UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT2008-1001

ROBERT JACOBSEN,

Plaintiff-Appellant,

v.

MATTHEW KATZERand KAMIND ASSOCIATES (doing business as KAM Industrt~),~ .. J

~o ,..... ri-1 r:: c:::

Defendants-1±>12~1l%s. (')r-- C ' -J

-, i

Appeal from the United States District Court for the Northern Distroct:.of -0

California in Case No. 06-CV-1905, Judge Jeffrey S. White ~:;S·' ~-':P

Motion of Robert Jacobsen for Costs

Pursuant to Fed. R. App. P. 39(d)(1) and 39(a)(4), Jacobsen requests

costs for his appeal.

Jacobsen appealed the denial of his motion for a preliminary

injunction to this Court. The district court based its decision on its

interpretation that terms in Jacobsen's open source license were contractual

covenants, which when violated, resulted in a breach of contract action, not

copyright infringement. Prior to this appeal, no appellate court had

interpreted an open source software license. A group of six major open

source organizations filed an amicus brief supporting Jacobsen. This case

was watched closely by the open source community.

On August 13,2008, this Court vacated the district court's opinion,

stating that Jacobsen's open source license terms were conditions, which

when violated resulted in copyright infringement. The decision is a key win

for open source, and it made national news. The New York Times, Wall

Street Journal, Reuters, Associated Press, BBC, and as well as the legal

press (e.g., San Francisco Daily Journal) and computer press (e.g., PC

Magazine and Information Week) reported on the Court's opinion. The

open source community has hailed this decision as a major win for open

source. !b&., Lawrence Lessig, "huge and important news: free licenses

upheld", at

http://lessig.org/blog/2008/08/huge_and_important_news_free_l.html (Aug.

13, 2008); Mark Radcliffe, "Major Victory for Open Source in Jacobsen

Decision", at http://lawandlifesiliconvalley.blogspot.com/2008/08/major­

victory-for-open-source-in.html (Aug. 13, 2008).

Although the Court vacated the district court's ruling, the Court did

not indicate who should bear costs. Jacobsen won a key point that he sought

to be reversed-that Artistic License terms are conditions and not

contractual covenants. This Court vacated, instead of reversed, the district

court's ruling because the district court's ruling was incomplete.

Considering the value of this Court's decision as a seminal case in copyright

2

law and open source law, Jacobsen believes that the Court should, in its

discretion, award costs to him for bringing the appeal. A bill of costs for

under $1000 is attached.

Jacobsen's counsel has discussed this motion with Katzer and

KAMIND Associates, Inc.' s counsel. Katzer and KAMIND Associates, Inc.

oppose this motion and will file a written response.

Summary

For the foregoing reasons, Jacobsen's motion for costs should be

granted.

Respectfully submitted,

DATED: August 27, 2008i/l:1~'a ~/~By __-----,-- _

Victoria K. HallLAW OFFICE OF VICTORIA K. HALL3 Bethesda Metro Suite 700Bethesda MD 20814

Telephone: 301-280-5925Facsimile: 240-536-9142

ATTORNEY FOR PLAINTIFF-APPELLANT

3

Form 9FORM 9. Certificate of Interest

UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

-'--R:.:.o-=-be-=-rt-=-J=..:a:..:c:.:.o-=-bs=..:e:.:..n'--- v. Matthew Katzer and KAMI NO Associates

No. 2008-1001

CERTIFICATE OF INTEREST

Counsel for the (petitioner) (appellant) (respondent) (appellee) (amicus) (name of party)

Robert Jacobsen certifies the following (use "None" if applicable; use extra sheetsif necessary):

I. The full name of every party or amiclis represented by me is:

Robert Gibbs Jacobsen

2. The name of the real party in interest (if the party named in the caption is not the realparty in interest) represented by me is:

None

3. All parent corporations and any publicly held companies that own 10 percent or moreof the stock of the party or amicus curiae represented by me are:

None

4.0 There is no such corporation as listed in paragraph 3.

5. The names of all law firms and the partners or associates that appeared for the partyor amicus now represented by me in the trial court or agency or are expected to appear in thiscourt are:

Law Office of Victoria K. Hall

For the record, I was an intern,

>(ll~. ;' ~ ;yPt/ eDate

serving with Judge Richard Linn from June-August 2002.

1/!6;;~dt/"-~1 Signature of counsel

!//c:nX?//l ,):': ///Je:- LPrinted name of counsel

113

UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT2008-1001

ROBERT JACOBSEN,

Plaintiff-Appellant,

v.

MATTHEW KATZERand KAMIND ASSOCIATES (doing business as KAM Industries),

Defendants-Appellees.

Appeal from the United States District Court for the Northern District ofCalifornia in Case No. 06-CV-1905, Judge Jeffrey S. White

Proposed Order Granting Jacobsen's Motion Costs

Having considered Jacobsen's Motion for Costs, and any opposition

filed, the Court hereby GRANTS the motion.

