As the use of free and open source software (“FOSS”) has become more ubiquitous, legal issues relating to FOSS have become more common and important. This year has seen a mix of new and old issues.  Even more so than 2008, this year has seen an increase in the importance of the top ten legal issues  http://lawandlifesiliconvalley.com/blog/?s=top+10+2008&x=40&y=6.  My list of the top ten FOSS legal developments for 2009 follow: 

1. MySQL Delays Sun/Oracle Merger.  The European Commission (“EC”) delayed the closing of the Sun/Oracle merger because of concerns about the future of the MySQL database software. MySQL software is the most widely used open source database.  The use of FOSS in the European Union is much higher than in the United States and the EC is very concerned about a potential reduction in competition in the database market.  The EC concerns seem to fundamentally misunderstand the nature of FOSS and the ability of the community to continue the development of the software even without ownership of the copyright in the particular software. This approach has been widely criticized http://www.economist.com/businessfinance/displaystory.cfm?story_id=14861553.  In mid December, Oracle offered ten commitments with respect to MySQL software. http://www.marketwire.com/press-release/Oracle-Corporation-NASDAQ-ORCL-1090000.html. The EC will make its decision next year. 

2. First Lawsuit by a Commercial FOSS Vendor.  Artifex uses a “dual licensing” model (providing the software under both the General Public License (”GPL”) and a commercial license) for its MuPDF rendering engine: the company filed suit against Palm for alleged copyright infringement because Palm allegedly violated the GPL (in the interests of transparency, I have worked for Palm in the past, but I am not involved in this matter)   http://lawandlifesiliconvalley.com/blog/?p=376. This complaint may signal the beginning of a trend by commercial open source companies with “dual licensing” models because the success of that model depends on the difference in the scope of rights available under an open source license and a commercial license (as well as the value of the additional protections, performance warranties, support and indemnification available under the commercial license). 

3. Microsoft Discovers Violation of GPL and Contributes to Linux.  Microsoft Corporation continues its engagement with the FOSS community by its prompt acknowledgement and correction of its failure to comply with the GPL in its distribution of the Windows 7 USB/DVD Download Tool http://lawandlifesiliconvalley.com/blog/?p=306. In addition, Microsoft provided three drivers to Linux under GPLv2 http://lawandlifesiliconvalley.com/blog/?p=276.

4. Standard for Injunctive Relief for License Breach Is Set High. Last year,  the Court of Appeals for the Federal Circuit (”CAFC”) overturned the District Court decision in Jacobsen v. Katzner and strongly supported the right of FOSS licensors to obtain copyright remedies for breach of FOSS licenses. This result was critical for FOSS licensors because copyright remedies include injunctive relief (an order by the court to the licensee to obey the license) and statutory damages of up to $150,000 for each infringed work. http://lawandlifesiliconvalley.com/blog/?p=64.  The CAFC decision was so clearly in favor of Jacobsen that most lawyers thought the District Court would grant an injunction to Jacobsen upon remand. Instead, the District Court refused to grant an injunction on the basis that Jacobsen had made no showing that he had actually suffered any potential harms and that Jacobsen had “failed to proffer any evidence of any specific and actual harm suffered as a result of the alleged copyright infringement” http://lawandlifesiliconvalley.com/blog/?p=141.  This decision is disappointing for FOSS licensors and hopefully other courts will not impose such a high standard for injunctive relief.  

