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Re: 9th Cir. License Primer

From: Alexander Terekhov
Subject: Re: 9th Cir. License Primer
Date: Wed, 30 Mar 2011 11:00:55 +0200

RJack wrote:
> Now, the SFLC utterly ignores the circuit precedent and claims:
> "Further, once Best Buy made a distribution of BusyBox that did not
> comply with the license terms, the license terminated, and therefore any
> further act of copying or distributing BusyBox by Best Buy (even if in
> compliance with the license) is without Andersen's permission.

This is well known Stallman/FSF/SFLC moronity regarding termination 
of licensing contracts due to (material) breach.

To wit:
(See 6 Contract Law Issues)

"Automatic termination of the license in case of breach of license
terms (condition subsequent)

- In a contract the termination is ultima ratio and needs prior 


"In addition, prior to the filing of the infringement suit, RT Graphics
never took affirmative steps to terminate the license which it had
granted. This court agrees with other courts which have previously held
that such a measure is necessary on the part of the copyright holder. In
Graham v. James, the Court of Appeals for the Second Circuit stated that
"[e]ven assuming [the publisher] materially breached the licensing
agreement and that [the programmer] was entitled to rescission, such
rescission did not occur automatically without some affirmative steps on
[the programmer's] part." 144 F.3d at 237-38. In Maxwell, the Court of
Appeals for the Eleventh Circuit expressed a similar view:

[E]ven assuming arguendo that the Miracle's conduct constituted a
material breach of the parties' oral understanding, this fact alone
would not render the Miracle's playing of the song pursuant to
[Albion's] permission a violation of [Albion's] copyright. Such a breach
would do no more than entitle [Albion] to rescind the agreement and
revoke [his] permission to play the song in the future, actions [he] did
not take during the relevant period.

Like the programmer in Graham v. James and the songwriter in Maxwell,
RT Graphics never formally withdrew previously-given permission which
allowed the alleged infringer to use the copyrighted material. See also
Fosson v. Palace (Waterland), Ltd., 78 F.3d 1448, 1455 (9th Cir. 1996)
(even assuming that movie producer materially breached licensing
agreement to use composer's song in film, composer never attempted to
exercise any right of rescission and summary judgment of
noninfringement of copyright was proper); Cities Serv. Helex, Inc. v.
United States, 543 F.2d 1306, 1313 (Ct. Cl. 1976) ("A material breach
does not automatically and ipso facto end a contract. It merely gives
the injured party the right to end the agreement; . . . ."). In the
case at bar, the court finds that there was no rescission of the
contract by plaintiff. Moreover, the Postal Service's conduct was
insufficient to justify any rescission which could have taken place,
and did not indicate a repudiation of the licensing agreement.
Accordingly, the court holds that the Use Agreement was at all times
valid and enforceable during the course of this dispute, and any
remedy which the plaintiff may seek for its failure to receive credit
cannot properly be based on a theory of copyright infringement. "

BTW, even assuming successful rescission/termination with affirmative
steps on the licensor part, what prevents the former licensee from
entering into licensing relationship anew?

The situation is no different when Microsoft would terminate my
Windows 7 EULA and I just go and buy another copy and create another
EULA relationship instead of terminated one.

So just take a license, breach it, wait for termination, take another
license, breach it, wait for termination... Rinse lather repeat.

To prevent that, the license contract must specify a condition 
precedent regarding previously terminated licenses and condition 
the new grant on successfull resolution of the previous breach 


(GNG is a derecursive recursive derecursion which pwns GNU since it can 
be infinitely looped as GNGNGNGNG...NGNGNG... and can be said backwards 
too, whereas GNU cannot.)

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