23 October 2008

Jacobsen v. Katzer: A Significant Victory for Open Source

Open source licenses rely on enforcement of certain obligations intended to further the ideals of the free software movement. The more significant of these obligations include preservation of copyright notices and developer attribution, to preserve the pride of authorship that motivates the open source developer community, and, most importantly, mandating that any modifications, improvements or derivative works of the open source software be made available under the same terms as the original license under which the software is licensed. The latter is oftentimes referred to as the "copyleft" obligation, in that the proprietary rights of copyright law, traditionally employed to restrict use, are instead used as a means of enforcing the liberalization ideals of the free software movement. The General Public License (GPL), the most popular open source license in use today, contains such an obligation. The GPL permits anyone to modify GPL-licensed code and distribute such modified code, provided that the entire derivative work thereby created by such modification is licensed as a whole under the terms of the GPL itself. Other open source licenses employ similar copyleft-like restrictions, such as the Mozilla Public License (MPL), used for the Firefox browser project.

Characterization of these obligations as either independent covenants or conditions on the scope of the license has significant remedies implications. Violation of conditions to the license rights (that is, exceeding the scope of the license) is tantamount to copyright infringement. As such, violation of license conditions gives rise to copyright infringement remedies, including injunctive relief, aided by the presumption of irreparable harm if the plaintiff is likely to succeed on the merits of the infringement claim. Violation of independent contractual covenants, on the other hand, generally does not give rise to injunctive relief, and permits merely compensation for direct economic loss. In the open source context, where software is licensed without charge, establishing economic loss is nigh impossible. The availability of injunctive relief is essentially the only meaningful remedy open source licensors have.

In Jacobsen v. Katzer, the US District Court for the Northern District of California ruled that defendant’s failure to comply with the attribution and notice obligations of the Artistic License, an open source license, amounted to a claim for breach of contract and not copyright infringement, materially limiting the remedies available to the licensor of the software at issue. Noting that the scope of the Artistic License was intentionally broad, the district court held in rather conclusory fashion that the notice and attribution requirements were not conditions to the license grant itself, and did not limit the scope of that license.

In so ruling, the district court seemed to ignore the portion of the Artistic License dealing with the right to modify the licensed code, in which the notice obligations are stated in conditional fashion: "You may otherwise modify your copy of this Package in any way, provided that you insert a prominent notice in each changed file …." The "provided" modifier clearly appears to be a conditional obligation to the right to modify. Further, the preamble in the Artistic License expressly states that the "intent of this document is to state the conditions under which [the licensed code] may be copied …"

The Jacobsen lower court ruling cast considerable doubt on whether the GPL's copyleft requirement is a limitation on or a condition of the license. The GPL's copyleft requirement, mandating that derivative works of that code be licensed under GPL in source code form, is expressed in a way substantially similar to the notice requirement in the Artistic License at issue in the Jacobsen case. It's not clear whether this requirement would be construed as a license condition under the reasoning employed by the Jacobsen district court. If not, the copyleft requirement of GPL would become practically unenforceable.

As the GPL is the most popular and strongest copyleft license in existence today – the flagship of the free software movement – the impact of the lower court’s reasoning would have been serious, if permitted to stand. In the words of Mark Radcliffe, General Counsel of the Open Source Initiative, "The appeal of the Jacobsen case has the potential for disaster for open source licensors: if the [Court of Appeals] decides the issue incorrectly and uses sweeping language …, open source licensors will be in a considerably weaker position in pursuing licensees who are in breach.”

Fortunately for the free software movement, the US Court of Appeals for the Federal Circuit repudiated the district court’s reasoning and left intact copyright remedies for breach of notice and attribution requirements and, by logical extension, copyleft obligations as well. In so ruling, the appellate court accorded considerable recognition, if not endorsement, of the objectives and beneficial aspects of the free software movement. (Jacobsen v. Katzer, 2008-1001, at 1 (Fed. Cir. August 13, 2008)).

Phrasing the issue for consideration as determining “the ability of a copyright holder to dedicate certain work to free public use and yet enforce an ‘open source’ copyright license to control the future distribution and modification of that work”, the court began its analysis by describing the “creative collaboration” represented by open source licensing, and by extolling the virtues of such collaborative efforts. “Open source licensing has become a widely used method of creative collaboration that serves to advance the arts and sciences in a manner and at a pace that few could have imagined just a few decades ago.”

The Federal Circuit then explained how the notice and attribution conditions of open source licenses are an integral component of open source licensing:

"Through [open source] collaboration, software programs can often be written and debugged faster and at a lower cost than if the copyright holder were required to do all of the work independently. In exchange and in consideration for this collaborative work, the copyright holder permits users to copy, modify, and distribute the software code subject to conditions that serve to protect downstream users and to keep the code accessible. By requiring that users copy and restate the license and attribution information, a copyright holder can ensure that recipients of the redistributed computer code know the identity of the owner as well as the scope of the license granted by the original owner."

Defendant had argued in the lower court that because plaintiff had made his code available under a broad non-exclusive license to the public at large, the defendant had essentially foreclosed the ability to recover any copyright infringement remedy notwithstanding the presence of obligations connected with the exercise of the rights in the Artistic License. The appellate court observed that defendant’s argument was premised on the notion that the plaintiff’s copyrights in the code licensed under the Artistic License “gave him no economic rights because he made his computer code available to the public at no charge.” Yet, economic rights go beyond royalties, the court stated. In comparing the open source model with traditional copyright business models calling for payment of royalties in exchange for licenses, the court emphasized the “substantial benefits, including economic benefits, to the creation and distribution of copyrighted works under public licenses that range far beyond traditional license royalties”, including increased market share, reputational benefits, and rapid product development and improvement.

Turning to analysis of the language of the Artistic License, the Federal Circuit rejected the district court’s interpretation, calling out the “provided that” phrasing as a typical means of expressing conditional obligations, and observing that the license expressly labels the obligations of the license as “conditions under which” the licensed code may be copied. Most significantly, the appellate court demonstrated its understanding of the issues at stake, and the importance of preserving injunctive relief for violation of open source license requirements, by the following passage in the court’s opinion:

"Copyright holders who engage in open source licensing have the right to control the modification and distribution of copyrighted material. … Copyright licenses are designed to support the right to exclude; money damages alone do not support or enforce that right. The choice to exact consideration in the form of compliance with the open source requirements of disclosure and explanation of changes, rather than a dollar-denominated fee, is entitled to no less legal recognition. Indeed, because a calculation of damages is inherently speculative, these types of license restrictions might well be rendered meaningless absent the ability to enforce through injunctive relief."

Section 2 of GPL states that “You may modify your copy of the Program or any portion of it, thus forming a work based on the Program, provided that ... you must cause any work that you distribute or publish, that in whole or in part contains or is derived from the Program … to be licensed as a whole at no charge to all third parties under the terms of this License.” This same phrasing is contained in the Artistic License. By upholding such language as conditional, and by explicitly recognizing the objectives and virtues of open source collaboration, the Federal Circuit largely eliminated any possibility that the GPL’s copyleft obligation would ever be characterized as a mere contractual covenant. As such, the court’s decision represents a substantial victory for the free software movement.

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