The US Court of Appeals for the Federal Circuit has ruled that
an open source software licence was enforceable and can attract
liability for copyright infringement.
In this case, the plaintiff Jacobsen had developed model
railroad design software. He made it available for public download
free of charge, under the so-called "Artistic License" (a
form of open source licence). The licence permits users to copy,
modify or distribute the licensed content provided that they
restate the attribution information found in the software, repeat
all copyright notices and document any modifications made to the
software from its original form.
Jacobsen alleged that the defendants Katzer and Kamind
Associates downloaded his code, included it in their competing
software program and failed to comply with the terms of the
Artistic License. He sued Katzer and Kamind for copyright
infringement and sought a preliminary injunction.
The lower court ruled that the defendants' alleged violation
of the licence merely gave rise to an action for breach of contract
and not for copyright infringement. While copyright infringement
would give rise to a presumption of irreparable harm under relevant
US law, a breach of contract would not. Since irreparable harm is a
requirement for the award of an injunction, the lower court denied
Jacobsen's motion for a preliminary injunction.
On appeal, the court made a determination as to whether the
terms of the licence were conditions or mere covenants. It noted
that the licence imposed its obligations through the use of the
words "provided that" — language that is
generally viewed as imposing a condition rather than a covenant.
Therefore, under the terms of the licence, the defendants could be
liable for copyright infringement as well as for breach of
contract, and the plaintiff could potentially obtain an injunction
against the defendants to prevent them from distributing their
infringing commercial software.
Also significant in the judgment is the appeals court's
discussion of consideration in open source licensing. Even though
open source software is often offered royalty-free, the court
opined that open source licensing is supported by economic
consideration: "[t]here are substantial benefits, including
economic benefits, to the creation and distribution of copyrighted
works under public licenses that range far beyond traditional
license royalties." These benefits can include growth in
market share and professional reputation.
The appeals court declined to award the plaintiff an injunction
because the lower court had not made factual findings on the
likelihood of success on the merits in proving that the defendants
violated the conditions of the licence. Instead, it reversed the
lower's decision and remanded the case back to the lower court
for further determination.
McCarthy Tétrault Notes:
This decision confirms the risk avoidance advice that Canadian
intellectual property (IP) practitioners have been providing to
clients with respect to open source software. Namely, open source
licences are to be treated as enforceable contracts and their
contravention will likely attract infringement liability under
copyright law. Thus far, however, Canadian case law has not drawn a
meaningful distinction between contractual covenants or conditions
in interpreting IP licences for purposes of assessing whether
infringement has taken place. Accordingly, all terms, conditions or
restrictions found in an open source licence should be adhered to
carefully in order to avoid liability for infringement in
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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