Notice

Just a reminder, these posts are not legal advice. This site is the personal blog of Mark Radcliffe and the opinions expressed are those of Mark Radcliffe and not those of his clients, DLA Piper or the clients of DLA Piper.

About Me:

Mark Radcliffe

I have been practicing law in Silicon Valley for over thirty years assisting startups and global companies develop and market innovative products and services. I have participated in multiple business cyles in Silicon Valley from hardware to software to internet to cloud. My projects have included developing the dual licensing business model for open source startup, developing the original domain dispute resolution policy for NSI and assisting Sun in open sourcing the Solaris operating system. Recently, I served on the US Japan Innovation and Entrepreneurship Council (one of ten members) to develop a plan to encourage the innovation in Japan and the United States. I have been working with the same attorneys since 1986 although we have merged with other law firms several times. I am now a partner at DLA Piper, a (relatively) new global law firm formed in 2005 from the merger of three law firms. The firm now has 4200 lawyers in 31 countries and 77 cities. My experience in corporate securities (particularly venture capital) and intellectual property enables me to assist companies structure the financing and intellectual property strategy for developing ane exploiting a new product or service. I and my team work with fifty startups at one time as well as Global Fortune 100. I have been fortunate enough to work with companies in software, cloud computing, semiconductor, health care IT and Web 2.0.

The year 2007 has been the most active year for legal developments in the history of free and open source (“FOSS”). In fact, you would have been hard pressed in past years to enumerate even five important legal developments. However 2007 permits the creation of a traditional “top ten” list. My list of the top ten FOSS legal developments in 2007 follows:

1. Publication of GPLv3. The GPLv2 continues to be the most widely used FOSS license, yet the law relating to software has developed significantly since the publication of the original publication of the GPLv2 in 1991. The first revision of the GPLv2 had a number of drafts over an 18 month period. However the new GPLv3 license is much more comprehensive than GPLv2 and addresses the new issues which have arisen in software law in the last 15 years.

2. SCO’s Attack on Linux Collapses. SCO filed lawsuits claiming that Linux infringed SCO’s copyrights in UNIX. These suits suffered a fatal blow when the court in the Novell litigation found that SCO did not own the copyrights in UNIX. The ownership of the copyrights is essential to prosecute cases for copyright infringement. The melt down of SCO’s strategy was complete when it filed for bankruptcy soon after this loss.

3. First Legal Opinion on Enforcing a FOSS License. In August, the district court in San Francisco surprised many lawyers by ruling that the remedies for breach of the Artistic License were in contract, not copyright. Most lawyers believe that the failure to comply with the major terms of an open source license means that the licensee is a copyright infringer and, thus, can obtain “injunctive relief” (which means that the court orders a party to cease their violation). On the other hand, if the remedy is limited to contract remedies, then the standard remedy would be limited to monetary damages. Such damages are of limited value to open source licensors. The district court decision has been appealed.

4. First US Lawsuit to Enforce GPLv2. The Software Freedom Law Center filed the first lawsuit to enforce the GPL for the BusyBox software in August. Subsequently, it filed three other lawsuits. Although the first three lawsuits were against small companies, the most recent lawsuit was against Verizon. These lawsuits represent a new approach for the SFLC which, in the past, has preferred negotiation to litigation. SFLC has settled two of the lawsuits. Each of the settlements has required that the defendants pay damages, another new development. These suits may be the first of many.

5. First Patent Infringement Lawsuit by Patent Trolls against FOSS Vendors. IP Innovation LLC (and Technology Licensing Corporation) filed suit against Red Hat and Novell in what may be the first volley in a patent war against a FOSS vendor. Acacia is a well known patent troll which has been buying patents for some time and works through multiple subsidiaries. The FOSS industry provides a tempting target because of its rapid growth. These suits could slow the expansion of FOSS because many potential licensees express concern about potential liability for infringement of third party rights by FOSS.

6. First Patent Lawsuit by a Commercial Competitor against a FOSS Vendor. Network Appliances, Inc. (“NetApps”) sued Sun Microsystems, Inc. (“Sun”) for patent infringement by Sun’s ZFS file system in its Solaris operating system. The ZFS file system posed a challenge to NetApps products because it permits the connection of less expensive storage devices to the operating system.

7. Microsoft Obtains Approval of Two Licenses by OSI. Microsoft Corporation continues its schizophrenic approach to FOSS by simultaneously asserting that the Linux operating system violates Microsoft’s patents and submitting two licenses for approval by OSI. In October, the OSI Board approved the Microsoft Public License (Ms-PL) and the Microsoft Reciprocal License (Ms-RL) as consistent with the Open Source Definition.

