systran Unix version of the Systran software, pre-exist the date of signature of the migration agreements, which came into being at a time when the EC-Systran Mainframe version used by the Commission was becoming obsolete.

97 In addition, it is clear from Article 13 of the first migration agreement – as was indicated at the hearing by the parties – that paragraph 1 refers only to the ‘EC’ part of the updating of the EC-Systran Unix version of the Systran software, namely all the results and patents that might be obtained by Systran Luxembourg, the contractor in question, in the context of the performance of the migration agreements. The ownership of everything which pre-exists those possible results and patents, namely the Systran Unix version, from which the EC-Systran Unix version is derived, is excluded from the scope of the agreement. Thus, those agreements do not call in question the rights in the part of the basic kernel of the Systran Unix version that were not modified in the EC-Systran Unix version. As for paragraph 2 of that provision, it expressly refers to ‘the Commission’s machine translation system’, namely the EC-Systran Mainframe version of the Systran software (see the definition provided in Article 2 of the first migration contract, set out at paragraph 27 above), therefore reserving the question of the rights held in the Systran Mainframe version, both of those versions being obsolete because of the Systran Unix version.

98 Furthermore, it should be pointed out that Systran is not a signatory to the migration agreements and that it cannot have assigned anything whatsoever to the Commission with respect to the rights relating to the Systran Unix version of the Systran software, which it developed and which it markets. In application of the principle of the relative effect of the agreements, which may be considered to be a general principle common to the laws of the Member States in contractual matters, the migration agreements are therefore not enforceable as such against Systran. In that regard, even on the assumption that Systran Luxembourg did not communicate to the Commission by 15 March 2002 ‘detailed evidence of all the rights … claimed by the Systran group and linked to the Systran machine translation system’ (see point 30 above), that cannot have the consequence of depriving Systran of the possibility of relying as against the Commission on the rights which it holds through having acquired the companies of the WTC group or, above all, of having created and marketed the Systran Unix version, as the Commission was aware. It should also be observed that, as the applicants claimed at the hearing without being contradicted on that point by the Commission, Systran Luxembourg was not at the time of the signature of the agreements a company fully integrated within the Systran group but was a joint undertaking combining the interests of the undertakings which previously worked with the Commission in order to provide maintenance for the EC-Systran Mainframe version and the interests of the Systran group in Luxembourg.

99 In the last place, and in any event, it is the rule in intellectual property matters that a clause assigning property rights cannot be presumed. As a matter of principle, such a clause cannot be implicit but must be express. In the present case, no contractual provision relating to the assignment of intellectual property rights from Systran, or indeed from an undertaking in the Systran group, capable of being relied on with respect to the Systran Unix version of the Systran software is apparent from the documents communicated to the Court by the parties.

100 It follows from the foregoing that none of the contractual provisions cited by the Commission supports the argument that the present dispute is necessarily of a contractual nature. Those contractual provisions, which relate to a period in the past, indeed the distant past so far as the contracts relating to the Systran Mainframe version, which became obsolete during the 1990s owing to the evolution of the computing environment, are concerned, do not substantiate the assertion that the Commission was or is authorised by the Systran group to disclose to a third party information capable of being protected by the copyright and know-how relied on with respect to the Systran Unix version of the Systran software developed and marketed by that group.

101 In the light of all the foregoing, it must be concluded that it follows from the content of the applicants’ claim for compensation and from the general principles common to the laws of the Member States on which the applicants rely in order to establish their rights in the Systran Unix version of the Systran software and the need to obtain the prior consent of its author before disclosing to a third party the content reproduced in the derivative EC-Systran Unix version that the applicants have established to the requisite legal and factual standard the elements necessary to enable the Court to exercise the non-contractual jurisdiction conferred on it by the Treaty.

102 Furthermore, examination of the various contractual provisions on which the Commission relies in order to establish that the claim for compensation has a contractual basis permits the finding that there was no assignment of copyright or authorisation to disclose to a third party information relating to the Systran Unix version by the Systran group.

