Strong Court Ruling Upholds the Artistic License (fwd)
dtemeles at nvalaw.com
dtemeles at nvalaw.com
Fri Aug 15 18:48:12 UTC 2008
This is not legal advice...
As an attorney spending a great deal of time on software related IP
licensing and litigation matters, I find the CAFC decision in the
Jacobsen case to be troubling. While I am sympathetic to the court's
apparent desire to validate the concept of open source licensing and
its alternative forms of consideration, I do not believe that the
court's ruling justifies a euphoric response by the open source
First, the CAFC's decision is a clear repudiation of the "bare
license" theory long espoused by Mr. Moglen and his followers. The
CAFC's decision reflects the fact that open source licenses, like any
other form of software licenses, are contracts. I agree with this
aspect of the decision as it is well supported by precedent at all
levels. Neither Mr. Moglen, nor any of his followers have cited legal
precedent in support of the bare license theory. The CAFC's decision
should serve as clear notice that the bare license theory is nothing
more than Moglen's wishful thinking. The necessary implication of this
finding by the court is that open source licenses must be interpreted
in the context of applicable state law, and to an extent, the common
law of the Federal Circuit in which the open source agreement is
interpreted. (This is directly in conflict with the CAFC's willful
failure to follow state law and Ninth Circuit precedent regarding the
interpretation of restrictions as conditions precedent).
Second, the CAFC's opinion creates a great deal of uncertainty for
software licensing (whether proprietary or open source). Let's take
the GPLv3 as an example. As most peoople are aware, there are a
variety of disagreements over exactly what is required of a licensee
to comply with various provisions of the GPL. Section 2 of the GPL
appears to "condition" the rights granted under the license on the
licensee's compliance with the "conditions" stated in the license.
Under the CAFC's decision in Jacobsen, it stands to reason that a
licensee that fails to fully satisfy the "conditions" stated in the
GPLv3 would infringe the licensor's copyrights rather than merely
breaching the license. Thus, even if the licensee unintentionally
violated the terms of the GPLv3 because the meaning of the terms are
not clear, the licensee would be liabile for infringement.
Why does this matter? State courts, the federal circuit courts of
appeal and the US Supreme Court have all uniformly and routinely
interpreted license restrictions as covenants rather than conditions
precedent. In other words, the courts presume that the restrictions
are covenants rather than conditions precedent unless the agreement
clearly defines the restrictions as conditions. the CAFC's decision
wholly ignores this long held principle of law.
Most licenses, open source or proprietary, contain provisions whose
meanings are open to viable debate. In the past, parties to a
software license have largely understood that a licensee that breaches
a license agreement's terms is liable to the licensor for damages
decided under contract law. Proprietary licenses typically include
provisions which define or otherwise limit the scope of damages that
may be recovered in the event of a breach. On the other hand, a party
that is liable for infringement of a copyright is subject to
injunctive relief and damages equal to the owner's actual damages
(plus the infringer's profits not covered by the owner's actual
damages) OR statutory damages of up to $150,000 per incidence of
infringement. Any contractually agreed limitations on damages would
be irrelevant in the infringement setting.
The CAFC's Jacobsen decision unwittingly attempts to radically change
the risks of licensing software. The CAFC states that any failure to
comply with a license provision that the license even generally calls
a "condition" is an infringement rather than a breach. Thus, any
licensee that violates the "conditions" of a license, even if
unintentional, is subject to infringement damages. If the CAFC's
decision stands and is generally followed in the Circuits and state
courts, (which it should not be), every license from this point
forward will need to clearly state which, if any, restrictions are
"conditions precedent" and which restrictions are merely covenants
(all other restrictions). Moreover, the provisions that are
conditions precedent will need to be defined with a high degree of
care to minimize a licensee's risk of unintentionally infringing the
copyrights as a result of miinterpreting the provisions.
Another side note - many licesne agreement issues are brought in state
courts. Section 301(a) of the Copyright Act, however, preempts any
state court from hearing or deciding any cause of action which is
equivalent to a copyright claim. If the CAFC's position is indeed the
law of the land, then any cause of action relating to a breach of a
provision in a license agreement that merely mentions the word
"condition" (or some synonym thereof), or that could conceivably be
interpreted as a condition precedent, will need to be decided by a
federal court. Otherwise, the parties run the risk of going through a
full trial in state court only to find that the state court has no
jurisdiction to even hear the matter in the first place because the
breach in fact constitutes an infringement.
Ultimately, the only people that will benefit from this decision are
attorneys. All open source licenses will need to be modified if the
decision stands ....
Quoting Ben Tilly <btilly at gmail.com>:
> On Wed, Aug 13, 2008 at 4:46 PM, Lawrence Rosen <lrosen at rosenlaw.com> wrote:
>> Ben Tilly asserted:
>>> Therefore it was through this list that they got connected with the
>>> legal help they needed.
>> To make sure that credit goes where it is really due: the connection between
>> Mr. Jacobsen and his attorney was made on the EFF list. If anyone, the
>> Electronic Frontier Foundation should get credit for providing lots of pro
>> bono advice to people on the edge of technology.
> This I had not known. Thank you for the further
> information/correction. I only knew what I said, which is that I
> first heard of this case through an email here, and I tried to forward
> them on. I have no idea how many other places they looked for and got
> help as well.
>> There are many EFF fans on this list. EFF does good work.
> Yes, and yes they do. :-)
> I should donate again...
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