[License-review] Approval: Server Side Public License, Version 1 (SSPL v1)

[VanL]

Replying to both Heather and Pam in a combined email:

On Fri, Oct 19, 2018 at 7:01 PM Meeker, Heather J. <hmeeker at omm.com> wrote:

> I am writing on behalf of MongoDB on the copyright misuse questions raised
> in this discussion.
>
>
>
> Copyright misuse is an equitable defense against infringement claims.  It
> has been acknowledged in several US circuits but not all of them, and it is
> not often successful.
>

I agree. I might add, for completeness, that the corresponding doctrine of
patent misuse is slightly out of favor.


>  In almost all cases where courts declined to enforce a copyright license
> violation due to copyright misuse, the misuse consisted of anticompetitive
> behavior similar to actions that would compose antitrust liability.
>

The courts have been explicit that misuse may rise to the level of an
antitrust claim, but that the bar for misuse as a defense is lower. There
is no need to attempt actions that would implicate antitrust liability to
bring in the doctrine of misuse.



> For example, in Lasercomb, the license agreement required the licensee to
> agree not to develop a competitive computer-aided design program for 99
> years.  Lasercomb America v. Reynolds. 911 F.2d 970, 15 USPQ2d 1846 (4th
> Cir. 1990).  In Practice Management Information Corp. v. American Medical
> Ass'n  121 F.3d 516 (9th Cir. 1997) the AMA licensed “CPT” health care
> codes (in which the AMA claimed a copyright) on a condition that the
> licensee not use any other such competing codes.  In Assessment
> Technologies v. WIREdata. 350 F.3d 640 (7th Cir. 2003), the copyright
> holder tried to limit the licensee’s access to the licensee’s own data
> stored using the software.  This defense is almost always applied to
> prevent a copyright holder from leveraging its copyright to impose
> anti-competitive practices.
>
>
>
> This is not a general rule that imposing any license condition not
> directly relating to copyright is unenforceable.
>

You accurately summarize the cases cited above. I also mostly agree with
your statement that there is "not a general rule that imposing any license
condition not directly relating to copyright is unenforceable." However: 1)
the scope of license conditions beyond the scope of the copyrighted work
generally sound in *contract,* not in *copyright*, and 2) attempts to
impose additional control on downstream behavior *using copyright
infringement as leverage *is what gives rise to the defense of copyright
misuse. Given that the trigger is conditioned on copyright, I maintain that
misuse is still an issue.

The basic reason why is because the scope of what the SSPL sweeps in is
*intentionally* vast. For example, assume Amazon was sued under the SSPL.
There are large amounts of proprietary shared infrastructure (perhaps all
of EC2) that would be swept into the scope of the SSPL under the current
language. In this example, the proprietary shared infrastructure
encompasses a number of unique works, not directly related to MongoDB, but
which would need to be SSPL'd.

Given the key issue of the licensing of other intellectual property, I
reviewed the cases to see if there was something closer on point. The
closest that I can find on point are a number of cases concerning SanDisk's
flash memory licensing program. SanDisk had a patent licensing program that
required any licensee to provide a grant-back license to any
subsequently-developed patents in the same field of use. Two courts
examined SanDisk's program under both the antitrust and patent misuse
angles [1][2].

[1] PNY Techs., Inc. v. SanDisk Corp., N.D.Cal, 2012 U.S. Dist. LEXIS 55965
[2] Sandisk Corp. v. Kingston Tech. Co. W.D.Wisc, 2010 U.S. Dist. LEXIS
152534

The issue was not fully litigated, but it does seem that forced licensing
would be enough to get to court. The court in Footnote 8 in *PNY Techs*
states: "At best, PNY alleges patent misuse through this licensing
<https://advance.lexis.com/document/teaserdocument/?pdmfid=1000516&crid=be638260-7f95-4327-93a4-ba813b1413c7&pdteaserkey=h1&pditab=allpods&ecomp=5pkLk&earg=sr6&prid=d3c3ef49-536b-428f-b14a-949e07bce944#>provision.
Complaint 90. While this may suffice as an equitable defense to a patent
infringement lawsuit, it stops well short of establishing a Sherman Act
violation."

And in *Sandisk*: "Thus, it is appropriate to consider whether, as a whole,
the assorted requirements plaintiff imposes on those who would participate
in the flash memory markets are anticompetitive and threaten to harm
competition. At this early stage of the proceedings, defendants'
allegations suffice....Finally, the licensing terms include cross-license
provisions under which plaintiff may use the fruits of a licensee's new
inventions. Such cross-license provisions would reduce incentives to create
innovative, non-infringing methods [*28]  that could compete in the flash
memory markets because plaintiff would be able to use the innovation.

Of course, we wouldn't know whether the defense actually be successful in
court, and these are patent misuse, not copyright misuse, so a court would
need to adapt the precedent. But these cases strike me closely analogous.

(As an aside, note the courts making the point I did above: actions that
are misuse under the law need not rise to the level of an antitrust
violation.)



> GPL itself has been challenged as an antitrust violation in the SCO case
> back in 2003, and in a later case where the 7th Circuit said, “The GPL and
> open-source have nothing to fear from the antitrust laws." Wallace v. IBM,
> 467 F.3d 1104 (2006).
>
>
>
> Sharing of source code is just not an anticompetitive practice.  The SSPL
> imposes no restrictions on the use of the software and requires licensee to
> make no covenants limiting the licensee’s right to conduct business.
>

Given the precedents above, I don't think that "is this an antitrust
violation" is the right bar. It is "does the license attempt to control
other works beyond the scope of the government grant," and I think it does.
Is it *per se* unenforceable? There is no law directly on point, so not
right now - but court would not grant summary judgment on this issue either
way. I think that there would be an issue with the OSI accepting a license
with such an infirmity.

Replying now to Pam:

On 10/18/18 8:53 PM, VanL wrote:

the entire purpose of the SSPL is to prevent competition to MongoDB by
copies that would otherwise be lawful ...

Van, this is where you're losing me. What are the "lawful copies"? If the
licensee hasn't complied with the terms of the license, paragraph 13 in
particular, then they don't have lawful copies. You point seems circular to
me.

I did not state this well, thanks for pointing that out. Better stated,
perhaps: The Lasercomb court says: "The misuse arises from Lasercomb's
attempt to ... control competition in an area outside the copyright, i.e.,
the idea of computer-assisted die manufacture". The "competition in an area
outside the copyright" is that is lawful. The SaaS services, while clearly
related to the underlying server, are not the same as the underlying Work
being licensed.

If you're saying that paragraph 13 would not be construed as a condition,
then you're in contract territory - and I do agree with that your
impossibility argument will often be true. But then query whether the
licensee should be taking the license if they know they can't comply.
Wouldn't there a counterclaim for that? Fraudulent misrepresentation?

Let's think about the context where this would come up: A party ("Service")
takes the SSPL'd MongoDB and implements a service. Service releases some
code, but there is a dispute between MongoDB and Service as to the scope of
the necessary code release. In the ensuing lawsuit, Service raises both
misuse (discussed above) and impracticability. Leaving aside the misuse
argument, a court could either a) find for Service, thus restricting the
scope of the code to be delivered, or b) find for MongoDB, thus giving rise
to an immediate defense of frustration, which would undo the contract.

Either way, I don't think that the SSPL would actually work the way MongoDB
would want.

But - to both Heather, Pam, and anyone else: I love understanding how/when
I am wrong. Further criticism welcome.

Thanks,
Van
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