Katzer and KAMIND Associates, Inc. shall pay $ 962.16 in costs.

Washington, D.C.

Dated: ---------

FOR THE COURT:

Circuit Judge

JACOBSEN v KATZER, 2008-1001

PROOF OF SERVICE

I hereby certify that on August 27,2008, I sent the Motion of RobertJacobsen for Costs, Declaration of Victoria K. Hall in Support of theMotion, the Proposed Order, and other related papers, by first class mailprepaid, to:

R. Scott JergerField Jerger LLP610 SW Alder St. Suite 910Portland OR 97205

Attorney for Defendants-Appellees Matthew Katzer and KAMINDAssociates, Inc.

Anthony T. FalzoneStanford Law SchoolCenter for Internet & SocietyCrown Quandrangle559 Nathan Abbott WayStanford CA 94305-8610

Attorney for Amici Creative Commons Corp. et al.

DATED: August 27,2008By t//?,~/~ k_~~

Victoria K. HallLAW OFFICE OF VICTORIA K. HALL3 Bethesda Metro Suite 700Bethesda MD 20814

Telephone: 301-280-5925Facsimile: 240-536-9142

ATTORNEY FOR PLAINTIFF-APPELLANT

~lawm F.3d m_

--- F.3d __n, 2008 WL 3395772 (C.A.Fed. (Cal.))

~Jacobsen v. KatzerC.A.Fed. (Cal.),2008.Only the Westlaw citation is currently available.

United States Court of Appeals,Federal Circuit.Robert JACOBSEN, Plaintiff-Appellant,

v.Matthew KATZER and Kamind Associates, Inc.(doing business as KAM Industries), Defendants­

Appellees.No. 2008-1001.

Aug. 13,2008.

Background: Copyright holder filed action againstcompetitor alleging infringement of copyright tocomputer programming code and also soughtdeclaratory judgment that patent issued to defendantwas not infringed by copyright holder and wasinvalid. The United States District Court for theNorthern District of California, Jeffrey S. White, J.,2007 WL 2358628, denied holder's request forpreliminary injunction. Holder appealed.

Holdings: The Court of Appeals, Faith S. Hochberg,District Judge, United States District Court for theDistrict of New Jersey, sitting by designation, heldthat:ill appeal from lawsuit that included not only claimfor copyright infringement, but also soughtdeclaratory judgment that patent issued to defendantwas not infringed by copyright holder and wasinvalid, arose in part under patent laws;ill attribution and modification transparencyrequirements in open source license createdconditions to protect economic rights in granting ofpublic license, and thus were enforceable; andill holder stated prima facie case of copyrightinfringement.

Vacated and remanded.

ill Federal Courts 170B ~1137

170B Federal Courts170BXlIJ Concurrent and Conflicting Jurisdiction

and Comity as Between Federal Courts170Bk 113 I Exclusive or Concurrent

Page 1

Jurisdiction170Bk1137 k. Patents and Copyrights.

Most Cited CasesAppeal from lawsuit that included not only claim forcopyright infringement, but also sought declaratoryjudgment that patent issued to defendant was notinfringed by copyright holder and was invalid, arosein part under patent laws, and thus Federal Circuitpossessed appellate jurisdiction over appeal offinding by district court that copyright holder did nothave cause of action for copyright infringement,although appeal concerned copyright law and notpatent law. 28 U.S.C.A. §§ I292(c)(I), I338(a),220 I(a).

ill Courts 106 ~96(7)

lllii Courts10611 Establishment, Organization, and Procedure

I0611(G) Rules of Decision106k88 Previous Decisions as Controlling

or as PrecedentsI06k96 Decisions of United States

Courts as Authority in Other United States Courts106k96(7) k. Particular Questions or

Subject Matter. Most Cited CasesFederal Circuit looks to the interpretive law of theregional circuit for issues not exclusively assigned tothe Federal Circuit.

ill Federal Courts 170B ~815

110B Federal Courts170BVIII Courts of Appeals

170BVIII(K) Scope, Standards, and Extent170BVIII(K)4 Discretion of Lower Court

170Bk814 Injunction170Bk815 k. Preliminary Injunction;

Temporary Restraining Order. Most Cited CasesUnder Ninth Circuit law, an order granting ordenying a preliminary injunction will be reversedonly if the district court relied on an erroneous legalpremise or abused its discretion.

ill Federal Courts 170B ~862

170B Federal Courts

© 2008 Thomson Reuters/West. No Claim to Orig. US Gov. Works.

m F.3d ----m F.3d m_, 2008 WL 3395772 (C.A.Fed. (Cal.))

