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

Tue Oct 23 00:00:19 UTC 2018

It is true that courts have considered a copyright misuse defense in some instances other than anti-competitive practices.  For example, there was a case where Disney imposed a license term that prohibited licensees from making negative statements about Disney or its films, implicating freedom of speech concerns (Video Pipeline, Inc. v. Buena Vista Home Entertainment, 342 F.3d 191, 203 (3d Cir. 2003) where the Third Circuit held the misuse defense did not apply, but commented on the possibility of such a basis for the defense.  We did not assert that the contours of copyright misuse and antitrust claims are identical.  But the misuse doctrine is not well developed, and there is no settled rule on what constitutes copyright misuse outside of anticompetitive practices.

If commentators on this list are advancing the position that SSPL should not be approved because it is prima facie copyright misuse, they should show a clear basis in law for their assertion.  MongoDB should not have to prove that it is an impossible defense to raise -- no one could ever prove that for an equitable defense.  The question here is not whether copyright misuse may theoretically someday be broadened to limit the enforceability of licenses like the SSPL.  It is whether such a doctrine exists today, based on current case law applying to the facts of reported cases.

It is a leap of logic to say that SSPL will be deemed misuse based on the statement in Sandisk ("cross-license provisions under which plaintiff may use the fruits of a licensee's new inventions...would reduce incentives to create innovative, non-infringing methods ..."). Setting aside that Sandisk was a patent misuse case with entirely different facts, cross-licenses to improvements are extremely common in both patent and copyright licensing, and there is no general doctrine saying they are unenforceable.

Heather Meeker, on behalf of MongoDB

From: License-review <license-review-bounces at lists.opensource.org> On Behalf Of VanL
Sent: Saturday, October 20, 2018 2:31 PM
To: license-review at lists.opensource.org
Subject: Re: [License-review] Approval: Server Side Public License, Version 1 (SSPL v1)

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<mailto: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 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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