Otoy vs Kozlov

The state is best judged by how it judges
S.E. Lets

More than a year legal disputes between OTOY New Zealand Limited (New Zealand) and Pinksoft LLC (Russian Federation) has concluded. It was considered the question regarding of who is the copyright holder of the FStormRender computer program and whether Pinksoft LLC and Kozlov A.A. violate New Zealand Company’s copyrights to the OctaneRender program.

At the same time, many users of these plugins who want to use licensed software and do not want to contact counterfeit still cannot understand who is right. OTOY New Zealand Limited says that PinkSoft LLC and its CEO Andrei Kozlov are plagiarists and violate copyrights, and Pinksoft says that its company is the correct copyright holder of the FStormRender software, developed by Andrei Kozlov.

Herewith, both parties, at first glance, present quite convincing arguments, referring to Russian and New Zealand judicial decision of the protection of copyrights to these software products.

OTOY New Zealand Limited justifies its position with the judicial decision of the High Court of New Zealand dated September 22, 2017, which was adopted in its favor (Case OTOY New Zealand Limited v. Andrey Kozlov). In this judicial decision, the court established that Kozlov A.A. copied the computer program «OctaneRender», belonged by OTOY New Zealand Limited. Therefore, the court acknowledged that the actions of the defendant (bringing to the public and distributing the computer program «FStormRender») violated the OTOY New Zealand Limited’s copyright.

Besides, the Moscow City Court established that the plaintiff did not prove that the FStormRender program product, hosted on the site https://fstormrender.ru, was identical to the OctaneRender software program in case No. 3-0292/2017 dated December 5, 2017. In this connection, OTOY New Zealand Limited’s lawsuit of prohibition to create technical conditions that ensure the placement, distribution, and other use of the computer program «Octane Render» under the name «FStormRender» on the site https://fstormrender.ru to A.A. Kozlov and Pinksoft LLC was denied. Therefore, the judicial decision of the Moscow City Court was in favor of Kozlov A.A. and Pinksoft LLC.

Thus, two judicial decisions are opposite in meaning and essence, and users of these software products are misunderstanding this fact.

The purpose of this article is to provide the public with an objective picture of this situation. It will let each user of plugins designed for Autodesk's product (a program for 3DS MAX) choose the program regarding its functionality and also its legal purity.

We propose to analyze two legal processes and compare their legal procedures because both parties focus on judicial decisions, which contain conflicting conclusions regarding the establishment of circumstances. This fact leads to legal uncertainty in the relations of the disputing parties. It will let each person determine for himself what judicial decision he trusts.

I propose to start the analysis with the rules of law that regulate the legal relations connected with the protection of the copyrights to computer programs.

According to Article 5 of the Berne Convention for the Protection of Literary and Artistic Works (Russian Federation and New Zealand are parties of this Convention) adopted on September 09, 1886 authors of the works created in New Zealand shall enjoy the rights which respective Russian laws do now or may hereafter grant to their nationals.

According to Article 4 of the WIPO Copyright Treaty dated December 20, 1996 (Russian Federation is parties of this Treaty), computer programs are protected as literary works in the sense of Article 2 of the Berne Convention. Such protection extends to computer programs regardless of the method or form of their expression.

It is known that copyright is only the expression of an idea and not the idea itself. Therefore, the same restrictions apply to computer programs. An analysis of judicial practice related to the protection of computer software copyrights shows that the courts think that the very idea about functions of the program is not protected, because the object of copyright can only be an expression of this idea in the program code. The only creative expression of the author’s idea is protected because technical, uncreative work does not create an object of copyright. This situation assumes that there are several ways to express the same idea in the source code.

In accordance with the principles of the Berne Convention, the program will be protected if it is original and is the result of the creative activity of the author. No other criteria for its protectability are established.

If we consider a dispute regarding the protection of the author’s copyrights of a program code and its violation, in particular, when elements of the main program code are included in another software product, it should be borne in mind that processing of the work is the creation of a new (derivative) work based on an existing work, and copyright to processing of the work is one way of using the work.

In order to establish the fact of violation of the copyright to a computer program, it is necessary to solve the issue of the ratio of opposed software products regarding scope, the principle of operation, as well as the availability of borrowings in their source codes. In connection with the courts appoint a computer-technical examination for this category of disputes.

We suggest you to read the table below, which contains the evidence examined by the courts to understand how the courts came to their conclusions.

The New Zealand High Court Case

 The sworn evidence of the director of OTOY New Zealand Limited corporation, Jules Urbach, that the computer program «Oktay Render» is a unique product in the market of rendering technologies, as well as that more than 70% of intellectual property and general form of the FStormRender software violates Otoy's copyrights to OctaneRender software.

 Screenshots and corresponding parts of the source code of the Octane and FStormRender software.

 The court took into account that Kozlov A.A. had access to the OctaneRender program during his work at OTOY New Zealand Limited, and was hired specifically to assist the development of the OctaneRender program.

