Re: Ruling Is a Victory for Supporters of Free Software

[Alexander Terekhov]

http://www.crynwr.com/cgi-bin/ezmlm-cgi?3:mss:15936

Subject: Re: Strong Court Ruling Upholds the Artistic License (fwd) 
From: dtemeles@nvalaw.com 
Date: Fri, 15 Aug 2008 14:48:12 -0400 

This is not legal advice...

As an attorney spending a great deal of time on software related IP
licensing and litigation matters, I find the CAFC decision in the
Jacobsen case to be troubling.  While I am sympathetic to the court's
apparent desire to validate the concept of open source licensing and its
alternative forms of consideration, I do not believe that the court's
ruling justifies a euphoric response by the open source community.

First, the CAFC's decision is a clear repudiation of the "bare license"
theory long espoused by Mr. Moglen and his followers.  The CAFC's
decision reflects the fact that open source licenses, like any other
form of software licenses, are contracts.  I agree with this aspect of
the decision as it is well supported by precedent at all levels. 
Neither Mr. Moglen, nor any of his followers have cited legal precedent
in support of the bare license theory  The CAFC's decision should serve
as clear notice that the bare license theory is nothing more than
Moglen's wishful thinking. The necessary implication of this finding by
the court is that open source licenses must be interpreted in the
context of applicable state law, and to an extent, the common law of the
Federal Circuit in which the open source agreement is interpreted. (This
is directly in conflict with the CAFC's willful failure to follow state
law and Ninth Circuit precedent regarding the interpretation of
restrictions as conditions precedent).

Second, the CAFC's opinion creates a great deal of uncertainty for
software licensing (whether proprietary or open source).  Let's take the
GPLv3 as an example.  As most peoople are aware, there are a variety of
disagreements over exactly what is required of a licensee to comply with
various provisions of the GPL. Section 2 of the GPL appears to
"condition" the rights granted under the license on the licensee's
compliance with the "conditions" stated in the license.  Under the
CAFC's decision in Jacobsen, it stands to reason that a licensee that
fails to fully satisfy the "conditions" stated in the GPLv3 would
infringe the licensor's copyrights rather than merely breaching the
license.  Thus, even if the licensee unintentionally violated the terms
of the GPLv3 because the meaning of the terms are not clear, the
licensee would be liabile for infringement.

Why does this matter?  State courts, the federal circuit courts of
appeal and the US Supreme Court have all uniformly and routinely
interpreted license restrictions as covenants rather than conditions
precedent.  In other words, the courts presume that the restrictions are
covenants rather than conditions precedent unless the agreement clearly
defines the restrictions as conditions.  the CAFC's decision wholly
ignores this long held principle of law.

Most licenses, open source or proprietary, contain provisions whose
meanings are open to viable debate.  In the past, parties to a software
license have largely understood that a licensee that breaches a license
agreement's terms is liable to the licensor for damages decided under
contract law.  Proprietary licenses typically include provisions which
define or otherwise limit the scope of damages that may be recovered in
the event of a breach.  On the other hand, a party that is liable for
infringement of a copyright is subject to injunctive relief and damages
equal to the owner's actual damages (plus the infringer's profits not
covered by the owner's actual damages) OR statutory damages of up to
$150,000 per incidence of infringement.  Any contractually agreed
limitations on damages would be irrelevant in the infringement setting.

The CAFC's Jacobsen decision unwittingly attempts to radically change
the risks of licensing software.  The CAFC states that any failure to
comply with a license provision that the license even generally calls a
"condition" is an infringement rather than a breach.  Thus, any licensee
that violates the "conditions" of a license, even if unintentional, is
subject to infringement damages.  If the CAFC's decision stands and is
generally followed in the Circuits and state courts, (which it should
not be), every license from this point forward will need to clearly
state which, if any, restrictions are "conditions precedent" and which
restrictions are merely covenants (all other restrictions).  Moreover,
the provisions that are conditions precedent will need to be defined
with a high degree of care to minimize a licensee's risk of
unintentionally infringing the copyrights as a result of miinterpreting
the provisions.

