Court acknowledges copyright law application to Open Source software

In an important ruling yesterday, the U.S. Court of Appeals for the Federal Circuit yesterday stood behind the concept that open source software should be covered by copyright law, which strengthens the rights of OS developers. 

This is a critical win for open source developers, which although seemingly obvious was an untested aspect of US law.  Software has long been viewed in the courts as being covered under copyright law.  Some background on the copyright protections provided to software is here, here and here.

The crux of the case centers on whether the terms of an open source license such as the Artistic License in this case (or similar licenses, such as Creative Commons) should be considered “conditions of, or merely covenants to, the copyright licenses.”  When a copyright holder grants a nonexclusive license to use a copyrighted work, he/she forfeits his/her rights to sue for copyright infringement and can only sue for breach of contract.

Why is this an important distinction?  One could consider violations of use a violation of contract law, which would significantly reduce the penalties for violation.  Contract law violations frequently result in awards that are a derivative of the monetary damages related to the contract.  In the case of Open Source software, there is very limited if any exchange of funds, and therefore very limited monetary damages.

In the ruling, Judge White addressed the question of economic benefits accruing to OS developers by writing:

The lack of money changing hands in open source licensing should not be presumed to mean that there is no economic consideration, however.  There are substantial benefits, including economic benefits, to the creation and distribution of copyrighted works under public licenses that range far beyond traditional license royalties. 

Copyright infringement on the other hand has a set of penalties and remedies that are much more significant and are not explicitly tied to the financial terms of an exchange.  In addition, copyright cases can include attorney’s fees in the remediation.

In the decision, the Artistic License used by the plaintiff was deemed to be limited in scope and have conditions, which the licensor violated, then the case was deemed to be infringing on copyright. Deciding in the plaintiff’s favor because of the clause “provided that …” created limitations and conditions in the license to which the licensor must adhere or they would be infringing on the copyrights of the licensor.  In this particular case, the “conditions set forth in the Artistic License are vital to enable the copyright holder to retain the ability to benefit from the work of downstream users.”  In addition, licensors are “authorized to make modifications and to distribute the materials provided that the user follows the restrictive terms of the Artistic License.”  These conditions of use were deemed to be sufficient restrictions to the terms of the license to distinguish them from contractual covenants.

This case will reinforce the legal protections for producers of OS software that have underpinned the development and sharing of OS code for years.  Andy Updegrove, a lawyer specializing in intellectual property law, standards and a prolific blogger, was quoted in PC Magazine as saying:

“For the community this wasn’t about the money at all, but about receiving the blessing of an important court that the foundations upon which the entire fee and open source and Creative Commons philosophies are based.”