GPL3 – Round Two

This client alert will summarize some of the changes contained in these two documents. General familiarity with the changes in the first draft is assumed. However, if you need to refresh your recollection, please see our Client Alert on the Draft 1, "GPL Version 3 – More Clear or More Issues?" dated April 18, 2006 ("Prior Alert").

As indicated in our Prior Alert, some of the most significant changes proposed in Draft 1 related to Patents, Digital Rights Management and Open Source License Compatibility. Not surprisingly, these topics each received numerous comments and the respective provisions in Draft 2 include significant changes on each of these topics. Other changes address related party transfers, sublicensing, clarification to the term "Corresponding Source," including the issues related to shared libraries and dynamic linking, charging fees for GPL software and related services, and some definitional changes. Other aspects of Draft 2 clarify other provisions of Draft 1.

One of the most significant - and needed – changes in Draft 2 relates to the patent provisions found in Sections 11 and 12. As indicated in our Prior Alert, Draft 1 contained patent provisions that seemed unworkable and went well beyond what was needed to accomplish the desired objectives. Fortunately, the patent provisions in Draft 2 were modified to take these concerns into account.

Draft 2 now introduces the concept of "Essential Patent Claims." A party's Essential Patent Claims in a work are all patent claims that the party can give permission to practice, whether already acquired or to be acquired, that would be infringed by making, using, or selling the work. In Section 11, Draft 2 grants a covenant and requires a covenant from the licensee:

Draft 2 includes a covenant not to assert that is more reasonable in scope and more workable than the patent provisions in Draft 1. It also addresses situations where the conveying party has a non-sublicensable right that is not generally available. Specifically addressing this situation is reasonable because it could impact the freedom of downstream users to exercise their rights.

As specified in Section 2, your license to run unmodified versions of a work terminates if you bring suit on your Essential Patent Claims. Section 2 states:

The revised wording in the definition of System Libraries removes the reference to patents. Draft 1 limited the system library exception to implementations that required "no patent license not generally available for the software under this License." This wording was troublesome because it was interpreted by some as imposing "an affirmative duty to investigate third party patents." See FN16 of Draft 2.

The DRM provisions of Draft 2 change the focus from a legal one to a technical one. See FN 39 of Draft 2. Draft 1 focused on the laws related to DRM and the inconsistency with the digital rights protections afforded by these laws and the permissive rights that are at the heart of the GPL. Draft 2 keeps the newly added DRM Section (Section 3) but changes the focus to technological restrictions that are used to deny users access to install or run modified versions of software. It also requires a waiver of certain rights relating to DRM.

The Preamble to Draft 2 now states:

Section 3 now provides:

Draft 2 also changes encryption "codes" to encryption "keys" to avoid confusion with source or object "code." Draft 2 further requires that the "key" be included with the Corresponding Source whether the key is given to the user or code generated. Footnote 26 makes clear that the user must be able to read and copy the key.

The title of Section 7 has been modified to focus on all the "additional terms" that a licensee is permitted to include in subsequent licenses rather than simply "license compatibility" issues. License compatibility issues represent only a subset of additional terms permitted.

Section 7 now requires that the complete set of additional terms be listed in "one central place in the source code." There are two types of permissible additional terms, additional permissions (addressed in Section 7a) and additional requirements (addressed in Section 7b).

Additional permissions are exceptions to one or more requirements of the GPL. Additional permissions applicable to the whole program "are treated as though they were included in" the GPL, as exceptions to its conditions. If additional permissions apply only to part of the Program, that part may be used separately under those permissions, but the entire Program remains governed by the GPL without regard to the additional terms.

A license document containing a clause that permits relicensing or conveying under the GPL shall be treated as a list of additional permissions, provided that the license document makes clear that no requirement in it survives such relicensing or conveying.

Additional requirements are terms that further constrain use, modification or propagation of covered works. The GPL affects only the procedure for enforcing additional requirements, and does not assert that they can be successfully enforced by the copyright holder.

Draft 2 contains a new list of permissible additional requirements. The permissible additional requirements of Draft 1 are expanded from 5 to 7 and further clarified. The new list is as follows:

• terms that require preservation of specified reasonable legal notices or author attributions; or

• terms that require that the origin of the material they cover not be misrepresented, or that modified versions of that material be marked in specific reasonable ways as different from the original version; or

• warranty or liability disclaimers that differ from the disclaimers in this License; or

• terms that prohibit or limit the use for publicity purposes of specified names of licensors or authors, or that require that certain specified trade names, trademarks, or service marks not be used for publicity purposes without express permission, other than in ways that are fair use under applicable trademark law; or

• terms that require, if a modified version of the material they cover is a work intended to interact with users through a computer network, that those users be able to obtain copies of the Corresponding Source of the work through the same network session; or

• terms that wholly or partially terminate, or allow termination of, permission for use of the material they cover, for a user who files a software patent lawsuit (that is, a lawsuit alleging that some software infringes a patent) not filed in retaliation or defense against the earlier filing of another software patent lawsuit, or in which the allegedly infringing software includes some of the covered material, possibly in combination with other software; or

• terms that are precisely equivalent in type and extent to a requirement expressly stated in this License, or that deny permission for activities that are clearly not permitted, expressly or otherwise, by this License.

