2007 Top Ten Free and Open Source Legal Issues

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.

BusyBox Files Lawsuit against Verizon to Enforce the General Public License

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.

Monsoon Media: Lessons for FOSS Management

I have been traveling so I have not been able to comment on the recent Monsoon Media settlement (if you are in London and like Indian food, I highly recommend Quilon at 41 Buckingham Gate, SW1). The recent settlement in the Monsoon Media case has several important lessons for managing FOSS software. Everyone, including Monsoon Media, appears to agree that they violated the GPLv2 by not making the source code of the BusyBox software available as required under the GPLv2. It is less clear why Monsoon Media did not respond to the requests of the BusyBox authors and the SFLC to come into compliance. According to the complaint, they simply admitted that they were not distributing source code of BusyBox as required by the GPLv2. Although the settlement of the case means that we will not have a court’s view on the enforceability of the GPLv2 and the appropriate remedy for breach, it is not surprising.

The settlement was described as follows: As a result of the plaintiffs agreeing to dismiss the lawsuit and reinstate Monsoon Multimedia's rights to distribute BusyBox under the GPL, Monsoon Multimedia has agreed to appoint an Open Source Compliance Officer within its organization to monitor and ensure GPL compliance, to publish the source code for the version of BusyBox it previously distributed on its Web site, and to undertake substantial efforts to notify previous recipients of BusyBox from Monsoon Multimedia of their rights to the software under the GPL. The settlement also includes an undisclosed amount of financial consideration paid by Monsoon Multimedia to the plaintiffs.

As I mentioned in an earlier post, this complaint was the first suit filed about the enforceability of the GPLv2 in the United States. In the past, the SFLC has sought compliance rather than damages http://emoglen.law.columbia.edu/publications/lu-13.html. However, in this case, Dan Ravicher of the SFLC noted (despite Monsoon Media’s public statements about coming into compliance): "Simply coming into compliance now is not sufficient to settle the matter, because that would mean anyone can violate the license until caught, because the only punishment would be to come into compliance." This statement suggests a new more aggressive approach on financially penalizing violators of the GPLv2.

The case also recognizes an often overlooked problem for GPLv2 licensees: if you are out of compliance with the GPLv2, you do not have a license and, thus, are likely to be liable for both copyright infringement and breach of license. This “termination” can be particularly problematic if you have significant amounts of product already distributed and, thus, “unlicensed”.

The dispute moved very swiftly: according to the complaint, Monsoon Media was first informed of their violation on August 28, 2007 (and admitted to their failure to supply source code on September 5, 2007), contacted again by the SFLC on September 11, 2007 and the suit was filed on September 20, 2007.

The lessons from this suit are as follows:

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.