5.  SCO Attack on Linux Rises From the Dead. In August, the Ninth Circuit Court of Appeals reversed the summary judgment granted Novell in its litigation over the ownership of the copyright in Unix software. The ownership of the copyrights in the Unix software is essential for SCO  to prosecute cases for copyright infringement against Linux. Thus, if SCO does not own the copyright in Unix, it cannot sue third parties claiming that the distribution of Linux infringes its copyright of Unix. The original contract between SCO and Novell relating to Unix does not transfer the ownership of copyrights in Unix to SCO, but a Second Amendment provides for a “conditional” assignment. The District Court had found that the conditions of the assignment had not been met and the assignment had not become effective. The Ninth Circuit decided that the facts were not sufficiently clear to grant summary judgment and asked the District Court to try the case. This decision is likely to have little practical effect. First, the decision does not grant ownership of the copyrights to SCO, but simply provides SCO the ability to litigate the issue rather than losing on summary judgment. Given that the judge has expressed his opinion that the copyright was not transferred by Novell under the “high” standard imposed by a summary judgment (a “summary” procedure setting a high standard of proof on the moving party,  Novell), it seems unlikely that he will change his decision under the lower standard of proof which applies in a lawsuit. Second, the continued prosecution of the case will be very expensive and SCO is in bankruptcy.  SCO would need to find additional financing to continue the case.  

6.  Enforcement of GPL for Busybox Continues. The Software Freedom Law Center has continued to enforce the GPLv2 on behalf of some of  the owners of the copyright in Busybox software. Most recently, the SFLC filed suit against fourteen major companies, including Samsung, Best Buy and Westinghouse  http://www.softwarefreedom.org/news/2009/dec/14/busybox-gpl-lawsuit/. The suits are based on violations of the GPLv2 in a variety of consumer electronic products, such as DVD players and televisions. However, Bruce Perens, one of the authors of the Busybox software, announced that he did not approve of the litigation  http://perens.com/blog/2009/12/15/23. He raised the question of the rights of one of the authors of FOSS in such litigation. This issue would depend on whether the software would be considered a “joint work” or “compilation” under copyright law  http://www.copyright.gov/title17/92chap1.html#101. As is the case frequently in software and copyright, these standard copyright categories are difficult to apply to software. A traditional example of a “joint work” would be a film because the work is the result of contributions by numerous authors to create a single work. A traditional example of a “compilation” would be a magazine which is the combination of independent copyrighted works from many authors.  This issue remains unresolved.   

7.  GPL Found to be Indirectly Enforceable in France. In case of first impression in France, the Court of Appeals in Paris has issued a holding, as part of a larger dispute over the delivery of software, that states that the terms of the General Public License were breached  (and thus the GPL is enforceable under French law). The basis for the decision was that the defendant, Edu4, had deleted two copyright notices in the VNC software and replaced them with its own copyright notice and had deleted the GNU GPL license language. The case is also unusual because it involved a suit by a licensee, AFPA, against a distributor, Edu4, claiming breach based on violation of the terms of the GPL by the distributor http://lawandlifesiliconvalley.com/blog/?p=285. 

8. ALI Adoption of Software Contract Principles.  The American Law Institute (“ALI”) approved the Principles of the Law of Software Contracts (the “Principles”) on May 19, 2009.  ALI is a very prestigious legal organization and the Principles have the potential to be very influential on courts. As I have discussed in this blog, the Principles continue to have significant flaws. The Principles were meant to clarify the ambiguity created by conflicting legal decisions and  the application of multiple laws to software licenses. Despite the stated goal of summarizing the case law and recommending best practices, the Reporters have included many new concepts which impose consumer type protections on both consumer and business software licenses. Although the Reporters have tried to exclude the applications of some of the Principles to FOSS, these modifications are not clearly successful in implementing this exclusion   http://lawandlifesiliconvalley.com/blog/?m=200906. 

9.  Microsoft Sues TomTom for Patent Infringement.  Microsoft Corporation sued TomTom for patent infringement for its GPS device which includes Linux. Although a number of commentators assumed that the suit was the first salvo in the long awaited patent assault on Linux by Microsoft, I was (and am) skeptical and thought that these concerns are premature. The claims relating to Linux, such as those covering FAT, are based on features common to many operating systems and would be likely to be subject to challenge under the new higher standards for patents set by the Supreme Court. Moreover, the case settled quickly, suggesting that it was not the beginning of a Microsoft assault against Linux   http://lawandlifesiliconvalley.com/blog/?p=214. 

