New provisions in the controversial law on the organisation of ordinary courts allow the Minister of Justice to acquire extensive rights to software supporting court IT systems. Similar rules are being introduced for prosecutors’ and bailiffs’ systems. Should suppliers be afraid?
The short answer is: they should be concerned, although the full context matters. The minister may issue a decision granting the State Treasury software rights to the extent necessary for courts’ duties. These include use, copying, modification, distribution through lending or rental, code reproduction and translation of its form. Suppliers may be required to deliver documentation, source code and compilation instructions, in a specified format for convenience.
Conditions for acquiring software rights
A decision is permitted where:
- efficient or continuous operation of a court program or IT system is threatened; or
- ensuring efficiency or continuity is required by an important state interest or the interests of justice;
and, in either case, agreement with the owner encounters obstacles. The minister may make the decision immediately enforceable, even during an appeal. The owner is entitled to remuneration set by the Minister of Justice after obtaining an expert opinion. Similar arrangements apply to prosecutors and bailiffs.
The rules lack internal coherence and compatibility with copyright law. Code reproduction and software copying are legally the same and already fall within software use, making these distinctions legislative clumsiness. The more important question is the potential harm to the IT sector.
Does the Act allow expropriation of software developers?
Technically, yes, because expropriation means deprivation of any property right. Contrary to some claims, however, economic copyright is not transferred to the State Treasury. The existing owner remains owner. The state’s rights resemble a non-exclusive compulsory licence: non-exclusive because the owner may continue using and distributing the software, compulsory because it cannot oppose state use. Industrial property law contains similar compulsory patent licensing mechanisms.
Grounds and remuneration
The grounds themselves do not seem excessively controversial. Difficulty reaching agreement should not alone justify a decision, particularly if it merely means differing negotiating positions. Expropriation solely for the interests of justice would be too arbitrary. But neither is sufficient alone: a threat to efficiency or continuity, or a need to ensure them, must also exist.
Existing law already permits use and even modification of lawfully acquired software without owner consent where necessary for intended use. This can be excluded contractually, but otherwise allows users to correct errors and ensure continuity themselves. No administrative decision or extra payment is needed. The new rules prevent contractual exclusion of the minister’s powers, while granting remuneration in return.
Remuneration, set after expert advice, must be equivalent to the acquired rights. The statute does not expressly require market value, although that interpretation is needed for constitutional compliance. An owner disputing the amount may sue in an ordinary civil court, which will examine equivalence. All available evidence may be used to establish the owner’s assessment of market value.
The owner may also challenge expropriation itself, denying a threat to operation, an important state or justice interest, or obstacles to agreement. This requires an administrative appeal, subsequently reviewable by administrative courts.
What can the State Treasury do with the software?
The potential rights initially appear very broad. Yet reproduction and modification may be acquired only as necessary for courts’, prosecutors’ or bailiffs’ duties. Copies and changes must serve those purposes. Other uses, such as installation in unrelated administrative sectors, are generally unauthorised.
The right of distribution is harder to justify. Distribution means making software publicly available, including placing it on the market for payment or free. Again, it must serve the specified judicial, prosecutorial or enforcement duties.
However, the Act imposes no restriction on the form distributed. The state could theoretically distribute object or source code, or simply publish it, if within those duties. A rational justification for publishing acquired source code is difficult to find, but the mere possibility will often be unacceptable to an owner. Disclosure could end a product’s commercial viability, causing major losses or even closure. Immediate compulsory delivery of source code and all technical documentation heightens the danger.
These aspects deserve criticism. Allowing public distribution without limiting it to object code may also be unconstitutional. The minister’s powers are disproportionately broad compared with genuine public-interest needs. They may conflict with the Berne Convention, TRIPS and WIPO agreements, which allow restrictions only without unreasonable prejudice to authors’ interests.
If the President signs…
At the time of writing, the provisions await presidential signature as part of the judicial reform that triggered nationwide protests for other reasons. If signed—and no veto has been announced for this Act—suppliers to courts should consider whether they accept these risks of dealing with the State Treasury. In particular, they must consider potential loss of source code control and the cost and uncertain outcome of litigation challenging decisions. They may investigate terminating existing licences before entry into force or a ministerial decision. Every supplier should assess the risks before tendering for court, prosecution or bailiff software. One may assume the state will not abuse the powers, but there is no guarantee.
