Re: Psystar's legal reply brief in response to Apple

[Alexander Terekhov]

ZnU wrote:
[...]
> indeed be copyright violation. He simply cited a case with little
> similarity to a hypothetical GPL case, in which conditions were not
> properly established.

You seem to confuse conditions to the grant of rights and covenants in
consideration of the rights granted.

"While a party that owns copyright rights is ordinarily entitled to 
pursue infringement claims against any third party who violates them, 
the courts have recognized that the rights and remedies available to 
copyright holders change significantly when the owner elects to give 
others a nonexclusive license to use such property. In that situation, 
the owner/user relationship is fundamentally different. Absent a 
license, the rights of the copyright holder are governed by statutory 
and common law rules applicable to such rights. With a license, 
however, the terms and covenants of the license establish the 
applicable rules. See Effects Associates, Inc. v. Cohen, 908 F.2d 555, 
559 (9th Cir. 1990) (in granting a copyright license, the licensor 
gives up its right to sue the licensee for infringement). 

Recognizing that the existence of consensual licensing arrangements 
significantly changes the applicable rules and the expectations of the 
parties, federal courts have held that a party cannot normally pursue 
a copyright infringement action based upon the licensees breach of 
covenants in the license agreement. As a general rule, " if the 
[licensees] improper conduct constitutes a breach of a covenant 
undertaken by the licensee . . . and if such covenant constitutes an 
enforceable contractual obligation, then the licensor will have the 
cause of action for contract," not for copyright infringement. Graham 
v. James , 144 F.3d 229, 236-37 (2d Cir. 1998) quoting 3 Melville B. 
Nimmer & David Nimmer, Nimmer on Copyright, 10.15[A] at 10-120 
(1998); see also Kolbe v. Trudel , 945 F. Supp. 1268, 1270-71 
(D. Ariz. 1996). As the Ninth Circuit explained in Topolos v. 
Caldewey, 698 F.2d 991, 993 (9th Cir. 1983): 

[A] case does not arise under the federal copyright laws . . . 
merely because the subject matter of the action involves or affects a 
copyright. "

In Jacobsen, the CAFC ruled:

"The choice to exact consideration in the form of compliance with the
open source requirements of disclosure and explanation of changes..." 

How on earth can "disclosure and explanation of changes" come before 
(be a condition precedent) to the license grant? 

As discussed by The Supreme Court of California in Diepenbrock v. Luiz,
115 P. 743, 744 (Cal. 1911), the term “provided” may or may not indicate
a condition, noting that “‘there is no magic in the term [“provided”],
and the clause in a contract is to be construed from the words employed
and from the purpose of the parties, gathered from the whole
instrument.’” Diepenbrock v. Luiz, 115 P. 743, 744 (Cal. 1911) (quoting
Boston Safe Dep. and Trust Co. v. Thomas, 53 P. 472 (Kan. 1898) (finding
that, based on a reading of an entire provision, a clause containing
“provided, that” was not a condition)). 

“It is undoubtedly true, as claimed by appellant, that stipulations in a
contract are not construed as conditions precedent unless that
construction is made necessary by the terms of the contract. ( Deacon v.
Blodget, 111 Cal. 418, [44 Pac. 159]; Antonelle v. Lumber Co., 140 Cal.
318, [73 Pac. 966].) There are also well considered cases holding that
provided does not necessarily impose a condition. In Hartung v. Witte,
59 Wis. 285, [18 N. W. 177], it is said: ‘But the words, “upon the
express condition,” as here used, or the words “if it shall so happen”
or “provided however” and the like do not always make a condition, and
it is often a nice question to determine whether it is a condition or a
covenant and courts always construe similar clauses in a deed as
covenants rather than as conditions, if they can reasonably do so.’ (2
Washburn on Real Property, 4.) 

“In Stanley v. Colt, 72 U.S. 119, [18 L. Ed. 502], it is declared that
‘The word provided though an appropriate word to constitute a common law
condition does not invariably and of necessity do so. On the contrary,
it may give way to the intent of the party as gathered from an
examination of the whole instrument, and be taken as expressing a
limitation in trust.’ 

“Similarly in Woodruff v. Woodruff, 44 N. J. Eq. 353, [16 Atl. 6, 1 L.
R. A. 380], it is said: ‘While the words “provided nevertheless” and
“upon the following conditions” are appropriate words to create a
condition, they do not of necessity create such an estate. They and
similar words, will give way when the intention of the grantor as
manifested by the whole deed, is otherwise, and they have frequently
been explained and applied as expressing simply a covenant or a
limitation in trust.’ 

“Indeed, the decisions are uniform to the point that, while ordinarily
the word ‘provided’ indicates that a condition follows, as expressed in
Boston S. and D. v. Thomas, 59 Kan. 470, [53 Pac. 472], ‘there is no
magic in the term, and the clause in a contract is to be construed from
the words employed and from the purpose of the parties, gathered from
the whole instrument.’ 

The Restatement (Second) of Contracts Article 224 states:

"Condition Defined:

A condition is an event, not certain to occur, which must occur, unless
its non-occurrence is excused, before performance under a contract
becomes due."

Obviously an "event" that depends on performance of a contract cannot
occur *before* performance of the contract becomes due. This result is
called an impossible condition in contract construction and is strictly
construed *against* the drafter.

regards,
alexander.

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