Court clarifies open source copyright: Key excerpts for the enterprise

Court clarifies open source copyright: Key excerpts for the enterprise

Summary: It's a big day for open source software as a U.S. District Appeals Court ruled that just because a developer gave code away for free doesn't mean it's not copyright protected.

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TOPICS: Open Source
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It's a big day for open source software as a U.S. District Appeals Court ruled that just because a developer gave code away for free doesn't mean it's not copyright protected.

The win, which stemmed from a railroad hobbyist spat, was praised by Stanford's Lawrence Lessig. The details can be found in the court ruling and all the analysis on Techmeme, but what you really need to know is that the ruling makes open source licensing legit. Copyright concerns have been a big overhang for enterprises. I'm no lawyer, but it sounds like this ruling is essentially an all clear bell for enterprises that rely on free software. If you have open source systems you may want to hook up with your corporate counsel/licensing guru to determine what it means to you.

Bottom line: All enterprises will have to do is pay programmers in attribution--giving credit where it's due and sticking to the open source licensing rules. The good news is that there seems to be some licensing structure that's legally valid. What follows are the key excerpts from the ruling:

Key excerpts:

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 Eleventh Circuit has recognized the economic motives inherent in public licenses, even where profit is not immediate.

And.

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 (a party in this spat). Thus, downstream users know about the collaborative effort to improve and expand the SourceForge project once they learn of the "upstream" project from a "downstream" distribution, and they may join in that effort.

And.

Copyright licenses are designed to support the right to exclude; money damages alone do not support or enforce that right. 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.

As noted before it's time to call corporate counsel to see how this ruling applies to your systems.

Topic: Open Source

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  • Court clarifies open source copyright: Key excerpts for the enterprise

    Huge break for all the people out there working on projects, only to have their stuff picked up and altered and their credit taken away
    jetsethi
  • Are you kidding?

    Really Larry?
    The teaser for this column is "Court makes open source licensing legit".

    As if there was a question. Would we see something like this referencing a proprietary license? Why is it implied frequently here on ZDNet that proprietary licenses are valid but 'open source' licenses are somehow of questionable legitimacy?

    It seems to me that if attorneys for enterprise interests can make sense of a Microsoft EULA then surely understanding most 'open source' licenses would be fairly easy.
    Tim Patterson
  • One good ruling, now we need two more ...

    We desperately need a definitive ruling on "shrinkwrap" licenses that conceal deceptive or unconscionable terms, and we need a ruling that does the same for website T&C's.

    While they are at it, they could fix the ridiculous software patent problems and the "lasts forever" copyright problems, but I'm not holding my breath on those ...
    terry flores
  • Excellent, but we need more legal clarity ...

    We need a ruling on the validity of those click-through EULAs, and the third-party issue (where the vendor has "agreed" to the EULA but then the purchaser -- who may not have -- is held legally bound by it) still has to be addressed.

    It would also be nice if the court mandated that EULAs be displayed full-page (not in ultra-tiny font is a mini-window) and be written in clear English.

    Until corporations and consumers are completely clear as to what the agreement is, what is given in return for what consideration, and how that affects their options for purchase then the issue remains muddled.

    Just my $0.02 USD...

    Regards,
    Jon
    JonathonDoe
    • RE: need more clarity....

      Ummm, unless I misread something, the last excerpt that Larry posted does exactly this - it holds the purchaser / distributor not only to monetary terms but also to uphold completely and fully the terms of the software itself, including upholding and adhering the terms of the software usage.

      Again, unless I am misreading something, this should be pretty much applicable for what you're talking about, right?
      johnlgalt
  • This is bigger than Larry Dignan's blog makes it sound

    Lawrence Lessig's original post says this is huge news because the decision is from the Court of Appeals for the Federal Circuit, which he refers to as "THE" Intellectual Property court in the US. But he doesn't explain why that's huge.

    It's because the court is not the "U.S. District Appeals Court." There are U.S. District Courts, which are trial courts with jurisdiction in a single state (or only a part of a large state) and there are U.S. Circuit Courts of Appeal, which are appellate courts (obviously) with jurisdiction over appeals from several states. The Court of Appeals for the Federal Circuit is comparable to the other Circuit Courts of Appeal except that its "circuit" is nation-wide (appeals from the Patent and Trademark Office, many types of civil cases in which the U.S. government is a party, and certain other Federal cases), not a geographical area of several states.

    Unlike a U.S. District Court or even another U.S. Circuit Court of Appeal, a decision on intellectual property from the Court of Appeals for the Federal Circuit will probably be followed by other courts throughout the U.S. (unless the Supreme Court disagrees).
    Walt_z
  • RE: Court clarifies open source copyright: Key excerpts for the enterprise

    Not to be overly picky, but it was a U.S. CIRCUIT Court of Appeals, specifically the U.S. Court of Appeals for the federal Circuit. The DISTRICT Courts are federal trial courts, which is what the Federal Circuit Appellate Court overturned.

    This type of comment is what happens when a techie becomes an attorney.
    mpaxton1
    • Re: Not to be overly picky...

