Software, Marjoram & Rosemary - A Brazilian Experience
Denis Borges Barbosa (1989)
The XVIII Century Brazilian playwright Antonio the Jew wrote a fine comedy named "The wars of marjoram and rosemary” where spiced love battles are fought in a setting not unlike Mozart (or Beaumarchais) "The marriage of Figaro". For at least ten years, the marjoram and rosemary warring scents are strongly felt in Brazil in regard to the protection of computer software; and despite the courteous setting of the discussions, the matter is serious enough to spill some blood around. (1)
From 1979 on, Brazilian Government, universities, incipient local computer industries, specialized workers and the legal circles have extensively discussed what steps should be taken to incentive local creation of computer software and general availability of foreign software products. In this period the establishment of a locally controlled computer industry was a major objective both of Government, including the military, and the nation's intellectual classes; the interest aroused by such discussions cannot be exaggerated.
Literally hundreds of seminars, courses, working groups and congresses brought the theme to the knowledge of high school students, military officers, would-be investors and the like. Very soon, the issue of legal protection of software emerged as one of the most important aspects of the discussion.
Should software creations be protected at all? University people felt that software, like scientific discoveries, should be open to all. If legal protection was necessary, what system should be chosen? Officials from the Brazilian Patent Office supported the argument that, waiting for the time where a universally accepted method of protection was found, the rules applied to transfer of technology contracts should be extended to software, which should therefore enjoy from a protection comparable to that granted to trade secrets or know how. Alternatively, the Patent Office proposed to regulate at once the tax, exchange and foreign investment aspects of software imports.
Other parties suggested the granting of special patents (a provision of the Patent Law denying protection to "systems" was deemed to prevent the issuing of regular patents). Many computer specialists and lawyers advanced the use of a special kind of protection, neither patent nor copyright, but a new specific system that should correspond to the unique problems brought by the software creations. A bill was introduced in Congress in 1984 providing for an example of such sui generis protection; but the sending of the Government Software bill the following year prevented it from ever being voted.
On the other hand, copyright protection found initially more opponents than supporters. Being the system of protection most frequently identified with the interests of foreign software producers, a feeling grew in some circles that the other methods could possibly be more favorable to help the domestic interests. In such a context, the Nationalistic undertones of the matter are easily emphasized.
The 1987 Software Law
But should really copyright protection be extended to software, on exclusively technical and economic grounds? After the December 1987 Software Act (Law n' 7.646) the matter seemed to be moot, as an unequivocal stance was taken in favor of the copyright solution. Even though not stating that copyright is the system governing software protection, the Law comes close to that by saying that except where provided otherwise, the Copyright Law (Law n' 5.998/73) should apply to the software creations.
Special provisions of the Act deal with the term of protection (25 years, as in the new French Law (2)); the status of foreign creations (reciprocity is the rule); the filing requirement (voluntary and secret); the title to the work in a employee or made-for-hire context (the employer is the sole owner instead of the fifty-fifty rule of common copyright); and the fair usage rules (somewhat stricter in the case of software).
In all other cases, the common copyright statute governs, including in some very important issues like moral rights, basic licensing rules, etc. The Brazilian system may be therefore now classified within the copyright model, albeit slightly modified. It is, in this sense, much more faithful to the original XVIII Century French concept of Droit d'Auteur than the already mentioned new French legal standard for software (in force since 1986) itself.
It must be made clear that Law n' 7.646 is not a pure blood Intellectual Property statute; much to the contrary, it contains a larger set of provisions regulating other related subjects, for example, the commercialization of software in the internal market, subjecting it to a registration with a specific Federal body not related to the Copyright Office; a system of controlled access of software products, whereby only foreign creations not similar to locally produced items should be allowed; tax and other incentives; and rules both in favor consumer protection and against abusive commercial practices.
This legislation intends to take care of national and developmental interests related to the creation and availability of software, the scope of which goes far beyond the intellectual property issue; the balancing of the various legal considerations at stake is done, therefore, in a much broader perspective. Even so, the portions of the Law n' 7.646 that address to the Intellectual Property aspects of computer software production do not stand the technical and economic argument against the use of copyright.
The continuing problems of copyright
In an article published in WIPO's Copyright Magazine of June 1988, this author advanced some arguments against the adoption of a copyright standard for computer software creations. A number of those arguments may certainly be applied to the present Brazilian Law:
"(...) copyright does not fully satisfy the legitimate interests of the software developer to the extent that protection only covers actual copying. Use of soft ware in the computers is also a major concern for the developers, specially in times when sharing of equipment resources and system linkages make it possible to multiple users to take economic profit from one copy of a program. Furthermore, using the basic concepts of a program to create new programs does not infringe the principle that copyright covers expressions and not ideas.
