CELEX: 51988PC0816
Language: en
Date: 1989-03-17
Title: Proposal for a COUNCIL DIRECTIVE on the legal protection of computer programs (presented by the Commission)

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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
 REVISED VERSION                          COM(88 ) 816 final - SYN 183
                                          Brussels , 17 March 1989
                                  Proposai for a
                                COUNCIL DIRECTIVE
                 on the legal protection of computer programs
                         ( presented by the Commission )
 ---pagebreak---                                        2
                            EXPLANATORY MEMORANDUM
                                   CONTENTS
PART ONE : GENERAL
1 .   Introduction
      The need for act ion
      i)      The nature of the Intellectual Property
      ii )    Existing protection measures
      iii )   Harmonisation of protection measures
2.    The type of intellectual property protection retained
       i )    Patents
       i i)   Contract
       i i i) Copyr ight
 3.   Relation to International Convent ions
 4.   The legal basis
 PART TWO : PARTICULAR PROVISIONS
 Object of protection
 Authorship of program
 Beneficiaries of protection
■Restricted Acts
 Exceptions to the restricted acts
 Secondary I nf r I ngement
 Term of protection
 ---pagebreak---                                          3
                               PART ONE : GENERAL
1.0 .  INTRODUCTION
1.1 . For the purposes of this proposal , the term “ computer program " is
       used .  This means a set of instructions the purpose of which is to
       cause an Information processing device , a computer , to perform its
       functions .   The program , together with the supporting and
       preparatory design material which have made possible the creation
       of the program , can also be called “ computer software ".   All such
       material Is Intended to be covered by the provisions of this
       proposal insofar as it can be demonstrated that , from the material
        In question , a form of program has been or could be created .
       However , It Is not thought advisable to include a definition in the
       Directive to avoid it becoming outdated .     Where the material is of
       a nature such that It could not lead to the creation of a program ,
       for example , a user manual accompanying a program , although the
       material will not be protected as part of the computer program ,
       protection by copyright or other means may nevertheless apply .
1.2 . Computer technology now plays a significant role in almost every
       aspect of the social and economic life of the Community ,     in fields
       as diverse as leisure , medicine , banking , education , transport ,
       commerce and industry .     It follows that the programs which are
       devised to cause the computer to perform its functions occupy a
       place of growing importance alongside the other more traditional
       expressions of the human intellect , such as works of literature ,
       art or music , or Industrial designs and Inventions .    The size and
       growth of the computer Industry Is such that Its Importance In the
       economy of the Community cannot be over-emphasized .
 1.3 . It Is essential to create a legal environment which will afford a
        degree of protection against unauthorized reproduction to the
        computer program which is at least comparable to that given to
        works such as books , films , music recordings or industrial designs .
 ---pagebreak---                                       4
      If research and Investment In computer technology are to continue
      at a sufficient level to allow the Community to keep pace with
      other Industrialised countries .   In particular , as regards small
      and medium sized enterprises It Is Important that their ability to
      create and market Innovative software Is not significantly reduced
      by unauthorized reproductions of their products . Protection must
      therefore be strengthened and made uniform throughout the Community
      as much In the Interests of the specialized small and medium sized
      software firms which can contribute so much to the future success
      of the European software Industry as In the Interests of the
      existing major producers .
      Without such a legal environment , the Intellectual effort and
      financial resources employed to devise computer programs are put at
      risk by the ease with which the program can be reproduced , imitated
      or counterfeited .   If the level of protection given to computer
      programs in Member States should fall below that accorded to
      programs created in other countries It is evident that the work of
      European Innovators In this fast moving and highly competitive
       field will be easily appropriated by predatory activities from
      outside the Community .
1.4 . An adequate level of protection should therefore be Unequivocally
      enshrined in the laws of all Member States and any difference which
      could affect the functioning of the Common Market should be
      eliminated .  Common principles are not only necessary In order to
      promote the free circulation of computer software within the
      Community without any restrictions due to diverging Intellectual
       property rules , but also to create conditions In which Industry can \
       take advantage of the single market .  The current absence of such
       clear and congruent legislative provisions In Member States
       concerning the rights of authors of computer programs has thus
       prompted the Commission to make this proposal to the Council .
 ---pagebreak--- 2.0 . THE NEED FOR ACTION
2.1 . In establishing the need for action to harmonize computer program
      protection , the Commission has had regard for three factors : the
      nature of the Intellectual property to be protected , the protection
      measures existing at present In Member States and the need to
      harmonize those protection measures throughout the Community .
      THE NATURE OF THE INTELLECTUAL PROPERTY
2.2 . As far as the property right Is concerned , a computer program . In
      common with other works protected by Intellectual property
       legislation , Is the result of a creative Intellectual human
      activity . While its mode of expression or fixation may still be
      unfamiliar to many , the degree of creativity , skill and
       Inventiveness required to devise a program make It no less
      deserving of protection than other works protected by copyright .
      The fact that computer programs have a utilitarian function does
      not change this .
2.3 . These elements of creativity , skill and inventiveness manifest
       themselves in the way in which the program Is elaborated .    The
       tasks to be performed by a computer program need to be defined and
      an analysis of the possible ways to achieve these results must be
      carried out .   A selection has to be made of the various solutions
       and the steps to achieve the end result must be listed .    The way in
      which these steps are expressed gives the program Its particular
       characteristics of speed , efficiency and even style .  A program has
       a structure , with sections and subsections , through which
       Information flows .   In common with other literary works , the
       computer program also has an underlying logic In the presentation
       of the various steps .
 ---pagebreak--- 2.4 . These steps , the algorithms , from which the program Is built up ,
       should not be protected as such against unauthorized reproduction .
      They are the equivalent of the words by which the poet or the
       novelist creates his work of literature , or the brush strokes of
       the artist or the musical scales of the composer .
2.5 . As with literary works In general , protection can only be envisaged
       for a computer program from the point at which the selection and
       compilation of these elements Indicate the creativity and skill of
       the author , and set his work apart from that of other authors .
2.6 . It Is evident that the more simple and limited the functions which
       the program requires the computer to perform , the more simple the
       program will be . Similarities between programs are thus inevitable
       where the tasks are similar and the solutions limited in number .
       The steps by which the computer will arrive at the completion of
        Its task will also be similar , even Identical from one program to
       another where the task , the solution and the steps required to
       achieve it are extremely simple .
