Neil rambles: copyright infringement or breach of contract?

I was asked to respond to a particular thread on about slipstreaming a Windows XP Home CD, and various acts relating to copying software, and, whilst the answer makes most sense in the context of that thread, I felt that the principles contained within my response might be of interest to a wider audience. Or, rather, I’d be grateful for any comments and reasoned thought against anything I’ve written here – hearing what others think is one of the best ways to learn. I’ve posted my response basically as it appeared on the forum- I’ve edited a few things so that it is not tied so tightly to the relevant thread, but, nothing of substance. I maintain, however, that (a) it’s probably dull, and (b), it’s definitely not legal advice- just my thoughts on a particular issue.

… I wanted to know if you could clarify something for me: Based on what you wrote, you feel that the UK law stipulates that it is considered a copyright violation if the consumer exceeds the bound limitations of the End User License Agreement. Since there is no provision expressly prohibiting disk imaging in Microsoft’s agreement (, does this mean that UK law essentially declares you are in copyright violation since Microsoft never says one way or another?

The argument at question here is a very old one; what is the difference between a licence and a contract? In short, is a EULA a copyright licence or a contract – or, indeed, both, or neither.

Copyright under English law

Software can be protected under copyright, specifically as a literary work, provided that it satisfies certain criteria (which are irrelevant for this); let’s assume that, upon writing the code to Windows XP, Microsoft automatically attracted copyright protection. (As a tangent, unlike US law, where enforcement of a copyright benefits strongly from having a registration, there is no process for registering copyrights under English law; a qualifying work is protected on being fixed in a tangible form – in this case, being written as source code.) The English legislation dealing with copyright (the Copyright, Designs and Patents Act 1988) sets out “acts restricted by copyright”; those rights which are controlled by the copyright owner. Amongst other things, these include the right to control copies, and the right to communicate copies to the public. As such, without a licence, it is an infringement to make a copy of a protected work.

There are exceptions to this copy-right, which means that certain classes of use are not covered by copyright; in a sense, like the “fair use” provisions under US law, although, not as far reaching. For example, the main carve-outs are for news-reporting, criticism and review; even research purposes are strictly limited, and there is certainly nothing as broad as reasonable personal use. As such, without a licence, creating a copy of a work is an infringement of copyright.

An owner of a copyright can grant a licence, which is basically a bare permission to do something- for example, I grant Ant a licence to the contents of this post, for the purposes of hosting it on the forum. I don’t recall seeing anything in any terms and conditions relating to intellectual property, so, the licence is an implied one. As such, if Ant were to, for example, make a book based on this information, or another user were to take something I had written and add it to the wiki, irrespective of whether it was attributed to me or not (that’s a moral rights issue, which is related, but irrelevant here), it would likely be an infringement of my copyright. (Whether I would choose to enforce my copyright is an entirely different issue.) The important thing to take away from this section is that, without a licence from the copyright owner, you have virtually no rights over a copyrighted work; from here on, I’m going to say you have no rights, as that’s pretty much the position in terms of useful rights relevant here.

A licence is a permission which a user is granted. It does not need to be accepted, nor even communicated to a user – without such a licence, a user has nothing. When you purchase software, you can probably imply a licence to do all acts necessary for the most basic form of installing and running that software; I’d be hard-pushed to suggest that you had a right to run N-lite, or other such tool, and then burn the resulting contents to CD for installation elsewhere. Most developers will include a licence, which sets out the scope of the rights granted to the user, but, a user has no say in this; either they can use the product in accordance with the licence, or they can use the product outside the scope of the licence, and thus infringe copyright. The GNU GPL attempts to be very clear on this point, that it is a licence and not a contract, but, as I will go on to explain, the difference is not always clear-cut, and can be very important.

Contract under English law
There are several prerequisites for a contract under English law, which I shall not bore you with, but, the part which is of relevance here is acceptance. Before a contact comes into existence, it has to be accepted by both parties to the contract. In the case of a Microsoft EULA, this is presented to the user before they can really begin to use the software; by clicking the “I accept” button (or “Okay”, or whatever the wording may be), the user indicates that they accept the terms and conditions of the contract. Note that a user does not really have scope to negotiate this contract – it is take it or leave it – but, the user does have the option of refusing to accept, and thus being eligible to return the product. (In practice, this returning of software can be rather difficult, especially if the user is wishing to keep the hardware, but get a refund on the unwanted, and often bundled, software).

A contract contains terms – some of these terms can have different names, and have different legal weights (“terms”, “conditions”, “warranties”, “indemnities”, for example) – but, fundamentally, it consists of terms. These terms may grant rights, or impose restrictions; for example, I could contract with you, to say that, I will give you my SugarBabes CD if you will give me your My Little Pony. If I break a term of the contract (for example, I take your My Little Pony, but do not give you my SugarBabes CD), you could sue me for breaching our contract. (I may also be committing a criminal offence in this example also – by possessing a SugarBabes CD, if not for the obtaining your My Little Pony by deception – but that is irrelevant here.)

The difference

The difference is of great importance, but is rather nuanced.

