Decision threats the software industry

The 3rd Panel of the Court of Appeals of the State of Minas Gerais, Southern Brazil, has recently issued a decision (Appeal No. 447.858-4) ruling that the use of a computer program in a company’s internal computer network system does not constitute copyright infringement.

Microsoft Corporation filed a court action against Frigorífico Tamoyo Ltda. alleging, among other issues, that the defendant was overusing its WINDOWS 3.11 operating system. Tamoyo purchased a license to use one copy of this computer program, installed it in a server and made it accessible to other 28 personal computers inside the company.

The Trial Judge decided, relying on Article 6, item IV, of the Brazilian Copyright Law (Law No. 9.609/98), that this overuse was not copyright infringement. Article 6 provides a number of exceptions (fair use) to the titleholder’s exclusive rights in a computer program and, in this regard, item IV of this Article establishes that the following does not constitute infringement:

IV – the integration of a program, maintaining its essential characteristics, with an application or operational system, technically indispensable for user needs, provided it is for the exclusive use of the person who effected it.

Microsoft took appeal but the Court of Appeals, as previously mentioned, upheld the Trial Judge’s decision, confirming that the exception of Article 6, IV, applies to the case. As part of its rationale, the Court of Appeals referred to a similar decision issued in 2002 by the Court of Appeals of Brasília (Appeal No. 19990110547999APC DF), Capital of Brazil, involving Microsoft Corporation (plaintiff) and Piazuma Materiais para Construção Ltda. and CIMFEL Comércio e Indústria de Madeiras e Ferros Ltda. (defendants).

Although the wording of Article 6, IV, is not technically perfect, it is possible to conclude that the above mentioned decisions are ill-grounded. In fact, the exception provided in this Article, rather than legitimating the unlimited use of the same computer program, appears to be devised to certain cases where an application program needs to be intertwined with another application or operational system such as the interface of a Linux developed word processor with Microsoft’s Windows. Furthermore, this exception has a very clear limitation, being applicable only for the benefit of the person who promoted the integration. The doctrine and case law is still incipient in regard to this matter but the referred cases constitute dangerous precedents to the software industry.