Numerous German Courts have recently addressed different aspects relating to the hardware lock (dongle, key). This is a hardware plug to be fixed on the parallel or serial interface of the computer for program use. As program use is only possible in conjunction with the hardware lock a simultaneous program use of one lawful program copy is excluded.
Most court decisions concerned the issue of circumvention/removal of hardware locks either by use of a circumvention program, by altering the programming of the original program responsible for the control and communication with the hardware lock, by use of compatible locks imitating the function of the original lock or by direct importation of US-versions of the original program which - contrary to the European versions - are not equipped with a hardware lock.
All court decisions - with the mere exception of one decision of the Mannheim District Court which, however, meanwhile on appeal was annulled by the Karlsruhe Court of Appeals with judgement of January 10, 1996 - have considered circumvention/removal of the hardware lock or offering/distribution of any means for such removal/circumvention as unfair competition and/or copyright infringement and therefore prohibited it (for a survey of these cases with further details and references cf. Raubenheimer, 1996 IIC 609, 632 et seq., 643 et seq.; for more details on the exclusive adaptation right under Section 69c No. 2 Copyright Act and on rightholder's claims under copyright and unfair competition law cf. Raubenheimer, Computer Law in Germany, in IT Law Group/Europe (ed.), European Computer Law (Transnational Publishers: Irvington, New York, USA, 1996), at 3 [1] [e] Exclusive Rights, at 3 [1] [i] Litigation and Remedies in Software Infringement Cases and at 3 [2] [d] Common or Civil Law Protection with further references to case law and literature).
The Munich District Court on October 6, 1993 and on December 1, 1994 as well as the Munich Court of Appeals in the appeal instance with judgements of November 3, 1994 and June 22, 1995 have enjoined offering and distribution of circumvention programs reasoning that this constitutes unfair competition (cf. Raubenheimer, Information & Communications Technology Law, Vol. 5, No. 1, 1996, p. 75 et seq.; Raubenheimer, Law, Computers & Artificial Intelligence, Vol. 4, No. 1, 1995, p. 111 et seq.). The Federal Supreme Court in a brief decision regarding provisional suspension of enforcement in one of these matters confirmed on November 9, 1995 that even according to the allegations of the defendants the latter are violating the unfair competition rules. Furthermore the Supreme Court in both cases on March 14, 1996 and July 4, 1996 definitely confirmed the condemnation of the infringer (cf. Raubenheimer, 1996 IIC 609, 643 note 146).
The Karlsruhe Court of Appeals on January 10, 1996 decided that the offer to alter the programming of the program in such way that the altered program versions can be used without hardware lock is copyright infringement, namely violation of copyright holder's exclusive adaptation right, as well as unfair competition. The Karlsruhe Court of Appeals explicitly clarified that only program use in conjunction with the original hardware lock is a program use in accordance with its intended purpose under Section 69d (1) Copyright Act (Art. 5 (1) Software Directive). For this reason the Court held that any use without original lock is unauthorized regardless of whether or not there might be technical problems due to the lock (cf. Raubenheimer, 1996 IIC 609, 632 et seq.). Meanwhile the Federal Supreme Court on September 19, 1996 confirmed the condemnation of the infringer.
The Düsseldorf District Court on March 20, 1996 with similar reasoning also enjoined the offer to remove a dongle by altering of the programming as well as such removal (cf. Raubenheimer, 1996 IIC 609, 632 et seq.). On appeal the Düsseldorf Court of Appeals on March 27, 1997 confirmed the decision and the reasoning of the first instance. Both judgements explicitly clarifiy that the risk of theft or other loss can never justify whatever circumvention/removal of the hardware lock. Furthermore the Munich District Court on May 6, 1997 issued a judgement by confession enjoining removal of a hardware lock through program alteration as well as respective offers. The defendant of the Munich case had acknowledged software manufacturer's claims. Therefore the Munich judgement has no written grounds (for more details on a program use in accordance with its intended purpose under Section 69d (1) Copyright Act cf. Raubenheimer, Computer Law in Germany, in IT Law Group/Europe (ed.), European Computer Law (Transnational Publishers: Irvington, New York, USA, 1996), at 3 [1] [g] Exceptions to the Exclusive Rights; see also Raubenheimer, 1996 IIC 609, 626 et seq. each with further references).
