Jacobsen v. Katzer: An Open Source License Is a Copyright License

In an opinion seen as a major development in open source jurisprudence, the Court of Appeals for the Federal Circuit ruled in Jacobsen v. Katzer, 535 F.3d 1373 (Fed. Cir. 2008), open source licenses create conditions on the scope of the license, and failure to comply with those conditions may constitute copyright infringement.

Background

An open source project enables a software developer to publish his or her work online in an environment where anyone can access it, understand it, modify it, duplicate it, incorporate it, improve it, etc.  As a result of their being altered in a collaborative, open source environment, these software programs can get written, debugged, and improved faster and more efficiently than if a developer was working alone. However, nearly all open source environments provide for some type of open source licensing, which places conditions or limits upon those accessing, modifying, and using the open source software.

Plaintiff Robert Jacobsen (“Jacobsen”) manages an open source software group called Java Model Railroad Interface (“JMRI”), which group created a computer programming application for model railroad enthusiasts called DecoderPro.  Jacobsen holds a registered copyright to the DecoderPro code.  The DecoderPro files are available for free download and use by the public on an open source incubator website, subject to the terms of its license (the “Artistic License”), clearly identified on the downloadable files. Among other terms, the Artistic License requires that users properly attribute the original source of the code (Jacobsen and JMRI) and provide a description of how their modification differs from the original.

Defendant Matthew Katzer (“Katzer”) owns Kamind Associates, a company that operates in the model railroad software arena. Jacobsen claimed that Katzer copied and used significant portions of DecoderPro in Katzer’s competing commercial software product called Decoder Commander without complying with the requirements of the Artistic License.  Jacobsen claimed that Katzer’s use constituted copyright infringement and sought a preliminary injunction against Katzer. The District Court for the Northern District of California denied the motion for preliminary injunction, determining that the open source software license was so broad that it did not create liability for copyright infringement.  The District Court reasoned that while the license may create a claim for breach of the contract, a mere breach of contract claim would not warrant an injunction.

Jacobsen appealed the District Court’s order to the Court of Appeals for the Federal Circuit, which disagreed with the District Court’s assessment.  The Court of Appeals vacated the lower court’s order and remanded the case for further proceedings. Jacobsen v. Katzer, 535 F.3d 1373 (Fed. Cir. 2008).

Conditions v. covenants to a copyright license

Katzer admitted that Jacobsen owns the copyright for the materials, and that Katzer did in fact take, modify, and distribute those materials without complying with the attribution requirements of the Artistic License.  Katzer, however, argued that the requirements were mere contractual covenants, rather than conditions of the copyright license, and therefore Jacobson could sue for breach of contract only, not copyright infringement.

The primary question before the appellate court was whether the attribution requirements were conditions of the license or merely covenants to the nonexclusive license contract. If the requirements are covenants, the District Court would have correctly determined that Jacobsen had, at best, a breach of contract action, which would not create the presumption of irreparable harm required to obtain a preliminary injunction. (Slip op., p. 9). On the other hand, if the requirements were conditions of the license, Katzer’s failure to comply with those conditions meant that he had not properly obtained the license in the first place and was in fact a copyright infringer. (Slip op., pp. 9-10).

The appellate court reviewed the facts and found that the terms of the Artistic License explicitly, on its face, created conditions, not merely covenants. (Slip op. p. 11). Under the License, “[t]he copyright holder [] expressly stated the terms upon which the right to modify and distribute the material depended and invited direct contact if a downloader wished to negotiate other terms.” (Slip op. p. 12). Katzer copied, modified and distributed the material without complying with the required terms and without contacting Jacobsen to negotiate other terms. Because Katzer acted outside the scope of the License, he did not properly obtain a license, so his use of the materials constituted copyright infringement. (Slip op. pp. 13-14).

Open source licensors do hold economic rights, and thereby, are afforded copyright law protection

Katzer argued that Jacobsen’s copyright gave him no economic rights – i.e., rights to royalties for use of the copyrighted materials – because he made the computer code publicly available free of charge. (Slip op., p. 10). As such, Katzer argued that copyright law cannot apply to Jacobsen, because copyright law does not recognize a cause of action for non-economic rights. (Slip op., pp. 10-11) (citing Gilliam v. ABC, 538 F.2d 14, 20-21 (2nd Cir. 1976)).

In response to this argument, the Court of Appeal analyzed the nature of open source software and the benefits it brings to open source developers. The Court found that developers do derive an economic benefit from the open source license, albeit not in the form of traditional royalties. The Court stated: “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.” (Slip op., p. 8) As examples, the Court noted that open source developers like Jacobsen rely on the license terms to build their professional reputations, to drive downstream users to their websites, to generate market share and to obtain expert improvements to their products free of charge. Id.

Accordingly, the appellate court rejected Katzer’s “economic rights” argument, finding that, “[t]he choice to exact consideration in the form of compliance with the open source requirements of disclosure and explanation of changes, rather than as a dollar-denominated fee, is entitled to no less legal recognition.” (Slip op., pp. 12-13).

CONCLUSION

In light of Jacobsen v. Katzer, open source programmers have stronger rights afforded to them in enforcing the licenses they choose to attach in providing free software.

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