SAS turns to Texas for help in copyright battle, suing British company and Pizza Hut

Two bites of the apple not having sufficed, SAS is taking a third and going back to court in hopes of shutting down a British competitor that’s cloned its namesake statistical-analysis software.

The Cary software company is suing World Programming Ltd., accusing it of violating copyright and patent law for coming up with a software suite that replicates the functionality and programming language of the SAS product.

Other competitors in the statistical-analysis market, unlike World Programming, went to the trouble of creating their own systems “as opposed to simply copying the system and creative expression of SAS,” SAS says in a new legal filing.

The lawsuit, filed in mid-July, also targets several companies that package and re-sell World Programming’s software, and several of World Programming customers. The most prominent of the targeted customers is the Pizza Hut restaurant chain.

But the biggest wrinkle of the case perhaps isn’t the filing itself, but where SAS and its lawyers chose to file it: the U.S. District Court for the eastern district of Texas.

The Eastern District is well known in legal circles for its friendliness to patent holders, to the point that in 2015 it hosted 44 percent of all the federal patent lawsuits filed that year, according to the San Francisco-based Electronic Frontier Foundation.

SAS went there after previous bids to get World Programming slapped with a copyright-infringement verdict failed in both a North Carolina federal court and in the United Kingdom.

“It’s blatant forum shopping,” said Alex Moss, a staff attorney at the Electronic Frontier Foundation, a San Francisco advocacy group.

SAS is seeking an injunction that would bar World Programming from duplicating the function of its analytics package, and force it to recall and destroy any copies of World Programming’s product that exist.

It’s “almost self-evident” that would ruin World Programming given that its SAS clone is the only thing the British company sells, 4th U.S. Circuit Court of Appeals Judge Harvie Wilkinson said in a ruling last fall that confirmed SAS can’t get an injunction from its North Carolina case.

What SAS alleges

The SAS software suite is the original, flagship offering of SAS Institute, and has been around in various forms since 1972.

Unlike a spreadsheet, it’s geared to working with enormous data sets and applying to them some of the most advanced statistical methods in mathematics. It has its own programming language that allows users to customize an analysis to a mind-boggling degree, and a reporting system that for many years was the industry standard in academia and finance.

World Programming, according to court filings, bought copies of the “learning edition” SAS sells to students, studied the program’s manuals and ran statistical procedures on test data to see how they worked. It then wrote its own back-end software called WPS Analytics that mimics the function of the SAS suite exactly.

The idea is that a programmer or customer used to working with the Cary company’s product can switch to World Programming’s without missing a beat, or even having to learn anything new. And of course, World Programming “markets to SAS customers for less than the cost of a SAS license,” lawyers for the Cary company said in their July 18 filing in Texas.

SAS began its litigation against World Programming in a North Carolina-based federal court in 2010, and also filed suit in the U.K.

But after a trial in the North Carolina, the most SAS was able to get in this country was a $79.1 million damages verdict stemming from what U.S. courts see as a breach of contract.

The court faulted World Programming for using the SAS Learning Edition to aid its development work, as the software license barred customers from reverse engineering and specified that the student version could be used only for “non-production purposes.”

The case went to the 4th Circuit on appeal, where a three-judge panel headed by J. Harvie Wilkinson III blocked SAS’ attempts to get a copyright infringement finding tacked on.

The “area of software copyrights is a murky one, and federal courts have struggled with it for decades” partly because it touches on free-expression rights, said Wilkinson.

SAS was even less successful in getting a copyright ruling from the U.K.

There, jurists consulted their counterparts in the European Union, and followed the advice of EU Advocate General Yves Bot. He argued that while a software package’s actual source code is protected from copying, a programming language like SAS is not.

A programming language “is the means which permits expression to be given, not the expression itself,” Bot said in his opinion.

While SAS “has not left the courtroom penniless,” as Wilkinson put it, the company clearly is not satisfied.

Why Texas?

By going to the Eastern District of Texas it’s availing itself of a set of procedural rules that’s extremely friendly to plaintiffs, Moss said.

Among other things, judges are reluctant even to consider motions to dismiss a case early, a stance that puts pressure on the target of a lawsuit to come to the bargaining table, according to a 2015 report by the Electronic Frontier Foundation.

“They make it as hard as possible to get out fast and cheap,” Moss said, adding that the judge already assigned to preside over the SAS lawsuit, U.S. District Court Judge Rodney Gilstrap, “doesn’t move on motions to dismiss at all.”

Adding the patent-violation allegations to the lawsuit also could take an appeal of the case away from the 5th U.S. Circuit Court of Appeal, which normally would hear cases winding their way up the chain from the Eastern District. Instead, it’d most likely go to the U.S. Court of Appeals for the Federal Circuit, which has jurisdiction over all patent litigation.

The Federal Circuit has handed down a copyright ruling, in a case involving Silicon Valley giants Google and Oracle, that could prove useful to SAS and that doesn’t have counterparts in jurisdictions like the 5th Circuit and 4th Circuit.

According to the federal ruling original works are “entitled to copyright protection as long as the author had multiple ways to express the idea.”

SAS “couldn’t go into the 4th or 5th Circuit and know they’d be walking into a court where they’ve already got that law,” Moss said. “It’s the only place they could go knowing they had a decision squarely in their corner.”

And the company’s lawyers drove home the point in the new lawsuit, noting that long-time competitors like SPSS, proprietary software now owned by IBM, and newer ones like R, an open-source program that’s finding increasing favor among academics, cover the same analytic ground as SAS in their own unique ways.

Moss’ group filed a friend-of-the-court brief against SAS when the North Carolina case reached the 4th Circuit. It tends to oppose restrictions on digital-privacy rights or the tightening of copyright and patent rules.

Had a view of copyright like the one SAS favors “been accepted at the birth of modern computing, many important technologies would never have existed or succeeded,” the group says, including some of today’s key operating systems and programming languages, and perhaps even the Internet’s fundamental operating protocols.

This story was originally published August 13, 2018 at 8:26 AM.