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24 December 2018
The Supreme Court recently declared that the mere passive storage of backups of copyrighted software with expired licences does not constitute copyright infringement. The judgment is significant as it clarifies which actions constitute copyright infringement and, from a practical perspective, relieves licensees from having to mine their backup servers in pursuit of potential 'sleeper' infringements.
The dispute concerned a software licence agreement between a software company and a Swedish municipality. The district court initially tried whether the municipality had acquired the copyright licence for the software, which was disputed by the software company. The court found that the municipality had held a licence for the copyrighted software for a limited time only. The case was appealed to the Court of Appeals; none of the parties succeeded on all claims. However, the court found that the software had been used after the municipality's licence had expired.
The Supreme Court granted leave to appeal for a limited issue – namely, whether the municipality's passive storage of backups of copyrighted software on servers with expired licences constituted copyright infringement.
The Supreme Court found that the software was protected by copyright, but also that rights holders' protection is limited by exceptions set out in the Copyright Act. Section 26(g) of the act states that licensees may reproduce:
The court noted that the right to reproduce backups is absolute (ie, not limited by mutual agreement by the parties) and that the action of saving a backup to a server may constitute copyright infringement if the person saving the backup does not hold a right to use the copyrighted work. However, the subsequent passive storage of software on a backup server does not constitute an infringing action in itself.
The court also assessed whether a licensee has a legal obligation to remove existing backup copies when its licence expires and found that the legislature clearly states that such an obligation is neither necessary nor suitable.
In the court's examination of whether EU law contradicted its assessment under Swedish law, it emphasised that Article 4.1(a) of the EU Computer Programs Directive (2009/24/EC)) applies only to the reproduction of protected works and does not oblige users to remove previously reproduced works. Therefore, the court found that EU law does not oblige users to remove passively stored backups of software.
This Supreme Court judgment makes an important distinction between which actions constitute copyright infringement. Notably, the court found that active actions (eg, storing software on a backup server) may constitute copyright infringement, while passive actions (eg, leaving stored copies of software idle on a backup server) do not.
Therefore, licensees with backups stored on their servers need not vet them for potentially infringing software. The decision should be welcomed as it may be difficult and time consuming for licensees to ensure that servers containing backups – which may not be regularly maintained and categorised – are properly monitored and updated and reflect expiring licence agreements.
For further information on this topic please contact Hans Eriksson or Gustav Kyringer at Westerberg & Partners Advokatbyrå Ab by telephone (+46 8 5784 03 00) or email (email@example.com or firstname.lastname@example.org). The Westerberg & Partners Advokatbyrå Ab website can be accessed at www.westerberg.com.
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