Dismissal of Microsoft complaint raises software licensing fears

The Third Panel of the Court of Appeals of the State of Minas Gerais has ruled (Appeal 447.858-4) that the use of a computer program in a company’s internal computer network system does not constitute copyright infringement.

Microsoft filed a court action against Frigorífico Tamoyo Ltda alleging, among other things, that Tamoyo was overusing its Windows 3.1 operating system. Tamoyo had purchased a licence to use one copy of this program. However, it then installed the program on its server and made it accessible to 28 other personal computers within the company.

Relying on Article 6(4) of the Brazilian Copyright Law (9.609/98), the judge held that this overuse did not amount to copyright infringement. Article 6 provides a number of fair-use exceptions to a titleholder’s exclusive rights in a computer program, including where:

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

Microsoft appealed the ruling but the Court of Appeals upheld the trial judge’s decision and confirmed that the exception set out in Article 6(4) applies. As part of its reasoning the appeal court referred to a similar decision issued in 2002 by the Court of Appeals of Brasília (Appeal 19990110547999APC DF) involving Microsoft, and Piazuma Materiais para Construção Ltda and Comércio e Indústria de Madeiras e Ferros Ltda.

However, there have been criticisms of both these decisions. Although the wording of Article 6(4) is not technically perfect, the exception that it sets out appears to be restricted to certain cases where an application program needs to be used alongside another application or operational system (eg, the interface of a Linux-developed word processor with Microsoft’s Windows). Further, the exception is clearly limited, being applicable only to the person who integrates the program. Although the legal principles and case law are still incipient in this area, there are fears that these two cases could act as dangerous precedents for the software industry.