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Software Licensing Train Wreck Averted

Court decisions on free and open source software licensing are unusual, and for lawyers who represent open source companies and projects, somewhat anxiety producing. Fortunately, lawsuits over such licenses are rare, because the licenses are effectively enforced informally to the extent necessary by the free and open source community and disputes are generally resolved informally. This is a positive thing; lawsuits are unbelievably wasteful in terms both of money and spirit. But as a consequence, there are few court decisions to serve as legal precedents.

This creates some uncertainties when a case gets to court. Free and open source software is still a relatively new paradigm. A court coming to the area for the first time may not immediately comprehend this paradigm, and in deciding a given case may draw on analogies to older legal rules that do not fit well. That court may just get things wrong. The effect of a single wrong decision is likely to be magnified, because a later court will be more likely to rely on that decision when it is one of few.



Those of us in the legal department at Red Hat were therefore a bit anxious while awaiting the decision from the Federal Circuit in the case of Jacobsen v. Katzer, which was issued yesterday. The case, which concerned the enforceability of the Artistic License, could have had unsettling consequences for FOSS, but instead it correctly settled a basic legal point. The Federal Circuit demonstrated an creditable grasp of the basic principles of free and open source software, and interpreted licensing law in light of those principles. The court’s opinion shows that widely used free and open source software licenses are fully enforceable.

The Jacobsen case concerned competing software products for model railroaders. Jacobsen maintained an open source project called Java Model Railroad Interface that included an application called DecoderPro licensed under the Artistic License. Katzer offered a competing product called Decoder Commander, which used files copied from DecoderPro. Katzer failed to comply with the terms of the Artistic License in several respects, including omission of the author’s names, of copyright notices, and of description of code changes. Jacobsen moved for a preliminary injunction based on copyright infringement. The trial court denied the motion, on the theory that Jacobsen could only sue based on breach of contract (rather than on copyright infringement), and the injunction was not a proper remedy for breach of contract. Jacobsen appealed to the Federal Circuit.

The Federal Circuit not only corrected the error of the trial court, but also provided a short primer on open source projects and licensing. It explained that such licensing “has become a widely used method of creative collaboration that serves to advance the arts and sciences in a manner and at a pace that few could have imagined just a few decades ago.” The appeals court acknowledged that with open source “software programs can often be written and debugged faster and at lower cost than if the copyright holder were required to do all the work independently.” The court also wrote about the substantial economic benefits associated with free and open source software, including product improvements from independent sources.

Much more can be said about these points, of course, but it is heartening that this important federal court has gotten the message and is helping to spread it. The free and open source software community is fully aware of the exponential growth of FOSS and of its transformative potential, but sometimes it’s too busy developing the next innovation to explain what’s happening to those less technically inclined. Even so, the Jacobsen opinion shows that the word is getting out.

As to the licensing issue, the Federal Circuit correctly determined that the Artistic License was enforceable through copyright law, because the relevant restrictions were conditions rather than mere covenants. The more important point is the general one that “copyright holders who engage in open source licensing have the right to control the modification and distribution of copyrighted material.” The court found that an open source licensor’s choice to impose requirements such as disclosure and an explanation of changes, instead of requiring monetary payment, was entitled to legal recognition.

Although the decision was based on the language of the Artistic License, the court made clear that its reasoning will apply to widely used FOSS licenses. In a footnote, the court mentioned an example that we use extensively at Red Hat: the GNU General Public License. Thus the Jacobsen case was consistent with what we previously understood – that is, that the GPL and other widely used FOSS licenses are enforceable.

The decision is not groundbreaking, but this is a good thing. The basic legal principles at issue were already well accepted within the FOSS community, and the only groundbreaking decision would have been one that changed those principles. A major change on the question of license enforceability under copyright law would have been a train wreck at a substantial scale. But happily, there was no wreck. The unofficial understanding is now codified in an important court opinion, and the FOSS world can sleep better tonight.