No source for concern: IPEC draws a line on software copyright in Edozo v Valos

If a chef creates a recipe that produces the same pudding as a rival's - by tasting the rival’s pudding and working out their own method - they haven't infringed copyright in the original recipe (Navitaire v easyJet [2004]). The same principle applies to software, as confirmed in the recent case of Edozo Limited v Valos (UK) Limited [2026] EWHC 93 (IPEC).

His Honour Judge Hacon held that creating a computer programme which replicates the functionality of a competitor's software (i.e., what it does and how it responds to user inputs) does not infringe copyright in the source code, provided that underlying code was not copied. 

Valos’ claim

Edozo and Valos are competitors in a market which provides valuations and other information about real property. One way in which Valos provided this information to customers was through the “Valos Reports”. The Valos Reports were generated by guiding customers through a sequence of steps on Valos's web-based platform, with each step presenting options via graphical user interfaces, ultimately producing a tailored report built from templates.

In late 2023, Edozo added to its portfolio the ‘Edozo Reports’, a competing product that similarly used an online platform and graphical user interfaces to generate automated reports. 

Valos’ counterclaim alleged (among other things) that the Edozo Reports reproduced the sequential steps which a user takes as they navigate through the Valos system (the “Valos Steps”). Valos argued this amounted to indirect copyright infringement of the source code of the programme. Valos did not allege (crucially), that Edozo ever had access to Valos’ source code or the underlying programming architecture. 

HHJ Hacon struck out this part of Valos’ counterclaim on the basis that the Valos Steps were part of the functionality of the software and therefore did not count as a form of expression of the relevant intellectual creation (namely, the source code). 

The ideas vs expression distinction 

What copyright law protects

In coming to this conclusion, HHJ Hacon explained and applied the principles in Designers Guild v Russell Williams [2000] 1 WLR 2416, SAS v World Programming [2013] EWCA Civ 1482 and Navitaire v easyJet [2004] EWHC 1725 (Ch).

In SAS, it was held that what is protected by copyright is the form of expression of an intellectual creation and not the intellectual creation itself. The functionality of a computer program does not count as a form of expression and falls on the ideas side of the fundamental distinction between ideas (unprotected) and expression (protected) under UK copyright law.

Consequently, not every idea embodied in a copyright work attracts protection. An idea that is too general, that does not constitute a substantial part of the expression in the copyright work, falls outside the scope of protection.

The SAS v World Programming principle: Functionality is not protected

Copyright also cannot protect elements that fall outside the nature of the protected work. To give Lord Hoffman’s example in Designers Guild, a literary work which describes a system or invention does not entitle the author to claim protection for his system or invention as such – only over the text describing it. A claimant therefore cannot rely on copyright to protect subject-matter which has insufficient connection with the nature of the literary, dramatic, musical or artistic copyright work.

Navitaire v easyJet: The recipe analogy for software development

In IBCOS Computers Ltd v Barclays Mercantile Highland Finance Ltd [1994] FSR 271, Jacob J explained that copying the plot (the “idea”) of a novel or play can infringe copyright if that plot represents a substantial part of the protected work. However Pumfrey J in Navitaire thought the better analogy was with a chef who invents a new pudding and writes down the recipe: a competitor who succeeds in emulating the earlier result and recording his own recipe does not infringe the literary copyright in the recipe recorded by the earlier chef.

In Navitaire, with the ending of its licence to use a system called ‘OpenRes’, easyJet engaged the second defendant to create software which would be indistinguishable in use and appearance from OpenRes. Navitaire sued for infringement of copyright in the source code without alleging that easyJet had accessed or copied it. The claim was dismissed. 

Pumfrey J observed that two completely different computer programs can produce an identical result, even if the author of one has no access at all to the code of the other, only to its results. His view was that, when the interface aspects of the programme were disregarded, only the business function (i.e. carrying out a transaction and creating a record of that transaction) remained. If the Software Directive excluded both computer languages and the underlying ideas of the interface from protection, then to allow “business logic” in this sense to attract copyright protection “would be an unjustifiable extension of copyright law into inappropriate territory”.

Valos Steps not protected by copyright

Applying these principles, Judge Hacon explained that the Valos Steps were not a form of expression of the relevant intellectual creation (i.e. the Valos source code). Therefore the Valos Steps were not protected by the copyright in that source code, and so Edozo’s copying of the Valos Steps by the creation of the Edozo Steps was not an act capable of being an act of infringement of the copyright in the Valos source code.

It would have been helpful to understand more about the functionality of the software – or, in Valos' words, its "dynamic logic and modularity". These details are hidden away in confidential schedules. Yet the software is presumably used without obligations of confidentiality (otherwise, this would be a breach of confidence case). We expect Judge Hacon chose not to wade into this particular thicket, but from the perspective of open justice – we ought to know.

The policy argument

HHJ Hacon rejected Valos' policy argument that investment in creating publicly beneficial functionality deserves legal protection. He explained:

• First, other forms of protection that might be available, such as literary or artistic copyright for the intellectual creativity that went into devising the steps, or potentially patent protection if the steps were inventive.
• Second, invoking Pumfrey J's analogy from Navitaire: Valos was in no worse position than a chef whose new pudding can be lawfully emulated by a competitor.
• Third, the case law demonstrates no legislative intention to introduce such a counter-policy into copyright law. 

Unresolved tension

HHJ Hacon noted that Abraham Moon v Thornber [2012] had not been addressed in the arguments before him. In that case, HHJ Birss QC (as he then was) held that a 'ticket stamp' - instructions for setting up a loom to produce the “Skye Sage” fabric, was a literary work that had been indirectly infringed when the defendant created a ticket for a completely different fabric, but which reproduced key information regarding the appearance of the “Skye Sage” fabric in a different 'language'.

A finding of (indirect) copyright infringement for copying a work’s underlying information (rather than the actual words used to express that information) may be inconsistent with the findings in Designers Guild and Navitaire that only the form in which ideas are expressed (and not the underlying ideas) are protected. Both Designers Guild and Navitaire pre-date the Software Directive 2009/14 and the Information Society Directive.

The CJEU in SAS discussed the protection of “intellectual creations”, which is broader than UK copyright law’s protection of literary, dramatic, musical or artistic works. Similarly, in Abraham Moon, Judge Birss noted that European law (the InfoSoc Directive) required the protection of all "intellectual creations". Today, the CJEU’s judgment in SAS is assimilated law. If Edozo v Valos proceeds to appeal before Birss LJ (as he is now), it will be interesting to what he makes of the apparent tension between these authorities.

If you would like to discuss themes related to copyright law and related rights, please speak to our specialist team.