Court Upholds Enforceability of Open Source Licenses

May 3, 2017

The District Court for the Northern District of California1 recently issued an opinion that is being hailed as a victory for open source software.  In this case, the court denied a motion to dismiss a lawsuit alleging violation of an open source software license, paving the way for further action enforcing the conditions of the GNU General Public License (“GPL”).

Artifex and the Dual Licensing Model

Plaintiff Artifex Software, Inc. provides Ghostscript—an interpreter for the PostScript language and the Adobe Portable Document Format (PDF).  This popular software is available under a choice of licensing options, under a model often referred to as dual licensing.  This business model was pioneered by MySQL AB in the 1990s and later adopted by many businesses seeking to maintain a balance between developing free software and funding development with license fees.

Under its dual licensing model, Artifex offers Ghostscript under two sets of license terms.  The GPL—most famous for applying to the Linux kernel—is an open source software license that allows free modification and redistribution of software, subject to making the source code available under GPL license terms, among other requirements.  This “copyleft” rubric ensures that all recipients of the software have free access to the source code.  Artifex also grants alternative licenses on proprietary licensing terms, for companies that prefer not to comply with the requirements of GPL.

Hancom, Inc. integrated Ghostscript into its software product.  It did not seek a proprietary license, but it also did not comply with the conditions of GPL.  Artifex then tried to convince Hancom to comply with the GPL conditions, and when Hancom refused, Artifex filed suit to enforce its rights and vindicate the GPL regime. 

The District Court Affirms That Artifex’s Case Can Proceed

Artifex’s complaint asserts that Hancom’s violations of the conditions of the GPL constitute both copyright infringement and breach of contract.  Artifex has requested remedies including compensatory, consequential, and statutory damages, as well as attorneys’ fees and costs.  Artifex also sought injunctive relief barring further infringement by Hancom and requiring Hancom to comply with obligations under the GPL. 

Hancom moved to dismiss Artifex’s complaint on several grounds.  The District Court denied Hancom’s motion to dismiss on each ground.  A few aspects of the decision are of particular interest to the open source community.  For example, Hancom argued that Artifex could not plead breach of contract for violation of GPL and could not request specific performance of the terms of GPL.  Hancom also argued that copyright damages were not available because the GPL grants royalty-free rights.

Open Source Licenses as Contracts and Damages for GPL Violations

As part of its motion to dismiss, Hancom argued that using open source code offered under open source licensing terms does not form a contract.  Whether open source licenses can be contracts in addition to conditional licenses has been an unsettled area of law.  In the seminal case on enforcement of open source licenses in the United States, Jacobsen v. Katzer,2 the Federal Circuit Court of Appeals held that open source violations could be brought as copyright claims, but did not foreclose the possibility of bringing contract claims as well.  In Artifex, the District Court ruled that Artifex’s breach of contract claim could proceed, finding that the GPL, by its express terms, requires that third parties agree to the GPL’s obligations if they distribute the open-source-licensed software. 

Hancom also argued that because the grant of license under the GPL is royalty free, Artifex could not plead damages for a violation of the GPL.  Relying on Jacobsen v. Katzer, the District Court concluded that royalty-free licensing under open source conditions does not preclude a claim for damages. 

Implications for Open Source Software Licensing

Here, in denying a motion to dismiss, the District Court only holds that the claims may proceed on the theories enunciated by Artifex, not necessarily that they will ultimately succeed.  Still, the case represents a significant step forward for open source plaintiffs.  Many open source compliance claims have been brought as copyright infringement claims, and Jacobsen affirmed this approach.  Generally, copyright claims may afford plaintiffs more damages and stronger remedies than contract claims.  However, contract claims may help a plaintiff pursue a violator’s worldwide conduct in a way that jurisdictional limits on copyright claims might not allow.  Breach of contract claims may also be able to address reputational harm and other indirect non-economic benefits that a plaintiff might derive from enforcing open source license conditions.  A breach of contract claim might also, in certain instances, allow for specific performance of open source obligations. 

In the past decade, while enforcement of open source licensing violations has become more common, few enforcement cases result in published law.  The open source community will be watching this case carefully, and this initial decision vindicates the rights of the open source authors to enforce GPL terms on both breach of contract and copyright theories. 

Artifex Software, Inc. v. Hancom, Inc., No. 16-cv-06982-JSC, 2017 U.S. Dist. LEXIS 62815, Doc. 32 (N.D. Cal. Apr. 25, 2017).

2 535 F.3d 1373 (Fed. Cir. 2008).

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