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Open Source Software Licenses Held Enforceable

By Matthew A. Goldberg, Litigation News Associate Editor – October 24, 2008

The ability of open source software providers to dedicate their programs to free public use, while at the same time using copyright law to control the distribution and modification of their work, has long been an unresolved legal issue. A recent decision by the U.S. Court of Appeals for the Federal Circuit has resolved many questions about the enforceability of open source licenses.


The Federal Circuit, widely perceived as the most influential court in the country regarding intellectual property law, unequivocally decided, in Jacobsen v. Katzer [PDF], that the terms of open source licenses are enforceable under copyright law. Open source software providers—and their lawyers—now have the right in alleged infringement cases to avail themselves of the formidable remedies offered by copyright law, when they had previously been limited to seeking damages for breach of contract.


Open source software projects involve programmers from around the world, who can view software code and improve and change it. Such collaboration allows programs to be written and improved faster and cheaper than if that same software were being created by an individual, or even a group of individuals, working alone. A lot of high-profile software— including the Linux operating system, the Firefox web browser, and the Apache web server—are products of the open source model.


In exchange for the free work programmers do to improve open source software, the copyright holder permits them to copy, modify, and distribute the software, which can benefit those programmers by raising their profiles within the software industry and by increasing the market share of their programs and related services.


The right to distribute modified versions of collaboratively produced software for one’s own economic advantage, however, is subject to license terms designed to protect the copyright holder’s ability to benefit from the work of those programmers who have themselves benefited from the opportunity to distribute modified versions of the original software. Typical examples of such terms include requirements to identify the original copyright owner and clearly distinguish the components of the software created by the owner from later modifications added by other programmers.


How copyright holders enforce their right to benefit from the modification and distribution of the original copyrighted software by so-called downstream users is at the heart of the Jacobsen decision.


“The specter of an injunction will create substantial risk and concern for defendants being sued for infringement who had previously not taken open source licenses seriously,” says Neil A. Smith, San Francisco, cochair of the Copyrights Subcommittee of the Section of Litigation’s Intellectual Property Litigation Committee.


The extra risks associated with alleged infringement claims after Jacobsen might have a dampening effect on the growth of the open source industry, Smith notes.


“Licensees who once thought of open source as an attractive alternative to expensive proprietary software may think twice about going open source because of the added risk, even if the use of the software is free,” Smith says.


Before Jacobsen, cases interpreting open source licenses were scant, creating considerable uncertainty among parties to these licenses—particularly with respect to the remedies available to a copyright holder alleging violation by a licensee.


Open source advocates were alarmed when the U.S. District Court for the Northern District of California—the court in which the Jacobsen case originated—denied plaintiff Jacobsen’s motion for a preliminary injunction [PDF] based on the premise that any violation of the license by defendant Katzer was not a violation of a condition of the license, thereby implicating copyright law. The lower court had found the alleged violation would be a breach of a contractual covenant of the license, for which the only available remedy was garden-variety breach of contract damages.


By contrast, a violation of a license condition allows a copyright holder to request statutory damages instead of having to prove damages, says Donald L. Zachary, Los Angeles, cochair of the Copyrights Subcommittee of the Section’s Intellectual Property Litigation Committee. In addition to seeking statutory damages, plaintiffs also can seek an injunction enjoining the alleged infringement.


Importantly, notes Zachary, “irreparable harm is presumed under copyright law,” lessening the burden of proof for a copyright owner requesting injunctive relief.


 

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