103 It follows from that global assessment that the dispute in question is of a non-contractual nature. The Court must therefore assess the allegedly wrongful and harmful nature of the Commission’s disclosure to a third party of information protected by copyright or know-how without the express authorisation of the owner in the light of the general principles common to the laws of the Member States applicable in such matters and not of contractual provisions set out in the agreements entered into in the past on questions which did not relate to Systran’s copyright and know-how in the Systran Unix version.

104 The Commission’s assertions that the action is inadmissible on account of its allegedly contractual basis must therefore be rejected.

2. The lack of clarity in the application

(a) Arguments of the parties

105 The Commission maintains that the action is inadmissible in that it does not satisfy the condition laid down in Article 44(1)(c) of the Rules of Procedure, which provides that the application is to state ‘the subject-matter of the proceedings and a summary of the pleas on law on which [it] is based’. The Commission submits that the application does not provide any details of the legal provisions which the Commission is alleged to have breached and provides little detail of the acts of infringement and disclosure of know-how alleged by the applicants.

106 The applicants submit, in substance, that the application is sufficiently precise for the Commission to be able to prepare its offence and for the Court to be able to adjudicate on the case.

(b) Findings of the Court

107 Under the first paragraph of Article 21 of the Statute of the Court of Justice, which applies to the procedure before this Court by virtue of the first paragraph of Article 53 of that statute, and under Article 44(1)(c) of the Rules of Procedure of this Court, all applications must indicate the subject‑matter of the dispute and contain a summary of the pleas in law on which the application is based. That statement must be sufficiently clear and precise to enable the defendant to prepare its defence and the Court to exercise its power of review. In order to guarantee legal certainty and the sound administration of justice, it is necessary that the basic legal and factual particulars relied on be indicated, at least in summary form, coherently and intelligibly in the application itself (orders in Case T‑85/92 De Hoe v Commission [1993] ECR II‑523, paragraph 20, and judgment in Case T‑294/04 Internationaler Hilfsfonds v Commission [2005] ECR II‑2719, paragraph 23).

108 In order to satisfy those requirements, an application seeking compensation for damage caused by a Community institution must state the evidence from which the conduct alleged against it can be identified (order in Internationaler Hilfsfonds v Commission, paragraph 107 above, paragraph 24).

109 In the present case, the applicants state in their application that the Commission unlawfully disclosed Systran’s know-how to a third party, following the award of a tender, and that on that occasion it infringed Systran’s copyright. The Commission engaged in two instances of unlawful and harmful conduct (see paragraph 66 above). Having regard to the above, the Commission was able to prepare its defence.

110 The Commission’s assertions relating to the inadmissibility of the action owing to the lack of clarity in the application must therefore be rejected.

3. The Court’s lack of jurisdiction to make a finding of infringement in an action based on non-contractual liability

(a) Arguments of the parties

111 The Commission maintains that the action is inadmissible in that the Court has no jurisdiction to adjudicate on an alleged infringement in the context of an action based on non-contractual liability, as was recognised in the order in Document Security Systems, paragraph 52 above. In that regard, the Commission observes that, unlike the overall Community harmonisation brought about in relation to trade marks, copyright has been the subject of only partial harmonisation, which, however, concerns the protection of software (Directive 91/250). The fact none the less remains that, for copyright, just as for the law on patents, an action for infringement is not among the remedies in respect of which jurisdiction is conferred on the Community Courts. The same applies to know-how, which has not been the subject of the slightest Community harmonisation. The Commission rejects any comparison here with the solution arrived at in Adams v Commission, paragraph 79 above, on the ground that the applicants do not allege infringement of Article 287 EC but merely assert wrongful disclosure of know-how, without providing further details or evidence. Unlike in Adams v Commission, moreover, the information obtained in the present case was obtained in the context of contractual relations and not in the context of the transmission of documents protected by secrecy.