      From the Court's own Website:

      "The Federal Circuit is unique among the thirteen Circuit Courts of Appeals. It has nationwide jurisdiction in a variety of subject areas, including international trade, government contracts, patents, trademarks, certain money claims against the United States government, federal personnel, and veterans' benefits." And so on...

      This is what he was talking about; this court has nationwide jurisdiction. Your criticism missed the point.
      Greenknight_z
  • So open source makes a profit, in money, and that profit is protected

    The Court could use no other rationale:

    Gilliam v. ABC, 538 F.2d 14, 20-21 (2d Cir. 1976) (AAmerican copyright law, as presently written, does not recognize moral rights or provide a cause of action for their violation, since the law seeks to vindicate the economic, rather than the personal rights of authors.

    So how does open source make a profit for the copyright holder of unpaid software?

    Quoting the decision:

    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.

    [Providing a component of a paid program free increases sales of the main program.
    If certain components are provided free of charge, that implies the main program is not free of charge.]

    Similarly, a programmer or company may increase its national or international reputation by incubating open source projects.

    [Software as public PR]

    Improvement to a product can come rapidly and free of charge from an expert not even known to the copyright holder.

    [Free work replaces the need for payment to an expert.
    A very important, I'd say essential point.]

    The Eleventh Circuit has recognized the economic motives inherent in public licenses, even where profit is not immediate.

    [Profit can be delayed, but it will come.]

    See Planetary Motion, Inc. v. Techsplosion, Inc., 261 F.3d 1188, 1200 (11th Cir. 2001)

    (Program creator Aderived value
    from the distribution [under a public license] because he was able to improve his Software
    based on suggestions sent by end-users. . . . It is logical that as the Software improved,
    more end-users used his Software, thereby increasing [the programmer's] recognition in his profession and the likelihood that the Software would be improved even further.


    [End re-paragraphed quote]



    As shown in that last statement ("recognition in his profession" is a monetary gain), there's a whiff of sophistry in these decisions. Find the dollar value of a heart of gold isn't easy.

    And neither will finding the financial harm in one company's failure to include attribution for part of its software.

    And finding irreparable or substantial financial harm will be the reason for granting an injunction in the case.

    So open source can still lose the most important part of this case, whose purpose was the ability to obtain an injunction rather than an eventual pittance of a fine.

    Absent significant present harm, no injunction. The Court has here held that there are vague future considerations. So a Court could hold no injunction is needed.

    And that would be a significant defeat for open source.
    Anton Philidor
    • Spin! Spin! Spin! Spin! Spin! Spin!

      <b>Wow Anton! You are THE most skilled MS shill here on the ZDNet forums (and boy are there a LOT of you MS bois rantin' away here every single day).<br>You are the only one who can spin a clear win for the Open-Source movement in the American legal framework as a defeat.<br>What, do they send you to advanced shill classes in Redmond?
      thungurknifur
      • It was a win.

        The specific result is that violations of an open source license can be treated as copyright infringements rather than contract violations. That is of great significance to copyright holders and infringers, but not to open source customers, that I can see.

        My point is that when an open source license holder goes for an injunction against an infringer, the new (2006 patent) test for granting an injunction is going to raise issues. That's because profits on open source can be dim and distant.

        And remember that the only reason a Court enforces an open source license is to protect money profits. Cash. Courts have already worked hard to say there are profits to protect, and that is why they intervene.
        Anton Philidor
        • Anton is making a good point here ...

          Anton is making a good point and I think that open sourcers can learn from it. While I definitely disagree with Anton on the issue of injunctions, I think that open sourcers could improve their licenses in many ways. Especially in the case of Artistic Licenses such as this. One way MIGHT be to actually put a price on the software in question EVEN if it is offered under a free license. This would allow the developer to assert that he has two ways of making money off of the software and the infringer is depriving him of both. And since the stated value method is the easiest to quantify, that should be the one to be used in assessing the need for an injunction. One thing, though, is certain. As open source software becomes more popular, developers will need to be getting more expert legal advice on how they write and enforce their licenses.
          George Mitchell
          • If you cast it as narrowly as Anton has...

            Though the parts of the ruling Anton ignores deals with revocation of the license involved.

            Not adhering to the license renders the licensees right to use it null and void.

            If what Anton is arguing was true then one would have expected the Appeal's Court to have ruled in the way Anton anticipates by citing case law with no possible relation to the case being discussed.

            It did not.

            In fact it strengthened and made clearly enforcible the Artistic License and all major known open source licenses out there, including Anton's much hated GPL.

            Nor did the court leave much in the way of wriggle room. The judgement is as close to plain English as lawyers and judges can get.

            The license was violated. Therefore the licensee no longer has the right to use the software. PERIOD, FULL STOP.

            In doing so it said that the copyright itself was also valid and allows the developer the right to license, the enforcement end of the copyright and rules of usage as they see fit, if it's an entirely original work or by following the terms of the source license they aquired to write their program. IE the GPL, Artistic License, Apache License, Mozilla Public License and on and on.

            Equally, OSI offers explainations of the licenses it has approved as well as providing links to those who wish to license their way.