10.  New GCC Runtime Exception.  The FSF announced new runtime exceptions (“GCC Exceptions”) for their popular GCC programs as part of its shift of the GCC programs from GPLv2 to GPLv3.  http://www.fsf.org/licensing/licenses/gcc-exception.html.  The exception is similar in purpose to the existing GCC exception for GPLv2 but is based on section 7 of the  GPLv3 which permits a limited (and carefully defined) number of “additional permissions.” The GCC Exceptions are necessary because the GCC program when it compiles another program may combine portions of certain GCC program header files and runtime libraries with the compiled program.  Without the GCC Exception, the compiled program would be required to be licensed under GPLv3 (just as without the prior exception, the use of GCC programs  licensed under GPLv2 for compilation would have required the compiled program to be distributed under GPLv2) . The GCC Exception permits the use of the GCC program to compile programs which are then licensed “under terms of your choice”, including proprietary licenses. However, the new GCC Exception has added a limitation to its scope which was not present in GPLv2 version of  the exception by limiting the use of non-GPL Compatible programs in the compilation process: “A Compilation Process is “Eligible” if it is done using GCC, alone or with other GPL-compatible software, or if it is done without using any work based on GCC. For example, using non-GPL-compatible Software to optimize any GCC intermediate representations would not qualify as an Eligible Compilation Process”.  This limitation was included because the GCC programs are moving to a “plug in” architecture and the FSF wanted to avoid permitting plug ins that “called out to proprietary software to transform the compiled code—effectively creating proprietary extensions to GCC and defeating the purpose of the GPL”.  

I am sure that this trend will continue in 2010, so stay tuned!

The most recent Black Duck survey of the use of open source licenses reveals some very interesting trends. http://www.marketwatch.com/story/gplv3-licenses-quadruple-in-2009-but-gpl-projects-drop-by-five-percent-from-2008-levels.

First, GPLv3, the first revision to GPLv2 in twenty years, is increasing in adoption: it is now the fifth most common license, passing Mozilla, MIT and Apache.  However, many large and important projects such as Linux, Hibernate and JBoss have chosen to remain with GPLv2.  According to Black Duck, GPLv3 is growing at four times the rate of last year.  GPLv3 is used on 9500 projects.  These numbers reflect both decisions by new projects as well as existing projects.  However, the decision to remain with GPLv2 has more than strategic dimension: large existing projects need to deal with the practical issues. For example, Linux has over 10,000 contributors and a shift to GPLv3 would require permission from each one of them (or rewriting the code) because Linus Torvalds licensed Linux under a “locked down” version of GPLv2. GPLv2 ,by its terms, permits any recipient of GPLv2 licensed software to shift to a newer version of the General Public License unless the licensor chooses to “lock down” the General Public License to a particular version.  However, even projects which are not “locked down” need to carefully consider this move because the terms of GPLv2 and GPLv3 are inconsistant and a shift to GPLv3 would “fork” the project.

Second, Black Duck notes that the use of GPL license variants declined by 5%. I have not seen this shift in my practice (which is more focused on companies with commercial interests), but I think that it may reflect the greater number of projects being made available by universities (and some corporateions) who are interested in ensuring the widest possible usage and, thus, pick a permissive license like BSD or Apache. Matt Asay has an interesting perspective on this issue http://news.cnet.com/8301-13505_3-10276903-16.html?tag=mncol;title. I don’t agree with him that the licenses are irrelevant, but I do agree that data is a new source of value.  Ironically, data is very difficult to protect under the US legal regime since its protection under copyright is limited.

