from the GNU-ruling dept.
Arthur T Knackerbracket has found the following story:
A recent federal district court decision denied a motion to dismiss a complaint brought by Artifex Software Inc. ("Artifex") for breach of contract and copyright infringement claims against Defendant Hancom, Inc. based on breach of an open source software license. The software, referred to as Ghostscript, was dual-licensed under the GPL license and a commercial license. According to the Plaintiff, those seeking to commercially distribute Ghostscript could obtain a commercial license to use, modify, copy, and/or distribute Ghostscript for a fee. Otherwise, the software was available without a fee under the GNU GPL, which required users to comply with certain open-source licensing requirements. The requirements included an obligation to "convey the machine-readable Corresponding Source under the terms of this License" of any covered code. In other words, under the open source license option, certain combinations of proprietary software with Ghostscript are governed by the terms of the GNU GPL.
Plaintiff alleged that because Defendant did not have a commercial license for Ghostscript, its use and distribution of Ghostscript constituted consent to the terms of the GNU GPL, Section 9 of which states:
You are not required to accept this License in order to receive or run a copy of the Program...However, nothing other than this License grants you permission to propagate or modify any covered work. These actions infringe copyright if you do not accept this License. Therefore, by modifying or propagating a covered work, you indicate your acceptance of this License to do so.
Plaintiff further alleged that Hancom failed to comply with key provisions of the GNU GPL, including the requirement to distribute the source code for Hancom's software.
Hancom responded to these allegations with three arguments. First, it alleged Plaintiff failed to state a claim for breach of contract and that any such claim is preempted by copyright law. Second, it alleged Plaintiff's copyright claim must be dismissed in part because Plaintiff has failed to allege that Defendant committed a predicate act in the United States. Finally, Defendant moved to strike portions of the relief sought in the complaint.
The Court rejected all three arguments. On the first issue, the court stated: "Defendant contends that Plaintiff's reliance on the unsigned GNU GPL fails to plausibly demonstrate mutual assent, that is, the existence of a contract. Not so. The GNU GPL, which is attached to the complaint, provides that the Ghostscript user agrees to its terms if the user does not obtain a commercial license." The Court added: "Plaintiff's allegations of harm are also adequately pled. Plaintiff plausibly alleges that Defendant's use of Ghostscript without obtaining a commercial license or complying with GNU GPL deprived Plaintiff of the licensing fee, or alternatively, the ability to advance and develop Ghostscript through open-source sharing. Indeed, as the Federal Circuit has recognized, there is harm which flows from a party's failure to comply with open source licensing: "[t]he lack of money changing hands in open source licensing should not be presumed to mean that there is no economic consideration" because "[t]here are substantial benefits, including economic benefits, to the creation and distribution of copyrighted works under public licenses that range far beyond traditional license royalties."
[...] This case highlights the need to understand and comply with the terms of open source licenses. Many companies use open source without having adequate open source usage policies or understanding of the legal risks of using open source. As this case highlights one of the key risks with using open source is that in certain circumstances, a company may be required to release the source code for its proprietary software based on usage of open source code in the software. It also highlights the validity of certain dual-licensing open source models and the need to understand when which of the options apply to your usage. If your company does not have an open source policy or has questions on these issues, it should seek advice.
In the previous ruling, the judge in the case had denied a motion to dismiss those claims, allowing the case to proceed. We've now reached the next step in the suit, involving a motion for summary judgment on the contract claim, which was also denied. In a motion to dismiss, the court assumes the truth of the allegations involved and rules on whether such allegations actually present a valid legal claim. In summary judgment, the court is asked to look at the undisputed facts and determine whether the outcome is so obvious that the matter need not go through a full trial. Such motions are routine, but making it past summary judgment does mean that the issue of recovery under contract theory is still alive in this case.
Hancom here made several arguments against the contract claim, but one is of particular interest. Hancom argued that if any contract claim is allowed, damages should only be considered prior to the date of their initial violation. They argued that since the violation terminated their license, the contract also ended at that point. The judge noted that:
the language of the GPL suggests that Defendant's obligations persisted beyond termination of its rights to propagate software using Ghostscript ... because the source code or offer of the source code is required each time a "covered work" is conveyed, each time Defendant distributed a product using Ghostscript there was arguably an ensuing obligation to provide or offer to provide the source code.