Cluster Meeting, 9 th February 2006 Legal issues in Open Source Software (OSS) Dr Zoe Kardasiadou (CIEEL)

DE Cluster Meeting, 9 th February 2006 Why a legal study on OSS? Objectives At European level there were a few studies dealing with related legal issues Aim of the study: summarize the legal discussion on comparative basis; highlight the implications & pitfalls; refine the legal requirements; provide first -step recommendations for developers / users provide recommendations for further actions

DE Cluster Meeting, 9 th February 2006 Structure of the study Generic nature of the study Empirical basis Analysis of the OSS characteristics Presentation of OSS implementations Business models Copyright law Patent law Contract law incl. warranties & liability

DE Cluster Meeting, 9 th February 2006 OSS licenses taxonomy Taxonomy is based on the freedom given to the licensee with regard to derivative works Non-copyleft licenses: licensees may make their own derivative work proprietary provided they do not remove the copyright mark of the initial code (BSD, APACHE, MIT) Copyleft licenses are based on reciprocity, i.e. derivative works may be released only under the OSS license conditions (GPL, MPL) Dual – licenses: The initial developer may also offer the code under a proprietary license; some licenses provide for the right of the initial developer to make also the licensees’ derivative works proprietary (Apple license) In general, the mere use of the program is free but there are some provisions that might affect also end-users

DE Cluster Meeting, 9 th February 2006 Copyright law Authorship Various types of authorship may arise (joint, linked, collective, derivative works) with practical consequences as to the person entitled to exercise the exploitation rights and to sue or be sued National jurisdictions may vary and provide for different results The copyright notice files might be of help The use of “fiduciary license agreements” should be further explored In new developments projects shall agree upon the OSS license type Grant of exploitation rights provides for legal uncertainties as they are inspired in US law The right to make available to the public (over the Internet) is not explicitly provided The right to control the distribution is subject to the EU law - first sale doctrine with the consequence that at the latest the acquirer of OSS physical copy by a person that has acquired the program by a lawful distributor is not bound by the OSS license;

DE Cluster Meeting, 9 th February 2006 Copyright law (2) Virality notions: in OSS licenses (esp. GPL clause) reg. programs linked with OSS may be found invalid as lacking transparency Compatibility of OSS licenses: are often not compatible to each other: the author of derivative works shall perform a compatibility test In new developments projects shall consider carefully this aspect Development of OSS by employees: Under EU law the employee is the owner of the moral right In some national jurisdictions the employee might require royalties based on the employer’s revenue In the absence of OSS licenses, conforming with EU law, OSS licenses should be construed in the light of the US law, so that the employer may appear as the author or by specific clauses in the contracts Confidentiality company agreements with employees shall provide for clear rules on the use of knowledge in OSS projects

DE Cluster Meeting, 9 th February 2006 Copyright law (3) Infringement of copyright through OSS National jurisdictions may vary; indemnification programs and certification programs should be considered

DE Cluster Meeting, 9 th February 2006 Patent law Draft Directive on patentability of computer- implemented inventions Gaps in current patent law (European Treaty) Scope of exclusive rights conferred by any patent shall be defined by the claims only (descriptions and drawings shall only explain the real meaning of claims and be subject to strict interpretation) The “equivalent functionality” test shall take into account the limitations of alternatives in IT sector A clear rule permitting the royalty-free license for purposes of interoperability is missing

DE Cluster Meeting, 9 th February 2006 Patent law (2) The risk of OSS to infringe existing patents is not higher as for any other proprietary software On this basis patent infringement defense insurance / indemnification programs may be offered Prior art documentation centres and patent documentation centres shall be further developed and supported by the EU Dedicated organisations may offer patent research services with respect to OSS For purpose of defending against patent infringement claims the elaboration of agreements, such as the fiduciary license agreements may be considered. Legal actions are available to challenge a patent grant; Advise may be offered by specialised organisations OSS developers shall consider the various OSS licenses before out- or in-licensing their work. Especially the grant of patent rights and the termination clauses in case of taking action against the licensor for patent infringements shall be considered.

DE Cluster Meeting, 9 th February 2006 Contract law OSS licenses are qualified as general terms and conditions Applicability of the respective rules according to the nature of the party invoking them and according to the national jurisdiction in question Directives 97/7/EC and 2000/31/EC might not apply where the licensor is acting outside his trade or profession Transparency and fairness control Valid incorporation Make available either according to the wrap system or by clear reference Use of English language might cause problems, esp. with respect to consumers (the actual knowledge concept implied by the initiative of the consumer to accept the contract might be helpful)

DE Cluster Meeting, 9 th February 2006 Contract law (2) Warranty and liability disclaimers will be decided on the basis of the qualification of the OSS contract (donation / sale, B2C / B2B) Subject to the applicable law Practical very difficult to determine the applicable law in disputes with parties that are not consumers because in general the law of the country where the developer residing applies and in OSS there might be a great number of developers residing in different countries The court that is competent to hear the case and its international private law shall be applicable might often be outside the EU. In such cases the minimum protection granted by the Rome Convention (for instance reg. the total warranty and liability disclaimers) will not apply In contracts with consumers the applicable law is always the law of consumer’s country of residence. The result may vary should this country be outside the EU

DE Cluster Meeting, 9 th February 2006 Contract law (3) The study provided recommendations: a) how warranty / liability clauses may be adjusted to EU law b) practical guidance for acquirers It should be further discussed whether O

DE Cluster Meeting, 9 th February 2006 Recommendations Use the LEGAL-IST study as first-step help Request support reg. specific developments & business models Further research initiatives & creation of guidelines are necessary Discussion on OSS specific legislation