       Provided that copying does not take place , a program maker might ,
        in theory , even produce an entire program which bears a very great
       similarity to existing programs , where the tasks to be performed
       are identical and the degree of complexity of operations is very
        low .
 2.7 . In practice , computer programs are rarely of such simplicity that
        authors will arrive at totally identical programs . Independently of
       each other .   On the other hand many sub-routines which programmers
        habitually use In order to build up programs are In themselves
        commonplace In the industry and the originality of the program may
        lie In the selection and compilation of these otherwise commonplace
       olements .
 ---pagebreak---                                            7
2.8 . The success of the program in terms of Its ability to perform the
         task for which It Is required will to a large extent be conditioned
         by these choices made by the author of the program at every step
         along the way . This success will manifest Itself in a program
         which Is quicker , easier , more reliable , more comprehensive , more
         productive to use than Its predecessors or its competitors .
         EXISTING PROTECTION MEASURES
2.9 . The following countries have explicitly recognized the protection
         of computer programs by copyright : Australia , Brazil , Chile',
         Dominican Republic . France , Germany ( Federal Republic of ), Hungary ,
          India . Indonesia , Japan , Malaysia , Mexico , Philippines , Republic of
         Korea , Singapore , Spain , Trinidad and Tobago , Turkey , United
         Kingdom , United States of America .     Draft laws are also under
         consideration In a number of countries to the same effect ,
          including Denmark , Italy and the Netherlands .
2 . 10 . The analysis of the existing copyright legislation In the Member
         States already reveals one major difference : the term of
         protection ranges from 25 years from creation to 70 years after the
         death of the author .    Further divergences appear if the
          Interpretation of the law by courts Is taken Into account .       It Is
         true that so far courts have had only a limited number of
         opportunities to judge cases Involving the protection of computer
         programs , but as regards one basic condition for protection , the
         originality criterion , diverging Interpretations exist between
         Member States , which result In a difference in the range of               \
         computer programs which can be considered protected by copyright .
         There Is similar uncertainty as to the scope of protection afforded
          to computer programs by copyright protection .
 ---pagebreak---                                       - 8 -
         HARMONISATION OF PROTECTION MEASURES
2 . 11 . Such differences In legislation can only be allowed to remain if
         they do not affect the functioning of the Internal Market .
         Intellectual property rights , which are by their very nature
         territorial rights merit special attention to ensure that they do
         not result In new barriers or perpetuate existing barriers to
         Intracommunity trade . Divergencies and uncertainty concerning the
         scope of protection and the different duration of exclusive rights
         may not only affect the free circulation of computer programs in
         the Community but may also Influence the decision to establish new
         firms or commercial  Initiatives and thus create a distortion of
         competition .
2 . 12 . The aim of the present proposed Community action Is therefore to
         establish legal protection in those Member States where It does not
         yet clearly exist and to ensure that the protection in all Member
         States Is based on common principles .  These principles can be
         summarized as follows :
         - computer programs are protected as literary works by exclusive
           rights under copyright ;
         - the person in whom the right arises is defined ;
         - the acts which require authorization of the right holder and the
           acts which do not constitute an infringement are determined ;
         - the term and the conditions for protection of the program are
           def ined .
3.0 . THE TYPE OF INTELLECTUAL PROPERTY PROTECTION RETAINED
 3.1 . Although It has been clearly established that there is a need for
          legal protection in this field and that divergences In legislation
          In Member States could bring about a situation in wftlch the
          functioning of the Internal Market Is adversely affected , the
 ---pagebreak---       question has been raised as to whether copyright Is the most
      appropriate mode of protection to choose .     A number of forms of
      legal protection exist and have been applied already In practice to
      protect computer programs .
      PATENTS
3.2 . As regards patent protection , this possibility seems to be limited
      In all Member States to those programs which form part of a
      patentable invention having a technical character and which meet
      the normal criteria for patentability .     But even for the limited
      group of computer programs which may satisfy most of these
      conditions the requirement of an inventive step will      lead , in the
      case of a large majority of valuable computer programs , to the
      conclusion that the conditions for patent protection are not
      fulfilled .   The inventive step may often pertain to the algorithms
      underlying the programs , which have normally to be considered
      unpatentable , like any mathematical formulae , principle or natural
       law . Therefore , patent protection can play a limited role in the
       legal protection of computer programs , but does not provide an
      adequate solution for the basic legal protection of such works .
      CONTRACT
3.3 . As regards contract law , this is a valuable form of protection
       Insofar as Individual contractual relations exist and respect of
       the contract clauses can be controlled .    Much of the software put
      on the market today Is subject to licence agreements between
       rightholder and user .   Indeed , this Is the normal mode of
       commercialization for all but the most simple , mass produced
       software , such as games or standard business packages .    Such
       licence agreements allow right holders to circumscribe the
       activities of users In respect of all the acts connected with the
       use of the program .   The user Is free to accept or reject the
 ---pagebreak---                                           10 -
      limitations on his activities which the licensing contract
      proposes .     However in some areas , the balance of power between
      producers and users of computer programs may not permit the latter
      to negotiate equitable contract conditions , due to the market
      strength of some software suppliers . Therefore , It seems necessary
      to provide for basic principles of protection which apply
      regardless of specific contractual provisions . Nevertheless ,
      Individually negotiated arrangements should be possible as long as
      they are not In conflict with the applicable competition law .
3.4 . Contract law alone does not provide efficient protection against
      most forms of misappropriation .        In particular , as regards mass-
      marketed programs for Personal Computers and computer games which
      do not need maintenance , contract law does not provide an adequate
      means to prevent the copying and use of computer programs by third
      persons .    Nor is it entirely clear whether the practice of so-
      called " shrink-wrap licensing " where use conditions are attached to
      a product which Is , to all intents and purposes " sold " to the
      user . const i tutes a valid licence in all circumstances and In all
      jurisdictions .
3.5 . It Is therefore proposed that the granting and limitation of
      exclusive rights in computer programs should reflect these
      different modes of commercial exploitation , outright sale , and
       licensing .    Where “ sale ", in the normal sense of the word occurs ,
      certain rights to use the program must be taken to pass to the
      purchaser along with the physical copy of the program .         Where
       licensing takes place In the conventional sense by means of a
      written contract signed by both parties , the rights to use the
      program which has been provided will , with a limited number of
      exceptions , remain circumscribed by contractual arrangements .        The
      choice remains open for the supplier then to decide on the most
      appropriate form of commercialisation for his product , and for the
      user to manifest his preference for an outright purchase or a
       licensing agreement .
