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Internet, E-Commerce & Information Technology - Major Victory for Open Source Software Industry
September 4, 2008
A federal court ruling on August 13, 2008 has expanded the scope of infringement remedies for open source licensors.
The case,
Jacobsen v. Katzer and Kamind Associates, Inc., is among the first real tests of remedies available in open source infringement cases. The Federal Circuit Court of Appeals reversed a trial court’s prior ruling and allowed an open source software vendor to pursue damages for copyright infringement rather than limiting the case to contract remedies. At the heart of this case is a question of whether someone who makes use of open source code, but does not abide by the open source license agreement, is (1) in breach of the license or (2) an infringer of the owner’s other rights in the software (i.e., patent and/or copyright rights). The open source vendor sought to recover damages for copyright infringement, but the defendant argued that such damages were barred by the fact that a license agreement existed, which governed the parties’ relationship. In making its decision, the Federal Circuit focused on whether the user of the open source code had taken the necessary steps to become a licensee under the license. In this instance, the question revolved around whether the license restrictions acted as “conditions” or “covenants.” If the restrictions of the license are viewed as “covenants,” then if the licensee fails to abide by the license, he is only liable for breach of contract, not infringement. But, in this case, the court construed the license terms as “conditions,” meaning that if they are adopted and followed by the licensee, they are contractual in nature, but if they are not followed, no license exists and the software vendor may bring suit for copyright infringement.
Why Should I Care Whether the License Exists?
It all comes down to remedies. Typically, a plaintiff in a copyright case has more potential remedies than one in a contract case. For example, copyright plaintiffs have access to statutory damages and injunctions, which are not typically available under contract law. The availability of a copyright remedy therefore makes open source licenses stronger and increases the licensor’s ability to adequately enforce its rights.
Can Open Source Licensors Choose Contract Damages Instead?
The Jacobsen decision does not address this point but, due to its reliance on the contract language, an open source license could be crafted to automatically grant the license rather than creating conditions for the license. Such construction may be desired in certain circumstances, especially if you are the licensee.
How does this decision affect your business?
The Jacobsen decision has important implications for open source licensors, licensees, and the companies that buy products from them. After Jacobsen, licensors should evaluate whether they desire copyright remedies or contract remedies, and draft (or revise) their licenses accordingly.
Open source software users must continue to carefully consider the legal requirements of the open source resources they use and abide by the terms of the licenses. For many companies, complete avoidance of open source software is the answer, but for those who rely on such resources, a thorough understanding of these often complex licenses is necessary.
These are complicated technical and legal issues that must be carefully examined before deciding on any course of action.