1. Comparative Law of Licenses and Contracts in the US, UK and EU
FOSDEM’18
4 Feb 2018
Pamela Chestek
Andrew Katz
Michaela MacDonald

2. US

3. Non-exclusive license
Contract (agreement)
Non-exclusive license
A license is a grant of permission to use copyrighted material. The license can be express (written or oral) or implied by conduct.
A non-exclusive license is a defense to an allegation of infringement.
If accused of infringement, one can avoid liability by showing that the accused acts were within the scope of the license grant.
A contract requires offer, acceptance and mutual consideration. Without consideration, the offer is revocable (unless the other party can show detrimental reliance). Case law says that the non-monetary benefits to the open source licensor is consideration.
A “unilateral” contract is accepted by performance

4. license agreement
A license can be (but rarely will be) the only subject matter of a contract.

5. License agreement
The defendant will not have a license defense, and therefore will be liable for copyright infringement, if the conditions of the license are not met. If the breach does not cause the license to fail, then there is only a breach of contract claim. An example might be, in terms of use, a prohibition on creating derivative works versus a prohibition on disparaging the website owner.
It then becomes an exercise in determining whether the license grant was conditioned on complying with the breached terms or instead the breached term was a “covenant” of the contract, where only contract damages are available.

6. An example of a condition ...
“You may convey a work based on the Program, or the modifications to produce it from the Program, in the form of source code under the terms of section 4, provided that you also meet all of these conditions:”
Courts look for specific language, “provided that,” “on the condition that.”
It can also be a question of whether the conduct implicates a the copyright right.
“You agree that you will not (ii) create or use cheats, bots, "mods," and/or hacks, or any other third-party software designed to modify the World of Warcraft experience” was a covenant, not a condition of the copyright license needed to play the game

7. Fair License <Copyright Information>
Usage of the works is permitted provided that this instrument is retained with the works, so that any entity that uses the works is notified of this instrument.
DISCLAIMER: THE WORKS ARE WITHOUT WARRANTY.

8. BSD 3-Clause License Copyright <YEAR> <COPYRIGHT HOLDER>
Redistribution and use in source and binary forms, with or without modification, are permitted provided that the following conditions are met: 1. Redistributions of source code must retain the above copyright notice, this list of conditions and the following disclaimer. 2. Redistributions in binary form must reproduce the above copyright notice, this list of conditions and the following disclaimer in the documentation and/or other materials provided with the distribution. 3. Neither the name of the copyright holder nor the names of its contributors may be used to endorse or promote products derived from this software without specific prior written permission.
THIS SOFTWARE IS PROVIDED BY THE COPYRIGHT HOLDERS AND CONTRIBUTORS "AS IS" AND ANY EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE DISCLAIMED. IN NO EVENT SHALL THE COPYRIGHT HOLDER OR CONTRIBUTORS BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO, PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES; LOSS OF USE, DATA, OR PROFITS; OR BUSINESS INTERRUPTION) HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, WHETHER IN CONTRACT, STRICT LIABILITY, OR TORT (INCLUDING NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY OUT OF THE USE OF THIS SOFTWARE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.

9. US
Bare license?
Contract?
Fair License ??
BSD X
Apache
GPL

10. Law of England and Wales. Northern Ireland is similar. Not Scotland
English Law
Law of England and Wales. Northern Ireland is similar.
Not Scotland

11. Rationale ‘Bare licence’ is a promise not to sue.
Enforceable by estoppel – licensee acts in reliance of the licence, may no longer be revoked.
Acting outside the scope of the licence is copyright infringement.
Courts look for specific language, “provided that,” “on the condition that.”
It can also be a question of whether the conduct implicates a the copyright right.
“You agree that you will not (ii) create or use cheats, bots, "mods," and/or hacks, or any other third-party software designed to modify the World of Warcraft experience” was a covenant, not a condition of the copyright license needed to play the game

12. Carlill -v- Carbolic Smoke Ball Co.
Unilateral contract
Promise to pay £100 to anyone using the smoke ball who contracts influenza.
Consideration is the economic benefit to the suppliers in selling more smoke balls.
Courts look for specific language, “provided that,” “on the condition that.”
It can also be a question of whether the conduct implicates a the copyright right.
“You agree that you will not (ii) create or use cheats, bots, "mods," and/or hacks, or any other third-party software designed to modify the World of Warcraft experience” was a covenant, not a condition of the copyright license needed to play the game

13. Is it necessary to imply a contract?
No -
“An implication may only be made if this is necessary, and then only of what is necessary and no more.”
Robin Ray v. Classic FM
Courts look for specific language, “provided that,” “on the condition that.”
It can also be a question of whether the conduct implicates a the copyright right.
“You agree that you will not (ii) create or use cheats, bots, "mods," and/or hacks, or any other third-party software designed to modify the World of Warcraft experience” was a covenant, not a condition of the copyright license needed to play the game

14. English Law Bare licence? Contract? Fair License Yes No BSD Apache GPL

15. Civil law jurisdictionsEU
Civil law jurisdictions

16. European legal systems
OS licences are interpreted as enforceable bilateral contracts
Bare licence not an independent, sui generis concept

17. Rationale
OS licence is “an agreement whereby the licensor grants the licensee permission to perform certain acts with respect to a copyright protected work, acts which would otherwise be prohibited on the basis of the licensor’s exclusive right on the work.”
Guibault, L., van Daalen, O. Unravelling the Myth around Open Source Licenses (2005 TMC Asser Press)

18. EU
Bare license?
Contract?
Fair License No
Yes
BSD
Apache
GPL

19. We are lawyers but not your lawyer. We could be wrong.
Summary
We are lawyers but not your lawyer.
We could be wrong.
The following slides are our best guess on the application of various legal principles.

20. Taxonomy US English Law EU Bare License A defense, not a document
No acceptance required. Defence to infringement claim
N/A
Unilateral Contract
Acceptance by conduct
Acceptance by conduct. Communication not necessary
No acceptance required – does not apply to software licences
Bilateral Contract
Acceptance by any means
Acceptance must be communicated

21. Revocability US English Law EU Bare License
Revocable at any time unless licensee has relied on it
Revocable at any time (unless licensee has relied on it)
N/A
Unilateral Contract
Not revocable after partial performance
Potentially irrevocable
German law (free revocation) / Italian law (promise is irrevocable)
Bilateral Contract
Terminates only on material breach

22. Third Party Beneficiary RightsUS
English Law EU
Bare License No
N/A
Unilateral Contract
Depends on wording
Yes
Yes?
Bilateral Contract
Being tested for copyleft licenses

23. Specific performance by licenseeUS
English Law EU
Bare License
N/A No
Unilateral Contract
Rarely granted, but theoretically possible
Yes (at discretion of court)
Yes – statutory remedy
Bilateral Contract

24. Costs follow event (discretionary)
Legal Costs US
English Law EU
Bare License No
Costs follow event (discretionary)
N/A
Unilateral Contract
Bilateral Contract

25. Exclusion of liability
English Law EU
Bare License
N/A
Enforceable (mainly)
Unilateral Contract
Most likely
Subject to reasonableness (UCTA), and Consumer protection
Requirement of proportionality, consumer protection
Bilateral Contract