January 14, 2010

Jacobsen v. Katzer: Open Source Licensor Prevails on Summary Judgment Motions

On December 10, 2009, the District Court for the Northern District of California ruled on the parties’ motions for summary judgment in the ongoing open source licensing dispute in Jacobsen v. Katzer. The District Court granted plaintiff Robert Jacobsen’s motions for partial summary judgment of copyright infringement, cybersquatting and violation of the Digital Millennium Copyright Act (“DMCA”). The District Court also granted plaintiff Jacobsen’s motion for summary judgment of non-infringement on defendant Matthew Katzer’s counterclaim for copyright infringement. This latest round of decisions provides interesting guidance as to how courts may handle important issues concerning damages and originality in the context of open source licensing.

The case involves software for controlling model trains made available by an open source project managed by plaintiff Jacobsen. It began as a patent dispute, but quickly became a copyright dispute when Jacobsen claimed that defendant Katzer copied the open source model train software into Katzer’s own commercial software without complying with the attribution requirement of Jacobsen’s open source license.

On August 17, 2007, the District Court denied Jacobsen’s request for a preliminary injunction because Katzer’s redistribution of Jacobsen’s open source software without a required attribution notice constituted a claim for breach of contract, and not a claim for copyright infringement. The District Court said that Jacobsen was entitled to money damages for Katzer’s breach of the open source license, but not a preliminary injunction halting Katzer’s redistribution while the case between Jacobsen and Katzer was pending.

On appeal, the U.S. Court of Appeals for the Federal Circuit disagreed with the District Court and held that an open source license can create conditions on the scope of a copyright license, and the breach of those conditions is copyright infringement. The Federal Circuit’s analysis focused on the difference between “conditions” that actually limit the scope of a copyright license and “covenants” that merely impose obligations without affecting the scope of the license. The Federal Circuit concluded that the terms in the open source license at issue were conditions which limited the scope of the license and not merely covenants. Thus, Katzer’s failure to abide by such conditions in his redistribution of Jacobsen’s software made Katzer potentially liable for copyright infringement. The Federal Circuit, having decided that a preliminary injunction was legally available to Jacobsen, remanded the case so the District Court could make the necessary factual findings as to whether Jacobsen had demonstrated, based on the record, that he was entitled to a such a court order stopping Katzer’s redistribution.

On remand, the District Court again denied Jacobsen’s motion for a preliminary injunction. While the Federal Circuit made it clear that such an injunction is potentially available to a copyright owner satisfying the relevant legal requirements, the District Court decided that Jacobsen had not satisfied those requirements. The District Court relied on a then-recent Supreme Court case, Winter v. National Resources Defense Council, which the District Court said raised the standard for the granting of a preliminary injunction.

In its order of December 10, 2009, the District Court addressed the eligibility of Jacobsen’s open source software for copyright protection, the availability of damages to an open source plaintiff-licensor when statutory damages for copyright infringement are unavailable and the stripping of attribution information as a potential DMCA violation.

Katzer, having admitted copying certain portions of Jacobsen’s software, had moved for summary judgment of non-infringement arguing that the copied software lacked the originality required by law to be eligible for copyright protection. If that software is not original and therefore ineligible for copyright, then Katzer’s copying, with or without attribution, cannot constitute copyright infringement. Although the District Court acknowledged that the copied files at issue were data, it found sufficient creativity in the selection, ordering and arrangement of that data to render the files eligible for copyright protection and denied defendant’s Katzer’s motion for summary judgment of non-infringement on those grounds.

Katzer also moved for dismissal of Jacobsen’s claim of copyright infringement on the grounds that Jacobsen had not suffered any actual damages and, since the software was not registered with the U.S. Copyright Office at the time of infringement, Jacobsen could not be awarded statutory damages either. In particular, Katzer argued that since Jacobsen licenses his software for no monetary cost, Jacobsen has no claim for compensatory damages suffered or for the disgorgement of Katzer’s profits. The Court denied Katzer’s motion because of evidence in the record attributing a monetary value to the work performed by contributors to the open source software.

The Court granted Jacobsen’s motion for summary judgment on Katzer’s counterclaim for copyright infringement. After the commencement of the litigation between Jacobsen and Katzer, Katzer purchased rights in a reference manual that was a source of data included in Jacobsen’s open source software. Apparently the data in the manual was incorporated into the open source software pursuant to an oral license from the original owner of the reference manual. Katzer waited nearly two years to assert his counterclaim of copyright infringement for the incorporation of that data, and based on this 27-month delay, the Court granted Jacobsen’s motion and denied Katzer’s counterclaim as barred by laches.

The Court also ruled favorably on Jacobsen’s DMCA claim. Jacobsen had claimed that Katzer’s removal of the authorship information and copyright notice from Katzer’s redistribution of Jacobsen’s software constituted a violation of the DMCA’s prohibition on the removal or alteration of copyright management information.

The Court’s resolution of these summary judgment motions means that, should the parties go to trial, the open source community may finally receive a published opinion addressing issues that have been the subject of much discussion over the years. Trial is scheduled this year for June 1 and 2 in San Francisco, but the parties have a settlement conference scheduled at the end of this month.