 ---pagebreak---        COPYRIGHT
3.6 . The overwhelming weight of evidence submitted to the Commission
       during the consultation process which followed publication of the
       Green Paper indicated that protection by copyright Is the most
       appropriate measure to adopt . Given the trend towards copyright as
       the best aval ( able means to ensure the International protection of
       programs not only among Member States but among the major trading
       partners of the Community , It Is hardly surprising that so many
       commentators on the Green Paper have Indicated that harmonisation
       of copyright laws within the Community Is now becoming a priority .
        It is further believed that within the framework of copyright ,
       protection as a literary work Is desirable .     Copyright can provide
       the solution of ensuring adequate protection against
       misappropriation and . In particular , against unauthorized
       reproduction .    Copyright has a.lready in the past proved its
       capacity to adapt to new technologies , such as films and
       broadcasts . Copyright protection does not grant monopolies
       hindering Independent development .     Copyright protects only the
       expression but not the underlying idea of a work .      It does not
        therefore block technical progress or deprive persons who
        independently developed a computer program from enjoying the
        benefits of their   labour and investment .
 3.7 . Protection by copyright allows a clear balance to be achieved
        between too little protection and over-protection .      It provides
        sufficient flexibility to permit a fair compromise between the
        divergent Interests of producers or suppliers on one side and users
        of computer programs on the other .    But the main advantages of this
        type of Intellectual property protection relate to the fact that
        the protection covers only the individual expression of the work
        and gives thus sufficient flexibility to permit other authors to
        create similar or even Identical programs provided that they
        abstain from copying .    This is particularly Important because the
        number of algorithms available , on which computer programs are
        based , Is considerable , but not unlimited .
 ---pagebreak---                                           12 -
3.8 . Some countries have Introduced " genre specific " provisions In their
        copyright law to accommodate possible differences between computer
        programs and other more traditional literary works . Such " genre
        specific " provisions should be kept to a minimum If the full
        benefit of the established copyright protection granted under the
        Berne and UCC Conventions Is not to be overly diluted .
        Accordingly , the present Directive seeks as far as possible to stay
        within the common parameters of literary work protection as It
        exists today In the Member States of the EC .
3.9 . Computer program protection by means of copyright raises two
        particular Issues ; that of standardization of aspects of programs
         In the Interests of greater Interoperability of hardware and
        software , and that of availability of information concerning the
         access protocols and Interfaces which ensure such Interoperability .
        Moves towards greater standardization of products within the
         computer and telecommunications Industries are well under way ,
         through the encouragement and initiatives of both the Commission
         itself and the industries concerned .    Many aspects of computer
         hardware and software interoperability are already governed by the
         International Standards Organisation 's Open Standards initiative .
         In addition , the existence of bodies such as X-Open Indicates
         a willingness on the part of industry to cede proprietary rights in
         some parts of programs into the public domain In order to achieve
         greater compatibility between systems .    The provisions of this
         Directive should contribute to the trend towards a greater use of
         standardization insofar as they determine with more legal certainty
         what are the exclusive rights of the author of the program .
3 . 10 . As regards the question of the protection of " access protocols and
          Interfaces " themselves , the question was raised In the Green Paper
         as to whether copyright protection should apply to these parts of
         programs .
 ---pagebreak---                                          13 -
3 . 11 . In order to produce Interoperative systems It Is necessary to
         replicate the Ideas , rules or principles by which Interfaces
         between systems are specified , but not necessarily to reproduce the
         code which Implements them .   Ideas , rules or principles are not
         copyrightable subject matter . Such Ideas , rules or principles may
         be used by any programmer In the creation of an Independent
          Implementation of them In an Interoperative program .
3 . 12 . Compet I tors are therefore free , once they establish through
          Independent analysis which Ideas , rules or principles are being
         used , to create their own Implementation of the ideas , rules or
         principles in order to make compatible products . They may build on
         the Identical Idea , but may not use the same expression as that of
         other protected programs . There is thus no monopoly on the
          Information Itself , but only a protection of the form of expression
         of that   Information .
3.13 . If similarities in the code which implements the ideas , rules or
         principles occur as between interoperative programs , due to the
          inevitability of certain forms of expression , where the constraints
         of the Interface are such that     in the circumstances no
         different Implementation is possible , then no copyright
          infringement will normally occur , because in these circumstances it
          Is generally said that idea and expression have merged .
 3 . 14 . Although It Is technically possible to decompile a program in order
          to find out Information concerning access protocols and interfaces
          this Is a lengthy , costly and inefficient procedure .    It Is usually
          more efficient for the parties concerned to agree on the terms
          under which the Information will be made available . Problems of
          access to Information may have to be addressed by other means which
          are outside the scope of this Directive .
 3.15 . In view of the rapid evolution of the computer industries the
          Commission will keep all these matters under constant review .
 ---pagebreak---                                      14
      RELATION TO INTERNATIONAL CONVENTIONS .
4.0 . Copyright has the added advantage of affording a high level of
      international protection to works so covered , through the
      application of the Berne and Universal Copyright Conventions .
      Although neither convention expressly mentions computer programs
      among the works to be covered by copyright it Is generally
      understood that as new forms of Intellectual property are developed
      they will be encompassed by the conventions Insofar as the same
      kinds of creativity are Involved In the elaboration of such new
      forms of work as for existing works .   The conclusion that computer
      programs are Indeed literary " works " within the meaning of the
      Berne and Universal Copyright Conventions leads to the assumption
      that where a Member State grants protection under the Berne
      Convention it will apply the principle of national treatment .
      Whatever the theoretical merits of “ sui generis " legislation in
      this field might be , they are far outweighed by the advantages of
      the existence of these International conventions .
5.0 . THE LEGAL BASIS
5.1 .  In its White Paper on the completion of the Internal Market , the
      Commission stated Its Intention to pay particular attention to the
       introduction of a Community framework for the legal protection of
      software and announced a proposal for a directive .   The present
      proposal therefore forms part of the Commission 's program for the
      completion of the Internal Market before 31 December 1992 .
