Patents and OSS Licenses Terry J. Ilardi Copyright Counsel IBM Corporation 1

Agenda Introduction Explicit Patent Grants in OSS Licenses Implied Patent Grants in OSS Licenses OSS and Patents: A Perfect Match? 2

Introduction While some FOSS communities have called for the abolition of software patents, the newer, most important FOSS licenses treat SW patents as a fact of FOSS life. RMS: “One less software patent, one less menace to programmers: the target is zero.” 33 out of the 77 OSI approved unique licenses include an explicit patent license. Roughly 35% of FOSS projects are licensed under agreements that include explicit patent licenses. 3

Top Ten FOSS Licenses by Usage 4 Usage RankLicense NamePer Cent of OSSInclude Patent License? 1MIT26%No 2GPLv221%No 3Apache v %Yes 4GPLv39%Yes 5BSD 2.0 (3-clause)6%No 6LGPLv2.14%No 7Artistic4%Yes 8LGPLv3.02%Yes 9Microsoft Public License2%Yes 10Eclipse Public License2%Yes

Explicit Patent Grants Licenses are generally straightforward, but do vary in scope. But no discussion of patent grants would be complete without also discussing a sort of “backdoor” license- Defensive termination clauses. Goal is to achieve “patent peace.” If a licensee of FOSS software under which a licensor has granted a patent license asserts against the licensor, the licensee loses its patent license (and sometimes its copyright license too). 5

Apache License v. 2.0 Earlier versions, e.g. v. 1.1 did not include a patent license. Added in version 2.0 in Grants right to “make, have made, use, offer to sell, sell, import, and otherwise transfer the Work” (§3). License attaches “only to those patent claims licensable by such Contributor that are necessarily infringed by their Contribution(s) alone or by combination of their Contribution(s) with the Work to which such Contribution(s) was submitted." 6

ASL 2.0 Defensive Termination Clause “If You institute patent litigation against any entity … alleging that the Work or a Contribution incorporated within the Work constitutes direct or contributory patent infringement, then any patent licenses granted to You under this License for that Work shall terminate as of the date such litigation is filed.” 7

GPLv3 and LGPLv3 The GPLv2’s lack of an explicit patent license was one of the most important issues that the GPLv3 addressed in Also sought to clarify GPLv2’s §7. The GPLv3’s grant is ostensibly “contribution” triggered. Each contributor grants you a non-exclusive, worldwide, royalty-free patent license under the contributor’s essential patent claims, to make, use, sell, offer for sale, import and otherwise run, modify and propagate the contents of its contributor version. 8

GPLv3/LGPLv3 A “contributor” is defined in §11, paragraph 2, as “a copyright holder who authorizes use under this License.” One who merely redistributes GPLv3 code is not a contributor. Paragraphs 4 through 7 of §11 detail the effects of cross licenses common in the IT field. The downstream shield requirements not triggered, since they only become operative when the licensee causes a covered work to be made available while “knowingly relying” on the patent license. This language is to be construed to situations where the licensee has actual knowledge of infringement. 9

GPLv3/LGPLv3 Even if the licensee has actual knowledge, it can avoid triggering the provisions of paragraph 5 by opting to take one of three alternative actions. Causing the corresponding source code to be available Depriving yourself of the license or Arranging to extend the license to all downstream recipients. 10

GPLv3/LGPLv3 Atypical defensive termination clause. Depends on the an interaction of §§8, 10 and 11. §8:You may not propagate or modify a covered work except as expressly provided under this License. Any attempt otherwise to propagate or modify it is void, and will automatically terminate your rights under this License (including any patent licenses granted under the third paragraph of section 11). The “no-further restrictions” language of §10, paragraph 3, prevents specifically, patent litigation. Under §10, bringing suit for patent infringement for code distributed under the GPLv3 triggers the termination clause of §8 and terminates the license granted under §11. 11

Artistic License 2.0 §13: This license includes the non-exclusive, worldwide, free-of-charge patent license to make, have made, use, offer to sell, sell, import and otherwise transfer the Package with respect to any patent claims licensable by the Copyright Holder that are necessarily infringed by the Package. If you institute patent litigation (including a cross-claim or counterclaim) against any party alleging that the Package constitutes direct or contributory patent infringement, then this Artistic License to you shall terminate on the date that such litigation is filed. 12

Artistic License 2.0 Package “means the collection of files distributed by the Copyright Holder, and derivatives of that collection and/or of those files.” The Artistic license is, then, a distribution triggered license. If you have a patent that reads on anything in the package then you have agreed to grant a patent license that covers it. 13