I70BVIll Courts of Appeals170BVIlI(K) Scope, Standards, and Extent

170BVIll(K)5 Questions of Fact, Verdictsand Findings

170Bk855 Palticular Actions andProceedings, Verdicts and Findings

170Bk862 k. Equity in General andInjunction. Most Cited CasesA district court's order denying a preliminaryinjunction is reversible for factual error only whenthe district court rests its conclusions on clearlyerroneous findings of fact.

ill Injunction 212 ~138.1

212 Injunction2121V Preliminary and Interlocutory Injunctions~12IV(A) Grounds and Proceedings to

Procure? 12IV(A)'l Grounds and Objections

212k138.1 k. In General. Most CitedCasesWhen determining whether to issue a preliminaryinjunction, the Ninth Circuit requires demonstrationof (I) a combination of probability of success on themerits and the possibility of irreparable harm; or (2)serious questions going to the merits where thebalance of hardships tips sharply in the movingparty's favor.

ill Copyrights and Intellectual Property 99E:;;:::::>10A

99 Copyrights and Intellectual Property991 Copyrights

99I(A) Nature and Subject Matter99k3 Subjects of Copyright

99k I0.4 k. Other Works. Most CitedCasesAttribution and modification transparencyrequirements in open source computer softwarelicense created conditions to protect economic rightsin granting of public license, and thus wereenforceable under Copyright Act, since conditionsgoverned rights to modifY and distribute computerprograms and files included in downloadablesoftware package and directly served to drive trafficto open source incubation page and to informdownstream users of open source licensingcollaboration project, which was significanteconomic goal of copyright holder.

Page 2

ill Copyrights and Intellectual Property 99~67.3

99 Copyrights and Intellectual Property991 Copyrights

9...2illl Infringement991(1) I What Constitutes Infringement

99k67.3 k. Other Works. Most CitedCasesCopyright holder stated prima facie case of copyrightinfringement on allegations that he held copyright forcertain materials distributed through his Internetwebsite pursuant to open source computer softwarelicense and competitor copied, modified, anddistributed pOltions of software as part of othersoftware in violation of open source license.

ill Copyrights and Intellectual Property 99€=48

99 Copyrights and Intellectual Property991 Copyrights

991(E) Transfer99k48 k. Licenses in General. Most Cited

CasesGenerally, a copyright owner who grants anonexclusive license to use his copyrighted materialwaives his right to sue the licensee for copyrightinfringement and can sue only for breach of contract;however. if a license is limited in scope and thelicensee acts outside the scope, the licensor can bringan action for copyright infringement.

ill Contracts 95 ~218

95 Contracts-- 951 I Construction and Operation

9511(E) Conditions95k218 k. Nature and Scope in General.

Most Cited CasesUnder California contract law, the phrase, "providedthat," typically denotes a condition.

UQl Copyrights and Intellectual Property 99<8=36

2.2 Copyrights and Intellectual Property991 Copyrights

991(1ll Scope

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--- F.3d ------- F.3d ----, 2008 WL 3395772 (CAFed. (Cal.»

99k35 Scope of Exclusive Rights;Limitations

99k36 k. In General. Most Cited CasesCopyright holders who engage in open sourcecomputer software licensing have the right to controlthe modification and distribution of copyrightedmaterial; the choice to exact consideration in theform of compliance with the open sourcerequirements of disclosure and explanation ofchanges, rather than as a dollar-denominated fee, isentitled to no less legal recognition under theCopyright Act.

Ull Copyrights and Intellectual Property 99~10.4

99 Copyrights and Intellectual Property991 Copyrights

99I(A) Nature and Subject Matter99k3 Subjects of Copyright

99k lOA k. Other Works. Most CitedCasesThe choice to exact consideration in the form ofcompliance with the computer software open sourcerequirements of disclosure and explanation ofchanges, rather than as a dollar-denominated fee, isentitled to no less legal recognition under theCopyright Act.

lUJ. Copyrights and Intellectual Property 99~36

99 Copyrights and Intellectual Property991 Copyrights

991(B) Scope99k35 Scope of Exclusive Rights;

Limitations99k36 k. In General. Most Cited Cases

Copyright law does not automatically protect therights of authors to credit for copyrighted materials.

.L.!.J..l Copyrights and Intellectual Property 99E?48

99 Copyrights and Intellectual Property991 Copyrights

991(E) Transfer99k48 k. Licenses in General. Most Cited

CasesA copyright holder can grant the right to make certain

Page 3

modifications, yet retain his right to prevent othermodifications.

Victoria K. Hall, Law Office of Victoria K. Hall, ofBethesda, MD, argued for plaintiff-appellant.R. Scott Jerger, Field Jerger LLP, of Portland, OR,argued for defendants-appellees.Anthony T. Falzone, Stanford Law School, Centerfor Internet and Society, of Stanford, CA, for amicicuriae Creative Commons Corporation, et al. Withhim on the brief was Christopher K. Ridder.

Before MICHEL, Chief Judge, PROST, CircuitJudge, and HOCHBERG/N* District Judge.

