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Re: license issue: calling a GPLv2 library

From: Alexander Terekhov
Subject: Re: license issue: calling a GPLv2 library
Date: Thu, 22 Jun 2006 00:50:56 +0200

David Kastrup wrote:
> Nonsense.  Price-fixing is a voluntary agreement between parties to
> the detriment of other parties.  But heeding an existing license is
> not a bilateral agreement, 

IP licenses are bilateral agreements/executary contracts.

>                            and everybody else is free to use and
> extend the software under the same license as everybody else.

Making illegal price-fixing conspiracy in violation of Sherman Act 
by employing unlawful licensing agreement (i.e. contract) open for 
everybody to join the combination doesn't make it any less illegal.

"Standard antitrust analysis applies to intellectual property

      The Agencies apply the same general antitrust principles to
conduct involving intellectual property that they apply to conduct
involving any other form of tangible or intangible property. That is
not to say that intellectual property is in all respects the same as
any other form of property. Intellectual property has important
characteristics, such as ease of misappropriation, that distinguish
it from many other forms of property. These characteristics can be
taken into account by standard antitrust analysis, however, and do
not require the application of fundamentally different principles.(9)

      Although there are clear and important differences in the
purpose, extent, and duration of protection provided under the
intellectual property regimes of patent, copyright, and trade secret,
the governing antitrust principles are the same. Antitrust analysis
takes differences among these forms of intellectual property into
account in evaluating the specific market circumstances in which
transactions occur, just as it does with other particular market

      Intellectual property law bestows on the owners of intellectual
property certain rights to exclude others. These rights help the
owners to profit from the use of their property. An intellectual
property owner's rights to exclude are similar to the rights enjoyed
by owners of other forms of private property. As with other forms of
private property, certain types of conduct with respect to
intellectual property may have anticompetitive effects against which
the antitrust laws can and do protect. Intellectual property is thus
neither particularly free from scrutiny under the antitrust laws, nor
particularly suspect under them."

  -- Antitrust Guidelines for the Licensing of Intellectual Property

"courts recognized that the unique attributes of intellectual property
licenses made per se treatment of vertical price restraints in software
licenses inappropriate. See LucasArts Entertainment Company vs. Humongous
Entertainment Company, 870 F. Supp. 285 (N.D.Cal. 1993) (granting summary
judgment against licensee who claimed that license provision regulating
resale prices for derivative works violated the Sherman Act)."

Note that it was a summary summary judgment (not Rule 12(b)(6)
dismissal) and it didn't involve predatory pricing.

Now, here's more on that case cited by the FSF.

In the intellectual property context, however, one federal court held
that the Cartwright Act did not prohibit, under the per se rule or
otherwise, a provision in a software licensing agreement which
prohibited the licensee from selling the licensed program at less than
a certain price to anyone other than the licensor. LucasArts
Entertainment Co. v. Humongous Entertainment Co., 870 F. Supp. 285
(N.D. Cal. 1993). The court relied on a federal decision, United
States v. General Electric, 272 U.S. 476 (1926), which held that
patent owners had the power to restrict prices at which licensees
sold. Although the General Electric case has not been overruled, its
continuing validity is questionable, as the United States Supreme
Court has twice split four to four on whether to overrule it and the
federal enforcement authorities decline to follow it.


The GE ruling on price-fixing has been heavily qualified but never
overruled. Any deviation from the GE-Westinghouse single-
manufacturing-licensee paradigm is virtually certain to be held
an antitrust violation (and therefore misuse as well). Thus, cross-
licenses with price restrictions are illegal. So, too, are licenses to
more than one licensee, which, in effect, put together a price-fixing
combination among licensees. The Supreme Court has twice divided 4-4
on whether to overrule GE. United States v. Line Material Co., 333
U.S. 287 (1948); United States v. Huck Mfg. Co., 382 U.S. 197 (1965).
The Antitrust Division has for years searched for a vehicle to
overturn GE but has never succeeded in getting a candidate to hold
still long enough to grab it. See ABA, Antitrust Law Developments
3d 822 & nn. 167-68.


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