You do not breach a licence, as far as I am concerned. You are either within the scope of the licence, or outside the scope of a licence. A licence is not a contract, and so cannot be breached. By acting outside the scope of the licence, you are infringing copyright.

However, if you act outside a contract’s terms, you are breaching that contract; you have broken the trusted position between yourself and the other party. A breach of contract does not necessarily mean an infringement of copyright, though.

Let’s consider a document quite close to my heart- the GNU GPL. Is it a contract, or is it a licence? Some will argue one way, some will argue the other; personally, my opinion changes depending on what I have read recently, or how I am thinking. It’s certainly not a fixed position.

The GNU GPL effectively states that “You have an unlimited licence to do pretty much everything a copyright owner can do, provided that you stick to the terms of the document”. And it’s the “provided that… document” part which causes the uncertainty. If a user were to fail to stick to the terms, would the user be liable for copyright infringement (and also breach of contract), or just breach of contract? Well, it depends on the interpretation.

If you interpret the “provided that… document” wording to be a restriction on the ambit of the licence, then, by failing to comply, you are acting outside the terms of the licence, and thus committing copyright infringement (and also breach of contract). This interpretation means that your licence is dependent on your compliance with the terms of the document.

If you interpret the “provided that… document” wording to be a term of a contract, then, by failing to comply, you are breaching your contract. Importantly, this interpretation means that, in exchange for your promises of what you will do, you are granted a wide-ranging licence; by failing to comply, you do not lose your licence, but rather are required to remedy your breach under the law of contract. Your use of the copyrighted work is still licensed.

Bringing the discussion back to a the Microsoft Windows XP Home EULA, the rights granted to a user are far more limited. As such, by copying without permission to do so, it is likely that you are infringing Microsoft’s copyright, as you are exceeding the ambit of the licence. You are not agreeing not to do something which you would otherwise be entitled to do; you are getting a limited licence subject to some terms and conditions, with no rights ever granted to exceed that licence.

As such, on an analysis such as this, I would suggest that, by creating an image of Windows XP Home, a user would be in breach of contract, but, more importantly here, infringing copyright.

The actual details as to why the distinction is important are not hugely interesting to a non-legal audience; basically, the distinction comes down to whether the infringement is remediable by damages, or whether the licensing party has grounds for an injunction against the infringing part. (An injunction might be harder to obtain against a party merely in breach of contract, as the breach is likely to be remediable by damages, and thus not needing an injunction).

To me, that seems unreasonable. I’m not saying it can’t be that way…like you said, these are obsolete laws in a tech-progressive world…but I would be hard pressed to vote for any yahoo willing to tell me I am guilty until proven innocent smile

I am not convinced that this is at all unreasonable. By paying money, you are being granted a licence to copy the software to your computer, and to do certain things which, otherwise, you would not have been entitled to do. If you just breach a term of the contract, but remain without the scope of your licence, then, you are liable for breach of contract. But if you copy the CD and give it to all your friends, then, you are infringing copyright as well as potentially breaching your contract. Without the EULA, you have no rights at all.

The right to enforce a copyright infringement is important in the open source world, as, to many projects, damages are insufficient. It is often stated to be spreading FUD that, if a user fails to comply with the terms of the GNU GPL, they could be required to release the source code to their changes- the argument is often made that this could never happen. Personally, I disagree with this; it could be possible to seek a writ of mandamus, or a specific performance; essentially forcing the user to comply with the GNU GPL, on the grounds that their breach is not remediable by damages. This has yet to be tested in court, but, I’d be very interested in hearing reasoned arguments against this approach.

It is important to note that no-one is being judged “guilty until proven innocent”; if you were to copy the Microsoft Windows XP Home CD, Microsoft would still need to prove that you had infringed their copyright, although, to be honest, I do not see that being very difficult, especially as (a) the scope of the licence is pretty clear, to my mind, and (b) it only needs to be proven “on the balance of probabilites”, as it is a civil, and not criminal, standard of proof.

(You may feel that, as argued by many about the US cases brought by the RIAA, this is only true in principle; few people have the resources to successfully defend themselves against a claim of copyright infringement brought by a determined company and the full weight of its legal team, and end up settling, and accepting that they were infringing copyright, simply because it is more commercially sensible to do so. This is not a criticism of the law of copyright, though, but rather one of due process, which is a very different point. For example, I might not be in a position to defend myself against a claim that I was negligent, with the result that I caused you injury, but, that is not a problem with the tort of negligence.)

I hope that this makes some form of sense- apologies for the length, and the complexity of the issue (the latter not entirely of my making, though). If you have any questions, please do not hesitate to let me know; the same goes if you feel that any part of this is incorrect, or my logic is flawed.


5 Responses to Neil rambles: copyright infringement or breach of contract?

  1. […] EEE PC placed an observative post today on Neil rambles: copyright infringement or breach of contract? […]

  2. Tyler says:

    Hmm, nice in detail explanation

  3. Idetrorce says:

    very interesting, but I don’t agree with you

  4. p1ip1i says:

    idetrorce- on any particular aspect, or with the whole thing? I’d be very interested to hear your reasoning, as i don’t think that anything I say is actually that legally unsound?


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