HOCHBERG, District Judge.* I We consider here the ability of a copyright holderto dedicate certain work to free public use and yetenforce an "open source" copyright license to controlthe future distribution and modification of that work.Appellant Robert Jacobsen ("Jacobsen") appealsfrom an order denying a motion for preliminaryinjunction. Jacobsen v. Katzer, No. 06-CV-01905JSW, 2007 WL 2358628 (N.D.Cal. Aug. 17,2007).Jacobsen holds a copyright to computer programmingcode. He makes that code available for publicdownload from a website without a financial feepursuant to the Artistic License, an "open source" orpublic license. Appellees Matthew Katzer andKamind Associates, Inc. (collectively"Katzer/Kamind") develop commercial softwareproducts for the model train industry and hobbyists.Jacobsen accused Katzer/Kamind of copying certainmaterials from Jacobsen's website and incorporatingthem into one of Katzer/Kamind's software packageswithout following the terms of the Artistic License.Jacobsen brought an action for copyrightinfringement and moved for a preliminary injunction.

The District Court held that the open source ArtisticLicense created an "intentionally broad"nonexclusive license which was unlimited in scopeand thus did not create liability for copyrightinfringement. The District Court reasoned:

The plaintiff claimed that by modifying thesoftware the defendant had exceeded the scope ofthe license and therefore infringed the copyright.Here, however, the JMRI Project license providesthat a user may copy the files verbatim or mayotherwise modify the material in any way,

© 2008 Thomson Reuters/West. No Claim to Orig. US Gov. Works.

--- FJd ------- F.3d ----, 2008 WL 3395772 (C.A.Fed. (Cal.))

including as part of a larger, possibly commercialsoftware distribution. The license explicitly givesthe users of the material, any member of the public,"the right to use and distribute the [material] in amore-or-Iess customary fashion, plus the right tomake reasonable accommodations."The scope ofthe nonexclusive license is, therefore, intentionallybroad. The condition that the user insert aprominent notice of attribution does not limit thescope of the license. Rather, Defendants' allegedviolation of the conditions of the license may haveconstituted a breach of the nonexclusive license,but does not create liability for copyrightinfringement where it would not otherwise exist.

Jacobsen, 2007 WL 2358628 at *7 (internal citationsomitted).

On this basis, the District Court denied the motion fora preliminary injunction. We vacate and remand.

I.

Jacobsen manages an open source software groupcalled Java Model Railroad Interface ("JMRI").Through the collective work of many participants,JMRI created a computer programming applicationcalled DecoderPro, which allows model railroadenthusiasts to use their computers to program thedecoder chips that control model trains. DecoderProfiles are available for download and use by the publicfree of charge from an open source incubator websitecalled SourceForge; Jacobsen maintains the JMRIsite on SourceForge. The downloadable files containcopyright notices and refer the user to a "COPYING"file, which clearly sets forth the terms of the ArtisticLicense.

*2 Katzer/Kamind offers a competing softwareproduct, Decoder Commander, which is also used toprogram decoder chips. During development ofDecoder Commander, one of Katzer/Kamind'spredecessors or employees is alleged to havedownloaded the decoder definition files fromDecoderPro and used portions of these files as part ofthe Decoder Commander software. The DecoderCommander software fi les that used DecoderProdefinition files did not comply with the terms of theArtistic License. Specifically, the DecoderCommander software did not include (I) the author'names, (2) JMRI copyright notices, (3) references to

Page 4

the COPYING file, (4) an identification ofSourceForge or JMRI as the original source of thedefinition files, and (5) a description of how the filesor computer code had been changed from the originalsource code. The Decoder Commander software alsochanged various computer file names of DecoderProtiles without providing a reference to the originalJMRI files or information on where to get theStandard Version. FNI

Jacobsen moved for a preliminary injunction, arguingthat the violation of the terms of the Artistic Licenseconstituted copyright infringement and that, underNinth Circuit law, irreparable harm could bepresumed in a copyright infringement case. TheDistrict Court reviewed the Artistic License anddetermined that "Defendants' alleged violation of theconditions of the license may have constituted abreach of the nonexclusive license, but does notcreate liability for copyright infringement where itwould not otherwise exist."ld. at *7. The DistrictCourt found that Jacobsen had a cause of action onlyfor breach of contract, rather than an action forcopyright infringement based on a breach of theconditions of the Artistic License. Because a breachof contract creates no presumption of irreparableharm, the District Court denied the motion for apreliminary injunction.

ill Jacobsen appeals the finding that he does not havea cause of action for copyright infringement.Although an appeal concerning copyright law and notpatent law is rare in our Circuit, here we indeedpossess appellate jurisdiction. In the district court,Jacobsen's operative complaint againstKatzeriKamind included not only his claim forcopyright infringement, but also claims seeking adeclaratory judgment that a patent issued to Katzer isnot infringed by Jacobsen and is invalid. Thereforethe complaint arose in part under the patent laws.See28 U.S.c. § 220l(a); Golan v. Pingel Enter., 310F.3d 1360, 1367 (Fed.Cir.2002) (explaining that "[i]nthe context of a complaint seeking a declaration ofnon infringement, the action threatened by thedeclaratory defendant ... would be an action forpatent infringement," and "[s]uch an action clearlyarises under the patent laws"). Thus the districtcourt's jurisdiction was based, at least in part, on 28U.S.c. § l338(a) as it relates to the patent laws, andwe have appellate jurisdiction under 28 U.S.C. §1292(c)(I).See28 U.s.C. § 1338(a) ("The district

© 2008 Thomson Reuters/West. No Claim to Orig. US Gov. Works.

