Replicating the functions of a software is not always counterfeiting

With judgement no. 20250 of July 15, 2021, the Italian Supreme Court confirmed that the creation of a software with similar functions to those of another existing software, is not always counterfeiting, not even if the new software is created starting from the source code of the already existing software.

The case concerned a dispute brought by a company author of a software used in the electoral consultations field with the aim to automatically manage the ballot and counting of votes procedures. This software was licensed to a second company that developed itself a software capable of carrying out the same functions of the licensed software and who gave it to the Public Administration permanently.

Therefore, the company author of the first software accused the licensee of having unlawfully decompiled the software, studied its procedure and re-elaborated the source code of the program to create a software capable of carrying out the same functions of the licensed one. A purpose that, once reached, would have damaged the licensed company also under the economic profile, being a behavior infringing the copyright on the program as well as under the competitive profile.

Nevertheless, the Italian Supreme Court rejects the appeal supporting the decisions expressed in the previous two levels of judgment. Starting from the assumption by which “it is not illicit to create a new software which meets the same functional needs of a software already in use”, the Court points out that the two programs had two different source codes.

On the basis of these considerations, the Court affirms that the second software, developed by the licensee, is not a simple reworking of the first one but a new creative work offering a different “expressive form”. As a matter of fact, during the proceeding, the Technical Consultant made sure that the two programs appeared different “from the point of view of their formal expression constituted by their source codes”, with the consequence that the second software could not be considered a counterfeit of the first one.

Not even the use of the information obtained through the decompilation was considered sufficient to integrate the hypothesis of counterfeiting. The Court recalled that the art. 64-quater of the Italian Copyright Law (Law n. 633/1941) prohibits “the information obtained by replicating the source code be used for the development, the production or the marketing of a computer program substantially similar in its expressive form, or for any other activity which violates copyright” but, in the case under exam, the expressive form of the second software was excluded to be similar to the form of the first software, as well as it was excluded “the expressive identity between the two programs” capable of leading to consider the second program as a skillfully masked replication of the first one.

Lastly, the Court excluded that the licensee’s contested conducts could be qualified as acts of unfair competition, in accordance with art. 2598 of the Civil Code.

Even considering that a further evaluation of the question did not fall within its competence, the Court on this matter stated that unfair competition by servile imitation “is identified with the only replication of the exterior forms identifying the product of the competitor … and not also of those made necessary by the functional characteristics of the product itself”.

In conclusion, the lawfulness of the development of a software able of executing the same functions of an already existing program has been confirmed, even if the new software is created thanks to the information obtained by studying the source code of the previous software, but on the condition that the second software has a different source code and that such code does not imitate the “central core” of the original source code.