The United States Court of Appeals for the Federal Circuit Wednesday overturned a year-old San Francisco district court decision that deprived the aggrieved plaintiff in a dispute over open source software governed by the Artistic License of the right to sue for copyright infringement and get an injunction against the defendant.

The finding, which sends the case back to the district court with instructions, is important to the FOSS community since the possibility of an injunction is considered one of the few safeguards open source software has. Free software is hard pressed to establish monetary damages.

How important it was is indicated by the amount of pro bono legal fire power the FOSS faction expended on the appeal.

According to a list on the OSI site, it involved at a minimum the plaintiff’s lawyer, the Creative Commons’ counsel who wrote an amicus brief and the Linux Foundation’s lawyer who weighed in on the Creative Commons’ brief as did the Perl Foundation’s lawyers, Larry Rosen of Rosenlaw & Einschlag, the HP lawyer assigned to OSI’s Legal Advisory Council and OSI’s two lawyers at DLA Piper.

The rare case was, as OSI lawyer Mark Radcliffe describes it, “the first real test of the remedies for breach of open source licenses in US courts” and if the appeals court had let the original decision stand, he said, it “could have been a disaster for [the] open source community.”

The district court originally found that the worst the defendant could be charged with was breach of contract for not including, among other things, the plaintiff’s original copyright notices but he couldn’t be hit with copyright infringement because the “intentionally broad” terms of the Artistic License “does not limit the scope of the license.”

The appeals court, however, found to the contrary that the terms in the Artistic License were “conditions” on the scope of the license that made the defendant liable for copyright infringement as well as breach of contract.

“If,” it said, “a license is limited in scope and the licensee acts outside the scope, the licensor can bring an action for copyright infringement.”

The court found that the Artistic License “states on its face that the document creates conditions,” citing its use of the very word “conditions” and “provided that.”

“The district court’s interpretation of the conditions of the Artistic License,” it said, “does not credit the explicit restrictions in the license that govern a downloader’s right to modify and distribute copyrighted work.”

The specific software at issue is the Java Model Railroad Interface (JMRI) and the action was brought by Robert Jacobsen, a physics professor at the University of California who heads up JMRI development, against Kamind Associates and its principal Matthew Katzer.

In reusing JMRI code in its competing product Kamind failed to include the original authors’ names, JMRI’s copyright notices, references to the COPYING file, any identification of SourceForge or JMRI as the original source of the definition files and a description of how it changed the files from the original source code, all requirements of the Artistic License.

Kartzer’s lawyer argued that since the terms of the Artistic License were merely “covenants” or contractual terms Jacobsen couldn’t get damages any more than he could get an injunction since the JMRI code was free and copyright law doesn’t recognize a cause of action for non-economic rights.

The appeals court disagreed and said there are other ways besides money changing hands for open source to establish “economic consideration.”

“There are substantial benefits, including economic benefits,” the three-judge panel said, “to the creation and distribution of copyrighted works under public licenses that range far beyond traditional license royalties,” citing as examples market share and reputation.

“The conditions set forth in the Artistic License,” the court wrote, “are vital to enable the copyright holder to retain the ability to benefit from the work of downstream users. By requiring that users who modify or distribute the copyrighted material retain the reference to the original source files, downstream users are directed to Jacobsen’s web site. Thus, downstream users know about the collaborative effort to improve and expand the SourceForge project once they learn of the ‘upstream’ project from a ‘downstream’ distribution, and they may join in that effort.”

“The attribution and modification transparency requirements directly serve to drive traffic to the open source incubation page,” the judges said, “and to inform downstream users of the project, which is a significant economic goal of the copyright holder that the law will enforce.”

The court also said that “Copyright licenses are designed to support the right to exclude; money damages alone do not support or enforce that right. The choice of exact consideration in the form of compliance with the open source requirements of disclosure and explanation of changes, rather than as a dollar denominated fee, is entitled to no less legal recognition. Indeed, because a calculation of damages is inherently speculative, these types of license restrictions might well be rendered meaningless absent the ability to enforce through injunctive relief.”

See http://www.cafc.uscourts.gov/opinions/08-1001.pdf for the 15-page decision.