Whereas the afore-mentioned decisions have been rendered in litigations on the merits circumvention and removal of the hardware lock as well as offering/distribution of any means for such illegal acts have also immediately been enjoined by way of preliminary injunctions. The Düsseldorf District Court on October 29, 1993 prohibited the offer to alter the programming in order to enable program use without the original hardware lock as well as the offer and the distribution of such altered versions. The Munich District Court in its preliminary injunction of December 6, 1995 enjoined offer and distribution of compatible hardware locks imitating the function of the original lock as well as of altered program versions which could be run without hardware lock. Furthermore, in this preliminary injunction, the Munich Court had ordered the defendants to give information about their supplier and their customers by listing these suppliers and customers with names, addresses and quantity of supplied products. Moreover the Munich Court ordered all compatible hardware locks and altered program versions to be seized by the bailiff in order to secure the destruction claims of the plaintiff which can be asserted in a litigation on the merits.
The Mannheim District Court on October 6, 1995 in another preliminary injunction prohibited offering and distribution of US-versions of the program which - contrary to European versions of the software - are not equipped with a hardware lock. The decision of the Mannheim District Court was based on copyright infringement. In the given case the direct importation of the US-versions from the US had infringed copyright holder's exclusive distribution right (for more details on the exclusive distribution right under Section 69c No. 3 Copyright Act cf. Raubenheimer, Computer Law in Germany, in IT Law Group/Europe (ed.), European Computer Law (Transnational Publishers: Irvington, New York, USA, 1996), at 3 [1] [e] Exclusive Rights; see also Raubenheimer, 1996 IIC 609, 622 et seq. each with further references to case law and literature).
Theft or loss are risks in the sphere of the user - therefore no claim for additional lock as replacement for stolen or lost lock
Finally one may mention a case where the Frankfurt District Court had to decide whether supplier had to provide an additional hardware lock free of charge where the original lock has been stolen. However, on April 4, 1995 the Court rejected the demand of a preliminary injunction filed by the user to this respect. The reasoning was that theft or loss of the original hardware lock occur in the sphere of the user and therefore is beyond the control of the software supplier who his part has already fulfilled his contractual obligations by delivery of the software in conjunction with the original hardware lock and by grant of a use right (license).
User is only authorized to legal measures of protection against theft or loss - therefore circumvention/removal of original lock not allowed
The latter judgement has in the meantime been abused by infringers who now try to justify their illegal acts of offering and distributing means for a circumvention/removal of a hardware lock with the argument that in case of theft or loss the user who wants to continue use of the software equipped with hardware lock has no other choice than to apply such means for circumvention/removal where supplier refuses to deliver an additional lock free of charge or to sell such additional lock separately. Of course already at first sight such reasoning is erroneous considering that user in any case has to respect copyright law, unfair competition provisions, license agreements, etc. which as seen above prohibit any circumvention/removal of the hardware lock (for more details on rightholder's claims under copyright and unfair competition law in case of circumvention/removal of the hardware lock cf. Raubenheimer, Computer Law in Germany, in IT Law Group/Europe (ed.), European Computer Law (Transnational Publishers: Irvington, New York, USA, 1996), at 3 [1] [i] Litigation and Remedies in Software Infringement Cases and at 3 [2] [d] Common or Civil Law Protection with further references to case law and literature). Therefore the user has to protect himself by particular security measures and increased control on the one hand and by a respective insurance which will compensate his financial loss in case of theft, etc.
Lock represents value of relating software - therefore user has to acquire complete new program license where lock is stolen or lost
The Düsseldorf District Court and the Düsseldorf Court of Appeals in their above-mentioned judgements of March 20, 1996 and March 27, 1997 shared the point of view of the Frankfurt District Court. Moreover the latter two judgements explicitly stated that the user must purchase another complete software license in case of theft or loss of the hardware lock. The Düsseldorf District Court furthermore explained that the lock represents the economic value of the program. It is important to note that the Düsseldorf District Court and the Düsseldorf Court of Appeals rejected a right of the user to circumvent or remove the hardware lock as an alleged protection for potential loss or theft of the lock which might occur later.
© 1997 by Andreas Raubenheimer, Munich/Germany