JP Morgan announced that it would make its CDS Analytical Engine software (which helps to price credit default swaps http://en.wikipedia.org/wiki/Credit_default_swap) available under an open source license. This contribution confirms the success of open source: a major bank can make available core infrastructure software under an open source license http://www.isda.org/press/press012909.html. We can expect to see more such contributions.
Legal issues continue to critical to the successful development and use of open source. And these issues are becoming more important with the increase in open source litigation http://lawandlifesiliconvalley.com/blog/?p=134. To assist the community to understand these issues, Black Duck Software has organized a series of webinars on legal topics. http://www.blackducksoftware.com/files/legal-webinar-series.html. Black Duck has selected Karen Copenhaver of Choate Hall & Stewart and I will be providing the seminars. Karen is the former General Counsel of Black Duck Software and counsel to the Linux Foundation, among others open source companies. She is one of the most thoughtful open source lawyers that I know and has been a leader on many legal issues for the community, such as the Jacobsen amicus brief and the ALI ABA proposals. We have the scheduled the following topics:
- Introduction to Open Source Software Licenses– Wednesday, January 28th, 11:30am ET
- Understanding the Top 10 Open Source Licenses- Wednesday, February 11th, 2pm ET
- Developing in a Hybrid Open Source-Proprietary World - March
- Best Practices in Managing Open Source - April
- Open Source Due Diligence in M&A and Financing - May
- Insights and Lessons from Open Source Case Law - June
And the price is right: free! We hope that you can join us.
Olliance Group has recently announced the dates of the Open Source Think Tank: March 1-3, 2009. http://thinktank.olliancegroup.com/.
This year represents the fourth Think Tank sponsored by Olliance Group and DLA Piper. I go to many open source events each year and the Think Tank is my favorite because it combines a sophisticated audience, a reasonable size and interesting discussion. Those who have attended also enjoy the format:
The Open Source Think Tank that was hosted by Olliance Group and DLA Piper was ideal, not only for the chance to share ideas and address the challenges surrounding commercial open source with my peers, but for the networking and business development opportunities. CollabNet was able move at least three partner and potential customer relationships forward at the event itself.”
Bill Portelli, CEO, CollabNet
During the 2008 Open Source Think Tank, 120 CEOs, CIO/CTOs, VCs, attorneys and industry luminaries representing the entire open source ecosystem from venture backed startups to Fortune 100 companies. The event is invitation only and it has sold out each time, so sign up early!
Business models in open source continue to evolve. We are seeing a very interesting dialog on this issue, started by Matt Aslett in his post last week http://blogs.the451group.com/opensource/2009/01/05/commercial-open-source-business-strategies-in-2009-and-beyond/. He notes that David Rosenberg’s described the dominant business model for commercial open source products is the “open core” model which he describes as follows:
“Typically we now see an “open core” freely available with “exclusive” or proprietary features only available when you pay. If you are trying to build a commercial business on top of an open source project, this is likely the right answer.”
In the past, this model has been called “dual licensing” and has been the basis for the successful open source businesses built by Zimbra and SugarCRM. It is not the only business model: as I noted in my post about the confusion on open source and business models, Marten Mickos found over thirteen different business models for open source companies. http://lawandlifesiliconvalley.com/blog/?p=130
Business models for open source companies are continuing to evolve. However the “open core” model poses the very significant challenge of deciding where to draw the line between the functions in the community edition and the “commercial” edition. This issue was the most interesting to the audience at the presentation to the Silicon Valley Chapter of the Association for Corporate Growth last Thursday by John Roberts on “Open Source and the Future of Software.” We set up the presentation as a dialog and my question to John about business model brought the most comments from the audience. The discussion reminded me how new “commercial open source” industry is: SugarCRM started in 2004. We should not be surprised that the model is still evolving.
Matthew also makes the point that many traditional proprietary companies are adding open source elements to their business model. I have assisted a number of proprietary companies on these issues and I expect this trend to accelerate in 2009.
He has followed up this week with a post this week about the importance of the community in any open source business http://blogs.the451group.com/opensource/2009/01/12/commercial-open-source-community-strategies-in-2009-and-beyond/. I think that the management of communities is one of the core differences between open source companies and proprietary companies. Communities provide open source companies many of their core advantages and their management is critical to the success of open source companies. Yet as more open source companies adopt the “Open Core” strategy, they need to ensure that their communities remain active and engaged.
The District Court in San Francisco in the Jacobsen v Katzner case denied Jacobsen a preliminary injunction (as well as clarifying the scope of some of the claims) in its decision issued yesterday (See the decision here: http://jmri.sourceforge.net/k/docket/284.pdf). This decision is very disappointing for the open source community. The decision by the Court of Appeals for the Federal Circuit (”CAFC”) last year was a great victory for open source licensors. http://lawandlifesiliconvalley.com/blog/?p=64
The District Court drew on a very recent Supreme Court decision which required a higher standard of proof of damages for the grant of a preliminary injunction: Jacobsen must prove that he is “likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor and that an injunction is in the public interest”. The Court then noted that Jacobsen had made no showing that he had actually suffered any of these 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 and he has failed to demonstrate that there is any continuing or ongoing conduct that indicates future harm is imminent.” The important details of the Court’s concerns are found in footnote 3 which should be read carefully by lawyers and licensing professionals. Without reviewing the actual evidence presented, it is difficult to assess the Court’s decision. However, it is clear that the standard for injunctive relief is higher than it has been in the past.
Another important part of the decision is the dismissal of the breach of contract claim for failure to state a cause of action. This type of dismissal is unusual because the Federal courts have a relatively low standard for pleading. The Court noted that as currently drafted the alleged damages do not arise from the breach of the Artistic License. In addition, the Court notes that, as drafted, the breach of contract claim overlaps with the copyright infringement claim and is preempted by copyright law. The Court granted leave to amend and this claim is likely to revised to meet these requirements.
The Court did permit Jacobsen’s claim under the Digital Millenium Copyright Act to proceed forward for the deletion of “Copyright Management Information.” Copyright Management Information includes:
“(1) The title and other information identifying the work, including the information set forth on a notice of copyright.
(2) The name of, and other identifying information about, the author of a work.
(3) The name of, and other identifying information about, the copyright owner of the work, including the information set forth in a notice of copyright.
(4) With the exception of public performances of works by radio and television broadcast stations, the name of, and other identifying information about, a performer whose performance is fixed in a work other than an audiovisual work.”
These claims may be particularly useful for open source licensors because of the importance of attribution to many software developers. This decision is disappointing and we will need to continue to moniter the case.
The power of the open source development model was demonstrated when Sony Ericsson Mobile Communications AB and Motorola Inc. had their joint venture, UIQ Technologies file for bankruptcy today after they donated UIQ’s mobile interface to the Symbian Foundation. The Symbian Foundation was created when Nokia purchased Symbian Ltd. and made its mobile operating system available under an open source license. The UIQ interface was developed in joint venture, UIQ Technology, which was owned by Sony Ericsson and Motorola. The companies decided that the technology could be developed more rapidly through an open source development model. http://www.reuters.com/article/rbssTechMediaTelecomNews/idUSL55414120090105.