5.2 . It follows from the approach of fixing basic common principles that
      a Directive Is the appropriate legal Instrument to harmonize the
       laws of the Member States as regards the legal protection of
      computer programs .
5.3 . Because differences In and uncertainties regarding the legal
      protection of computer programs can have a negative effect on the
      functioning of the common market In these products . Article 100 A
       Is the appropriate legal basis for the present proposal .
 ---pagebreak---                                       15 -
      For the completion of the Internal market before 31 Oecember 1992 ,
      Article 100A paragraph 1 , sentence 2 provides by way of derogation
      from Article 100 :
      "The Council shall , acting by a qualified majority on a proposal
      from the Commission In cooperation with the European Parliament and
      after consulting the Economic and Social Committee , adopt the
      measures for the approximation of the provisions laid down by law ,
      regulation or administrative action In Member States which have as
      their object the establishment and functioning of the Internal
      market " .
      Article 8A paragraph 2 defines the Internal market as comprising
      " an area without Internal frontiers In which the free movement of
      goods , persons , services and capital Is ensured in accordance with
      the provisions of this Treaty ."
5.4 . The present proposal will favour the free circulation of computer
      programs insofar as industry in those countries with clear and
      established protection of computer programs is currently In a
      moref avourable position than that In countries where protection is
      uncertain ; such differences In legal protection distort the
      conditions of establishment and of competition in Member States for
      firms which engage In activities concerned with computer programs .
      This situation may affect the growth of the Community software
       Industry and the operation of the Internal Market .  In addition by
      harmonizing the conditions under which the results of research and
      development In the computer program field are legally protected on
      a uniform basis In the Member States , Innovation and technical
      progress throughout the Community will be encouraged .                      \
5.5 . In the preparation of this proposal the Commission has taken Into
      account the requirements of Article 8c of the EEC Treaty and has
      concluded that no special provisions or derogations seem warranted
      or justified at this stage .
                                                                           - -.ï, *
 ---pagebreak---                                         16
5.6 . Likewise the Commission has studied the question of the high level
      of health / safety / environmental and consumer protection required by
      the terms of Article 100A(3 ) of the EEC Treaty .
      It has done so following consultation with the Industrial and
      social partners concerned , and In the light of an analysis of the
      risks Inherent   In this area and of the current technical
      capabilities of European Industry .     The proposal takes full account
      of these considerations In the light of the overall objectives of
      this provision of the Treaty .
 ---pagebreak---                        PART TWO : PARTICULAR PROVISIONS
CHAPTER I
Article 1                    Object of protection
1.1 .   The words “ computer program " are not defined for the purposes of
        this Article .    It has been recommended by experts In the field
        that any definition in a Directive of what constitutes a. program
        would of necessity become obsolete as future technology changes
        the nature of programs as they are known today .
        Given the present state of the art , the word program should be
        taken to encompass the expression In any form , language ,
        notation or code of a set of Instructions , the purpose of which
         Is to cause a computer to execute a particular task or function .
        The term should be taken to encompass all forms of program , both
        humanly perceivable and machine readable , from which the program
        which causes the machine to perform Its function has been or can
        be created .
        Preparatory and design material such as flow charts or
        descriptions of sequences of steps In plain language will be
          Included , as will embodiments of the program within the hardware
          Itself , either permanently or In removable form . Material such
        as user manuals or maintenance manuals will not be considered to
        be parts or manifestations of the program , except that where
         substantial parts of the program are reproduced therein , those
         extracts from the program will be protected by copyright In the
         program Independently from any rights which may subsist In the
         manual or other documentation .
 1.2 .   Member States shall be required to apply the same provisions for
          the protection of computer programs as apply to literary works .
          A program has all the characteristics of a literary work , namely
 ---pagebreak---                                    18
   that It Is the expression In language and In a perceivable form
   from which It can be reproduced of an Idea or series of Ideas ,
   created by the expenditure of human skill and labour .      The fact
   that the language may be only comprehensible to those skilled In
   the art , and that some manifestations of the program may take
   forms which are not at all times comprehensible to the human
   senses does not preclude protection as a literary work , since
   other literary works may also be embodied In carriers which
   require a mechanical device to render them perceivable to the
   human mind .
   In order to avoid legal uncertainty , computer programs must be
   protected as literary works and not " as If " they were literary
   works or " assimilated to” literary works .     Similarly they should
   not be treated as a new and separate " sub-category " of literary
   work .  Failure to accord the full protection given to literary
   works generally In Member States could result In divergencies In
   the nature and scope of protection and in uncertainties as to
   the level of protection afforded to such works under the Berne
   and Universal Copyright Conventions .
3. Copyright protects the expression of ideas but not the Ideas
   themselves .  Therefore the protection given to computer programs
   will extend to the program as a whole , and to Its constituent
   parts , insofar as they represent a sufficient degree of
   creativity to qualify as " works” In themselves .     The only
   criterion which should be applied to determine the eligibility
   for protection is that of originality , that is , that the work
   has not been copied . No other aesthetic or qualitative test
   should be app lied . Sub-rout I nes and routines which go together to
   form modules which In turn form programs may all qualify for
 ---pagebreak---                                           19 -
       protection Independently of the protection given to the program
       as a whole , that Is , as a compilation of such elements . The
       algorithms which go to make up the sub-routines are not normally
       In themselves capable of receiving protection under copyright
       Insofar as they are similar In nature to mathematical formulae .
       They may In exceptional circumstances attract patent
       protection .       Similarly , the Ideas , principles , or logic which
       underlie the program will not be copyrightable .
1.4a . Many algorithms and many sub-routines are commonplace In the
        Industry . They may have been placed or have fallen Into the
       public domain or they may be de facto standard routines or
       algorithms .       Where a program Is composed wholly or In part of
       such commonplace or unprotected algorithms and routines . It
       should nevertheless be protected as a compilation , provided that
        it is original in the above mentioned sense and that the creator
        demonstrated skill and labour in the creation of the
        comp i l at Ion .
1.4b .  An increasingly large number of programs are now generated by
        using a computer .       This means that program A Is used In order to
        create programs B , C and so on with some degree of human
        intervention in order to select the most appropriate means to
        achieve the objective .        Program A could In this repect be
        likened to a literary work such as a dictionary which permits
        the creation of other literary works .        Although much of the
        routine programming work Is done by purely mechanical means ,
        human effort       Is still nevertheless a critical element In the
        creative process .        It Is therefore proposed that insofar as
        programs generated by such means fulfill the criteria which
        would enable them to be categorized as "original works " they
        should be protected In the same way as programs created without
        the aid of such machine generation processes .
