Strong Court Ruling Upholds the Artistic License (fwd)

[Ben Tilly]

On Fri, Aug 15, 2008 at 11:48 AM,  <dtemeles at nvalaw.com> wrote:
> This is not legal advice...

And I am not an attorney, so this is *really* 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 community.

Obviously I disagree.

> 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).

This I do not agree with.  The lower court's decision repudiated the
bare license theory.  This decision strongly SUPPORTS it.

Moglen's bare license theory is that the GPL is enforcible without
needing to resort to contract law because if you do something that
requires the copyright holder's permission and also violate the
conditions of the GPL, then you're in violation of the copyright
holder's copyright.

Now it is quite possible for a license to be interpreted as a contract
on *top* of being a copyright license.  I believe that Larry Rosen in
particular has advocated doing this, and both the lower and this
decision support that option.  However for many free software projects
this is often not a good option for the simple reason that you cannot
prove that someone agreed to your offered contract.  Therefore by
saying that they never agreed, they trivially win the contract case.

> 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.

I don't see the uncertainty at all.  The GPL has always said that if
you fail to fully satisfy the conditions, then you are in breach of
copyright rather than just being in violation of a contract you never
accepted.  If this possibility bothers you, then you should not be
using GPLed software.  However most of us aren't operating in a grey
area, and most who are can take comfort from the fact that virtually
all GPL disputes wind up resolved amicably.

> 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.

I have to ask, are you deliberately trolling here?

The judge in this case found that the text of the Artistic License
clearly defines the restrictions as conditions.  And cited precedents
for why it should be read this way.  An unbiased reading of the GPL
will show that it was intended to be read the same way.

> 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.

And this is a problem because..?

It is customary in legal cases to make every possible case that you
can for why you should win.  If you are both in violation of my
contract and in violation of my copyright, then I should have the
right in a lawsuit to make both the case for violation of contract and
copyright.  If you are only violating one, then I should make that
case.  In this situation it is much better to pursue a copyright case
than the contract case, and the judge has agreed that there is a valid
copyright case.

> 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.

This is not a radical change.  This is entirely in line with how the
entire open source world expects licenses to be interpreted, and is in
line with how they have actually been interpreted in other court cases
in other countries.

> 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.

That is a technical matter that I have no opinion on.

> 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 ....

There you are absolutely wrong.  If the previous decision had stood
then all open source licenses would have been in serious danger of
being effectively unenforcible within the USA.  The current decision
brings US precedent in line with the expectations of the open source
community and existing decisions in other countries.

In short, existing open source licenses were written on the
expectation that they would be read this way.  Therefore a decision
that they will be read as they are, in fact, intended to be read does
not require modification to open source licensors and will not cause
surprise to the open source community.

Cheers,
Ben