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--- F.3d ----, 2008 WL 3395772 (C.A.Fed. (Cal.»

courts shall have original jurisdiction of any civilaction arising under any Act of Congress relating topatents, plant variety protection, copyrights andtrademarks."); id at § 1295(a)(I) (The FederalCircuit shall have exclusive jurisdiction "of an appealfrom a final decision of a district court of the UnitedStates" if (I) "the jurisdiction of that court was based,in whole or in part, on section 1338 of this title" and(2) the case is not "a case involving a claim arisingunder any Act of Congress relating to copyrights,exclusive rights in mask works, or trademarks and noother claims under section 1338(a)."); id at §.I292(c)( 1) (Federal Circuit shall have jurisdictionover appeals from interlocutory orders of the districtcourts refusing injunctions "in any case over whichthe court would have jurisdiction of an appeal undersection 1295").

II.

*3 r2lr31r41 This Court looks to the interpretive lawof the regional circuit for issues not exclusivelyassigned to the Federal Circuit.!-Iutchins v. 20tt MedCorp., 492 F.3d 1377, 1383 (Fed.Cir.2007). UnderNinth Circuit law, an order granting or denying apreliminary injunction will be reversed only if thedistrict court relied on an erroneous legal premise orabused its discretion. Wright v. Rushen, 642 F.7d1129, 1132 (9th Cir.1981 ). A district court's orderdenying a preliminary injunction is reversible forfactual error only when the district court rests itsconclusions on clearly erroneous findings of fact.Sports Form, Inc. v. United ['ress Int'l. IIlC., 686 F.2d750, 753 (9th Cir.1982).

ill In detennining whether to issue a preliminaryinjunction, the Ninth Circuit requires demonstrationof (1) a combination of probability of success on themerits and the possibility of irreparable harm; or (2)serious questions going to the merits where thebalance of hardships tips sharply in the movingparty's favor. Per(ect 10, Inc. v. Amazon. com, Inc. ,487 F.3d 701, 713-14 (9th Cir.2007); Dep't of Parks& Recreation v. Bazaar Del Mundo, Inc.. 448 F.3d1118, 1123 (9th Cir.2006). In cases involvingcopyright claims, where a copyright holder hasshown likelihood of success on the merits of acopyright infringement claim, the Ninth Circuit hasheld that irreparable harm is presumed. LGSArchitects, Inc. v. Concordia Homes of Nev., 434F.3d 1150, 1155-56 (9th Cir.2006).But see MGM

Page 5

Studios, Inc v. Grokster, Lid, 518 F.Supp.2d 1197,1212 (CD.Cal.2007) (noting that "the longstandingrule that irreparable harm can be a presumed after ashowing of likelihood of success for purposes of acopyright preliminary injunction motion may itselfhave to be reevaluated in light of eBav [Inc. v.MercExchange, L. L. C, 547 U.S. 388, 126 S.Ct.1~64 L.Ed.2d 641 (2006»)"). Thus, for apreliminary injunction to issue, Jacobsen must eithershow (I) a likelihood of success on the merits of hiscopyright infringement claim from which irreparableharm is presumed; or (2) a fair chance of success onthe merits and a clear disparity in the relativehardships that tips sharply in his favor.

A.

Public licenses, often referred to as "open source"licenses, are used by artists, authors, educators,software developers, and scientists who wish tocreate collaborative projects and to dedicate certainworks to the public. Several types of public licenseshave been designed to provide creators ofcopyrighted materials a means to protect and controltheir copyrights. Creative Commons, one of the amicicuriae, provides free copyright licenses to allowparties to dedicate their works to the public or tolicense certain uses of their works while keepingsome rights reserved.

Open source licensing has become a widely usedmethod of creative collaboration that serves toadvance the arts and sciences in a manner and at apace that few could have imagined just a few decadesago. For example, the Massachusetts Institute ofTechnology ("MIT") uses a Creative Commonspublic license for an OpenCourseWare project thatlicenses all 1800 MIT courses. Other public licensessupport the GNU/Linux operating system, the Perlprogramming language, the Apache web serverprograms, the Firefox web browser, and acollaborative web-based encyclopedia calledWikipedia. Creative Commons notes that, by someestimates, there are close to 100,000,000 workslicensed under various Creative Commons licenses.The Wikimedia Foundation, another of the amicicuriae, estimates that the Wikipedia website has morethan 75,000 active contributors working on some9,000,000 articles in more than 250 languages.