 ---pagebreak---                                        20 -
  Article _2_                Authorship of program
  2.1 .    In common with all literary works , the question of authorship of
           the program Is to be resolved In favour of the natural person or
           persons who have created the work .  Although the right to
           exercise exclusive rights may be assigned to another , the author
           will retain at least the unalienable rights to claim paternity
           of his work .
, 2.2 .    Copyright In a work created by a group of persons , which Is
           normally the case with the development of computer programs , is
           to be exercised In common unless the persons concerned contract
           otherwise .
  2.3 .    Computer programs are frequently created by freelance
           programmers working on particular projects on behalf of
           organisations which have commissioned a given program .   In such
           circumstances , unless the parties agree otherwise , it is normal
           that the person or entity which causes the work to be created
           should wish to retain the control over the exclusive rights in
           the program , with the exception of the right to claim paternity
           of the work mentioned in paragraph 2.1 above .
  2.4 .     In circumstances where a programmer is employed to create
           programs within a company or organisation , the employer will
           normally require that the exclusive rights in the program should
           remain within his control , with the exception of the right to
           claim paternity of the work , unless the parties agree otherwise .
            In respect of the circumstances described in this paragraph and
 ---pagebreak---                                     21
      In paragraph 2.3 above , It Is the Intention of this Directive
      that a certain measure of harmonisation of current practice in
      Member States should be brought about .     Nevertheless the freedom
      to negotiate contracts of employment and terms for commissioned
      works must remain to a large extent a subject for contractual
      negotiation between the parties .
      In respect of other aspects of authors * moral rights such as the
      right to maintain the Integrity of the work , the nature of
      computer programs is such that substantial modification and re ¬
      util isatlon of parts of programs Is constantly taking place and
      the concept of integrity of the work is of much less relevance
      to the author 's interests than has traditionally been the case
      with other literary works .
2.5 . As indicated in 1.4b , a large number of works are now generated
      by means of a computer program which serves as a tool to
      generate new programs .    The question arises as to whether
      authorship of these programs generated by the first computer
      program should reside with the creator of the first program , or
      with the person who causes it to generate other works .      Since
       the first program is no different in its function from any other
       tool used to create a work , such as an instruction manual by
      means of which another work is created ,     It would seem
       appropriate that the person who uses such a tool to generate
       programs should be considered as the creator of those programs .
       In practice , such a person may be the operator of the computer ,
       or the natural or legal persons who retain the right to exercise
       the rights in programs which they have commissioned or which
       have been created by their employees .     In these circumstances it
        is doubtful that a right to claim paternity of the programs
       generated by a machine could be upheld .     The human Input as
       regards the creation of machine generated programs may be
       relatively modest , and will be Increasingly modest In future .
       Nevertheless , a human " author ** In the widest sense is always
       present , and must have the right to claim " authorship " of the
       program .
 ---pagebreak---                                             22
Article    3                 Benef Iclar les of protection
3.1 .      Where the literary works of natural and legal persons are
           currently protected by copyright In Member States either by
           virtue of nationality or residence , In the case of natural
           persons , or by having a real and effective presence In a Member
           State in the case of legal persons , the same protection will
           apply for computer programs . Where Member States afford
           protection on the basis of first publication of a literary work
            in a Member State , that criterion should also apply to computer
           programs .    Thus the rules of national treatment under the Berne
           Convention will be applied to computer programs as to all other
            I I terary works .
3.2 .      As mentioned above , computer programs are frequently the
           creation of large teams of programmers , some of whom would not
           be currently eligible for protection under the residence ,
           nationality or first publication criteria outlined In Article 3
           ( 1 ) above .  This anomaly can be removed by extending the
           application of Articles 3 and 5 of the Berne Convention to all
           authors where a work has been created jointly , provided that at
             least one member of the group is able to establish a right to
           protection .     In this way , programmers from outside the Community
           and In particular programmers from developing countries who co¬
           operate on joint projects with programmers from Member States
           will not be unfairly disadvantaged .
Article 4
 4.1 . a .  Under traditional copyright protection for literary works the
            author 's exclusive rights comprise the right to control
             reproduction , adaptation and translation of his work .   The Berne
            Convention does not expressly give a right to control the
            distribution of works but the exclusive rights In respect of
             reproduction are In practice exercised In most countries of the
            Berne Union to allow the author to determine how his work shall
            be put on the market .
 ---pagebreak---                               23
The right to control reproduction given In Article 4.1 . ( a ) is
fundamental to achieve adequate protection for computer
programs .   Unlike other forms of literary work , a computer
program cannot serve Its purpose unless It Is " reproduced ".
This " reproduction " should not be confused with " replication ".
The program may be re-created in part or In whole as part of the
 Internal processes of the computer which runs It .     No second
permanent copy of the program Is made during this process ,
although parts of the program will be " reproduced " and stored In
other parts of the memory of the computer during the operation
of the program . These temporary copying , moving and
stor Ingoperat Ions may leave no trace once the operation of the
machine has terminated .    Thus " copying " In the traditional sense
of producing a second permanent version of an original does not
 normally take place unless a " back-up " copy of the program Is
 made .  Nevertheless , where programs are licensed , reproduction
 without authorization should be prohibited , principally because
 all the acts which could be prejudicial to the author 's
 Interests , namely , loading , viewing , running , transmitting or
 storing the program cannot be performed except by means of a
 reproduction of the program .
 Loading of the program Is to be considered a restricted act
  insofar as it normally at the present time necessitates
 reproduction of the program in part or in whole .      In future
 programs may be more often contained In media which can be
  Inserted physically Into the computer , such as chips , or may be
 an Integral part of the hardware . In these circumstances ,
 reproduction of the program may no longer be necessary In order
  to work on It .  For the present time , and In view of the risk of
 unauthorized users entering and corrupting programs , it Is felt
  that loading should remain under the author 's exclusive control .
