Legal and licensing aspects of open source. Mikko Välimäki

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1 Legal and licensing aspects of open source Mikko Välimäki

2 Structure Software copyright law Computer program as a work: originality, idea v. expression, architecture and interface Exclusive rights and user rights Licensing overview Copyleft Risks - patents

3 Work as code? Computer program is a literal work In copyright law, computer program is seen as a set of instructions, which make the computer to execute a given function Programmer s perspective (source code and object code) is the basis of copyright protection

4 Originality Code must be creative and original According to software directive: no tests as to the qualitative or aesthetic merits of the program should be applied However, trivial code is not copyrighted: if there is just one solution to a given problem, the originality criteria is not met

5 Idea v. expression 1/2 Even if code is original, if it only reflects ideas, it may not be under copyright What is idea - CA v. Altai (1992, USA): 1. If one can express the idea in only one meaningful way (cf. originality)

6 Idea v. expression 2/2 What is unprotectable idea.. 2. Code that is necessary to reach a particular goal (e.g. ATM, word processor): (1) mechanical specifications of the computer on which a particular program is intended to run; (2) compatibility requirements of other programs with which a program is designed to operate in conjunction; (3) computer manufacturer s design standards; (4) demands of the industry being served; and (5) widely accepted programming practices within the computer industry

7 Architecture 1/2 Whelan v. Jaslow (USA, 1986): We hold that... copyright protection of computer programs may extend beyond the programs literal code to their structure, sequence, and organization - Was criticized and not followed Directive (1991): computer program... also includes preparatory design work leading to the development of a computer program provided that the nature of the preparatory work is such that a computer program can result from it at a later stage

8 Architecture 2/2 Architecture and preparatory material must be original expression Even if architecture would be under copyright, the actual code can be usually written in different ways; the object of protection is only architecture, not implementation

9 User interface In Lotus v. Borland (1995) a menu function copied from a competing product did not infringe the copyright since it was unprotectable method of operation comparable to idea. Menu function was compared to QWERTY-standard used in keyboards to justify that one can not copyright such regardless how much money and effort one has put into designing the menu. In Apple v. Microsoft (1992) Microsoftin Windows did not infringe Apple s copyright to graphical user interface. Accordingly, one must study the copyright to interface element by element and not as a whole ( look and feel ). Particular structural principles in windowing systems are unprotectable ideas.

10 Does copyright work? Since software copyright primarily targets code, it has been claimed that the most valuable parts of a computer program (functionality) is not protected Architecture, system design etc. requires a lot of resources and investments On the other hand the monopolization of ideas may not be a good idea for the society as a whole

11 While copyright law can provide appropriate protection for some aspects of computer programs, other valuable aspects of programs, such as the useful behavior generated when programs are in operation and the industrial design responsible for producing this behavior, are vulnerable to rapid imitation Samuelson et al, 1994, in their article Manifestation for the Legal Protection of Computer Programs

12 Exclusive rights Moral rights: name and respect Not in US and UK law Copying - with or without modification Distribution Technical protection measures (copy protections, DRM)

13 Copying Directive (1991): when copying of a computer program includes loading, displaying, running, transmision or storage one needs authorization Right to copy a computer program is rather extensive and covers almost all kind of software use although traditionally copyright is not about use Directive (1991) on temporal copies: permanent or temporary reproduction is under copyright; problem on the Internet?

14 Modification Minor modification (bug fixes etc.) does not affect copyright and is allowed Normal modification (porting, maintenance): both further and original developer share copyright New work: there is no original source code in the new version of the computer program; copyright is owned by the new author

15 Distribution Distribution is part of making avaialable right having multiple components For example application service providing can be interpreted to be e.g. access-right or renting Directive (1991): The first sale in the Community of a copy of a program by the rightholder or with his consent shall exhaust the distribution right within the Community of that copy, with the exception of the right to control further rental of the program or a copy thereof - e.g. software trade ok

16 Copy protections According to directive (1991) the following is not allowed: any act of putting into circulation, or the possession for commercial purposes of, any means the sole intended purpose of which is to facilitate the unauthorized removal or circumvention of any technical device which may have been applied to protect a computer program. First time copy protection systems were given legal protection

17 User rights Necessary copies (also back-ups) and errors Studying Reverse engineering Circumvention of technical protection measures

18 Necessary copies and errors According to directive (1991), art 5: In the absence of specific contractual provisions, [copying and distribution] shall not require authorization by the rightholder where they are necessary for the use of the computer program by the lawful acquirer in accordance with its intended purpose, including for error correction. Maintenance monopoly? Recital 18: Whereas this means that... the act of correction of its errors, may not be prohibited by contract...???