Another side note - many licesne agreement issues are brought in state
courts.  Section 301(a) of the Copyright Act, however, preempts any
state court from hearing or deciding any cause of action which is
equivalent to a copyright claim.  If the CAFC's position is indeed the
law of the land, then any cause of action relating to a breach of a
provision in a license agreement that merely mentions the word
"condition" (or some synonym thereof), or that could conceivably be
interpreted as a condition precedent, will need to be decided by a
federal court.  Otherwise, the parties run the risk of going through a
full trial in state court only to find that the state court has no
jurisdiction to even hear the matter in the first place because the
breach in fact constitutes an infringement.

Ultimately, the only people that will benefit from this decision are
attorneys.  All open source licenses will need to be modified if the
decision stands ....

   Quoting Ben Tilly <btilly@gmail.com>:

> On Wed, Aug 13, 2008 at 4:46 PM, Lawrence Rosen <lrosen@rosenlaw.com> wrote:
>> Ben Tilly asserted:
>>> Therefore it was through this list that they got connected with the
>>> legal help they needed.
>>
>> To make sure that credit goes where it is really due: the connection between
>> Mr. Jacobsen and his attorney was made on the EFF list. If anyone, the
>> Electronic Frontier Foundation should get credit for providing lots of pro
>> bono advice to people on the edge of technology.
>
> This I had not known.  Thank you for the further
> information/correction.  I only knew what I said, which is that I
> first heard of this case through an email here, and I tried to forward
> them on.  I have no idea how many other places they looked for and got
> help as well.
>
>> There are many EFF fans on this list. EFF does good work.
>
> Yes, and yes they do. :-)
>
> I should donate again...
>
> Ben
>

Freetard Ben responded: 

http://www.crynwr.com/cgi-bin/ezmlm-cgi?3:mss:15937 

Another attorney responded to freetard Ben: 

http://www.crynwr.com/cgi-bin/ezmlm-cgi?3:mss:15939

Subject: RE: Strong Court Ruling Upholds the Artistic License (fwd) 
From: "Marc Whipple" <MWhipple@itsgames.com> 
Date: Fri, 15 Aug 2008 14:59:33 -0500 

-----Original Message-----
From: Ben Tilly [mailto:btilly@gmail.com] 
Sent: Friday, August 15, 2008 2:19 PM
To: dtemeles@nvalaw.com
Cc: license-discuss@opensource.org
Subject: Re: Strong Court Ruling Upholds the Artistic License (fwd)

On Fri, Aug 15, 2008 at 11:48 AM,  <dtemeles@nvalaw.com> wrote:
>> If the CAFC's position is indeed the law of the land, then
>> any cause of action relating to a breach of a provision in a license
>> agreement that merely mentions the word "condition" (or some synonym
>> thereof), or that could conceivably be interpreted as a condition
>> precedent, will need to be decided by a federal court.  Otherwise, 
>> the parties run the risk of going through a full trial in state 
>> court only to find that the state court has no jurisdiction to even 
>> hear the matter in the first place because the breach in fact 
>> constitutes an infringement.

>That is a technical matter that I have no opinion on.

[Marc Whipple] I am a lawyer, but this is not legal advice. Always
consult an attorney licensed in your jurisdiction and familiar with the
relevant law before making legal decisions.

I think you probably mean, "I do not consider myself able to offer an
informed opinion on this point," but the way it was phrased sounds a
little dismissive. If you didn't mean it that way, accept my apology if
I've over-read your statement.

That being said, calling this a "technical matter" is oversimplification
to a rather radical degree. As an attorney who often walks the line
between questions of Federal and State jurisdiction it was one of my
first concerns when I read a summary of the decision this morning. The
utter pre-emption of matters even remotely concerned with the Copyright
Act means that this is a question of the utmost importance to anyone who
has anything to do with such licenses. I haven't read the full decision
yet, and so won't comment on whether the assertion the OP makes is
accurate, but if it is, he is right to be concerned. Among other things
it would mean that the enforcement of OS licenses just got, at the bare
minimum, a lot more expensive.

MW

</quote>

He!He! Ha!Ha! Ho!Ho!

regards,
alexander.

-- 
http://gng.z505.com/index.htm 
(GNG is a derecursive recursive derecursion which pwns GNU since it can 
be infinitely looped as GNGNGNGNG...NGNGNG... and can be said backwards 
too, whereas GNU cannot.)