And Who Says Entrepreneurs Don’t Care About IP?

Last night I had the pleasure of presenting a  “Crash Course” on Intellectual Property for Entrepreneurs at the University of Colorado here in Boulder.  The presentation was well attended (especially given that it was the night of our first real snow storm for the season here in Boulder) and the Q&A following the presentation really brought out some interesting concerns – not just about the interplay between IP and technology but involving content and new media IP issues as well.  Special thanks to Brad Bernthal from the Silicon Flatirons Center for Law, Technology and Entrepreneurship at CU for inviting me to give the presentation and organizing the event.

The presentation was part of a larger series of “Crash Course” events geared toward entrepreneurs sponsored by Silicon Flatirons.  You can access a list of current and future “Crash Courses” on the Silicon Flatirons web site.  Past topics have included angel and VC fund raising, marketing for early stage tech companies, and growing a business in the current uncertain economy.  I understand the folks at Silicon Flatirons are lining up more interesting topics in the near future.

The materials from my presentation are now available online. I encourage you to check them out and to visit the Silicon Flatirons site for more information on the ongoing “Crash Course” series.

The Decision All Of Open Source Has Been Waiting For

As has been widely publicized in the industry, legal and even mainstream media, on August 13, 2008 the U.S. Court of Appeals for the Federal Circuit (CAFC) issued its decision in the closely-watched case of Jacobsen v. Katzer. In its decision, the CAFC confirmed one of the core legal assumptions upon which the entire open source world is based — namely that open source licenses are legally enforceable as licenses under U.S. copyright law. Perhaps more importantly, the CAFC’s decision also validated the ability of open source licensors to seek injunctive relief under copyright law to stop violations of open source licenses, in addition to merely being able to seek monetary damages in compensation for those violations. While the decision itself totals only 12 pages, it has potentially far-reaching implications for both users and distributors of free and open source software (and has instantly become required reading for anyone with interest or involvement in open source software licensing or compliance issues).

District Court Case

Interestingly, the Jacobsen case was originally filed as a patent infringement case in the U.S. District Court for the Northern District of California. In the case, Matthew Katzer (through his company Kamind Associates Inc. d/b/a KAM Industries) alleged that the DecoderPro model railroad software developed and distributed by Robert Jacobsen infringed U.S. Patent No. 6,530,329 (for a “model train control system”) owned by Katzer. Jacobsen responded to these allegations by, among other things, seeking to invalidate the Katzer patent on the basis of fraud. In particular, Jacobsen asserted that significant portions of the software covered by Katzer’s patent, and marketed by Katzer under the name “Decoder Commander,” were in fact comprised of code taken from Jacobsen’s own DecoderPro software. Jacobsen also brought a counterclaim against Katzer asserting copyright infringement on the basis of Katzer’s unauthorized use of the portions of DecoderPro in Decoder Commander.

The DecoderPro software is distributed by Jacobsen under the Artistic License, a well-known open source license. Jacobsen’s counterclaim alleged that Katzer distributed the portions of DecoderPro included in Decoder Commander in violation of the Artistic License by failing to comply with the attribution provisions of the license. In particular, the Artistic License requires that all original copyright notices and disclaimers on the software received under the license be preserved in any distribution of software and that any changes made by the licensee be distinguished from the software originally received under the license. Jacobsen asserted Katzer’s failure to adhere to these provisions of the Artistic License constituted an infringement of Jacobsen’s copyright in DecoderPro, reasoning that the use of DecoderPro outside of the scope of the applicable license constituted copyright infringement.

On this basis, Jacobsen moved for a preliminary injunction to enjoin Katzer from infringing the copyright in DecoderPro. However, in a decision issued on August 17, 2007 the district court surprised many by denying Jacobsen’s motion.

Conditions vs. Covenants

It is well-settled that the grant of a license to copyrighted material effectively constitutes a waiver of the licensor’s right to sue for copyright infringement, so long as the licensee complies with the conditions placed on the scope of that license. If a licensee does not remain within the scope created by those conditions, it thus follows that the licensee is infringing the copyright of the licensor and that the licensor may seek an injunction against the licensee to stop the infringing activity. A condition on the scope of a license is, however, treated differently from a separate covenant placed on the license. Rather than giving rise to the right to seek an injunction for copyright infringement, the violation of a separate covenant is treated more akin to a breach of contract and thus gives rise only to a right to seek monetary damages for that breach.