 ---pagebreak---                                         24
          Similarly , viewing , running , transmission and storage of the
          program all Involve reproduction and are potentially damaging to
          the right holder 's Interests .   Computer programs are especially
          vulnerable not only to copying by electronic means but also to
          unauthorized adaptation , destruction or corruption , either for
          financial gain or for political objectives .     Computer programs
          controlling banking , military or security operations must be
          protected against attack by " hacking " - that Is unauthorized
          entry Into the system In order to remove , add or change
          Information contained within It .    Such acts of fraud or sabotage
          can only be controlled If authors have wide and enforceable
          powers to protect programs against reproduction .
4.1 . b . Adaptation of a literary work normally Implies transformation of
          a given text such as a novel Into another literary " genre " such
          as a play .   Translation of a literary work Is normally done from
          one human language into another .     In the case of computer
          programs , whether the act is a translation from humanly readable
          form Into machine readable form , or from one programming
           language to another , or an adaptation of a program designed to
          perform one task in order that it may perform another , the term
          " adaptation " best describes the activities involved .    It is
          therefore to be understood that " adaptation " in this Directive
           Includes " translation ".
4.1 . c . Distribution of a computer program by means of sale or licence
           is normally controlled by the author of the program , either
          directly If he Is also the producer of the marketed product , or
           Indirectly by assignment of his right to a publisher or producer
          of programs .   The author 's right Is normally exhausted once the
          product has been put on the market with his consent .     This
          Directive proposes that as regards the rental , leasing and
           licensing of software , the distribution right should not be
          exhausted "by the first sale , leasing or licensing of the
          program .   This will enable the right holder to exercise control
          over rental of products which have been previously sold , leased
          or licensed and to have continued control over the rental ,
 ---pagebreak---         leasing or licensing of products which have been previously
        distributed by these means .   Once a product has been sold with
        the right holder 's consent he should no longer be able to
        exercise control over subsequent sale , that is sale to third
        parties of legally acquired programs .     Likewise , as regards
        Importation for the purposes of sale , licensing , lease or
        rental , once the program has been Imported Into the Community
        with the author 's consent , his right to control subsequent
        Importation will be exhausted .
        It Is essential to permit right holders to control the rental of
        programs which have been sold or licensed If copying of programs
        without authorization is to be prevented .      It Is possible at
        present to rent a copy of a software package at a nominal
        charge , to copy It at home using relatively Inexpensive material
        and to return It the following day .     It Is clear that given the
        complexity of most programs and the fact that they are used for
        a given purpose rather than read for enjoyment , cheap , short ¬
        term rental allows the home copier to save on the cost of
        purchasing or leasing programs : as such , rental is highly
        prejudicial to right holders' Interests and should be subject to
        the right to prohibition , with the limited exceptions indicated
         in Article S below .
Article 5            Exceptions to the restr i cted acts
5.1 .   Where a program Is sold to the public . It Is normal that certain
        rights to use the property thus acquired should apply .      These
        rights should of necessity Include the right to use the program
        without further express authorization from the right holder .      It
         should not be necessary to obtain the right holder 's
         authorization In order to lend the program to a third party or
         to use It on a given piece of apparatus or In a given location .
         Similarly the acts of loading , viewing , running , transmission or
 ---pagebreak---                           - 26
storage should be taken as not requiring express authorization
of the right holder provided that , particularly In the case of
transmission and storage , they are only carried out for the
purposes of using the program and do not result in a second
permanent replication of the program .    Thus temporary or
permanent transmission to and storage by a second party of a
program legally acquired by a purchasor for his own use will not
fall within the exceptions to the restricted acts enumerated In
Article 4 , whereas such acts of transmission and storage
performed by the purchasor temporar I I y for the purposes of using
the program himself will not require authorization by the right
holder .  Similarly any form of reproduction other than that
required for use will not be permitted , In particular , the
making of a back-up copy or a copy for private use .     Where a
back-up copy is necessary for the purposes of use of a program
 this Is normally expressly permitted by the right holder .
All reproduction should be controllable whether it is of part of
 the program or of the entire program . In that a partial
 reproduction may be sufficient to cause considerable economic
 harm to the author 's interests , for example , by copying the
protocol and interface program elements of a given program .
As regards the Anglo-Saxon law concept of " fair dealing " by
which reproduction of Insubstantial parts of literary works is
permitted In certain circumstances . It Is believed that in
 respect of licensed programs , which constitutes the most common
method of commercialisation at present , the parties are free to
negotiate exceptions to the author 's exclusive right to control
 Insubstantial reproduction of the program If circumstances
warrant such a derogation .   In the case of programs which are
 sold or made available by means other than a written license
agreement signed by both parties , the provisions which exist In
 the copyright laws of Member States In relation to exceptions to
 the exclusive rights of the author of a literary work should
 continue to apply In the case of computer programs .
 ---pagebreak---                                     27
      Where the current practice of " shrink wrap " licensing applies ,
      program producers Impose conditions on the use of programs which
      have been In reality " sold " to the consumer .   The provisions of
      Articles 4 and 5 are Intended to have as their effect that where
      software is licensed In the normal sense of the word , right
      holders will be able to exercise exclusive rights In respect of
      all acts of reproduction and adaptation , the exact provisions
      being the subject of contractual arrangements under the terms of
      the licence .   But where no written , signed licence agreement is
      employed , as Is the case with " shrink-wrap " licences ( the
      customer being merely advised by means of Instructions contained
      within the packaging which surrounds the program carrier of his
      rights in respect of his purchase ) the provisions of Article 5
      ( 1 ) will allow the purchasor to assume the rights described
      above .   This Is a necessary compromise between the Interests of
      suppliers and consumers of computer programs .     Article 4 of
      theDIrective gives wide powers to right holders to control the
      acts of reproduction , adaptation and distribution , but these
      powers should not in fairness be used to circumscribe the normal
      enjoyment of property by a person who legally acquires a program
       by purchase . ■ If program producers wish to ensure the greater
       degree of control over the reproduction , adaptation and
       distribution of their programs which the system of licences
       permits , the would-be " purchasor " of a program should be
       required to read and sign a legally binding licence agreement at
       the point of sale .
5.2 .  Adaptation and translation of programs are acts which the
        licensee of sophisticated programs may frequently wish to do in
       the course of normal use of the program .    Many custom-made
       computer programs have not stabilized when they are supplied to
       end users ; similarly many programs require correction in use or
       adaptation to changes In user requirements .    This correction and
       adaptation work could In many Instances be done by the user .