All other additional requirements are prohibited, including, but not limited to: attorney's fees provisions; choice of law; forum and venue clauses; arbitration clauses; mandatory contractual acceptance clauses; requirements regarding changes to the name of the work; and terms that require that conveyed copies be governed by a license other than the GPL.

These additional term provisions also relate to the new LPGL that was also released on July 27, 2006. Significantly, the LPGL has essentially been rewritten as a set of permissive exceptions to the GPL, in accordance with Section 7 of Draft 2.

Section 7c addresses terms that can be added or removed from a particular copy. It states:

Many in the Open Source community have questioned whether transfer of open source software, in certain situations involving related entities, constitutes a distribution. Two scenarios relate to outsourced development and acquisition of one company by another. One issue relates to whether the transfer of software from one company (e.g., a software development company) to another, pursuant to a development contract, constitutes a distribution. Another relates to whether the conveyance of open source software, pursuant to an acquisition of one company by another, constitutes a distribution.

Section 2 now includes, as a basic permission, the explicit right to have another party "make and run" privately modified versions of the program on your behalf. In other words, this draft now makes explicit that outsourcing development does not affect your rights to private use of a program. When the third-party developer transfers the code to the entity that contracted for it, this does not count as a Conveyance for purposes of determining rights under GPL.

Section 10 now clarifies the rights transferred to a successor in a "transaction transferring control of an organization." Draft 2 explicitly states:

This clarifies that if GPL covered code is transferred as part of "transfer in corporate control" there is automatic licensing and right of possession and, presumably, that no conveyance has occurred.

The basic permissions of Section 2 now contain an explicit prohibition against sublicensing. Given that Section 10 provides an automatic license to downstream users, the FSF believes that sublicensing is unnecessary. According to the FSF, the explicit prohibition against sublicensing further "ensures that enforcement of the GPL is always by the copyright holder." See FN 34 of Draft 2.

Section 1 contains a significant clarification impacting the scope of the "Corresponding Source" (previously "Complete Corresponding Source Code"). Draft 1 raised concerns for being too broad and open ended in defining the associated code and programs that were covered under the license. Draft 2 attempts to clarify that the Corresponding Source includes those shared libraries files and dynamically linked subprograms that "the work is specifically designed to require."¹ Footnote 20 further clarifies that this does not include libraries invoked by the work that can be readily substituted by other existing implementations. This change appears to limit the scope of programs subject to the license requirements.

Corresponding Source is defined as:

In a further effort to simplify the term Corresponding Source, the lengthy exception which was formerly the last paragraph of Section 1 has been eliminated. In its place, Draft 2 defines "System Libraries" (as a new term) and then excludes System Libraries from the scope of the Corresponding Source.

The term "System Libraries" is defined as follows:

The last paragraph of Section 6 has been added to explicitly state:

Section 4 clarifies that anyone can charge a price (or no price) for any copy of a Program that they Convey. Additionally, Draft 2 adds that anyone can offer support (in addition to warranty protection provided for in Draft 1) for a fee. This change was made to make clear that that those who Convey GPL-covered software may offer commercial services for the support of that software. See Fn 42 of Draft 2.

Section 6.b has been modified to limit the price that you can charge for providing copies of the Corresponding Source to "a price no more than your reasonable cost of physically performing this conveying of the source." Draft 1 allowed you to charge up to ten times the actual cost of providing a physical copy of the object code.

Section 6.b1 specifies that if the Corresponding Source is made available for download from a networked server, it must be done at no charge.

Section 10 of Draft 1 made clear that downstream users receive a license from the original licensors. Draft 2 adds that "you may not impose a license fee, royalty, or other charge for exercise of rights granted under this License." This provision prevents imposing a royalty or license obligation on downstream users. However, presumably this does not impact the right to charge a price for the software to those to whom you convey the software pursuant to Section 4.

In addition to the forgoing, Draft 2 includes other changes to definitions or terminology. Many of these are prompted by the desire to "internationalize" the terminology of the license and steer away from using copyright terminology of any particular country. For example, Draft 2 avoids the use of "derivative work," which is a term of art associated with U.S. copyright law.

Draft 2 adds a new defined term "Convey" to replace the U.S. copyright term of art "distribute" which was used in Draft 1. To "Convey" a work means any kind of propagation that enables other parties to make or receive copies, excluding sublicensing."

The definition of "Program" has been simplified. It is now defined to mean "any work of authorship" licensed under GPL 3. The notes particularly point out that the extent of the Program is defined by copyright law "and not arbitrary file boundaries."

The phrase "Based On" replaces the previous phrase work Based On "the Program" to allegedly provide a broader, more universally accepted definition. A work "Based On" another work means "any modified version, formation of which requires permission under applicable copyright law."

The phrase "modified work" replaces "Modification" (used in Draft 1) to further internationalize the language and avoid the U.S. Copyright law focus. A "modified work" includes, without limitation, versions in which material has been translated or added.

Draft 2 is a much improved version of GPL3 as compared with Draft 1. The openness of the process is to be credited for enabling the concerns of the open source community to be heard and for many of the concerns to be addressed.

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.