In the first reported decision to directly address the enforceability of open source licenses, the U.S. Court of Appeals for the Federal Circuit ruled on August 13, 2008, that the grantor of an open source license for software code that is publicly available had a cause of action not only for breach of contract but also for copyright infringement when a member of the public used such code without abiding by the notice and attribution requirements of the license. According to the Federal Circuit, "[o]pen source licensing has become a widely used method of creative collaboration that serves to advance the arts and sciences in a manner and at a pace that few could have imagined just a few decades ago." In exchange and consideration for this collaborative work, the court stated, the copyright holder "permits users to copy, modify and distribute the software code subject to conditions that serve to protect downstream users and to keep the code accessible."
In Jacobsen v. Katzer, 535 F.3d 1373 (Fed. Cir. 2008), the Federal Circuit reversed a District Court holding that the open source license at issue was "unlimited in scope" and therefore did not create liability for copyright infringement. Jacobsen managed an open source software group called Java Model Railroad Interface ("JMRI"). JMRI had created a software application called DecoderPro, which is used by model railroad enthusiasts to program the decoder chips that control model trains. The DecoderPro code is made publicly available under the Artistic License-one of many open source code licenses pursuant to which source code is made available to the public. The Artistic License grants to users the right to copy, modify and distribute the software, provided that certain notices are included in the source code files for the new program and that the new program is not distributed outside of the user's organization. In this context, the term "new program" means a program that includes modified DecoderPro code.
Katzer offered a competing software program called Decoder Commander that was also used to program decoder chips of model trains. The Decoder Commander code base incorporated DecoderPro source code files, but Katzer had not complied with the notice requirements of the Artistic License. Katzer made a technical argument, namely, that the notice requirements of the Artistic License were "covenants" and not "conditions." The significance of this distinction is that if the notice requirements were merely covenants and not conditions of the license, then the only remedy would be breach of contract—not copyright infringement. Katzer also argued that copyright law does not recognize a cause of action for non-economic rights and that there were no economic rights at issue because no fee was charged for the DecoderPro code.
The Federal Circuit rejected both of Katzer's arguments. As to the economic rights issue, the court held that consideration in the form of compliance with open source requirements of disclosure and explanation of changes made by the user to the code is no less legitimate than consideration in the form of a license fee. Further, the court held that the notice requirements of the Artistic License were conditions (and not merely covenants) to protecting the economic rights at issue in the granting of an open source license. Specifically, "[t]he attribution and modification transparency requirements directly serve to drive traffic to the open source incubation page and to inform downstream users of the project," which the court characterized as a "significant economic goal" that is legally enforceable.
The significance of this case to software development firms is that it emphasizes the need to establish a system for policing the use of open source code by developers to ensure that if open source code is used, the license governing use of that code is identified, and the terms and conditions of that license are complied with. The terms of open source licenses vary, and it may be advisable to avoid certain open source license altogether in order to maintain the proprietary nature of the software.
