This just in from a federal court that has jurisdiction over Silicon Valley and the Bay Area (a/k/a the southern suburbs of Seattle): those who publish and license open source licenses now have a solid precedent to rely on for bringing breach of contract claims.

The District Court of Northern California’s decision last month in Artifex Software, Inc. v. Hancom, Inc.[1] may be the first real-life example where a breach of contract claim based on the GNU General Public License has survived a motion to dismiss. Now that licensors of open-source software have an additional arrow in their quiver, so to speak, software developers and others have even more reason to be careful when unpacking the terms and implications of open source licenses. 

Until Artifex, the only settled issue regarding enforcement of copyleft open source licenses that I’m aware of is that licensors can bring copyright infringement claims against misappropriators.[2] True, earlier cases left open the possibility of contractual claims where damages are adequately pled (which is not difficult to do when the license in question is copyleft).[3] But this new precedent, announced in the backyard of Silicon Valley, crosses that bridge.

My early take is that standard representations and warranties and indemnification provisions in software development or asset purchase deals should be revised in light of the decision in Artifex Software. But there’s a more urgent upshot at the business level, of course: one shouldn’t be integrating copyleft software into your own web service or other software, without first understanding the license terms.

Parting thought: the requirement that a plaintiff must prove damages to succeed in a breach of contract action based on an open source license leaves unresolved the question of how this precedent will apply to permissive open-source licenses (like the Apache License or the MIT License). To me, the best bet for now is to start with the assumption that every permissive open source license may be an enforceable contract.

 

[1] Artifex Software, Inc. v. Hancom, Inc., No. 16-cv-06982-JSC, 2017 WL 1477373, *2–3 (Apr. 25, 2017 N.D. Cal.)

[2]Jacobsen v. Katzer, 535 F.3d 1373 (Fed. Cir. 2008).

[3] Id.; Jacobsen v. Katzer, 609 F. Supp. 2d 925, 932 (N.D. Cal. 2009), dismissed, 449 Fed. Appx. 8 (Fed. Cir. 2010).