112 The applicants claim that, in view of the Community harmonisation which exists with respect to the protection of software by copyright (Directive 91/250), the Court has jurisdiction to determine whether there has been an infringement of software copyright by the Commission. The present action cannot therefore be made subject to the exercise of a national remedy which, unlike the case in which the order in Document Security Systems, paragraph 52 above, was made, relating to patent protection, would be incapable of leading to reparation of the damage. It is a matter of ensuring effective judicial protection for the applicants. As regards the wrongful disclosure of know-how, the applicants emphasise the relevance of Adams v Commission, paragraph 79 above, which establishes the obligation of confidentiality placed on the Commission and its staff by Article 287 EC as a general principle of law.

(b) Findings of the Court

113 The Commission relies on the order in Document Security Systems, paragraph 52 above, to support its contention that the Court has no jurisdiction to adjudicate on infringement in the context of an action for damages.

114 It must be observed, however, that in Document Security Systems the Court distinguished the action for patent infringement brought by the applicant from the action for compensation in the strict sense. In the form of order sought, the applicant claimed that the Court should declare that the European Central Bank (ECB) had infringed the rights conferred by the patent and to order the ECB to pay damages and interest for its infringement of the rights conferred by the patent (order in Document Security Systems, paragraph 52 above, paragraph 25). In response, the Court first of all observed that it did not have jurisdiction to hear and determine an action for patent infringement (order in Document Security Systems, paragraph 52 above, paragraphs 50 to 75). As regards the action for damages in the strict sense, the Court expressly stated that it had jurisdiction to give judgment in that action under the combined provisions of Article 235 EC and the second paragraph of Article 288 EC (order in Document Security Systems, paragraph 52 above, paragraph 76). However, that action for damages was declared manifestly lacking any foundation in law, in so far as the applicant had submitted no proof in that case capable of establishing the unlawfulness of the alleged conduct of the defendant (order in Document Security Systems, paragraph 52 above, paragraphs 80 to 82).

115 In the present case, it should be observed that the concept of infringement of copyright is relied on in conjunction with the concept of protection of the confidentiality of know-how for the sole purpose of characterising the Commission’s conduct as unlawful in the context of an action alleging non‑contractual liability. That assessment of the unlawful nature of the conduct in question is carried out by reference to the general principles common to the laws of the Member States and does not require a previous decision of a competent national authority, as was the case for the various patents at issue in Document Security Systems, paragraph 52 above. Thus, the ECB had brought revocation actions in a number of Member States and some of the courts with which those actions were lodged had delivered decisions at first instance and those decisions – which were inconsistent from one court to another – were the subject of appeals (order in Document Security Systems, paragraph 52 above, paragraphs 21 to 24), which is by no means the position in the present case.

116 Consequently, in view of the jurisdiction conferred on this Court by Article 235 EC and the second paragraph of Article 288 EC in matters of non-contractual liability, and in the absence of any national remedy that could lead to the Commission making reparation for the damage allegedly suffered by the applicants as a result of the alleged infringement, there is nothing to preclude the concept of infringement used by the applicants being taken into consideration for the purpose of characterising the Commission’s conduct as unlawful in the context of a claim for damages.

117 The concept of infringement used by the applicants in the context of the present action for damages is to be interpreted solely in the light of the general principles common to the laws of the Member States, which, so far as computer programs are concerned, are reproduced or laid down in a number of harmonisation directives. The Court must therefore reject the Commission’s allegations relating to the inadmissibility of the action because the Court has no jurisdiction to make a finding of infringement in the sense that might be given to that word by a competent national authority of a Member States in application of the law of that State.

B – The other heads of claim

118 The Commission asserts that a number of heads of claim submitted by the applicants are inadmissible. These are the claims that the Court should order the immediate cessation by the Commission of the acts of infringement and disclosure, the confiscation from the Commission or Gosselies of certain IT data or their destruction and the publication of the decision of the Court, at the Commission’s expense, in specialist journals and reviews and also on specialist Internet sites.

