A federal appeals court has overruled a lower court ruling that, if sustained, would have severely hampered the enforceability of free software licenses. The lower court had found that redistributing software in violation of the terms of a free software license could constitute a breach of contract, but was not copyright infringement. The difference matters because copyright law affords much stronger remedies against infringement than does contract law. If allowed to stand, the decision could have neutered popular copyleft licenses such as the GPL and Creative Commons licenses. The district court decision was overturned on Wednesday by the United States Court of Appeals for the Federal Circuit.

The copyright holder in the case is Robert Jacobsen, the lead developer of the Java Model Railroad Interface, a software package used by model railroad enthusiasts. A firm called Kamind Associates downloaded parts of Jacobsen's project, stripped out the copyright notice and other identifying information, and began redistributing the modified version without Jacobsen's approval.

JMRI was released under version 1.0 of the Artistic License, which is also widely used in the Perl community. While not not technically a copyleft license, it gives users broad freedom to use, modify, and redistribute the JMRI software provided that certain conditions are met. Jacobsen argued that Kamind's failure to comply with the terms of the license deprived it of any permission to redistribute the software and made it guilty of copyright infringement. The District Court for the Northern District of California disagreed, holding that the Artistic License granted an "intentionally broad" license to the JMRI software, and that violations of the license terms should be viewed as mere breaches of contract rather than copyright infringement.







Used under GNU Free Documentation License v1.2 Image credit: Daniel Case Used under GNU Free Documentation License v1.2

That matters because copyright holders can typically obtain injunctions against continued use of their works, whereas the winning party in a contract dispute more commonly receives monetary damages. That's problematic for free software because it's difficult to compute the monetary value of software that is given away free of charge. As a result, many violations of copyleft licenses could have been punished with small fines that would amount to little more than a slap on the wrist.

The decision outraged the free software community and the broader free culture movement. In December, a broad coalition of organizations that rely on copyleft licenses, including Creative Commons, the Software Freedom Law Center, and the Wikimedia Foundation, filed an amicus brief urging that the ruling be overturned. The brief, authored by lawyers at Stanford's Center for Internet and Society, pointed out that there are now hundreds of millions of works released under licenses similar to the Artistic License and suggested that the district court had failed to appreciate the potential consequences of neutering them. It made the case that the decision could "disrupt settled expectations on which literally millions of individuals, including award winning producers, firms such as IBM, educational institutions such as MIT and Harvard, and even governments have built businesses, educational initiatives, artistic collaborations, and public service projects."

The Federal Circuit appears to have been heavily influenced by the Stanford brief, as it specifically cited Creative Commons, MIT, Wikipedia, and various free software projects as examples of organizations that benefit from copyleft licenses. In a short, clearly-reasoned opinion, the Federal Circuit summarized the public benefits of public licensing and found that the district court had dismissed its terms too lightly. Unlike the lower court, the appeals court seemed to understand that reciprocity lay at the heart of free software licenses. Just as traditional software firms thrive on the exchange of code for money, free software projects thrive on the exchange of code for code. The Federal Circuit recognized that "there are substantial benefits, including economic benefits, to the creation and distribution of copyrighted works under public licenses that range far beyond traditional license royalties." Allowing those rules to be flaunted undermines the free software model.

Larry Lessig, who founded both Creative Commons and Stanford's Center for Internet and Society, called the decision "huge and important." His reaction is likely to be shared by other advocates of free software, who have long worried about the enforceability of copyleft licenses.

It's important to distinguish between this case and the other cases on software licensing that Ars has covered recently. Like this week's decision, those cases were focused in part on whether copyright licenses would be enforced via contract law or copyright law. However, there was a crucial difference between those cases and this one: the first-sale doctrine, which says that selling a given copy of a work exhausts the copyright holder's rights with respect to that copy. In the previous cases, the dispute was over a single copy of the work—a promo CD in one case and a box of software in the other. The courts held that no license was needed in those cases because under the first sale doctrine, the lawful owners of those copies didn't need any further permission to use them. This week's case, on the other hand, involves a firm that was creating and distributing new copies of a work, a situation in which the first-sale doctrine simply doesn't apply.