The file format can be copyrighted. Because somebody had to think up a way to store Microsoft Word documents into a single file, that person is converting a creation of the mind into an existing document in the real world. The file format is then considered an intellectual works.
If a file format is copyrighted, what happens is not what you have implied.
Let's say, for arguments sake, that Microsoft copyrighted their .doc format, and the people creating Open Office wanted to use that file format. They would need permission or need to pay royalties to Microsoft to use their program to store .doc files. However, Open Office DO NOT need to contact Microsoft to READ .doc files. A file format is a copyrighted method of storing files, not reading them. Anybody is allowed to read a file, provided they have the capacity to read a file.
Do you understand so far?
Also, what you store in a copyrighted file is not copyrighted to the owner of the file format, but is copyrighted to you. In lamens terms, you are allowed to enter a program in a contest no matter what file type it is. They simply need to be able to read the file.
If the contest involved editing the program, then they would need the appropriate legal software to do that.
Any more questions?