*4 Open Source software projects invite computer

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programmers from around the world to view softwarecode and make changes and improvements to it.Through such collaboration, software programs canoften be written and debugged faster and at lowercost than if the copyright holder were required to doall of the work independently. In exchange and inconsideration for. this collaborative work, thecopyright holder permits users to copy, modify anddistribute the software code subject to conditions thatserve to protect downstream users and to keep thecode accessibleFN2By requiring that users copy andrestate the license and attribution information, acopyright holder can ensure that recipients of theredistributed computer code know the identity of theowner as well as the scope of the license granted bythe original owner. The Artistic License in this casealso requires that changes to the computer code betracked so that downstream users know what part ofthe computer code is the original code created by thecopyright holder and what part has been newly addedor altered by another collaborator.

Traditionally, copyright owners sold theircopyrighted material in exchange for money. Thelack of money changing hands in open sourcelicensing should not be presumed to mean that thereis no economic consideration, however. There aresubstantial benefits, including economic benefits, tothe creation and distribution of copyrighted worksunder public licenses that range far beyond traditionallicense royalties. For example, program creators maygenerate market share for their programs byproviding certain components free of charge.Similarly, a programmer or company may increase itsnational or international reputation by incubatingopen source projects. Improvement to a product cancome rapidly and free of charge from an expert noteven known to the copyright holder. The EleventhCircuit has recognized the economic motives inherentin public licenses, even where profit is notimmediate. See Planetary Motion, Inc. v.Techsplosion, Inc., 261 F,3d 1188, 1200 (I IthCir.200l) (Program creator "derived value from thedistribution [under a public license] because he wasable to improve his Software based on suggestionssent by end-users .... It is logical that as the Softwareimproved, more end-users used his Software, therebyincreasing [the programmer's] recognition in hisprofession and the likelihood that the Software wouldbe improved even further.").

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B.

J!illll The parties do not dispute that Jacobsen is theholder of a copyright for certain materials distributedthrough his website. FN3 Katzer/Kamind also admitsthat portions of the DecoderPro software werecopied, modified, and distributed as part of theDecoder Commander software. Accordingly,Jacobsen has made out a prima facie case ofcopyright infringement. Katzer/Kamind argues thatthey cannot be liable for copyright infringementbecause they had a license to use the material. Thus,the Court must evaluate whether the use byKatzer/Kamind was outside the scope of the license,See LGS Architects. 434 F.3d at ll56.Thecopyrighted materials in this case are downloadableby any user and are labeled to include a copyrightnotification and a COPYING file that includes thetext of the Artistic License. The Artistic Licensegrants users the right to copy, modify, and distributethe software:

*5 provided that [the user] insert a prominentnotice in each changed file stating how and when[the user] changed that file, and provided that [theuser] do at least ONE of the following:

a) place [the user's] modifications in the PublicDomain or otherwise make them Freely Available,such as by posting said modifications to Usenet oran equivalent medium, or placing the modificationson a major archive site such as ftp.uu.net, or byallowing' the Copyright Holder to include [theuser's] mod ifications in the Standard Version of thePackage.

b) use the modified Package only within [theuser's] corporation or organization.

c) rename any non-standard executables so thenames do not conflict with the standardexecutables, which must also be provided, andprovide a separate manual page for eachnonstandard executable that clearly documents howit differs from the Standard Version, or

d) make other distribution arrangements with theCopyright Holder.

UD The heart of the argument on appeal concerns

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m F.3d ----, 2008 WL 3395772 (C.A.Fed. (Cal.))

whether the terms of the Artistic License areconditions of, or merely covenants to, the copyrightlicense. Generally, a "copyright owner who grants anonexclusive license to use his copyrighted materialwaives his right to sue the licensee for copyrightinfringement" and can sue only for breach ofcontract. Sun Microsystems. Inc.. v. MicrosoO Corp..188 F.3d 1115. 1121 (9th Cir.1999); Graham v.James. 144 F.3d 229, 236 (2d Cir.1998). If, however,a license is limited in scope and the licensee actsoutside the scope, the licensor can bring an action forcopyright infringement. See S.o.S.. Inc. v. Pavdav.Inc.. 886 F.2d 1081, 1087 (9th Cir.1989); Nimmer onCopyright, § 1015[A] (1999).

Thus, if the terms of the Artistic License allegedlyviolated are both covenants and conditions, they mayserve to limit the scope of the license and aregoverned by copyright law. If they are merelycovenants, by contrast, they are governed by contractlaw. See Graham. 144 F.3d at 236-37 (whetherbreach of license is actionable as copyrightinfringement or breach of contract turns on whetherprovision breached is condition of the license, ormere covenant); Sun Microsystems. 188 F.3d at 1121(following Graham: independent covenant does notlimit scope of copyright license). The District Courtdid not expressly state whether the limitations in theArtistic License are independent covenants or, rather,conditions to the scope; its analysis, however, clearlytreated the license limitations as contractualcovenants rather than conditions of the copyrightlicense.FN4