The district court in Jacobsen found that the Artistic License has a very broad scope, placing very few actual conditions on a licensee’s right to copy, distribute, and create derivative works of software provided under the license. The court found that even the use by Katzer of portions of DecoderPro in Decoder Commander did not exceed the scope of these conditions. Separate and apart from these conditions, the court found that the attribution provisions of the Artistic License instead constitute a separate covenant between the parties to the license. As a result, Katzer’s use of portions of DecoderPro without providing the required attribution to Jacobsen constituted only a violation of a separate covenant to the license and not a violation of a condition of the license itself. Thus, though Jacobsen may be subject to monetary damages for breach of these covenants, the court found that his actions did not constitute copyright infringement. As a result, the court held that it had no basis upon which to issue an injunction for copyright infringement.

Appeal to the CAFC

The decision of the district court in Jacobsen surprised many in the open source community who had long assumed that a failure to comply with the terms of an open source license such as the Artistic License would constitute a violation of the conditions on the scope of the license and thus give rise to a claim for copyright infringement and the right of the licensor to seek an injunction to stop the infringement. The decision caused concern that the court had effectively foreclosed the option of an injunction as a remedy for the violation of an open source license, leaving aggrieved open source licensors with only the far less attractive (and often far more difficult to obtain) remedy of monetary damages. The decision of the CAFC in the appeal of the district court’s finding, however, serves to calm many of these concerns.

Stating that “Copyright holders who engage in open source licensing have the right to control the modification and distribution of [their] copyrighted material,” the CAFC found that the “clear language” of the Artistic License creates conditions, and not covenants, to protect the rights of the licensor at issue under the license. These conditions, the court noted, include not only the provisions regarding the copying, distribution, and modification of the software subject to the license but also the relevant attribution provisions. In justifying its conclusion, the CAFC noted that the conditions on distribution, modification, and attribution in the Artistic License serve to create significant and direct economic benefit to the licensor under the Artistic License. The conditions are thus necessary to accomplish the objectives of the licensor and therefore must be enforced. Interpreting the provisions of the Artistic License otherwise would, according to the decision of the CAFC, render them “meaningless” by foreclosing the ability to enforce those provisions through injunctive relief.

The CAFC thus vacated the decision of the district court and remanded the case back to the district court for further consideration in accordance with the decision of the CAFC.

The Impact

While Jacobsen is focused on the language of the Artistic License, the decision of the CAFC is broadly worded and seemingly also applicable to the language of many other popular open source licenses, such as the widely used GNU General Public License (GPL) and GNU Lesser General Public License (LGPL). As a result, the decision should be viewed as a ringing endorsement of the validity of not just the Artistic License but of open source licenses in general. In addition, the decision opens the door for open source licensors under all open source licenses to seek injunctive relief for copyright infringement as a remedy for license violations.

It is also significant to note that a finding of copyright infringement gives rise not just to the option of injunctive relief, but to additional remedies as well. Under U.S. copyright law, copyright holders may in many cases also seek statutory damages (without the need to prove actual monetary damages) in the case that the infringement involves a registered copyright. Likewise, registered copyright holders can also make a claim for the recovery of attorney’s fees for copyright infringement. Depending on how Jacobsen is interpreted in future contexts, the case thus has the potential to provide open source licensors with strong additional powers to enforce their rights.

For companies that have already taken steps to comply with the open source licenses to which they are subject, the CAFC’s decision in Jacobsen should not have a significant impact. However, Jacobsen has the potential to significantly increase the risk of noncompliance with open source licenses. For those companies that have elected not to comply with open source licenses or, as is the case with many companies, have chosen to remain unaware of the open source software licenses to which they may be subject, Jacobsen should be all the incentive that is necessary to adopt and implement a sound open source license compliance program.

ABA Open Source Panel in New York

While much of the open source community was in San Francisco last week at the LinuxWorld Expo , I was in New York at the 2008 Annual Meeting of the American Bar Association (ABA) speaking at the “Life after GPLv3: New Developments in Open Source Software Licensing” event organized by the ABA Section of Intellectual Property Law. My presentation covered an update on the lawsuits filed over the past 12 months by the Software Freedom Law Center (SFLC) on behalf of their clients Erik Andersen and Rob Landley (the two principal developers of the BusyBox open source utility) against Monsoon Multimedia, Xterasys Corporation, High-Gain Antennas, Verizon Communications, Bell Microproducts, Inc., Super Micro Computer, Inc. and Extreme Networks alleging copyright infringement based on a violation of version 2 of the GNU General Public License (GPL) in connection with BusyBox. In addition to discussing the history and resolution of the BusyBox cases (including my involvement with several of the cases), I also highlighted the similarities and differences between these cases and past open source software license enforcement efforts outside of the courts by the Free Software Foundation (FSF) and Harald Welte of gpl-violations.org. The presentation materials are now available online. I understand that the ABA will be posting the materials from the other presenters at the event, as well as a podcast of the entire event, on the ABA website in the coming weeks.

