## Facts

- IT Development SAS developed project-management software and granted Free Mobile SAS a license to use it for managing deployment of a mobile-telephony network.
- IT Development alleged Free Mobile modified the software’s source code without authorization and beyond the license terms.
- IT Development sued in France on a copyright-infringement theory under extra-contractual (tort) liability rather than primarily as a contract claim.
- The trial court dismissed, reasoning the alleged misconduct arose from the license and therefore could not be pursued as tort-based copyright infringement under the national contract/tort separation principle.
- On appeal, the Paris Court of Appeal sought a preliminary ruling on the interaction between EU software-copyright rules and EU enforcement rules where the alleged infringer is a licensee.

## Issues

1. Whether a licensee’s unauthorized modification of a computer program’s source code, in breach of a license agreement, can constitute infringement of exclusive rights in a computer program under EU law.
2. Whether an enforcement action against a licensee for such unauthorized modifications falls within the scope of Directive 2004/48 on the enforcement of intellectual property rights.
3. Whether EU law requires Member States to classify such an action as contractual or tortious, or otherwise harmonizes the applicable liability regime.

## Decision

- The CJEU held that unauthorized source-code modification by a licensee may infringe the rightholder’s exclusive rights in a computer program under Article 4(1) of Directive 2009/24.
- The Court held that an action brought by the copyright holder against the licensee for those unauthorized modifications falls within the scope of Directive 2004/48.
- The Court held that Directive 2004/48 does not determine whether such actions are categorized as contract or tort under national law and does not harmonize national liability regimes.
- The Court concluded that classification remains for national law, but Member States must ensure measures, procedures, and remedies provide effective enforcement and the required level of protection for intellectual property rights.

## Legal Principles

- Acts reserved to the author of a computer program include adaptation and other alterations; unauthorized source-code modifications can infringe those exclusive rights.
- The enforcement framework for intellectual property rights applies to infringement actions even when the alleged infringer is in a contractual relationship with the rightholder (e.g., a licensee).
- Directive 2004/48 regulates enforcement mechanisms (measures, procedures, remedies) rather than the substantive content of intellectual property rights or the national labeling of claims as contractual or tortious.
- Member States may maintain domestic rules separating contractual and tortious liability, but those rules must not reduce the effectiveness of IP enforcement remedies required by EU law.

## Conclusion

The CJEU ruled that a licensee who modifies software source code beyond license limits may commit copyright infringement, and enforcement measures under Directive 2004/48 apply; however, national law decides whether the claim proceeds in contract or tort, subject to effective and dissuasive enforcement requirements.


IT Development SAS v. Free Mobile SAS, Case C-666/18 (C.J.E.U. 2019)