Jacobsen argues that the terms of the Artistic Licensedefine the scope of the license and that any useoutside of these restrictions is copyrightinfringement. Katzer/Kamind argues that these termsdo not limit the scope of the license and are merelycovenants providing contractual terms for the use ofthe materials, and that his violation of them is neithercompensable in damages nor subject to injunctiverelief. Katzer/Kamind's argument is premised uponthe assumption that Jacobsen's copyright gave him noeconomic rights because he made his computer codeavailable to the public at no charge. From thisassumption, Katzer/Kamind argues that copyrightlaw does not recognize a cause of action for non­economic rights, relying on Gilliam v. ABC. 538 F.2d14, 20-21 (2d Cir.1976) ("American copyright law,as presently written, does not recognize moral rights

Page 7

or provide a cause of action for their violation, sincethe law seeks to vindicate the economic, rather thanthe personal rights of authors."). The District Courtbased its opinion on the breadth of the ArtisticLicense terms, to which we now tum.

III.

*6 I2l The Artistic License states on its face that thedocument creates conditions: "The intent of thisdocument is to state the conditions under which aPackage may be copied."(Emphasis added.) TheArtistic License also uses the traditional language ofconditions by noting that the rights to copy, modify,and distribute are granted "provided that " theconditions are met. Under California contract law,"provided that" typically denotes a condition. See,e.g., Diepenbrock v. Luiz. 159 Cal. 716, 115 P. 743U.2ill (interpreting a real property lease reciting thatwhen the property was sold, "this lease shall ceaseand be at an end, provided that the party of the firstpart shall then pay [certain compensation] to theparty of the second part"; considering the appellant's"interesting and ingenious" argument for interpretingthis language as creating a mere covenant rather thana condition; and holding that this argument "cannotchange the fact that, attributing the usual andordinary signification to the language of the parties, acondition is found in the provision in question")(emphases added).

The conditions set forth in the Artistic License arevital to enable the copyright holder to retain theability to benefit from the work of downstream users.By requiring that users who modify or distribute thecopyrighted material retain the reference to theoriginal source files, downstream users are directedto Jacobsen's website. Thus, downstream users knowabout the collaborative effort to improve and expandthe Source Forge project once they learn of the"upstream" project from a "downstream"distribution, and they may join in that effort.

The District Court interpreted the Artistic License topermit a user to "modify the material in any way"and did not find that any of the "provided that"limitations in the Artistic License served to limit thisgrant. The District Court's interpretation of theconditions of the Artistic License does not credit theexplicit restrictions in the license that govern adown loader's right to modify and distribute the

© 2008 Thomson Reuters/West. No Claim to Orig. US Gov. Works.

m F.3d ------- F.3d ----, 2008 WL 3395772 (C.A.Fed. (Cal.))

copyrighted work. The copyright holder hereexpressly stated the terms upon which the right tomodify and distribute the material depended andinvited direct contact if a down loader wished tonegotiate other terms. These restrictions were bothclear and necessary to accomplish the objectives ofthe open source licensing collaboration, includingeconomic benefit. Moreover, the District Coul1 didnot address the other restrictions of the license, suchas the requirement that all modification from theoriginal be clearly shown with a new name and aseparate page for any such modification that showshow it differs from the original.

[10][1 I] Copyright holders who engage in opensource licensing have the right to control themodification and distribution of copyrighted material.As the Second Circuit explained in Gilliam v. ABC538 F.2d 14, 21 (2d Cir.I976), the "unauthorizedediting of the underlying work, if proven, wouldconstitute an infringement of the copyright in thatwork similar to any other use of a work that exceededthe license granted by the proprietor of thecopyright."Copyright licenses are designed to supportthe right to exclude; money damages alone do notsupport or enforce' that right. The choice to exactconsideration in the form of compliance with theopen source requirements of disclosure andexplanation of changes, rather than as a dollar­denominated fee, is entitled to no less legalrecognition. Indeed, because a calculation ofdamages is inherently speculative, these types oflicense restrictions might well be renderedmeaningless absent the ability to enforce throughinjunctive relief.

*7 [12][13] In this case, a user who downloads theJMRI copyrighted materials is authorized to makemodifications and to distribute the materials"provided that" the user follows the restrictive termsof the Artistic License. A copyright holder can grantthe right to make certain modifications, yet retain hisright to prevent other modifications. Indeed, such agoal is exactly the purpose of adding conditions to alicense grant. FN5The Artistic License, like many othercommon copyright licenses, requires that any copiesthat are distributed contain the copyright notices andthe COPYING file. See, e.g.. 3-10 Nimmer onCopyright § 10.15 ("An express (or possibly animplied) condition that a licensee must affix a propercopyright notice to all copies of the work that he

Page 8

causes to be published will render a publicationdevoid of such notice without authority from thelicensor and therefore, an infringing act.").