19 Adding new features Krause v. Titleserv (2005) in the US: Thus, a right to make those changes necessary to enable the use for which it was both sold and purchased should be provided. The conversion of a program from one higher-level language to another to facilitate use would fall within this right, as would the right to add features to the program that were not present at the time of rightful acquisition Again, more expansive user right (fair use) interpretation than the limitation approach used in Europe

20 Studying According to directive (1991): a person having a right to use a computer program should not be prevented from performing acts necessary to observe, study or test the functioning of the program, provided that these acts do not infringe the copyright in the program Naturally, does not give a right to directly copy the studied code

21 Interoperability IBM PC 1981 Compaq computer 1982 First IBM-compatible PC Compatibility required system software (BIOS) interoperability!

22 Can one decompile code? In the beginning of 1990s market leaders Microsoft, IBM, Apple, Lotus wanted decompilation / disasembly under copyright Amstrad, Bull, Olivetti, Fujitsu etc (other than US firms) wanted decomplation to be allowed Commission supported US firms but parliament backed others, and this position also won in the end (in the US case law as well)

23 I know in our industry that type of reverse engineering is prevented - Bill Gates, in a 1994 court case when asked if GM could buy a japanese car and put it into pieces to learn something

24 By carefully choosing their defendants, the ultaprotectionists succeeded in getting courts to issue draconian rulings which... would have crippled interoperable devevelopers. Fortunately for the computer software industry, good facts, good lawyers, and a good court reversed this harmful trend. - Band and Katoh, 1995, advocates of the winning firms

25 Directive Article 6: The authorization of the rightholder shall not be required where reproduction of the code and translation of its form... are indispensable to obtain the information necessary to achieve the interoperability of an independently created computer program with other programs Conditions: legal copy, information not available, only interoperable parts, only interoperability as goal...

26 Limits Decompliation can not be used to copy noninteroperable parts of source code According to Commission can be used in the development of competing products Teaching and studying not mentioned as goals; the right to study can, however, be interpreted in expansive manner

27 Licensing and open source - an overview

28 Copyright and patent law Copyright protects program and its source code Copying, distribution and modification not allowed Proprietary licenses typically give restricted rights to use the binary Also patents may apply to some parts of software; commercial use of patents not allowed

29

30 What is open source? Open Source Initiative s requirements: Free redistribution Open (and hopefully free) source code Derivative works must be allowed Non-discrimination (hardware, users,...) Author s integrity (name) must be protected Cf. open access, open standards, open content...

31 Licensing concepts Academic or university licenses: you are permitted to do whatever you like - just do not remove the copyright notice and remember to give attribution to the author GNU licenses - copyleft: you can t close the source and can t collect licensing fees. This is the most popular licensing concept.

32 The way it was characterized politically, you had copyright, which is what the big companies use to lock everything up; you had copyleft, which is free software's way of making sure they can't lock it up; and then Berkeley had what we called copycenter, which is take it down to the copy center and make as many copies as you want - Kirk McKusick, Berkeley Unix lead developer in the 1980s

33 License comparison Criteria Free distribution Free use Open code Copyleft Strong copyleft Network use Shareware X Freeware X X BSD X X X LGPL X X X X - - GPL X X X X X - OSL X X X X X X

34 Main point: traditional licensing/product business is not possible in a copyleft world

35 Business at risk...

36 Pricing copyleft? First sale always possible - nothing to worry about for project business Services and bundles are fine (warranty, support, hardware etc) Applications over the Internet - for example Amazon, Google etc. run basically on open source but do not publish the source code Dual licensing: selling proprietary (commercial) licenses to such embedded users who don t want to be bind to copyleft

37 Legal issues - copyleft

38 What does copyleft mean? GNU GPL: 2 b) You must cause any work that you distribute or publish, that in whole or in part contains or is derived from the Program or any part thereof, to be licensed as a whole at no charge to all third parties under the terms of this License Open source >< commercial software?

