The German legal system is examining whether SAP can legitimately charge for indirect access to its software from a third-party application
Many SAP customers have been disturbed by its insistence on charging for indirect access. Last year’s case against Diageo supported SAP’s position that access by users that were connecting to SAP systems indirectly was chargeable, even though SAP had no user metric for such use.
However, there is a basic question that is currently being examined in Germany: is SAP permitted, by European Union (EU) law, to charge for indirect usage when this is a necessary part of the program usage?
The possibility of invalidity derives from interpretation of key provisions in the EU’s 2009 Software Directive, which recognised the crucial value of software but also sought to eradicate what it called “negative effects on the functioning of the internal market as regards computer programs”.
The fundamental question of whether the imposition of charges for indirect access was invalid under EU law was surprisingly neither included as part of the defence, nor examined by the judge, in the Diageo high court case.
However, German academics have now been exploring this point in the context of SAP’s business practices. Representations were also made earlier this month by the German Association of IT Professionals to the country’s competition authority (the Bundeskartellamt), although details of these representations have not been released.
The starting point is that any rights owner, such as a software supplier, will own copyright in its programs and can choose how, under what terms and at what prices it can license these to its customers.
However, copyright law includes certain “permitted acts” that do not require permission from the owner and for which no charges can be levied. Fair use is one example. The UK’s copyright legislation has more than 60 of these exceptions, established over 200 years but more recently often derived from EU directives.
The EU has always sought to support the interests of the rights owners, who should be encouraged to invest and innovate and so expect remuneration. But, equally, this must be balanced against the requirements of business and consumers.
Against this backdrop, the EU issued a directive in April 2009 specifically addressing software.
Such directives are sometimes quite general in nature and do lead to the courts having to interpret the intentions behind a directive, as reflected in the background wording, as well as the specific articles.
The 2009 directive specifically recognised the critical importance of normal usage and interoperability and that these should not be inhibited.
The objective was acknowledged to make it possible that all applications, from different suppliers, could work together without legal barriers imposed by one supplier.
So, against this backdrop, there are two invariable requirements laid down by the EU:
Use (in the form of running, loading, display, and so on) does not require a licence from the software owner where it is “necessary” for its use by the buyer, including for error correction.
And (subject to certain conditions) a licence is also not required where the use is “indispensable to obtain the information necessary to achieve interoperability with other programs”. However, this second provision cannot be applied if it “unreasonably prejudices the rightholder’s legitimate interests” or conflicts with “a normal exploitation” of the software.