8. German Court Finds that Skype Violates GPLv2 The enforcement of the GPLv2 in Germany continues with a Munich court finding that Skype had violated GPLv2 by not including the source code with the binary version of the software (instead, Skype had included a “flyer” with a URL describing where to find the source code version). The suit was brought by Harald Welte, who has been the plaintiff in virtually all of the German enforcement actions for GPLv2. Harald runs gpl-violations.org, an organization which he founded to track down and prosecute violators of the GPL.

9. New License Options. Two of the most controversial issues in FOSS licensing, network use and attribution, were addressed in new licenses adopted this year. A “network use” provision imposes a requirement that when a program makes functions available through a computer network, the user may obtain the source code of the program. Essentially, it extends the trigger requiring providing a copy of the source code from “distribution” of the object code (as required under the GPLv2) to include making the functions available over a computer network. An “attribution” provision requires that certain phrases or images referring to the developing company be included in the program. This provision was very controversial on the License Discuss email list for OSI. The Free Software Foundation published the Affero General Public License in the fall which expanded the scope of the GPLv3 to include a “network use” provision. A limited form of attribution was included in the GPLv3. And OSI approved the Common Public Attribution License which included both the “network use” and “attribution” provisions.

10. Creation of Linux Foundation. The Open Source Development Labs and the Free Standards Group merged to form the Linux Foundation. The FOSS industry is unusual because of the extent to which it depends on non profit entities for guidance. These entities include the OSI, Free Software Foundation, Mozilla Foundation, Apache Foundation and Eclipse Foundation. This merger provides a much stronger platform to promote Linux and open standards.

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The Software Freedom Law Center (”SFLC”) has settled a second BusyBox sofware lawsuit. The settlement for Xterasys is confidential, but appears to be virtually identical to the settlement for Monsoon Media. Dan Ravicher, the SFLC attorney for BusyBox, stated:

As a result of the settlement, Xterasys has agreed to cease all binary distribution of BusyBox until SFLC confirms it has published complete corresponding source code on its Web site. Once SFLC verifies that the complete source code is available, Xterasys’ full rights to distribute BusyBox under the GPL will be reinstated.

Additionally, Xterasys has agreed to appoint an internal Open Source Compliance Officer to monitor and ensure GPL compliance, and to notify previous recipients of BusyBox from Xterasys of their rights to the software under the GPL. Xterasys will also pay an undisclosed amount of financial consideration to the plaintiffs.

The settlement suggests that SFLC has adopted a template for settlement. The lessons for FOSS management are the same as I suggested in my post about Monsoon Media. http://lawandlifesiliconvalley.blogspot.com/2007/11/monsoon-media-lessons-for-foss.html

1. You need to respond quickly and appropriately to any complaints about non compliance with open source licenses.

2. You should have a FOSS Use Policy to avoid these problems.

3. Your FOSS Use Policy should include a procedure for responding to these types of complaints.

4. Non-compliance, even “innocent” non-compliance, is getting more expensive.

If you don’t take these steps voluntarily, they may be imposed on you and you will have your own Open Source Compliance Officer.

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In Bangalore at FOSS.IN, Simon Phipps, Sun Microsystem’s open source guru, announced on Friday that Sun will be establishing an “award program” to support innnovation and advance open source development relating to its products. He describes the program as providing a “substantial prize purse”. The fund will be divided into six chunks of about $175,000 each — war chests to ignite original ideas in six streams or communities working on Sun-created open environments: OpenSolaris, GlassFish, NetBeans, OpenJDK, OpenOffice and OpenSparc. http://www.hindu.com/2007/12/08/stories/2007120854141800.htm

This announcement deals with one of the most fundamental questions in the FOSS industry: will the future of FOSS be constrained by the limited number of programmers who are willing to work for free? This issue translates into the more immediate question for FOSS companies of how to motivate FOSS developers to become part of their community given the proliferation of FOSS companies and projects. Many industry commentators have emphasized that developing a robust community is critical to the success of a company depending on an open source business model. This announcement may mark the rise of a new approach to community development.

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On Thursday, BusyBox, through the Software Freedom Law Center (”SFLC”) filed a new lawsuit to enforce the General Public License (”GPL”). The lawsuit claims that Verizon used BusyBox software in one of its routers without complying with the GPL. This lawsuit is the fourth filed by the SFLC in the last two months and confirms that the trend that I mentioned in my earlier post http://lawandlifesiliconvalley.blogspot.com/2007/11/software-freedom-law-center-files.html. SFLC appears to be taking a much more aggressive approach by filing lawsuits within weeks of the original demand letter. In this case, SFLC states that they gave notice to Verizon on November 16 and filed suit on December 5. The allegations in this suit are similar to the earlier complaints. However, this lawsuit is the first against a company of substantial size.

Companies should review their use of BusyBox software which is the basis for these claims and should be prepared to respond quickly to demand letters from the SFLC.

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