Other very important issue is reverse engineering. Again the notion that copyright covers expression, not ideas, leads naturally to the conclusion that anyone can extract the ideas of a program without infringing any law. This question may show to be especially important in some kinds of software, even considering that, for some authors, it is impossible to reverse engineer something without copying, decompiling, disassembling or performing the program, therefore without infringing the copyright attached to it.
From the standpoint of the public interest, as opposed to the software developer's interest, copyright seems to be an excessive and unreasonable form of protection; totally unbalanced in favor of the copyright owner.(...) The more obvious examples of unbalanced treatment in the use of copyright to protect software are (...) the moral rights issue.
(...) under the moral rights principle, in force in many civil law jurisdictions, the titleholder to a copyrighted work may withdraw an already sold or licensed work from publication, irrespective of prior commitments to buyer or licensee, e.g. in Brazilian Copyright Law, Art 25, IV. It does not seem adequate that such an ethically- oriented, humanistic institution should be used to enhance the commercial value of a spreadsheet.
The inadequacies of a copyright protection of software do not stop there: a literary or artistic work-designed legislation does not provide for other legitimate needs of the community, as for instance, to have the technology for which the protection is sought effectively worked in the country for the general benefit of the public.
Without the means to compel the software owner to work his product within the country, for example under pain of revocation or compulsory licensing, a copyright law may enable someone to abusively withhold technology essential to the development of a country, or even technology necessary for medical, environmental or other humanistic reasons. (...)"
The main problem with the new Brazilian statute, however, was that the copyright solution, while voluntarily adopted in the U.S. and in other countries (more for expediency and certainty than for adequacy), resulted in the case of Brazil mainly from strong U.S. inducements, backed by threats of retaliation under Section 301 of the U.S. 1984 Trade Act (3). Other inducements of comparable persuasiveness were employed by U.S. officials in third world countries, following a specific Congressual directive to such a purpose (4).
For copyright was an acceptable alternative in the U.S. particularly because it is ready to use and quite practical: it has already worked well in similar contexts, as for instance to help the building up of a cinema industry. What was not taken into consideration (perhaps for strategical reasons) was that copyright as a concept is singularly extraneous to a number of legal systems.
While the English (and American) tradition sees the copyright as an objective, or property right, consisting in the exclusive right to reproduce a work, the French tradition stresses the individualistic and personal aspects of creation: the 1789 Revolutionary legal concept of copyright is an Author's Right and not a right to copy. In countries influenced by the French tradition of the "Droit d'Auteur" (as Brazil is), the basic legal standards are directed to the protection of the individual author or creator's personality rather than his property interests, irrespective of the increasingly commercial patterns that prevail in the market, especially in the case of collective works like cinema and software.
As actual conditions of the Brazilian adoption of copyright were already mentioned in this author's article in WIPO's Copyright Magazine of June 1988, it seems enough to stress that assimilation of copyright patterns in a Droit d'Auteur environment is not an easy task. Some legislative developments in Brazil since the enactment of the 1987 Software Law has been demonstrating this difficulty.
The return of Nature
The individualistic tradition was by no means discarded on the enactment of the new software law. More than a simply statutory construction, individualism and anti-business standards in the matter of copyright are philosophic concepts deeply imbedded in Brazilian sensibility, if not always apparent in the legislation as enacted. The fact that such philosophy is quite compatible with the Droit d'Auteur tradition seems to show that it is not peculiar to Brazilian culture or entirely naive in its analysis.
"Chassez le naturel, il revient au galop" (strike out the natural: it comes back fast as a bolt). A recent Copyright Reform bill, introduced in Brazilian Congress in September 1989, seems to justify the old Destouches saying: less than two years after the Software Law have introduced its new concepts into the Brazilian legal system, the legislative proposal eliminates corporate ownership; also excluded is the right to assign or sell to third parties the copyright, which shall be thus held exclusively by individuals.
As the proposed law would revoke prior general copyright provisions, including those related to software, extreme uncertainty if not complete chaos would follow, should this bill ever be enacted. It must be stressed that this bill is not an unprecedented or isolate initiative in the Brazilian Legislative History; even though presented by a representative of a minority party, it follows almost to the letter, in the pertinent points, a draft prepared recently by the Federal Copyright Board.