39 Linux is a cancer that attaches itself in an intellectual property sense to everything it touches... The way the license is written, if you use any opensource software, you have to make the rest of your software open source Steve Ballmer, Microsoft CEO 2001

40 Incompatibility Because of copyleft obligations, open source components may be incompatible with each other GPLv2 code can not be combined with GPLv3 code! (without authorization) - licenses may create exclusive barriers License proliferation has increased incompatiblity issues - there are currently tens of copyleft licenses in use, all Open Source certified

41 Relevance of the problem Almost every bigger company uses open source within its organization End-use is not problematic from intellectual property perspective The real problem is production use when open source code is part of the company s product: the use by programmers and other development engineers must be identified

42 Not a problem... If the license does not have a copyleft clause If copyrighted code is not copied into the product If copyleft clause is accepted and the business model is based on something else than direct license sales (e.g. services)

43 Copyright and copyleft If code is not directly copied ( copy-paste + irrelevant variable names changes etc.), copyright does not apply Assumption that copyleft licenses are copyright licenses, not contracts Technical rule of thumb (except GPL): if the copyleft-component is a separate file, there should be no problem olla (on the other hand not legal cases)

44 Your rights to reproduce and distribute the software (or any part of the software), or to create and distribute derivative works of the software, are conditioned... If you distribute the larger work as a single file, then you must grant all recipients the rights [to copy, distribute and modify]... for the entire larger work. You must also provide recipients the source code to the larger work along with a copy of this license. Microsoft Community License (MS-CL)

45 Possible limits File-based copyleft: Mozilla Public License, Microsoft s licenses etc. More fuzzy: GNU GPL, interpreted to cover any kind of combined use within a single computer system Even combined use over the Internet ( public use ): Open Software License

46 Practical relevance Any bigger company must do a legal clearing before code goes public May take months and is never 100% complete: one can perhaps find copied open source code and incompatible licenses but finding patents or copied proprietary code practically impossible

47 Internal usage rules One must report open source use to company Before use one must check the license and intended use (end user, product development) Some of the licenses can be accepted beforehand, others need case-by-case analysis (copyleft) One must have data on open source components in use (which component, which license, who uses, what kind of use etc.)

48 Patents - risks

49 Infringement risks Problem: even if you didn t know the software infringes someone s copyrights or patents (IPRs), you might be liable

50 Case: SCO v. Linux users A US firm near collapse sued big Linux supporters starting from IBM Claim: IBM has copied intellectual property owned by SCO into Linux Do all Linux users need to buy a license from SCO? Counterclaims: SCO distributed the same code before under GPL and such code trivial

51 Patents in the US

52 Some day, for all countries that are entering WTO, somebody will come and look for money to pay for the patent rights for that intellectual property. Steve Ballmer, Microsoft CEO

53 So what is the actual risk? Linux infringes 286 software patents - Open Source Risk Management, Inc. press release 2004 (sells insurance) However, most of the big IT firms use patents only as a defensive tool In fact, open source licenses require all relevant patents to be licensed for all users free of charge - for examples see patentcommons.org

54 When you distribute a covered work, you grant a patent license to the recipient, and to anyone that receives any version of the work, permitting, for any and all versions of the covered work, all activities allowed or contemplated by this License... This patent license is nonexclusive, royalty-free and worldwide... GNU GPL v3, draft

55 We are pledging the free use of 500 of our U.S. patents, as well as all counterparts of these patents issued in other countries, in the development, distribution, and use of open source software. IBM Nokia hereby commits not to assert any of its Patents... against any Linux Kernel... existing as of 25 May The aforesaid non-assertion shall extend to any future Linux Kernel... Nokia

56 Rights clearing Fragmentation of rights increases risks Possible solutions: Buy those rights Rewrite the code (invent around) Rely on patent pool for cross-licensing Indemnification and insurance Terminate use

57 Infringement risks are manageable What about the value of existing patent portfolio?

58 Value at risk (again) For example IBM s patent licensing revenues exceeded 1 billion already in 2000 and now Microsoft is trying to follow - open source undermines this trend But what is the actual open source risk? Does not affect other than open source use/users Does not affect cross-licensing (only royalties) Does not affect hardware patents

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