The Moscow City Court Case

 The expert opinion dated March 16, 2017, prepared by an expert of ZAO Federal Institute for the Certification and Valuation of Intellectual Property and Business (CJSC SOIS) Leontyev B. B.;

 Review (motivated opinion) of the expert opinion dated March 16, 2017, compiled by the software engineer of NITA Firm LLC, Gavrilov V.G.;

 Expert opinion № 8014 dated June 30, 2017, compiled by an expert of the Independent Expertise Research, Certification and Technical Testing Center ANO Borovkov D.A.;

 The court of the first instance appointed a forensic computer-technical examination, which was conducted by an expert of the «Digital Information Research Center of MSTU named N.E. Bauman», LLC I.A. Yakovlev. He concluded that the source code/program code for the FStormRender program is not a reproduction (copy) of the source text/code of the computer program «Octane Render», in this connection the FStormRender computer program is an independent work;

 Expert Yakovlev I.A. gave the testimony at the hearing and confirmed his conclusion. Moreover, he provided detailed written explanations on the plaintiff's comments to the expert’s opinion, which he confirmed at the hearing;

 The court assessed the fact that the defendant Kozlov A.A. was an employee in OTOY New Zealand Limited and concluded that this fact alone cannot testify to an inappropriate performance by A. A. Kozlov his labor obligations and confidentiality conditions, including those software products created by him. The author of the computer program «FStormRender» is A. A. Kozlov, according to certificate № 2016662237 of the state registration of a computer program provided by the Federal Service for Intellectual Property.

If we analyze the evidence that was checked by New Zealand and Russian courts, it can be seen that the High Court of New Zealand came to its conclusions, guided by the sworn evidence of the director of OTOY New Zealand Limited corporation, Jules Urbach and the visual comparing the source codes of opposed software products without involving specialists in the field of computer technology. In our opinion, it seems rather strange, because the source code of the «FStormRender» program consists of at least 1000 A4 format paper and it is impossible to establish the fact of borrowing source code without special skills in programming and to use special software.

Besides, the New Zealand court could not explore the source code of the FStormRender program because of A. A. Kozlov was removed from the defense during the considering of the case in the High Court of New Zealand. Therefore he was not able to implement his rights and protect himself. The court did not examine the arguments and evidence presented by A.A. Kozlov.

According to the circumstances of the case examined by the Russian court, the company «OTOY New Zealand Limited» initially also wanted the dispute to be considered in the absence of A. A. Kozlov and PinkSoft LLC. Herewith, the company made requirements to the hosting provider of the site https://fstormrender.ru – Domain Name Registrar REG.RU, LLC, where the FStormRender program was hosted.

However, the Moscow City Court attracted to participate in the case as third parties without independent claims regarding the subject of the dispute A. A. Kozlov and Pinksoft LLC, believing that the judicial decision may affect the rights and obligations of them.

Subsequently, OTOY New Zealand Limited file an application of replacement of the inappropriate defendant – REG.RU Domain Name Registrar LLC with the appropriate one – Kozlov A.A. and Pinksoft LLC.

Thus, A.A. Kozlov, Pinksoft LLC, and OTOY New Zealand Limited took a direct part in the trial, the parties actively used the procedural rights, presented evidence, filed motions, gave explanations in the court. As can be seen from the table above, the court examined three expert opinions, one of which was prepared by the task of the court.

At the same time, the court evaluated the objections of the OTOY New Zealand Limited company regarding of the I. A. Yakovlev’s expert opinion and noted that there were no grounds for the court not to trust the expert’s conclusions, because they were motivated, scientifically substantiated. The court appointed the examination. The expert was warned of criminal liability for giving a false conclusion, his conclusions are objective, and the research has been carried out comprehensively on a scientific and practical basis, within the framework of expert specialty. Expert Yakovlev I.A. works in the field of high technology and specialized expert research for five years, has a specialization «Forensic Computer-Technical Expertise». The expert applied the methodology for solving expert problems and referred to the relevant literature. The expert answered the questions posed to him by the court clearly and unequivocally.

Moreover, the judicial decision of the High Court of New Zealand was not appealed to a higher court because A.A. Kozlov was removed from the defense, and the plaintiff was satisfied with the judicial decision adopted in his favor. The judicial decision of the Moscow City Court was appealed by OTOY New Zealand Limited, and the higher courts denied granting the application.

We propose to compare two legal processes, and each person can determine for himself what judicial decision he trusts. Therefore, we will not make any conclusions and give our own assessment of the correctness or fallibility of the court conclusions. Let everybody who reads this article will make his personal choice, which program to use.

I would like to end the article with the words of the ancient Greek playwright, philosopher Euripides: «It is well said that in a dispute between the two parties, the court must listen to both parties».

The author

Roman Larshin
Intellectual Property Protection