Judge rules against SAS’ claim that a British startup illegally cloned its software
A federal judge in Texas has rejected SAS Institute’s claims that a British startup illegally cloned its popular statistics software and violated copyright law.
The judge, based in the U.S. District Court for the Eastern District of Texas, ruled that parts of SAS’ software were not copyrightable and dismissed the claims with prejudice, which means they cannot be filed again.
The ruling was the latest in a years-long legal tussle between Cary-based SAS and World Programming Limited (WPL), whom SAS has repeatedly accused of illegally reverse-engineering its software.
SAS’ statistical software has been around since the 1970s and has made the company a giant in analytics. Co-founded by Jim Goodnight while he was a teacher at N.C. State University, the company now employs around 6,000 people at its headquarters in Cary and made Goodnight the wealthiest man in North Carolina.
In court, SAS has tried to keep WPL, a much smaller competitor, from selling its software, called WPS Analytics, in the U.S., The News & Observer has previously reported.
SAS has even won some monetary damages in its complaints. In 2015, a North Carolina jury found that WPL had committed fraud in its dealings with SAS that ultimately led to the creation of its own software. In that case, SAS was awarded damages worth up to $79 million, The N&O reported.
However, this is the third time that SAS has failed to get a copyright-infringement verdict to stick against WPL, after previous attempts in North Carolina federal court and in the United Kingdom were turned away.
The Texas lawsuit goes back to 2018 when SAS accused WPL of “simply copying the system and creative expression of SAS.” The Cary company also sued some of WPL’s customers, including Pizza Hut, The N&O reported at the time.
In a statement, SAS said it planned to appeal the federal court’s decision.
“SAS is disappointed in the recent copyright decision against SAS, and intends to appeal it,” spokeswoman Shannon Heath said in an email.
“The recent copyright decision does not disturb any of the earlier rulings against WPL stemming from WPL’s breach of contract and fraud,” Heath added, “nor does it change that WPL remains enjoined from licensing WPS to any new customer for use within the United States. WPL remains responsible for paying SAS nearly all of the $79 million award against WPL.”
WPL declined to comment and referred The N&O to the ruling from the judge.
In its lawsuit, SAS alleged that WPL had bought copies of a “learning edition” that SAS sells to students, then proceeded to break down how the company’s software worked. WPL then was able to write its own software that essentially mimicked SAS’ popular software tools.
This created an obvious business threat to SAS, as customers could easily switch to WPL’s analytics program without much friction. WPL also went on to market its software to customers for less than SAS charged.
SAS began to fight against WPL in court in 2010, first in North Carolina and then in the U.K. That was when SAS won the $79.1 million damages verdict in North Carolina from what a jury found was a breach of contract. SAS’ Learning Edition bars customers from reverse engineering.
But the copyright accusation did not stick in North Carolina or the U.K.
The dispute in the lawsuit is not over the lines of code that make up WPL’s software but rather other elements of its program.
“It is settled law that, to at least some extent, software is entitled to copyright protection,” District Judge Rodney Gilstrap wrote, noting protection can extend to “literal” elements, like source code, as well as “non-literal” elements, like organization and interface.
SAS said it was these “non-literal” elements that were at stake, namely some of SAS’ input formats, output designs, naming and syntax.
But, Gilstrap wrote, “WPL established that at least some of the asserted works were unprotectable because they were in the public domain.”
“Once a defendant establishes that at least some of the material is not entitled to protection, the burden shifts back to the plaintiff,” he wrote, saying that SAS needed to show why these elements actually were entitled to protection or that WPL had copied other protectable parts of the program.
“SAS has done neither,” the judge wrote. “[T]hey simply repeated and repeated that the SAS System was ‘creative.’”
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