Many thanks to Mark Wittow and Gloria Archuleta, co-charis of ABA IP Section for organizing the event and inviting me to speak. Thanks also to my co-presenters Terry Ilardi of IBM Corporation, Jim Markwith of Microsoft Corporation, and Gabe Holloway of Leonard, Street and Deinard, as well as the moderator of the panel discussion portion of the event, Sue Ross of Fulbright & Jaworski L.L.P.

Heading to New York?

I will be in New York on August 8th to speak on a panel at this year’s American Bar Association (ABA) Annual Meeting. The panel, titled “Life after GPLv3: New Developments in Open Source Software Licensing” is sponsored by the ABA Section of Intellectual Property Law and is being held at 2:00 PM on the 8th at the Waldorf-Astoria.

We have structured the panel as a series of brief presentations by the panelists followed by a general Q&A session on the presentations. While the title for the panel is a bit innocuous, the presentations will cover a variety of relevant open source topics, including: GPLv3 and the GPLv3 drafting process (including differences between GPLv2, GPLv3 and other open source licenses), open source patent concerns, legal strategies for using open source software in connection with proprietary software, and issues raised by open source software under the Sarbanes Oxley Act of 2002 and other corporate regulations.

My presentation will include a brief history and update on the “BusyBox lawsuits” brought over the last year by The Software Freedom Law Center (SFLC) on behalf of its clients Erik Andersen and Rob Landley (the two principal developers of the BusyBox open source utility) alleging copyright infringement based on a violation of version 2 of the GNU General Public License (GPL). I will be including information based both on my personal experience working with defendants in several of the BusyBox cases as well as discussions with others involved in the suits. Details on the panel and the other panelists are included below.

For those of you based in New York or headed to the ABA Annual Meeting, please let me know if you would be interested in getting together while I am in town.

2008 ABA Annual Meeting
Section of Intellectual Property Law

2:00 p.m. – 3:30 p.m.
CLE Program: Life after GPLv3: New Developments in Open Source Software Licensing.
co-sponsored by the Section of Science & Technology Law

The past year has seen significant legal developments concerning open source software licensing, most notably, the publication of the GPLv3 license, which is much more comprehensive than GPLv2 and attempts to address the changes in software law over the past 15 years, as well as initial efforts to enforce open source software license requirements in the courts. This panel will explore the new GPLv3 license, how it differs from GPLv2, the status of GPLv3 adoption and recent litigation concerning the enforcement of GPL and other open source license terms affecting GPLv3 or other open source license use.

Moderator
Sue Ross, Fulbright & Jaworski L.L.P., New York, NY

Speakers
Gabe Holloway, Leonard, Street and Deinard, Minneapolis, MN
Terry Ilardi, IBM Corporation, Armonk, NY
Jason Haislmaier, Holme Roberts & Owen LLP, Boulder, CO
Jim Markwith, Microsoft Corporation, Redmond, CA

BusyBox Goes Extreme

Adding to the already substantial list of lawsuits filed on behalf of its clients Erik Andersen and Rob Landley (the two principal developers of the BusyBox open source utility), the The Software Freedom Law Center (SFLC) has announced today the filing of yet another suit alleging copyright infringement based on a violation of version 2 of the GNU General Public License (GPL) in connection with BusyBox.  The current suit has been filed against Ethernet solutions provider Extreme Networks.  As with the previous suits brought by Andersen and Landley (against Monsoon Multimedia, Xterasys Corporation, High-Gain Antennas, Verizon Communications, Bell Microproducts, Inc. and Super Micro Computer, Inc.) , the complaint against Extreme Networks alleges that Extreme makes and sells various products containing firmware in which BusyBox, or a modified version of BusyBox, is included.  Specifically, the complaint names the Summit X450 Series network switches as one of the offending products offered by Extreme.  According to the lawsuit, Extreme continues to distribute this product and others with firmware containing BusyBox without making the source code to BusyBox available in accordance with the terms of the GPL.   As the complaint notes, under the terms of the GPL, Extreme is obligated to provide the source code of the BusyBox software to recipients of products with firmware containing BusyBox.

According to the complaint, Extreme was first notified of the requirements of the GPL as early as July of 2006 by a “third party” who requested a copy of the Busy Box source code.  The complaint further alleges that the SFLC later contacted Extreme in February 2008 on behalf of the BusyBox developers and that the parties have had multiple interactions since that time in an attempt to settle the allegations against Extreme.  The complaint continues, however, that Extreme has failed to respond to the latest notice provided by the SFLC on June 26, thus prompting the lawsuit.  As with the complaints in previous cases, the complaint filed against Extreme  requests that an injunction be issued against the defendant and that damages and litigation costs be awarded to the plaintiffs.

