August 13, 2008 was a day of vindication for plaintiff Robert Jacobsen, as the United States Court of Appeals for the Federal Circuit, in vacating and remanding a U.S. District Court decision, held that an “open source” software  copyright license can be enforceable. Jacobsen oversees the Java Model Railroad Interface (“JRMI”) project, which created DecoderPro, an application for model railroad hobbyists. Last year, Jacobsen sought a preliminary injunction against Matthew Katzer and Kamind Associates, the creators of Decoder Commander, a competing piece of software which used DecoderPro code as a source but did not honour JRMI’s Artistic License. The District Court held that DecoderPro’s Artistic License was “intentionally broad” and permitted users “to modify the material in any way.” As such, no copyright violation was initially found.
From a legal standpoint, the Court of Appeals ruling in Jacobsen v. Katzer comes as a welcome relief, as it is fairly clear that the lower court decision was plainly poor, in that it ignored or mischaracterized several critical points. First, the District Court chose to read the “provided that” limitations in JRMI’s Artistic License as a “covenant” (which is governed by contract law) and not a “condition” (governed by copyright law), even though California law states that the reverse is true. Furthermore, the District Court ignored several important limitation clauses in the Artistic License—notably: the requirement that any changes to the original source code be clearly indicated and that users acknowledge the original authors’ names and copyright notices—that Katzer and Kamind openly admitted they ignored.
The Court of Appeals shrewdly pointed out that open source programs need not be tied to the physical exchange of money to be protected from a copyright standpoint, noting that there are “economic motives inherent in public licenses, even where profit is not immediate.” Examples of this include increases in market share by offering computer code free of charge and rapid improvements to the product due to the multitude of users. In essence, DecoderPro creates a dollarless feedback loop for JRMI, wherein free use promotes more users, who improve the product, providing the impetus for still more users…and so forth.
While many have effusively praised the decision—including, not at all surprisingly, Professor Lawrence Lessig, who worked diligently on Jacobsen’s behalf; Lessig remarked, on his popular tech blog: “…trust me, this is huge”—some others in the blogosphere view the decision much more darkly, in that it appears to be ushering in a less permissive (and, by extension, more punitive) era of user involvement, though such concerns, in this context, should be mitigated by Katzer’s blatant attempt to supplant Jacobsen’s work.
Frankly, it is difficult to view this decision as anything other than a big step forward for intellectual property law, for, in a day and age when vital creative leaps have become routine, doing anything to stifle that—as, make no mistake, failing to uphold an open source license would—seems fundamentally wrong-headed.
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 at p. 8.