119 On that point, the Commission refers to settled case-law according to which even in proceedings for damages the Community judicature cannot make orders against a Community institution without encroaching on the rights and powers of the administrative authorities (see Case T‑279/03 Galileo International Technology and Others v Commission [2006] ECR II‑1291, ‘Galileo’, paragraph 60 and the case‑law cited).

120 It should be borne in mind that, pursuant to the second paragraph of Article 288 EC, ‘[i]n the case of non-contractual liability, the Community shall, in accordance with the general principles common to the laws of the Member States, make good any damage caused by its institutions or by its servants in the performance of their duties’. That provision refers both to the conditions of non-contractual liability and to the extent of the right to damages. Furthermore, Article 235 EC confers jurisdiction on the Community judicature in disputes relating to compensation for damage provided for in the second paragraph of Article 288 EC.

121 It follows from those two provisions – which, unlike to the first paragraph of Article 40 CS, which envisaged only monetary compensation, do not preclude the award of compensation in kind – that the Court of Justice has the power to impose on the Community any form of reparation that accords with the general principles of non-contractual liability common to the laws of the Member States, including, if it accords with those principles, compensation in kind, if necessary in the form of an injunction to do or not to do something (Galileo, paragraph 119 above, paragraph 63).

122 Consequently, the Community cannot, as a matter of principle, be excluded from a corresponding procedural measure on the part of the Court of Justice, as it has exclusive jurisdiction to hear actions seeking compensation for damage attributable to the Community (see, concerning an injunction relating to a trade mark, Galileo, paragraph 119 above, paragraph 67).

123 For the damage caused in the present case to be fully compensated, the right of the owner of the copyright must be re-established intact which, irrespective of any damages to be assessed, requires at the very least the immediate cessation of the infringement of his right. It is precisely by means of the injunction applied for in the present case that the applicants are seeking to ensure that the Commission’s alleged infringement of their copyright should cease (see, to that effect, Galileo, paragraph 119 above, paragraph 71). The reparation in full of the damage may also take the form of the confiscation or destruction of the result of the infringement, or of publication of the Court’s decision at the Commission’s expense.

124 Consequently, the Commission’s allegations concerning the inadmissibility of the heads of claim not relating to a claim for compensation for the alleged harm must be rejected.

125 It follows from the foregoing that all the objections of inadmissibility raised in the present action must be rejected.

II – Substance

126 For the Community to incur non-contractual liability within the meaning of the second paragraph of Article 288 EC, a series of conditions must be met, namely, the conduct of which the institutions are accused must have been unlawful, the damage must be real and a causal connection must exist between that conduct and the damage in question (Case 26/81 Oleifici Mediterranei v EEC [1982] ECR 3057, paragraph 16, and Case‑243/05 P Agraz and Others v Commission [2006] ECR I‑10833, paragraph 26).

A – The rights invoked by the applicants and the unlawfulness of the Commission’s conduct

127 The unlawful conduct alleged against a Community institution must consist of a sufficiently serious breach of a rule of law intended to confer rights on individuals (Case C-352/98 P Bergaderm and Goupil v Commission [2000] ECR I‑5291, paragraph 42). Where the institution criticised has only considerably reduced, or even no, discretion, the mere infringement of Community law may be sufficient to establish the existence of a sufficiently serious breach of Community law (Bergaderm and Goupil v Commission, paragraph 44).

128 In substance, the applicants claim that there is substantial similarity between the Systran Unix version, developed by the Systran group since 1993, and the EC-Systran Unix version, developed by Systran Luxembourg to meet the Commission’s requirements as from 22 December 1997. That great similarity entitles the applicants to object to the disclosure to a third party without their consent of the content of the EC-Systran Unix version on account of the copyright and know-how relatin