The take away from this latest suit is fairly simple.  As the campaign of lawsuits brought by BusyBox continues to roll forward (and it appears safe to now call it a “campaign”), and as mentioned in connection with the previous BusyBox suits, product vendors (particularly in the wireless and terrestrial networking space) should take note of whether and to what extent the products distributed by their organizations (including products produced by third parties) contain BusyBox or other open source software.  And, as shown by the timeline in this and the other BusyBox cases, those vendors should take seriously any contact from the SFLC or other organizations inquiring about potential violations of the GPL or other open source licenses.

Red Hat Settles with Firestar

News out of Boston that Red Hat has settled the long-running patent infringement lawsuit filed against it by Firestar Software and a later suit filed against the company by DataTern.

Filed on June 26, 2006, the lawsuit by Massachusetts-based software vendor Firestar Software, Inc. was brought against Red Hat in connection the Hibernate 3.0 software product acquired by Red Hat through its then-recent acquisition of JBoss. In the lawsuit, Firestar alleged that JBoss and Red Hat are infringing U.S. patent number 6,101,502 (issued on August 8, 2000) through their activities relating to Hibernate. While software patent infringement lawsuits had become increasingly frequent in the world of proprietary software at the time of the lawsuit, the suit was viewed as the first of its kind relating to a widely distributed open source software product.

The specific financial and other terms of the settlement were not disclosed. However, Red Hat indicates that the settlement includes broad terms covering “all software distributed under Red Hat’s brands.”  Of particular note, the settlement also protects all “upstream predecessor versions” as well.   In addition, Red Hat indicates that the settlement protects “derivative works of, or combination products using, the covered products from any patent claim based in any respect on the covered products.” Perhaps most importantly (for shareholder of Red Hat in particular), the company indicates that the settlement is sufficient to enable RedHat (and its users) to continue to distribute its open source software products in compliance with the terms of all applicable open source licenses.

In its press release on the settlement, Red Hat indicates that the settlements leave Red Hat with one remaining patent infringement suit against it — based on a complaint filed in October 2007 by IP Innovation LLC and Technology Licensing Corp, both subsidiaries of patent troll (er, “holding company”) Acacia Media.

BusyBox is Back, Back Again

The Software Freedom Law Center (SFLC) has announced today that it has filed a new round of lawsuits on behalf of its clients Erik Andersen and Rob Landley (the two principal developers of the BusyBox open source utility) alleging copyright infringement based on a violation of version 2 of the GNU General Public License (GPL). The defendants in the new lawsuits are Bell Microproducts, Inc. (dba “Hammer Storage“) and Super Micro Computer, Inc., each well-established distributors of a wide range of storage and other computer hardware products and components. These two new suits bring the total of lawsuits brought by the SFLC on behalf of the BusyBox developers to six (the previous four having been filed against Monsoon Multimedia, Xterasys Corporation, High-Gain Antennas, and Verizon Communications.

The complaints against Bell Micro and Super Micro were filed on June 10, 2008 in the United States District Court for the Southern District of New York and are available online at — Erik Andersen and Rob Landley v. Bell Microproducts, Inc. d.b.a. Hammer Storage and Erik Andersen and Rob Landley v. Super Micro Computer, Inc. The complaints are similar in many respects to the complaints previously filed by filed in the Monsoon Media, Xterasys, High-Gain and Verizon suits. In each case the complaint alleges that the defendant “makes and sells various communications and hardware devices” containing firmware that contains BusyBox (either directly or in modified form). In the case of Bell Micro, the complaint specifically targets the Bell’s “MyShare HN1200 network attached storage device” and with Super Micro the complaint specifically names the “AOC-SIM1U+ IPMI 2.0 System Management Card“. Under the terms of the GPL, each complaint alleges that the defendant is obligated to provide the source code of the BusyBox software to recipients of the named products containing the firmware containing BusyBox. According to each lawsuit, Bell Micro and Super Micro continue to distribute products containing firmware containing BusyBox without source code in violation of the GPL, despite having been contacted by SFLC. Each complaints seek an injunction against each company and requests that damages and litigation costs be awarded to the plaintiffs.

It remains to be seen if the current cases will be settled out of court (as has happened in each of the prior cases brought by BusyBox to date) or continue on and become the first lawsuit alleging a violation of the GPL ever to go to trial in the U.S. Regardless, these cases signal that after a brief hiatus Eric Andersen and Rob Landley (and the SFLC) appear again to be interested in enforcing the GPL against alleged violators in court rather than pursuing out of court settlements. As mentioned in connection with the previous BusyBox suits, now is the time to take steps to identify whether and to what extent your organization is using BusyBox and other open source software and to ensure that you are in compliance with the open source software licenses applicable to that software.

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