       However the supplier has a number of reasons for wishing to
       maintain his exclusive rights to control adaptation and
 ---pagebreak---       translation .  A guarantee and maintenance contract may attach to
      the program which has been supplied and such guarantee and
      maintenance arrangements may be Invalidated or rendered
      expensive and Impracticable If the licensee is able to
      constantly amend his licensed program .   The supplier will also
      frequently set the licence rate to take Into account the use
      which can be made of the program , In terms of the number of
      users and the amount of program which can be accessed .   Such
      control is exercised by means of copy protection and metering
      systems Incorporated In the program Itself .   If the user were
      able to adapt the program , he would be at liberty to remove
      these control mechanisms .   Therefore any adaptation and
      translation which Is done should be subject to the right
      holder’s control   In the case of licensed software and should be
      the subject of contractual arrangements between supplier and
      user .
5.3 . The exclusive right to control rental given In Article 4 ( c ) Is
      subject to a derogation in favour of one group of users for whom
      special arrangements can and should be made .   This Is non-profit
      making public libraries where members of the public may go to
      use and to study computer programs .   Libraries are able to
      control the use made of such programs by means of safeguards to
      prevent their duplication or their removal from the premises .
       It Is Important , given the need to encourage computer literacy
       in all sections of the Community , that libraries are able to
      offer computer programs for study by the public In the same way
      as they offer other literary works .
                                                                         \
 ---pagebreak---                                       29 -
Article 6                   Secondary Infringement
6.1 .    In order to ensure that right holders may bring successful
         actions against Infringers of the exclusive rights given In
         Article 4 , It Is necessary to provide for the cases where
         Infringing copies have been put In circulation .    The ease with
         which unauthorized copies of programs can be transferred
         electronically from one “ host " computer to another , across
         national borders and without trace , requires that the
          importation and possession of Infringing copies should also be
         actionable as should be all dealing with infringing copies In
         the sense of selling , offering for sale , receiving , transmitting
         and storing such copies .
6.2 .    Many programs are marketed with a technical protection system
         which prevents or limits their unauthorized use or reproduction .
          If such systems are used by right holders to protect their
         exclusive rights , it should not be legally possible to remove or
         circumvent such systems without the authorization of the right
         holder .  The term “ deal with " should be taken in this context to
          include sale , offer or advertise for sale , transmit , store or
          receive such means to circumvent protection systems , and to
          include also the communication of   information as to the means
          for circumvention or removal of protection systems .
 Article 7                    Term of Protection
 7.1 .   Although the term of protection for literary works is life of
          author plus fifty years , attaching the term of protection to the
          life of a human author might cause some hesitations in the light
         of joint authorship of computer generated works and the length
          of term which will result .   These hesitations outweigh the
          benefits of maintaining the classical " literary work " term .
 ---pagebreak---                                 Proposai for a
                              COUNCIL DIRECTIVE
                 on the legal protection of computer programs
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Economic Community
and in particular Article     100a  thereof ,
Having regard to the proposal from the Commission ,
In cooperation with the European Parliament ,
Having regard to the opinion of the Economic and Social Committee /
Whereas computer programs are at present not clearly protected in all
Member States by existing legislation and such protection , where it
exists , has different attributes ;
Whereas the development of computer programs requires the Investment of
considerable human , technical and financial resources while computer
programs can be copied at a fraction of the cost needed to develop them
 Independent ly ;
Whereas computer programs are playing an Increasingly Important role in
 a broad range of industries and computer program technology can
 accordingly be considered as being of fundamental importance for the
 Community 's Industrial development ;
 ---pagebreak---                                       31
Whereas certain     differences      in     the legal protection of computer
program offered by the laws of the Member States have direct and
negative effects on the functioning of the common market as regards
computer programs and such differences could well become greater as
Member States Introduce new legislation on this subject ;
Whereas existing differences having such effects need to be removed and
new ones prevented from arising , while differences not adversely
affecting the functioning of the common market to a substantial degree
need not be removed or prevented from arising ;
Whereas the Community’s legal framework on the protection of computer
programs can accordingly In the first Instance be limited to
establishing that Member States should accord protection to computer
programs under copyright law as literary works and further In
establishing who and what should be protected , the exclusive rights on
which protected persons should be able to rely in order to authorize or
prohibit certain acts , and for how long the protection should apply ;
Whereas the function of a computer program is to communicate and work
 with other components of a computer system and with users ;
 Whereas for this purpose , a logical and , where appropriate , physical
 interconnection and interaction is required to permit all elements of
 software and hardware to work with other software and hardware and with
 users in all the ways they are intended to function .     The principles
 describing any such means of interconnection and interaction are
 generally known as “ an Interface ".   Where the specification of
  Interfaces constitutes  Ideas and principles which underlie the program ,
 those Ideas and principles are not copyrightable subject matter ;
 ---pagebreak--- Whereas the Community Is fully committed to the promotion of
International standardization ;
Whereas protection of computer programs under copyright laws should be
without prejudice to the application In appropriate cases of other forms
of protection ;
HAS ADOPTED THIS DIRECTIVE :
 ---pagebreak--- CHAPTER I
Article 1                    Object of protection
1.    Member States shall protect computer programs by conferring
      exclusive rights in accordance with the provisions of this
      Oirect ive .
2.    Exclusive rights shall be conferred by the provisions of copyright
       laws .  Protection shall be accorded to computer programs as
       t iterary works .
3.    Protection In accordance with this Directive shall apply to the
      expression In any form of a computer program but shall not extend
      to the Ideas , principles , logic , algorithms
      or programming languages underlying the program . Where the
      specification of Interfaces constitutes ideas and principles which
      underlie the program , those ideas and principles are not
      copyrightable subject matter .
4.     (a)    A computer program shall not be protected unless It satisfies
              the same conditions as regards its originality as apply to
              other literary works .
       (b)    Programs generated by means of a computer shall be protected
              Insofar as they satisfy the conditions laid down In 4(a )
              above .
 Article 2                   Authorship of program
 1.   Subject to the following paragraphs , the author of a computer
      program Is the natural person or group of natural persons who has '
       created the program .
 2.     In respect of computer programs created by a group of natural
 ---pagebreak---                                       - 34 -
     persons , the exclusive rlghtsshall be exercised In common unless
     otherwise provided by contract .