Microsoft Public License 2(B) … each contributor grants you a non-exclusive, worldwide, royalty-free license under its licensed patents to make, have made, use, sell, offer for sale, import, and/or otherwise dispose of its contribution in the software or derivative works of the contribution in the software. Licensed patents are “a contributor's patent claims that read directly on its contribution.” Contribution triggered, but only covers direct reads, Apache license, not on combinations of the contribution with parts of the software contributed by another. There is no defensive termination clause. 14

Eclipse Public License §2 b) …each Contributor hereby grants Recipient a non- exclusive, worldwide, royalty-free patent license under Licensed Patents to make, use, sell, offer to sell, import and otherwise transfer the Contribution of such Contributor, if any, in source code and object code form. This patent license shall apply to the combination of the Contribution and the Program if, at the time the Contribution is added by the Contributor, such addition of the Contribution causes such combination to be covered by the Licensed Patents. The patent license shall not apply to any other combinations which include the Contribution. 15

Eclipse Public License Provides an explicit patent license from the contributor covering its respective contribution and combinations of the contribution and the Program if, at the time the contribution is added by the contributor, the addition of the contribution causes the combination to need a license under a patent licensable by the contributor. There is no patent license granted by a contributor covering contributions made by another. 16

Eclipse Public License Defensive termination. Eclipse’s predecessor, the IBM Public License (1999) was one of the earliest OSS license to include defensive termination. If a recipient institutes patent litigation against anyone alleging that the Program itself infringes the recipient's patents, then the recipient's patent license granted under §2(b) terminates. (§7). 17

Implied Patent Licenses An implied license is an action or inaction of patent owner that “signifies a patentee's waiver of the statutory right to exclude others.” Wang Labs, Inc. v. Mitsubishi Elecs. Am., Inc. (Fed. Cir. 1997). Normally a licensee is only granted under stated rights. But equity prohibits a contracting party from taking legal action that interfere with the rights of the of the other party. The existence of an implied license is a question of law. ZapatA Indus., Inc. v. W.R. Grace.,(S.D. Fla. 1999) But “judicially implied licenses are rare…” Wang. 18

Implied License Theories Four theories of implied license, each having different requirements. Equitable estoppel, Legal estoppel Conduct, and Acquiescence. (Wang Labs). Conduct and acquiescence are used less often. 19

Equitable Estoppel AKA “estoppel in pais” Is found when a party has acted unfairly. “…focuses on misleading conduct suggesting that the patentee will not enforce [its] patent rights.” A. C. Aukerman Co. v. R.L. Caides Constr. Co.(Fed. Cir. 1992) False representations, Concealment of material facts or Failure to act. 20

Equitable Estoppel Equitable Estoppel requires: 1. The patentee through statements or conduct gave an affirmative patent grant 2. Reliance by the alleged infringer on those statements or conduct 3. The alleged infringer would be materially prejudiced if the patentee were allowed to proceed with the claim. 21

Legal Estoppel “ Legal estoppel refers to a narrower category of conduct encompassing scenarios where a patentee has licensed or assigned a right, received consideration, and then sought to derogate from the right granted.” (Wang Labs) “The essence of legal estoppel that can be found in the estoppel of the implied license doctrine involves the fact that the licensor (or assignor) 1. has licensed (or assigned) a definable property right for valuable consideration, and then 2. has attempted to derogate or detract from that right. The grantor is estopped from taking back in any extent that for which he has already received consideration. “ (Amp, Inc. v. United States) 22

Legal Estoppel Legal estoppel looks for an “affirmative” license While equitable estoppel looks for “‘misleading’ conduct suggesting that the patentee will not enforce patent rights.” Wang. Often comes up in the context of a broad patent grant followed by subsequent acquisition and assertion by the grantor of a dominating patent. 23

Implied License by Conduct “Any language used by the owner of the patent or any conduct on his part exhibited to another, from which that other may properly infer that the owner consents to his use of the patent in making or using it, or selling it, upon which the other acts, constitutes a license, …” DeForest Radio v. US 273 (US Supreme Court,1927). 24

Implied License by Acquiescence An implied license by acquiescence can be found when a patent owner acquiesces in the activities of a party and has accepted partial payment for those activities. Very few cases. 25

