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Global Media and Communications Watch The International Legal Blog for the Tech, Media and Telecoms Industry
Posted in Copyright, Licensing Dr. Christian Tinnefeld

Germany: Inspection of source code – Federal Supreme Court renders decision in favor of copyright holder

Source CodeCopyright holders can request inspection of source code at the defendant’s premises by court experts if reasonable grounds indicate unlawful use of copyright protected software by the defendant. According to a recent decision of the Federal Court of Justice (“FCJ”), published mid-April, this also applies if the copyright holder only claims infringement of parts of his software and even if these parts in question comprise sequences that are in the public domain (FCJ, decision of 20 September 2012, docket no.: I ZR 90/09 – “UniBasicIDOS”).

1. Scope of the decision of FCJ

In the decision at issue, the plaintiff claimed copyright infringement committed by a licensee of a migration software that was designed for software converting purposes. In particular, the software in question could transfer software applications under the outdated operating system “IDOS” into current versions of the operating system “UniBasic”. Whilst the licensee was appointed and entitled to develop a previous version of the software at issue, there were indications that he unlawfully and without consent of the licensor refined and transferred a later version of the migration software to a third party. The FCJ overturned a decision of the Appellate Court of Munich (Decision of the Higher Regional Court of Munich, 28 May 2009, docket no. 29 U 1930/08) that had rejected the plaintiff’s motion for software inspection.

2. Preliminary injunction and independent evidentiary proceedings

According to German copyright law the copyright holder can request an inspection of source code in preliminary injunction proceedings based on Article 101a (3) Federal Copyright Act and apply for examination of the defendant’s premises and technical devices like computers and storage media (including webserver access). However, the courts regularly stress that the defendant’s legitimate interest of non-disclosure and protection of trade secrets have to be considered as well. In order to comply with these interests, the inspection of source code has to be excecuted by IT experts appointed by the court (the copyright holder is allowed to make proposals for the appointed person).

Afterwards the court expert will evaluate and compare the source code seized at the defendant’s premises with the original source code provided by the copyright holder in an independent evidentiary proceeding (i.e. prior to a civil lawsuit based on cease and desist and damage claims). Matching parts of the source code components recorded in the court expert’s opinion may then form grounds for subsequently raised cease and desist and damage claims.

3. Whats`s new in the decision of FCJ

Justice statue In their recent decision the FCJ confirms the principles of source code inspection. In contrast to the Appellate Court, the FCJ held that the copyright holder does not have to prove which particular piece of the software application is affected by the alleged copyright infringement. In the case at issue, the defendant fruitlessly argued that the migration software comprised a number of components and codes in which the plaintiff cannot claim any copyrights or property rights. According to the view of FCJ, it is irrelevant that the source code may comprise open source code or unprotected components, as long as the plaintiff is able to show a likelihood that copyright protected parts of the software were unlawfully taken by the defendant for the illegitimate software development.