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Re: Looking for an open source license..

From: Alexander Terekhov
Subject: Re: Looking for an open source license..
Date: Mon, 26 Jun 2006 14:55:52 +0200

David Kastrup wrote:
> Cf. <URL:> for examples.


It's a Small Welte After All

Across the wide ocean, other enforcement of the GPL runs along a
different trail. Harald Welte, a self-appointed enforcer of the GPL
who operates a GPL Web site filed two actions with the District Court
of Munich to enforce the license. In both cases, Welte was the author
of code that had appeared in the defendant's product. The court
granted Welte an injunction against Sitecom Deutschland GmbH,
prohibiting Sitecom from distributing a wireless networking router
until it complied with the GPL.


Well, the injunction was about "netfilter/iptables code" and nothing
else. No word about the router.


Sitecom appealed the injunction, but lost,


Sitecom's objection (not really "appeal") to the injunction had really
nothing to do with the GPL. Sitecom basically told the court that Welte
sued wrong defendant and that the injunction makes no sense at all given 
that Sitecom's German call center doesn't distribute anything. 

And the subsequent ruling by the same district court "discussing" the 
GPL (as presented by Welte's attorney) was so bizarre that nobody over 
here in his right mind believes that it could have withstand the 
scrutiny of Hauptverfahren, real appeals aside for a moment.


and Sitecom later posted the terms of the GPL on its FAQ Web page for
the router. Welte also filed for an injunction against Fortinet UK Ltd.
based on its firewall products, with similar results.

Though much has been made of these two cases, there are reasons why
Welte has already obtained injunctions in Germany while the FSF has
not yet sought one in the US. Injunctive enforcement in Germany is so
simple and quick that it makes Americans suspicious about piddling
legal details like legal due process. In Germany, a preliminary
injunction can be obtained ex parte -- in other words, without giving
the defendant the chance to defend itself. (This has the
appropriately scary sounding name einstweilige Verfuegung.)


And here's some feedback from Appellate Judge (Court of Appeal of
Dusseldorf, Copyright Senate), Professor in Intellectual Property Law
at the University of Muenster, Member of Task Force Group on
Intellectual Property Law, European Commission, and etc. etc.


1. The decision of the District Court of Munich is celebrated as the
first-ever judgement on the validity of the GPL. That is surprising.
The decision is the judgement of only a single district court in
Germany. And it is only a summary and preliminary decision based on
injunctive remedies. Furthermore, the judgement refers to only one
special case within the Open Source scene. There was only one main
developer involved in this project, so there was no need to decide,
for example, on the complicated questions of rights ownership involved
in Linux.

2. Given the high importance that the Open Source community attributed
to the judgement, the Court's legal arguments are extremely poor. I do
not want to deal with the many spelling and grammatical mistakes in
the original version of the decision; such things happen in the heat
of the moment. But it is even more astonishing that most of the
relevant legal literature has not been considered. The Court
essentially refers only to an essay from Metzger/Jäger written in
1999, apart from two essays from Omsels and Plaß. None of the critical
voices about the effectiveness of the GPL have been heard.

3. Apart from these formalities, the argumentation of the judges
raises many questions and prompts many criticisms.

a. The homepage of the plaintiff included a link to the GPL version 2
(June 1991), an American document of the FSF. However, the US version
of the GPL was not considered by the Court. Instead the Court used an
unofficial German translation without devoting even a single sentence
to justifying this approach. The judges also did not mention the
history of the GPL, nor did they ask how the GPL might be interpreted
under US rules on the interpretation of contractual documents. They
simply applied German methodology and concepts to a document whose
legal roots are deeply intermingled with US law and the US Open Source

b. The court interpreted the GPL in the light of the German model of
"condition subsequent" based upon Sect. 158 of the German Civil Act
(BGB). The court argued that infringements of the GPL would lead to an
automatic loss of rights, based upon a condition subsequent. The user
of open source products gets the license to use the product only on
the condition that, and as long as, he sticks to the rules of the GPL.
The Court held that this extremely tight link between the use right
and the GPL would not prevent the software product from being
marketed, as a third party would be able at any time to re-acquire the
rights from the software developer. However, sects. 2 and 4 of the GPL
do not refer to the German concept of conditions. Sect. 4 refers to
particular rights "provided that". Sect. 2 uses the term "conditions",
but in a very broad and general sense, such as a contractual term
which has to be met. It might well be that a violation of the GPL
leads to contractual remedies for non-performance, but not to an
automatic loss of use rights.

