UK: Jacobsen v Katzer And Kamind Associates, Inc – The Trainwreck Decision That Threatened To Derail Open Source Software

Last Updated: 10 September 2008
Article by Mark Henley

Although all Open Source Software ("OSS") licences guarantee certain fundamental freedoms to licensees, there is a vast amount of variation between them. When reviewing the terms of any particular licence, one consideration is whether it will constitute a bare licence or a contractual licence. The distinction is important for three main reasons. First, the terms of a contractual licence may be enforced against both licensor and licensee. In contrast, under a bare licence, the licensee cannot bring a claim against the licensor. Second, when interpreting a contract, a court may imply or disallow terms in certain circumstances to give effect to the presumed intentions of the parties or public policy. Third, if a licence is a contract then it is possible that the remedy of specific performance might be granted by a court in the event that its terms are broken. For an OSS licence such as the GNU General Public License ("GPL"), specific performance of the obligation to disclose source code would be an extremely powerful remedy for the licensor.

Court judgments which look at OSS licences in detail remain extremely rare and there is a complete absence of case-law for England & Wales. When they do arise, they pique the interest of the whole Open Source community. The recent US case of Jacobsen v Katzer and Kamind Associates, Inc [Case No. C 06-01905 JSW] was also set in the glamorous world of the model railway hobbyist and so almost guaranteed to attract widespread attention. The District Court for the Northern District of California had to consider whether it would award an interim injunction to prevent continuing breaches of an OSS licence pending trial and, in the course of doing so, the court examined whether the licensor was correct to bring a claim for copyright infringement or whether his claim ought to be for breach of contract. Finding that the claim should be for breach of contract, the District Court denied the request for an interim injunction and issued a judgment that threw the OSS community into turmoil.

Going loco – the District Court's decision1

Bob Jacobsen, a professor of physics at UC Berkeley, is a keen model train hobbyist who manages and contributes code to an open source project developing software for controlling model trains. The software is licensed under the OSS Artistic License.2 Professor Jacobsen alleged that Matthew Katzer and Kamind Associates Inc. had infringed his copyright by using his software outside the scope of the licence.

In August 2007, Professor Jacobsen's application for an interim injunction was heard by the District Court for the Northern District of California. The Judge considered whether infringement of copyright might be found on the basis that the licensees had: (i) breached the licence terms; or (ii) acted outside the scope of the licence.

In relation to breach, the Judge observed that the licence was non-exclusive and subject to various conditions, including the obligation to attribute authorship. However he stated that it was implicit in a non-exclusive licence that the licensor would not sue for copyright infringement. Accordingly he found that although the licensor might have a claim for breach of the licence, it could not be a copyright infringement claim.

In relation to acting outside scope, the Judge found that the licence was intentionally broad and that the attribution obligation did not limit the scope of the licence. The licensees could not therefore have exceeded the scope of the licence. Once again, their activities would not result in infringement of copyright.

The Judge concluded that if Professor Jacobsen was entitled to claim for breach of the non-exclusive licence but not for infringement of copyright, then his claim must be for breach of contract. As there is no presumption of irreparable harm under Ninth Circuit case-law for a claim based on a breach of contract, he denied the request for an injunction.

Back on track – the Appeal3

An appeal was brought before the US Court of Appeals for the Federal Circuit.4 The OSS community felt so threatened by the District Court's judgment that a number of influential members (including the Open Source Initiative, the Software Freedom Law Center, Linux Foundation and Creative Commons Corporation) submitted as amici curiae a brief supporting the appeal. The judgment was delivered on 13 August 2008.

The Court of Appeals agreed with the District Court that it was implicit in a non-exclusive licence that the licensor would not sue for copyright infringement. However, they disagreed that the obligations imposed on the licensee did not limit the scope of the licence. The heart of the argument, they said, was whether the terms of the Artistic License were conditions of, or merely covenants to, the copyright license. If conditions, the obligations limited the scope of the licence and violation would mean the licensee was acting outside its scope and infringing copyright. If mere covenants, then a failure to comply with the obligations would result in a breach of contract only.

Reviewing the terms of the Artistic License, the Court of Appeals found that it stated on its face that it created conditions. Furthermore it used the traditional language of conditions by noting that rights to copy, modify and distribute were granted "provided that" the licensee complied with certain obligations.

The Court of Appeals vacated the District Court's decision, finding that if the licensees had failed to comply with the conditions then an action for copyright infringement could be brought against them. The application was remanded back to the District Court for a decision on the other criteria for award of an interim injunction.

Leaves on the line

The decision of the Court of Appeals has been celebrated by the OSS community as a major victory.5 Indeed it is, as an interim injunction to prevent infringement pending trial is a powerful remedy and one which OSS developers certainly need at their disposal. However, the decision may also have created an unattractive precedent for the OSS movement.

Most members of the OSS community appear to take the view that OSS licences are bare copyright licences.6 For the reasons given in the opening paragraph, this insulates OSS developers from claims brought by dissatisfied licensees and the unpredictable consequences that can sometimes ensue when judges are invited to interpret technology contracts.

However some commentators have instead characterised OSS licences as contracts. In their eyes an OSS licence starts as a unilateral contract – an offer made to the world by the author to use his/her software in compliance with certain conditions – where the normal requirement to communicate acceptance is waived by the licensor.7 That offer can be accepted by conduct and a standard bilateral contract will result.

In proceeding straight to an examination of whether the licensee obligations of the Artistic License were conditions or contractual covenants without applying a traditional analysis for contract formation8, the District Court and the Court of Appeals have given the impression that they found it obvious that the Artistic Licence was a contract.

It may be that the decision will be distinguished in the future on the basis of the specific wording of the Artistic License (although it reads less like a contract than many other OSS licences, including the GPL – see note 7) or on the basis that the contract formation point simply was not argued before the court. In the meantime, however, the decision tends to support the argument that OSS licences, in California at least, should be seen as contractual licences.

Footnotes

1 For the District Court's judgment in full, see http://www.thelen.com/tlu/JacobsenVKatzer.pdf.

2 The Artistic Licence is approved by the Open Source Initiative. For a copy of the licence, refer to http://www.opensource.org/licenses/artistic-license-1.0.php

3 For the judgment in full, see http://www.cafc.uscourts.gov/opinions/08-1001.pdf.

4 Although the Court of Appeals for the Federal Circuit normally does not hear appeals in copyright cases, it accepted jurisdiction on the basis that Professor Jacobsen's original complaint included a declaration of patent non-infringement and invalidity.

5 http://lessig.org/blog/2008/08/huge_and_important_news_free_l.html

6 For example, the publicly expressed views of the Free Software Foundation are that the GPL is a bare copyright licence with conditions attached ( http://www.gnu.org/press/mysql-affidavit.html at paragraph 18). In contrast to the Artistic Licence, the GPL expressly provides that breach of those conditions automatically results in the loss of the licence to distribute (at section 4).

7 For example, section 5 of the GPL version 2 states "...by modifying or distributing the Program (or any work based upon the Program), you indicate your acceptance of this License to do so..."

8 Although the decision of the Court of Appeals did find that "consideration" – a critical component for the formation of a contract – was provided to the copyright owners in return for their permission to copy, modify and distribute the software.

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