3.   Where a computer program Is created under a contract , the natural
     or legal person who commissioned the program shall be entitled to
     exercise all rights In respect of the program , unless otherwise
     provided by contract .
4.   Where a computer program Is created in the course of employment ,
     the employer shall be entitled to exercise all rights In respect of
     the program , unless otherwise provided by contract .
5.    In respect of programs which are generated by the use of a computer
     program , the natural or legal person who causes the generation of sUjseqjent
     programs shall be entitled to exercise all rights in respect of the
     programs , unless otherwise provided by contract .
Article 3                Beneficiaries of protection
1.   Protection shall be granted to all natural or            legal persons
     eligible under national copyright legislation as applied to
      1 1 terary works .
2.    In the case referred to in Article 2 paragraph 2 the computer
     program shall be protected in favour of all authors If at least one
     author Is a beneficiary of protection in accordance with paragraph
     1 of this article .
 ---pagebreak--- Article 4                      Restr icted Acts
     Subject to the provisions of Article 5 . the exclusive rights
     referred to In Article 1 shall include the right to do or to authorize
    a)   the reproduction of a computer program by any means and In any
         form . In part or In whole .   Insofar as they necessitate a
         reproduction of the program in part or In whole , loading ,
         viewing , running , transmission or storage of the computer
         program shall be considered restricted acts ,
    b)   the adaptation of a computer program ,
    c)   the distribution of a computer program by means of sale ,
         licensing , lease , rental and the Importation for these purposes .
         The right to control the distribution of a program shall be
         exhausted in respect of its sale and its importation following
         the first marketing of the program by the rightholder or with
         his consent .
Article 5             Exceptions to the restr Icted acts
 1.  Where a computer program has been sold or made available to the
     public other than by a written licence agreement signeo c y both
      parties , the acts enumerated In Article 4 ( a ) and ( b ) shall not
      require the authorization of the rightholder . Insofar as they are
      necessary for the use of the program .    Reproduction and adaptation
      of the program other than for the purposes of Its use shall require
      the authorization of the rightholder .
 2.   Where a computer program has been sold or made available to the
      public by means other than a written licence agreement signed by
      both parties , the exclusive right of the rightholder to authorize
      rental shall not be exercised to prevent use of the program by the
      public in non-profit making public libraries .
 ---pagebreak---                                     36 -
Article 6                 Secondary Infringement
1.    It shall be an Infringement of the author 's exclusive rights in the
     computer program to Import , possess or deal with an Infringing copy
     of the program , knowing or having reason to believe It to be an
      Infringing copy of the work .
2.    It shall be an Infringement of the author 's exclusive rights in the
     computer program to make . Import , possess or deal with articles
      Intended specifically to facilitate the removal or circumvention of
     any technical means which may have been applied to protect a
     program .
Article 7                   Term of protection
     Protection shall be granted for fifty years from the date of
     creat ion .
CHAPTER I I
Article 8     Continued application of other legal provisions
1.   The provisions of this Directive shall be without prejudice to any legal
     provisions concerning patent rights , trade marks , unfair
     competition , trade secrets or the law of contract Insofar as such
      provisions do not conflict with the principles laid down in the
      present Directive .
 2.   The provisions of this Directive are applicable also In respect of
      works created prior to V date in Article 9 7.
 ---pagebreak---                                   - 37 -
CHAPTER  l I 1
Article 9                    Final provisions
1.   Member States shall bring Into force the Laws , regulations or
      administrative provisions needed In order to comply with this
      Directive by [ date .]
2.   Member States shall ensure that they communicate to the Commission
      the texts of the provisions of national law which they adopt In the
      field covered by this Directive .
Article 10
      This Directive is addressed to the Member States .
 Done at   Brussels                                  For the Council
                                                    The President
 ---pagebreak---                                      .Ьб
Commission conclusions decided on the occasion of the adoption of the
Commission 's proposal for a Council directive on the legal protection
                          of computer programs
In adopting a proposal for a Council directive on the legal protection
of computer programs the Commission approves the following policy
guidelines .   It affirms its conviction that computer programs , given
the intellectual effort and the financial investment which may be
necessary for their creation and the ease with which they can be
copied, merit adequate legal protection . Following a worldwide trend,
the Commission proposes copyright as a suitable legal basis for
ensuring a balance between an effective level of protection and the
interests of users . Divergencies between the copyright statutes of the
Member States as to the availability and scope of the protection have
caused the Commission to initiate the harmonisation process in view of
the objective of completing the internal market .
Software is an industrial tool which is essential to the Community 's
economic development .   The grant of exclusive rights under copyright
law wil create incentives for software developers to invest their
intellectual and financial resources and thereby to promote technical
progress in the public interest .        Technical progress and public
welfare, however, are also ensured by a system of indistorted
competition, one of the principal goals of the Treaty .        Exclusive
proprietary rights and free copmpetition, while in principle designed
to achieve the same objective by different means, may conflict where a
copyright owner is in a position to exercise his statutory exclusive
rights beyond their intended purpose .        The exercise of exclusive
copyrights will not prejudice the application of the competition rules
and the imposition of effective remedies in appropriate cases .
Further, the Community commitment to international standardisation in
the fields of information technology and telecommunications must not be
compromised .
The relation between the Community 's competition rules and copyright is
governed by the European Court 's distinction between the existence and
the exercise of the intellectual property rights in question .       Any
arrangement or mesure which goes beyond the existence of copyright can
be subject to control under the competition rules . This means that for
example any attempt to extend by contractual agreements or other
arrangements the scope of protection to aspects of the programs for
which protection under copyright is not available, or the prohibition
of any act which is not reserved for the right owner may constitute an
infringement of the competition rules .
                   '1
 ---pagebreak---                                          т
                             - 2 -
Moreover, companies in a dominant position must not abuse that position
within the meaning of Article 86 of the Treaty .    For example, under
certain circumstances the exercise of copyright as to the aspects of a
program, which other companies need to use in order to write compatible
programs, could amount to such an abuse . This could also be the case
if a dominant company tries to use its exclusive rights in one product
to gain an unfair advantage in relation to one or more products not
covered by these rights .
Furthermore , the ability of a competing manufacturer to write an
independent but compatible program often depends on his possibility to
have access to the target program or to certain information relating to
it .    Access to information is not a matter of copyright law.
Article 86 always applies where a dominant company abusively refuses
access to such information or restricts unreasonably such access .