            Oh, and if I read it correctly, code contributed to Public Domain is considered to be covered by a form of license, according to the ruling.

            ttfn

            John
            TtfnJohn
        • Anton filters to make his point...incorrectly.

          As far as profit goes Anton's correct.

          Notably he leaves out another part of the ruling which is as important as the copyright validation of the Artistic License, and all FOSS licenses including the GPL.

          Violation of the terms of the license and not just the copyright pertaining to it results, according to the ruling in rendering the license null and void to the person who violated both the license and copyright accompanying it.

          And that [b][i]is[/b][/i] the EULA portion of FOSS licenses. You have rights to the code far beyond what a proprietary license, as we've come to know it, as long as you observe the rules of the license.

          Which does, then, open the door to injunctive relief as well as items like general and other forms of damage to the license holder.

          Never mind the reality that no attempt to enforce a FOSS license that I'm aware of has sought damages but the door to both injunctive relief and damages is there.

          One should note that unlike proprietary shrink wrap software licenses the terms and conditions of a FOSS license are known before the software is downloaded and used. It can, then, be taken as a voluntary entering into a contract between the licensor and licensee.

          Of course, Anton's profit centric world cannot see that someone would wish to enforce the terms of a FOSS license not to recover damages but to simply enforce the terms of the contract/license voluntarily entered into and known before, say, the shrink wrap is broken or, as is more the case with FOSS, the installer started.

          Courts, Anton, also intervene to enforce contracts regardless of profit or the potential for profit. Otherwise you might as well toss contract and tort law right out the window.

          ttfn

          John
          TtfnJohn
          • Copyright, not contract

            Please read the decision again.

            The Judge who was overruled treated this as a contract issue. The Appeals Court said copyright applied. That gives a much broader range of remedies beyond a "slap on the wrist", aka a small fine, much later.

            The reason it's a copyright issue is that there are profits to protect. And profit is, as the judgment notes, the sole interest of the legal system.

            Conditions are part of copyright.
            Anton Philidor
  • "Absent significant present harm, no injunction"

    "And that would be a significant defeat for open source."

    Short term perhaps.

    Still "significant defeat"="significant present harm". So if we were to approach significant defeat, then the lawyers will retool to convey how no injunction would mean "significant present harm".

    It shouldn't be such a strech as code released without poper licensing disclosure would mean that there is an opportunity lost for any benefits for improvements made to that code to accrue back to the community.

    Absent such opportunity for benefit, surely you are right that would equate "significant defeat" and just as surely the courts will recognize as such.

    That said, courts are too often clueless...so yes you could be right.
    javajunkie1
    • Money value to the copyright holder.

      There's no consideration of "improvements made to that code to accrue back to the community." It's the dollar loss to the copyright holder from not having his copied software identified properly that counts.

      That said, the case for an injunction would seem to be sound (despite the fact the defendent has removed the offending code, I believe). Here's the quote frpom the decision:

      Thus, for a preliminary injunction to issue, Jacobsen must either show (1) a
      likelihood of success on the merits of his copyright infringement claim from which
      irreparable harm is presumed; or (2) a fair chance of success on the merits and a clear
      disparity in the relative hardships that tips sharply in his favor.

      That presumption of irreparable harm would be useful, except for the patent trolls 4 part test. As the decision said:

      But see MGM Studios, Inc. v. Grokster, Ltd., 518 F. Supp. 2d 1197, 1212 (C.D. Cal. 2007)
      (noting that ?the longstanding rule that irreparable harm can be a presumed after a showing of likelihood of success for purposes of a copyright preliminary injunction motion may itself have to be reevaluated in light of eBay [Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006)]?).

      http://www.cafc.uscourts.gov/opinions/08-1001.pdf

      That test:

      ? It has suffered irreparable injury.
      ? Remedies available at law are not adequate to compensate for that injury.
      ? A remedy in equity is warranted in light of the balance of hardships between the plaintiff and defendant.
      ? The public interest would not be disserved by a permanent injunction.


      http://news.tmcnet.com/news/-ebay-mercexchange-patent-lawsuit-infringement-/2006/05/16/1650892.htm


      The small dollar harm in these circumstances that might limit a fine might also limit the need for a judge to issue an injunction.

      Because it's all about the money and not about the code in itself, this victory may (or may not) prove to have limited usefulness.

      And given that prior cases have scared up some indirect dollar value in open source, it's difficult to see why any organization would feel more protected legally than it had been.
      Anton Philidor
      • There's another wrinkle you keep ignoring because...

        It renders your drivel totally valueless.

        Another part of the ruling we're discussing also says the the license to use the software is rendered null and void due to the copyright violation which reopens the door to injunctive relief all by itself.

        As even Microsoft has sought to treat an EULA as subject to contract law even they would be hard pressed to say..."hold on a minute here, we only meant for us!" or anything similar which is, what in essence they'd be doing if they opposed an injunction which is based on license violation.

        And contract law, dear misguided Anton, isn't enforced or predicated on a basis of profit simply by "were the terms of the contract violated" money changing hands or not.

        That is the salient point here, not just the copyright.

        Can't blame you for cherry picking though I'm guessing they're a bit sour today.

        ttfn

        John
        TtfnJohn