Federal Circuit holds that failure to comply with open source license terms also violates copyright law

A recent ruling from the US Court of Appeals for the Federal Circuit favors the ability of open source software developers to impose limits on distribution of the software by others.  Specifically, the decision confirms that open source developers can enjoin further use of the software – rather than simply seek damages for breach of license terms – when others violate the terms of the open source license. 

If you know what open source software is, you can skip to the next paragraph.  If not, here’s a bit of background:  open source software is source code developed by individuals who make the code publicly available for others to use, adapt, and modify.  The Open Source Initiative has published a definition of “open source” that is generally accepted in the industry.  Open source software is made available on a royalty-free basis (i.e., at no cost).  However, open source software typically is subject to a license that imposes conditions on redistribution or commercial uses.  Commonly-used open source licenses include the Apache Software License, the Common Public License, and various versions of the GNU General Public License.  These conditions may include minor obligations such as retaining all copyright notices and original author attributions, or major obligations such as making any modified software products also available on an open source basis.

In the recent Federal Circuit decision, Jacobsen v. Katzer (No. 08-CV-1908, Aug. 13, 2008), Jacobsen was an open source software developer who made his software available under the Artistic License, which requires others who redistribute and modify the software to identify the original authors, retain the original copyright notices, and comply with various other conditions.  Jacobsen used his open source software in a product that allows model railroad enthusiasts to program the decorder chips that control model trains. 

The defendants offered a competing product that included portions of Jacobsen’s code, but the defendants’ product did not include the identifications and attributions required by the Artistic License.  Jacobsen sued, asserting claims of breach of contract and copyright infringement, and Jacobsen sought a preliminary injunction against defendants’ distribution of the software. 

Under Ninth Circuit law, irreparable harm may be presumed in a copyright infringement case, but a breach of contract claim created no such presumption.  So, the success of Jacobsen’s injunction motion hinged on whether or not he could bring a claim for violation of copyright.  The defendants argued that there was no claim for breach of copyright because they had a license to use the software, and the only question was whether or not they complied with the terms of the license.  The district court agreed with the defendants and held that Jacobsen a breach of contract claim, but no claim under copyright law. 

On appeal, the Federal Circuit disagreed.  Analyzing Ninth Circuit law, the court acknowledged that under Sun Microsystems v. Microsoft Corp., 188 F.3d 1115 (9th Cir. 1999), a copyright owner who grants a nonexclusive license waives his right to sue the licensee for copyright infringement.  However, citing S.O.S. Inc. v. Payday, Inc., 886 F.2d 1081 (9th Cir. 1989), the court explained that if a license is limited in scope, the licensor can still bring a claim for copyright infringement if the licensee acts outside of that scope.  Analyzing the Artistic License, the court found that certain conditions limited the scope of the license, including conditions that required redistributors to retain references to the original developer and to apply a new name to all modifications.  Noting that “[c]opyright licenses are designed to support the right to exclude; money damages alone do not support or enforce that right”, the court allowed Jacobsen’s copyright claim to proceed.

The decision should prompt users of open source software to audit all such uses and confirm that they are complying with the terms of the open source licenses.  While the low risk of monetary damages may have prompted some to ignore those conditions in the past, the prospect of an injunction under the new decision should prompt a more careful use of open source in the future.

One response to “Federal Circuit holds that failure to comply with open source license terms also violates copyright law

  1. While the appeals court decision is certainly an important move for software creators, and one that organizations should review carefully, it should not scare people from using open source within development. More and more companies that are using open source code are doing so in the right way, so that licensing and other obligations are met. Black Duck sees the court decision as more of a wake up call to software development organizations without a proper open source use policy in place, rather than an industry-shifting milestone.

    Open source is becoming an increasingly important and strategic component of today’s software development process – enabling faster and more cost effective product evolution. Underscoring its importance, Gartner recently found that 47% of the companies surveyed say they are using code from external sources. A large number of these organizations have well-established policies for open source use and adoption that take into account license obligations. The combination of proprietary and open source software has created a hybrid software development model that definitely requires careful attention to licensing – but can be managed.

    Developers and their organizations should have a clear understanding of what’s inside their software components, no matter how seemingly insignificant, in order to avoid legal, financial and business ramifications. Open source code analysis is not about policing developers or prohibiting use, it provides a clear, concise and efficient way to track open source use and license restrictions- a necessity of doing business in a world in which software development is an open field.
    -Peter Vescuso, Black Duck Software

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