I am surprised that we have not seen a greater growth in the use of the Affero General Public License v3. This license is the GPLv3 with a “network use” provision.  Essentially, the license broadens the situation in which the GPLv3 obligations (making source code available and right to modify etc) are imposed from distribution (GPLv3) to include making the software available over a network. As we move into a more web centric world, I think that projects (and companies) which are trying to achieve the GPLv3 level of a “commons” need to consider AGPL. However, I will note that for many prospective licensees, the scope of AGPL is very troubling and there is a reluctance to license software using the AGPL software.  For more information about aligning your business strategy and your intellectual property and licensing strategy, you can see by OSBC presentation at http://www.slideshare.net/markradcliffe/ip-and-licensing-strategy-for-open-source-companies

The Black Duck survey continues to provide very useful information about how the industry is evolving.

Last year was the one of the most active years for legal developments in the history of free and open source (“FOSS”). http://lawandlifesiliconvalley.com/blog/?p=27   This year, 2008, has seen a continuation of important legal developments for FOSS. My list of the top ten FOSS legal developments in 2008 follows:

1. First Major Appellate Decision for a FOSS License.  Last year, the District Court in San Francisco in Jacobsen v. Katzner decided the first case under US law interpreting an open source license. That decision had the potential to significantly undercut the ability of FOSS licensors to enforce their license.  However in August, the Court of Appeals for the Federal Circuit (”CAFC”) overturned the District Court decision and strongly supported the right of FOSS licensors to obtain copyright remedies for breach of FOSS licenses: such remedies include injunctive relief (an order by the court to the licensee to obey the license) and statutory damages of up to $150,000 for each infringed work. http://lawandlifesiliconvalley.com/blog/?p=64

2.  Final End of the SCO Attack on Linux.   Although SCO’s lawsuits against IBM and others was largely resolved by the decision last year against SCO in its litigation with Novell over ownership of the copyrights to UNIX, several important issues remained. This year the court confirmed its ruling against SCO and awarded Novell $2,547,817 from the amount paid to SCO by Sun. The decision is interesting because the court came to different conclusions about whether licenses to SVRX software in SCO’s agreements with Sun and Microsoft were “incidental”.   This term was important because SCO did not owe royalties to Novell if the license of the SVRX software (the royalties from which would have to be paid to Novell) was ”incidental” to the licensing of Unixware. This case demonstrates the importance of careful drafting in intellectual property licenses.

 3. First Settlement of Patent Infringement Litigation For an Open Source Community.  Red Hat’s settlement of the Firestar litigation demonstrated the need to carefully consider the nature of open source communities on the settlement of patent litigation.  Unlike traditional patent settlements, Red Hat ensured that the settlement covered other members of the community including upstream licensors of products incorporated in the Red Hat product and downstream licensees.  The settlement of patent litigation for open source products needs to deal with the complexity of many open source products and communities. This reality makes settlement of patent litigagtion much more complicated for open source products than for traditional software. http://lawandlifesiliconvalley.com/blog/?s=firestar

4.  Major Litigation on GPL.  In December, the Software Freedom Law Center filed suit against Cisco Systems, Inc. alleging that Cisco had violated the GPLv2 and LGPLv2 in its distribution of certain software whose copyright is owned by the Free Software Foundation, including GNU C Library, GNU Coreutils, GNU Readline, GNU Parted, GNU Wget, GNU Compiler Collection, GNU Binutils, and GNU Debugger. The complaint asserts that Cisco distributed the programs without providing complete and corresponding source code as required by the GPLv2 and LGPLv2. FSF requested that an injunction be issued against Cisco and that damages and litigation costs be awarded to the FSF.  The SFLC states that they filed the lawsuit reluctantly and had negotiated with Cisco for two years on the issues.  The suit raises the question of whether the SFLC is becoming more willing to file suits to enforce the GPL.  For example, the SFLC has been vigorously enforcing the rights under the GPLv2 for Busybox.

5.  Enforcement of GPL for Busybox Continues. The Software Freedom Law Center has continued to enforce the GPLv2 on behalf of the owners of the copyright in Busybox software.  Although most of these cases apparently are settled without litigation, SLFC filed suit three suits this year:  Bell Products, Super Micro Computer, Inc. and Extreme Networks, Inc.

