Aztech Systems Pte Ltd v. Creative Technology Ltd.

([1996] 1 SLR 683; Civil Appeal No.181/95 - 12 November 1996)

Comment

This is the first major case to be decided outside the United States on the right to decompile a software program for the purpose of copying it.

Aztech Systems Pte Ltd. ("A") targeted Creative Technology Ltd.’s ("CT") "Sound Blaster" software, decompiled it to work out how it worked and stole critical lines of code for use in A’s competing "Sound Galaxy" product. When caught, A tried to justify its action on the basis that it merely was trying to make its products compatible with application programs that had been developed to operate with the "Sound Blaster". A relied on the fair dealing provisions in the Singapore Copyright Act ("SCA").

The Court in deciding the case had to analyse the purpose and character of the acts that had taken place. The Court of first instance misunderstood the motives behind and the nature of A’s acts and found that A’s admitted copying was excused by the fair dealing exception to infringement. The Court of Appeal, however, was able to comprehend exactly what A had done and why. It was therefore able to apply the relevant fair dealing provisions correctly, reverse the decision of the Court below and find infringement.

Facts

CT developed the "Sound Blaster" series of sound cards. The "Sound Blaster" consists of an Intel 80C51 chip with CT’s software embedded into its ROM.

CT provided drivers (specialized program designed to communicate with CT’s sound cards), including CT-VOICE.DRV, to purchasers of its sound cards. It also bundled with its sound cards a software program called TEST.SBC.

A were the producers of the "Sound Galaxy" family of sound cards. A wanted to make its sound cards compatible with "Sound Blasters" and interoperable with the application programs that had been developed to operate with "Sound Blaster". Therefore, A’s cards had to be able to respond to application programs as if the cards were "Sound Blasters". A investigated the "Sound Blaster" cards and developed the "Sound Galaxy" sound cards in 3 versions which were all "Sound Blaster" compatible. A also used Intel’s 80C51 chip in its sound cards.

CT commenced proceedings for infringement of copyright in relation to the reverse engineering of its software embedded in the ROM of the chips for the "Sound Blaster" sound cards and in relation to the disassembly (decompilation) of its TEST.SBC program. A raised the following defences:-

  1. that it developed its ROM software independently and without access to CT’s source code;

  2. that in so far as the process of development required some reproduction of CT’s TEST.SBC program, this reproduction amounted to fair dealing for the purpose of private study;

  3. that CT had, by attacking compatible sound card manufacturers, acted contrary to the principle of "non-derogation from grant"; and

  4. that it was entitled to use CT’s card and any associated software however it wished, pursuant to the principle in Betts v. Willmott.

Defences 1, 2 and 4 were accepted by Lim Teong Quee JC at first instance. CT appealed.

Judgment of Court of Appeal

1.Did A reverse engineer CT’s sound card?

This was a question of fact. CT relied on 5 "fingerprints" of disassembly - 5 undocumented commands which were included in the "Sound Galaxy" cards. The codes for A’s commands included copies of some errors in CT’s codes. On the evidence, the similarities between CT’s and A’s software were such that the chances of independent development were low. The Court decided that it was highly probable that disassembly had taken place.

2.Did the similarities in coding support a finding of infringement?

Only about 4% of A’s code was identical to CT’s code. In terms of literal copyright infringement, this did not amount to a substantial taking. This, however, did not prejudice a finding of disassembly which involve a degree of reproduction and adaptation having a greater impact in terms of revealing the ideas and interfaces of a program, insights which would not otherwise have been obtained by independent development or empirical observation within a given time frame.

3.Did A copy the TEST.SBC program?

A admitted running the TEST.SBC program with a DEBUG program for the purpose of "understanding functionality in order to make a non-infringing, compatible product". To run the TEST.SBC program, it had to be down loaded to a PC and copied to the PC’s memory. This constituted infringement unless excused by a copyright defence.

4.Did the defence of "fair dealing for the purposes of research and private study" apply?

The relevant sections (sections 35(1)1, (2) and (5) of the SCA are at attachment 1. Consideration of a fair dealing defence usually involves consideration of 2 questions:-

(a) was the use for the purpose of research or private study?

(b) was the use fair?

Section 35 of the SCA excludes research and study for commercial purposes. The word "study" is qualified by the word "private". Commercial research is specifically excluded by section 35(5). Therefore, A could not rely on this defence. There was no need to consider whether the use was fair.

5.Did the Betts v. Willmott defence apply?

A argued that, as a lawful purchaser of the TEST.SBC program, it was entitled to use it for any reasonable purpose in the absence of a clear agreement to the contrary. Copying to ascertain functionality with the object of creating a non-infringing, compatible program was said by A to be a "reasonable purpose".

The Court held that the principles of Betts v. Willmott are restricted to transactions involving products protected by patent. They do not extend to products protected by copyright. This is because the exclusive rights given to a patentee include the right to use and sell the product. Purchasers therefore need a implied licence to resell. Copyright owners do not enjoy such exclusive rights. Their rights are confined to an exclusive right to reproduce.

6.Was copying of the TEST.SBC program onto a PC an essential step in the utilisation of the program in conjunction with a machine (section 39(3)SCA)?

Section 39(3) of the SCA is at attachment 2.

This section was enacted for a limited purpose - to permit the rightful owner of a program to input and use it in his computer. A did no copy the TEST.SBC program as an essential step in the utilisation of the program; A copied it as part of the running of the DEBUG program. Therefore, this section did not apply.

US cases of Vault Corporation v. Quaid Software Ltd. 847 F2d 255 (5th Cir 1988) and Sega Enterprises Ltd. v. Accolade Inc. 977 F2d 1510 (9th Cir 1992) were considered.


1 There is no equivalent to section 35(5) in the Copyright Bill (Hong Kong).

Attachment 1

"35(1) A fair dealing with a literary work …. for the purpose of research or private study shall not constitute an infringement of copyright.

(2) For the purposes of this Act, the matters to which regard shall be had, in determining whether a dealing with a literary …. work …. constitutes a fair dealing with the work …. for the purpose of research or private study shall include -

  1. the purpose and character of the dealing, including whether such dealing is of a commercial nature or is for non-profit educational purposes;

  2. the nature of the work or adaptation;

  3. the amount and substantiality of the part copied taken in relation to the whole work or adaptation; and

  4. the effect of the dealing upon the potential market for, or value of, the work ….

    ….

(5) In this section, "research" shall not include commercial research, research carried out by bodies corporate (not being bodies corporate owned or controlled by the Government), companies, associations or bodies of persons carrying on a business."

Attachment 2

"39(3) …. it is not an infringement for the owner of a copy of a computer program to make or authorise the making of another copy or adaptation of that computer program provided that such a new copy or adaptation is created as an essential step in the utilisation of the computer program in conjunction with a machine and that it is used in no other manner."

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