Implied Patent Licenses Generally Many cases do not analyze based on these four categories Not always clear-nor dispositive-where a given activity fits. “Generally, when a seller sells a product without restriction, it in effect promises the purchaser that in exchange for the price paid, it will not interfere with the purchaser's full enjoyment of the product purchased. The buyer has an implied license under any patents of the seller that dominate the product or any uses of the product to which the parties might reasonably contemplate the product will be put. (emphasis supplied).” Hewlett-Packard Co. v. Repeat-O- Type Stencil Mfg. Corp.., Inc (Fed Cir. 1997) 26

Implied Patent Licenses Generally If equipment has no non infringing use and the circumstances of the sale “plainly indicate that the grant of the license should be inferred” a court will find implied license. Met- Coil v. Korners (Fed. Cir. 1986) 27

Implied Grants in OSS Licenses The widely used GPLv2 and BSD licenses, do not. Many, but not all, members of the relevant FOSS communities believe that these, and other FOSS licenses silent on patent licenses grant at least some implied patent rights. No real case law dealing specifically with the availability of implied patent licenses in the context of FOSS agreements. So we are left to apply what we have learned about implied patent licenses 28

GPLv2 GPLv2 §1, “You may copy and distribute verbatim copies of the Program's source code as you receive it, in any medium,..” and §2. “You may modify your copy or copies of the Program or any portion of it, thus forming a work based on the Program, and copy and distribute such modifications or work under the terms of Section 1 above, provided…” GPLv2 grants the right to make and sell (distribute). Right to use not explicitly granted but needed to practice the rights granted. 29

Legal Estoppel and the GPLv2 GPLv2 grants right to practice the invention “The facet of this licensing agreement which is of crucial importance and which plaintiff ignores is that it licenses the Government to use an idea and not just the Byrem Patent itself.” Amp. Claim of infringement would derogate that right Consideration? Reciprocal grant of rights-licensee agrees to further distribute the Program and its derivative works under the GPL. In Wang proliferation of Wang’s technology and its standardization were held to be sufficient consideration. Benefits under GPLv2 sufficient consideration. 30

Equitable Estoppel and the GPLv2 The patentee through statements or conduct gave an affirmative patent grant. Patentee’s distribution of the GPLv2 software is conduct indicating its intent not to sue. Reliance by the alleged infringer on those statements or conduct. In using and distributing the program licensee indicates its reliance on the GPLv2. The alleged infringer would be materially prejudiced if the patentee were allowed to proceed with the claim. 31

GPLv2: Conduct/Acquiescence While used less often patentee’s decision to distribute software under the GPLv2 and allowing users to download and use that software for any significant period of time may well support an implied license based on conduct or acquiescence. Equity may permit a court to make such a decision. 32

The FSF’s Position FSF has asserts that a distributor of GPLv2 licensed code implicitly agrees to a grant of a patent license under any patents that they had a right to license that read on the code. (The Implied Patent Grant in GPL, by Dan Ravicher, published by the Free Software Foundation, 2004). GPLv2 grants an implied patent license to recipients of GPLv2 programs. (relying on Hewlett Packard). GPL licensee is free to practice any patent claims held by the licensor for “reasonably contemplated uses” of the GPL code GPL implied license is consistent with HP; covers reasonably contemplated uses, including modification and distribution. 33

The FSF’s Position (cont’d) Uses may “include creation and distribution of derivative works since the GPL’s terms, under which the patented code is distributed, expressly permits such activity.” The “implied patent license” only extends to use of the software in accordance with the GPL, however. Use of the program without complying with the GPL, terminates its patent license along with its copyright license. Each party that distributes any GPL program grants a license under its patents to all distributees in the subsequent distribution chain. 34

BSD and MIT Family of Licenses “Redistribution and use in source and binary forms, with or without modification, are permitted…” Arguably an explicit patent grant to use and sell. Failing that, analysis under estoppel, conduct and acquiescence parallels that of the GPLv2. Non copyleft nature of these licenses makes the consideration analysis under legal estoppel less certain. Fits within the Hewlett-Packard. Continued use, manufacture (making) and distribution (selling) of the code is reasonably contemplated by the terms to grant a patent license to make, use and sell the OSS licensed under the BSD. 35

Are Patents Actually Good for OSS? Should OSS developers apply for patents at all? What’s the sense if you are going to grant an explicit or implied license? An OSS license that offers a patent license should encourage licensees to use the OSS. Patents can be used in the same way that copyrights are used to enforce OSS licenses. Alternative is probably to take a royalty bearing license. Finally, patents still seem to be the best prior art. 36

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