Intellectual Property Law

Federal Circuit Validates Open Source Licensing Model

By Tim Feathers

The Open Source Community has based it's business model on the assumption that it could enforce compliance with various open source license agreements by bringing causes of action for copyright infringement against those who do not comply. The theory has been tested in the case of Jacobson v. Katzer, a copyright case involving alleged infringement of open source control software for model railroad enthusiasts.

The District Court had denied the copyright holder's motion for a preliminary injunction on the basis that non-compliance with the applicable open source license constituted merely breach of contract, and not copyright infringement. The Federal Circuit Court of Appeals vacated and remanded the District Court, concluding that the key provisions in the open source license were conditions rather than covenants. In so doing, the court concluded that by violating those conditions, the violator no longer had a license to copy and use, and was therefore engaging in copyright infringement. Accordingly, the plaintiff had injunctive relief available as a potential remedy for the infringement.

In other words, the court has provided an affirmative answer to the frequently asked question about the open source license model, namely, "does this work?" In so doing, the Court provided an explanation of the open source licensing model that the open source community should be thrilled with, and which will no doubt be often cited in open source opinions that will inevitably follow. Here is a sampling (citations and footnotes omitted):

Public licenses, often referred to as ``open source´´ licenses, are used by artists, authors, educators, software developers, and scientists who wish to create collaborative projects and to dedicate certain works to the public.

. . .

Open source licensing has become a widely used method of creative collaboration that serves to advance the arts and sciences.

. . .

Open Source software projects invite computer programmers from around the world to view software code and make changes and improvements to it. Through such collaboration, software programs can often be written and debugged faster and at lower cost than if the copyright holder were required to do all of the work independently. In exchange and in consideration for this collaborative work, the copyright holder permits users to copy, modify and distribute the software code subject to conditions that serve to protect downstream users and to keep the code accessible. (Footnote omitted.)

By requiring that users copy and restate the license and attribution information, a copyright holder can ensure that recipients of the redistributed computer code know the identity of the owner as well as the scope of the license granted by the original owner. The Artistic License in this case also requires that changes to the computer code be tracked so that downstream users know what part of the computer code is the original code created by the copyright holder and what part has been newly added or altered by another collaborator.

. . .

Traditionally, copyright owners sold their copyrighted material in exchange for money. The lack of money changing hands in open source licensing should not be presumed to mean that there is no economic consideration, however. There are substantial benefits, including economic benefits, to the creation and distribution of copyrighted works under public licenses that range far beyond traditional license royalties. For example, program creators may generate market share for their programs by providing certain components free of charge. Similarly, a programmer or company may increase its national or international reputation by incubating open source projects. Improvement to a product can come rapidly and free of charge from an expert not even known to the copyright holder.

. . .

The heart of the argument on appeal concerns whether the terms of the Artistic License are conditions of, or merely covenants to, the copyright license.

. . .

The conditions set forth in the Artistic License are vital to enable the copyright holder to retain the ability to benefit from the work of downstream users. By requiring that users who modify or distribute the copyrighted material retain the reference to the original source files, downstream users are directed to Jacobsen's website.

. . .

The choice to exact consideration in the form of compliance with the open source requirements of disclosure and explanation of changes, rather than as a dollar-denominated fee, is entitled to no less legal recognition. Indeed, because a calculation of damages is inherently speculative, these types of license restrictions might well be rendered meaningless absent the ability to enforce through injunctive relief.

The clear language of the Artistic License creates conditions to protect the economic rights at issue in the granting of a public license. These conditions govern the rights to modify and distribute the computer programs and files included in the downloadable software package. The attribution and modification transparency requirements directly serve to drive traffic to the open source incubation page and to inform downstream users of the project, which is a significant economic goal of the copyright holder that the law will enforce. Through this controlled spread of information, the copyright holder gains creative collaborators to the open source project; by requiring that changes made by downstream users be visible to the copyright holder and others, the copyright holder learns about the uses for his software and gains others' knowledge that can be used to advance future software releases.

. . .

Copyright holders who engage in open source licensing have the right to control the modification and distribution of copyrighted material.

Full post as published by The TechKnowledgy Blog on September 06, 2008 (boomark / email).