Enforceability of Open Source click-licenses

Saw an interesting oral argument at the Federal Circuit today, in Jacobsen v. Katzer, on appeal from the District Court (which I assume to be of the Northern District) of California. The case presented was that petitioner open-source group posted a type of codec on a website, with a click-license that permission to copy was only given if a downloader agreed to be bound by one of four provisions of the license. Respondent software provider downloaded the code, made changes, and commercialized without following the terms. Those terms appear to be preserving the OSS copyright notice and attribution.

There was one main issue. Was the license binding, and if so, what were the terms of it. Specifically, were the four provisions "covenants" that were restrictions on behavior after formation of the contract, or were they "conditions precedent" such that no contract was performed unless they were accepted.

The reason this is interesting is that since the software was OSS, there were no damages that could be recovered. Therefore the only remedy that is available is an equitable injunction, but violation of a covenant does not give rise to equitable relief, only violation of a condition precedent.

Both lawyers did a pretty poor job of arguing. I was pretty sympathetic to the OSS advocate, but she got pushed against the wall too much by the insightful and aggressive questioning of Judge Hochberg (D. N.J., by designation). In particular, Judge Hochberg wanted to know from petitioners what economic interest of the copyright holder was protected, since copyright law protects the economic interests of the copyright holder.

Here petitioner missed the boat. She waxed on about how OSS produces better software faster than conventional methods, then listing the names of well-known OSS software, and then lists the companies that founded on the basis of OSS, and so on. But Judge Hochberg wasn't asking for the benefits to society as a whole, but to the copyright holder himself. This is particularly significant to me for this reason: the benefits of an OSS copyright holder's work goes to society whether the terms of any license are enforced or not. Indeed, there are more benefits that go to society if the OSS copyright holder's copyright is ignored, because then both the copyright holder's work and improvements made by people unwilling to be bound by OSS licensing will both produce, giving society more options.

I think the best correct answer is that the copyright holder offers his copyright in exchange for a quid pro quo. In exchange for giving license to edit and distribute his code, he demands in exchange the right to edit and distribute your code that improves on it. Therefore he has an interest in the fact that he will in the future have better code for free, which is an economic benefit flowing to him directly. Petitioner didn't say this, even though Judge Hochberg, very fairly, offered her several chances to say exactly that, and in one instance even prompted her with suggestions about what types of benefits there might be. So long as OSS is busy trying to both justify its unconventional economic approach and its unconventional philosophical approach, it will face similar struggles. Nail down the economic first, because it's right there. Judge Michel raised exactly this issue - if you're not looking for economic rights, it must be moral rights, and U.S. law simply isn't on board with those.

Respondents fared no better. They were placed in the very difficult position of having to justify their view of the contract which was pretty much unambiguous. At one point Judges Prost and Hochberg both asked, point blank: if this contract doesn't give rise to a condition that protects the OSS license, then what contract would? And respondents gave the types of unsatisfactory answers you'd expect from first round foundation-year moot court. "Well, if it said you had a license for 2 years and then it reverted back if you didn't comply with the terms of it...," to which Judge Michel replied - "well, if you never had the license in the first place, what would there be to revert?"

And just for procedural posture gravy, the panel noted that the respondent had already agreed to stop distribution, and agreed not to repeat in the future, so there was absolutely nothing for an injunction to be enforced against.

It almost makes it look like the case was set up as a softball for OSS to establish precedent for enforcement of its licenses.