It is outside the scope of the Artistic License tomodify and distribute the copyrighted materialswithout copyright notices and a tracking ofmodifications from the original computer files. If adown loader does not assent to these conditionsstated in the COPYING file, he is instructed to "makeother arrangements with the CopyrightHolder."Katzer/Kamind did not make any such"other arrangements." The clear language of theArtistic License creates conditions to protect theeconomic rights at issue in the granting of a publiclicense. These conditions govern the rights to modifyand distribute the computer programs and filesincluded in the downloadable software package. Theattribution and modification transparencyrequirements directly serve to drive traffic to theopen source incubation page and to informdownstream users of the project, which is asignificant economic goal of the copyright holder thatthe law will enforce. Through this controlled spreadof information, the copyright holder gains creativecollaborators to the open source project; by requiringthat changes made by downstream users be visible tothe copyright holder and others, the copyright holderlearns about the uses for his software and gainsothers' knowledge that can be used to advance futuresoftware releases.

IV.

For the aforementioned reasons, we vacate andremand. While Katzer/Kamind appears to haveconceded that they did not comply with theaforedescribed conditions of the Artistic License, theDistrict Court did not make factual findings on thelikelihood of success on the merits in proving thatKatzer/Kamind violated the conditions of the ArtisticLicense. Having determined that the terms of theArtistic License are enforceable copyright conditions,we remand to enable the District Court to determinewhether Jacobsen has demonstrated (1) a likelihoodof success on the merits and either a presumption ofirreparable harm or a demonstration of irreparableharm; or (2) a fair chance of success on the meritsand a clear disparity in the relative hardships andtipping in his favor. F

1'6

© 2008 Thomson Reuters/West. No Claim to Orig. US Gov. Works.

--- F.3d ------- F.3d ----, 2008 WL 3395772 (C.A.Fed. (Cal.»

*8 The judgment of the District Court is vacated andthe case is remanded for further proceedingsconsistent with this opinion.

VACATED and REMANDED

FN* The Honorable Faith S. Hochberg,District Judge, United States District Courtfor the District of New Jersey, sitting bydesignation.

FN 1. Katzer/Kamind represents that allpotentially infringing activities using any ofthe disputed material have been voluntarilyceased. The district court held that it couldnot find as a matter of law thatKatzer/Kamind's voluntary termination ofallegedly wrongful activity renders themotion for preliminary injunction mootbecause it could not find as a matter of lawthat it is absolutely clear that the allegedbehavior could not recur. Jacobsen, 2007WL 2358628 at *5, We agree that thismatter is not moot. See also AdarandConstructors, inc. v. Slater, 528 U.S. 216,222, 120 S.Ct. 722, 145 L.Ed.2d 650 (2000)("Voluntary cessation of challenged conductmoots a case ... only if it is absolutely clearthat the allegedly wrongful behavior couldnot reasonably be expected torecur."(emphasis in original».

FN2. For example, the GNU General PublicLicense, which is used for the Linuxoperating system, prohibits downstreamusers from charging for a license to thesoftware. See Wallace v. iB/v! Corp.. 467F.3d 1104, 1105-06 (7th Cir.2006).

FN3. Jacobsen's copyright registrationcreates the presumption of a valid copyright.See, e.g., Triad Srs. Corp. v. SE Exp. Co, 64F.3d 1330, 1335 (9th Cir.1922J

FN4. The District Court held that"Defendants' alleged violation of theconditions of the license may haveconstituted a breach of the nonexclusivelicense ... [and] the Court finds thatPlaintiffs claim properly sounds incontract."Jacohsen, 2007 WL 2358628 at

Page 9

*7. Thus, despite the use of the word"conditions," the District Court treated theterms of the Artistic License as contractualcovenants which did not limit the scope ofthe license.

FN5. Open source licensing restrictions areeasily distinguished from mere "authorattribution" cases. Copyright law does notautomatically protect the rights of authors tocredit for copyrighted materials. SeeGilliam. 538 F.2d at 20-21 ("Americancopyright law, as presently written, does notrecognize moral rights or provide a cause ofaction for their violation, since the law seeksto vindicate the economic, rather than thepersonal rights of authors."); Graham, 144F.3d at 236.Whether such rights areprotected by a specific license grant dependson the language of the license. See Countv ofVentura v. Blackburn, 362 F.2d 515, 520\.21b..-_ Cir. 1966) (copyright infringementfound where the county removed copyrightnotices fTom maps licensed to it where thelicense granted the county "the right toobtain duplicate tracings" from photographicnegatives that contained copyright notices).

FN6. At oral argument, the parties admittedthat there might be no way to calculate anymonetary damages under a contract theory.

C.A.Fed. (Cal.),2008.Jacobsen v. Katzer--- F.3d ----, 2008 WL 3395772 (C.A.Fed. (Cal.»

END OF DOCUMENT

© 2008 Thomson Reuters/West. No Claim to Orig. US Gov. Works.

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FOR PRINTING SERVICES:19 copies and original- United States Court of Appeals for the Federal Circuit

2008-1289, BRIEF OF APPELLANT, Robert G.Jacobsen v. Matthew Katzer and KAMiND Associates,Inc. (doing business as KAM Industrie::,).

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