c. To operate with a condition subsequent is "beating the devil with
the devil". If I were a producer of proprietary software products, I
would be very happy with the judgement of the district court because
nobody can prevent the producers of proprietary software from likewise
using a condition subsequent. They can now restrict the transfer of
sold software to third persons or the use of a programme on different
computers by combing these (invalid) contractual restrictions with a
condition subsequent related to the "license". If you pass software to
anybody else or use it in another computer, you (and the third person)
automatically lose your right to use the software. Everything courts
had said on the (in-) validity of contractual use restrictions in the
software business is now going to be undermined by the model of the
condition subsequent.

d. Why does the GPL call itself a "license"? The term "license" is not
used in the German Copyright Act and is not known in Continental
European copyright law. That is good: the term "license" is nebulous
and has been used in business as a smokescreen to mask the invalidity
of "license" restrictions. In recent years the license model has been
efficiently refuted by European courts and traced back to traditional
concepts such as the purchase of rights or a
legal lease. The district court should have dealt with this opinio
communis. But what happened in Munich?

e. The ignorance of the Munich court as to the opinio communis can
also be demonstrated in connection with the problem of exhaustion. If
the GPL is regarded to be binding even in cases of the transfer of
software to a third person, the concept of exhaustion might be
violated. The European Software Directive has provided that the
exhaustion of the copy of a program is applied Community-wide by a
first sale of that copy in the Community with the consent of the
right-holder; once an author has sold a copy of a work, he or she
loses the exclusive distribution right with respect to that work. A
contractual limitation of this principle is held to be invalid, at
least in Germany and Austria. The Munich court obviously did not know
of these developments; instead it simply stated that the German
copyright legislator had once expressed its support for Open Source.
However, this support has been given only in other legislative debates
regarding mandatory rights of creators to adequate remuneration. But
even if the legislator generally likes Open Source, it does not at all
mean that the legislator supports and considers every rule of the GPL
as legally effective.

f. En passant, the Court raised some more radical questions without
giving good arguments. For instance, the Court claimed that a
non-exclusive license gives a right in rem; this contradicts the
interpretation of the Federal Supreme Court, which held that
non-exclusive use rights are not property rights but contractual
rights (BGH, GRUR 1959, 201, 202 – Heiligenhof). The court has not
really discussed rules relating to the conflict of laws. Of course,
copyright law is governed by the principle of territoriality. But what
about the relevant rules for contractual aspects, as with the
interpretation of the GPL (see above) or the applicability of
regulations concerning unfair contract terms?

g. Finally, there is the important question of the consequences of the
assumed invalidity of the GPL. The Munich court argued that the
question of the enforceability of the GPL was in no way relevant.
According to the Bavarian judges, if the GPL is legally ineffective,
the user does not have a license and is thus violating copyright law.
On the face of it, that sounds plausible, but it is
not. If somebody offers software on the Internet for downloading and
links the download with invalid general terms, he can hardly sue for
copyright infringement. Instead, the validity of the standard terms is
a matter for the software distributor: if he wants to use invalid
contractual terms, he bears the risk of their use. It would violate
equity and good faith if he were allowed to sue others merely on the
grounds that his license terms were invalid.

4. I know some Open Source fundamentalists will hate me for my
remarks: who is not for us is against us; who criticises us will be
knocked down. I hope that one day we shall be ready for a
non-fundamentalist and mature discussion about the legal possibilities
of Open Source (and implicitly Open Content). The preliminary
judgement of the German court is, so far as it goes, an important
milestone. The judges have thrown a stone into the water, making waves
that might help to clarify the difficult legal questions involved in
the GPL.



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