Furthermore, the new Brazilian Constitution, enacted in October 5, 1988 also stresses the individualistic approach to copyright in a series of provisions, namely:
Art. 5º, XXVII: "to the authors belong the exclusive right to use, publish or reproduce their works, to be transferred to the heirs for the time stated in law;"
Art. 5º, XXVIII: "according to the law, it is assured:
a) the protection of the individual participations in collective works (...)
b) the right to audit the economic exploitation of the works created or in which some participation was held, granted such right to the creators, the performers and to the respective unions or associations."
The copyright standard does not seem to be a lasting solution, therefore, in countries like Brazil. It is hard to conceive how a sophisticated market economy may exclude IBM or Ashton Tate from the right to hold software ownership; but is also difficult to believe that the individualistic trend, so deeply ingrained into Brazilian sensibility, could be quashed for the foreseeable future.
In other words, copyright in Brazil (and, probably, in many other countries) cannot be considered a safe business environment. A much more sensible approach to the need to protect software would be the sui generis solution advanced for many years by specialized writers and lawyers. In the Brazilian scene, some clear steps were already taken in such a direction.
The dawn of a new right
The same 1988 Constitution, even though extending on a unprecedented fashion the rights and privileges of the individual scientific, artistic or literary creator, has also established a specific Constitutional status for inventions and industrial creations which favors corporate ownership and investment in a Development-oriented environment.
In six of the seven Brazilian Constitutions to date a specific provision was included to assure protection to industrial property. Patents were mentioned already in 1824, as a patent statute have been enacted in 1808; from 1891 on trademarks and trade names were added. The 1988 Constitution is however the first one to provide for the protection of "inventions and other industrial creations" as specific kinds of intellectual property rights (Art. 5, XIX). But what is an "industrial creation"?
It must be said that this provision was introduced into the Constitutional Bill as result of a draft originally prepared by this author, who was then the Attorney General of the Patent Office. The original purposes of the new Constitutional item may be therefore established with certainty even though court construction and practice may eventually dissent from it.
Professor Andre Lucas coined the expression “industrial creations” or, more precisely, abstract industrial creations in his outstanding 1975 book (5) on the new and valuable technical solutions that could not be adequately protected by the traditional patent system. A common aspect of such creations (the paramount example of which is computer software) is that they markedly differ from the classical industrial invention to the extent that they do not result in transforming or reducing a subject matter into another state or thing - a essential test of patentability, usually described as "industrial utility" (6). As is well known, software is a result of an informational technology, the achievements of which do not require physical transformation of any kind.
The most important aspect of Professor Luca's findings is that there are now essential technologies, deserving legal protection, but heretofore excluded from patentability, as they are not "inventions". "Industrial creations" could be thus defined as those new solutions of technical problems other than inventions; under such a concept, even small improvements resulting from the workshop experience could then enjoy from some a legal status. Some of them are "abstract", in the sense established by Professor Lucas; others may not be so.
By accepting other industrial creations (including Professor Lucas abstract creations) besides inventions as protectable items the 1988 Constitution expanded broadly the scope of Industrial Property or, more precisely, the Constitutional authorization under which lower laws could establish the Industrial Property rights.
As any undue expansion of the protection accorded to technology may impair rather then stimulate the progress of the industry, the new Constitution subject the enactment of any Industrial Creation right to the fulfilling of some requirements. The law protecting abstract or other industrial creations must therefore take into consideration the social interests of the country and, furthermore, contribute to the technological and economic development of Brazil. Those requirements are, by the way, exactly those imposed on the exploitation of industrial property rights in Brazil by Art. 2' of Law 5.648/70; now they were granted Constitutional status in order to prevail over the ordinary Legislative process itself.
Thus, under the present Constitutional setting, the treatment of Industrial Creation rights and copyright are substantially different. The individualistic and anti-business aspects present in the copyright provisions are not apparent in the case of the newly introduced Industrial Property right; on the other hand, Industrial Creations are only to be granted in the interest of Brazilian society and development, while copyright is recognized irrespective of national purposes and interests, developmental or otherwise.
A proposal for the future
Except for some extreme case where the demand for protection is clearly and unequivocally against the general interests of Brazil, Brazilian History and legal tradition leads to the belief that the new Constitutional right shall in due time support and even incentive the enactment of new statutes, assuring protection for semiconductor chips, biochips or any new object of technology, specially where they are not deemed to be inventions.