6.  Open Source Litigation from Other Countries. Although litigation about open source licenses has generally been confined to Germany and the United States, one case that settled this year about the enforeceability of the GPL was in Isreal.  The plaintiff, Maryanovsky, claimed that the IchessU software violated the terms of the  GPL because IchessU software did include credit for him and was released under a proprietary end-user license agreement.  He also suggested that an audio-visual module developed by IchessU was a derivative work, since it could not compile without his code.  The case was filed in 2006, but was settled confidenitally this year. 

7.  SFLC Guide to Legal Issues and GPL Compliance.  The increasing ubiquity of open source software as well as the litigation to enforce the GPL and other open source licenses has made understanding the obligations imposed by the GPL very important for a wide range of companies. The SFLC has been the leader in developing and enforcing the GPL. They shared their views of the legal issues in open source and the obligations imposed by the GPL in two publications: “A Legal Issues Primer for Open Source and Free Software Projects” and  ”A Practical Guide for GPL Compliance”.  The Primer and Guide are quite usefull. Although licensing attorneys may not agree with all of their conclusions (the nature of the law and the lack of court decisions make this statement true about most open source license issues), the Primer and the Guide should be read by any lawyer working with open source legal issues.

8.  American Law Institute Publishes Draft of Principles of the Law of Software Contracts with Significant Problems for Open Source Software.   The ALI is a very prestigious and influential non profit institution whose purpose is “to promote the clarification and simplification of the law and its better adaptation to social needs.”  The Principles state that the “best practices” in software licensing would be to include two new “non disclaimable” warranties which would result in significant problems for the open source community. The warranties are the (1) warranty of non infringement of intellectual property rights (such as patents or copyrights) if the contributor knew or should have known of the infringement and the contributor holds himself out by occupation as having knowledge or skill peculiar to the software and (2) warranty of no hidden material defects. Current law (and all OSI approved licenses) permit the contributor (and any licensor) of open source software to completely disclaim all warranties i.e. promises about performance or non infringement which could result in liability to a contributor or a licensor(so called AS IS provisions).  If accepted by the courts, these recommendations would have a significantly negative effect on open source licensors. http://lawandlifesiliconvalley.com/blog/?p=56.

9.  Publication of Version 1.3 of GNU Free Documentation License.  The new version permits the use of the FDL with the Creative Commons Attribution ShareAlike License (CCASL). The draft is an interim one and SFLC is working on FDL 2.0. However, the Wikimedia Foundation requested the FDL be made compatible with the CCASL. This change recognizes the need for the two major branches of “free” content licenses to be compatible just as the GPLv3 was modified to be compatible with the Apache license.

10.   Project Governance Concerns Become More Important. The recent fork in the Twiki community (an open source wiki project) demonstrates the need for a community to think about how it will manage itself.  As open source projects have greater economic value, the potential for the community to split over decisions regarding the direction of the project (in particular, commercialization) will increase. Communities need to develop processes to discuss these issues and come to a conclusion that is supported by the community. Although forks are always an option for open source projects, they generally create significant loss of momentum and can doom a project if it has competitors offering similar functionality. In the case of Twiki, the ownership of the Twiki trademark by Peter Theony, the project leader, was critical to the control of the project.

The most recent report from Palamida indicates that open source companies are continuing to adopt GPLv3 at a rapid pace: over 2000 projects have adopted GPLv3. http://gpl3.blogspot.com/2008/03/gpl-project-watch-list-for-week-of-0328.html.

Palamida notes that: At this rate the GPL v3 is being adopted by 1000 projects every 4-5 months, and if the trend continues, the license will be used by 5000 projects by the end of the year. 5k will be a very substantial amount of projects under the GPL v3, which may influence larger projects to move over the the GPL v3 as well.