What is software?
• General protection by § 2 para 2 of Czech Copyright Act (act no. 121/2000
Sb.)
• § 65 Copyright Act (1) A computer program, regardless of the form of its
expression, including preparatory conceptual materials, is protected as a
literary work, unless otherwise provided by this Act.
• BUT
• (2) The ideas and principles on which any element of a computer program is
based, including those which are the basis for its connection with another
program, are not protected under this Act.
• + SAS v WPL (C-406/10 SDEU)
• =>
• Functionality is not protected
1
• The text of the code is protected ONE TO ONE (eg
as a book)
• Source / machine code
• What is not protected?
– Function (functionality)
– Thoughts / ideas on which a computer
program is based
Software liability?
• Who is liable for software defect?
• Is the producer always liable?
• What about open source software and frequently used disclaimer (e.g.
in MIT license)
• When is the producer of the software liable?
• What is the defective software?
• X Digital Content
• etc.
3
Software liability in Czech Republic
• Liability mainly regulated by Civil Code (CC)
• Major defects can lead to offense liability, possibly even to criminal
liability
• The most typical is to deal with private liability and to cover
damages, contractual penalties etc.
4
Liability before closing the contract
• § 1728 et seq. CC
– If the negotiations are ongoing, it is not possible to end it without
reasonable reason
– It is necessary to well define what is expected from the producer of the
software and what are the purpose and functions of the software
– Also information duty – both parties have to inform each other by all
relevant facts (not only concerning software but also the capabilities of the
parties etc.)
– Example: the seller of computer has to inform unexperienced consumer that
necessary software to run the computer can be expansive (German decision)
– Example: the negotiations have to lead to suitable software solution, if the
producer cannot offer such on the basis of lack of information from the
customer, the customer has to specify
5
Software defects
• Software malfunction (it does not work)
• Modules malfunction (some parts of the software don‘t work)
• Exchanging information malfunctions (delayed sending of data,
ping, different standards etc.)
• Purpose malfunction (software is working, but not serving the
purpose)
• 2095 CC and 2615 et seq. CC etc.
6
Factual defects X legal defects
• The software has to have quality as indicated in the contract or as
was expected
• If not, than the producer is liable
• Necessary to asses this when handing over and accepting of the
software
• If the product (SW) was tested and did not show any defects, the
producer did not intend to cause damage, but the damage still
occurred (e.g. improper use of the SW by the buyer), the producer
may not be liable for this.
• Legal defects – the software is owned by someone else, it is illegal
(dual use) etc.
7
Defects while handing over / later
• When the software is handed over:
– The customer has right to: flawless performance (possible additional period
for rectification), withdraw from contract, issue damages
• The defect appears later:
– The customer has the right to: elimination of the defect, withdraw from the
contract, reasonable discount, claim damages
• Warranty / quality guarantee:
– 6 months business, 2 years consumer / could be even longer ( by contract)
– §§ 2099 CC et seq., 2616 CC, 2113 CC et seq., etc.
8
Dealing with defects
• Communication, best possible description, documentation,
relevant information
• When the producer is not liable (exceptions)?
– Unexpected circumstances (vis mayor, electricity failure etc.) - § 2913 CC
– Limitation of liability, waiver of claim for defective performance
– Legal defects – the producer has to prove, that he was not aware of the
problem
– Limited damages when the damage was unexpected
• In agreement, almost everything can be different = SLA
– Different periods, mechanisms to hand over software, limited / extended
damages etc. (there are however always some limits – it cannot be excessive)
9
Digital services / quality – EU legislation
• What happens when digital content is not working as indicated?
• What are the specifics compared to material things?
• = consumer protection!
10
Digital services / quality
• Directive (EU) 2019/770 of the European Parliament and of the Council of 20 May 2019 on
certain aspects concerning contracts for the supply of digital content and digital services
• Art. 2:
• (1) ‘digital content’ means data which are produced and supplied in digital form;
• (2) ‘digital service’ means: (a) a service that allows the consumer to create, process, store or access data in digital form; (b) a service that allows the
sharing of or any other interaction with data in digital form uploaded or created by the consumer or other users of that service
• For example in Czech implemetnation, there is nothing as a definition of digital service
• Problematic, what is difference between information society service and digital service (however
different scopes of legal regulation)…...any service normally provided for remuneration, at a distance, by electronic means and at the
individual request of a recipient of services
11
Digital services / quality
• Strong emphasis on the
quality of services!
• Art. 7 and 8 – Subjective
and Objective
requirements for
conformity
12
Digital services / quality
• digital content should be without defect? (problematic concept) - SW always has some
imperfections and defects and the primary question is what purpose it should serve (the
authors of the directive also tried to define the border, in the end it failed - hence the
subjective and objective aspect)
• If digital content or service is not in conformity – reduction of payment / cancellation /
money chargeback etc. (however the lack of conformity cannot be only pretext for
consumer)
13
Digital services / quality
14
Digital services / quality
15
Digital services / quality
16
Cyberpunk
story
continues
• „As players were dissatisfied with the quality of Cyberpunk, company
shareholders felt similarly bewildered by the release—resulting in the
current class action. The plaintiff alleges, on behalf of the class, that the
company and the individual defendants violated §10(b) and Rule 10b-5 of
the Securities and Exchange Act of 1934. The defendants allegedly did this
by employing devices, schemes, and artifices to defraud investors. Further,
the complaint asserts they made untrue statements of material facts or
omitting material facts that defrauded the purchasers of company stock.“
Whole plot here
17
.. and it is not only Cyberpunk
• GTA Trilogy Remastered: https://www.denofgeek.com/games/gta-
trilogy-definitive-edition-problems-bugs-glitches-reactions/
• Battlefield 2042: https://www.washingtonpost.com/video-
games/2022/02/18/battlefield-2042-fixes-bugs-petition/
And many more…
18
Disclaimer
• MIT license: THE SOFTWARE IS PROVIDED "AS IS", WITHOUT
WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT
NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT.
IN NO EVENT SHALL THE AUTHORS OR COPYRIGHT HOLDERS BE
LIABLE FOR ANY CLAIM, DAMAGES OR OTHER LIABILITY,
WHETHER IN AN ACTION OF CONTRACT, TORT OR OTHERWISE,
ARISING FROM, OUT OF OR IN CONNECTION WITH THE
SOFTWARE OR THE USE OR OTHER DEALINGS IN THE SOFTWARE.
• OK x NOK?
19
Disclaimer
• § 2898 CC
• “An arrangement which precludes or limits in advance the obligation to
compensate a person for his natural rights or which is caused
intentionally or through gross negligence shall not be taken into account;
nor does it take into account an arrangement which precludes or limits
the weaker party's right to compensation for any damage. In these
cases, the right to compensation cannot even be validly waived.“
• The disclaimer is not valid when caused intetionally, also professional
knowledge shifts the limitation of liability from the experienced
producer, so be aware of that!
20
Disclaimer
+
• § 5 CC
• Whoever, in public or in dealings with another person, declares himself
to be a member of a particular profession or condition, thereby shows
that he is capable of acting with the knowledge and care which is
inherent in his profession or condition. If he acts without such
professional care, he shall be held liable.
21
Another examples / balancing of liability
• I am owner of a company, I have hired contractors to write the code.
Who is responsible for their fault?
• I am open source developer and I used faulty code (which was reported)
under MIT license. Yet, without any change, I use it further. Am I liable
(even though there is disclaimer)?
• Is there anything like adequate testing which limits my liability?
• What is the difference in the liability for commercial software and open
source software?
22