GPLv3 : Welcome to Contract Law

As the tech and business community try to read the tea leaves behind various groups being left out (Apache) and those who just squeezed in (Google), it seemed appropriate to take a look at the legal ramifications of the new draft.  So we asked our IP Counsel, Richard Wilder, to take a look at the new draft and give us the legal breakdown of the new changes.  What he discovered is a draft that breaks the GPL's traditional position as a license, and moves it firmly into the category of "Contract".

In its Third Discussion Draft of GPLv3, the Free Software Foundation (FSF) explained that Paragraphs 4 and 5 of Section 11 were needed to “combat the threat” of a recent cooperation agreement between Novell and Microsoft and other agreements like it.

The stated “threat” was the covenant by Microsoft not to assert its patent rights against customers who have purchased SUSE Linux Enterprise Server or other covered products from Novell.  The real concern, however, is that Novell and Microsoft have found a way to build bridges between the two worlds of open source and proprietary software. 

This was a bridge too far for the FSF.

The FSF drafted a new paragraph to require the automatic grant of a patent license to all recipients of a covered work if they “convey, or propagate by procuring conveyance of, a covered work.” 

The flaw in this provision significant:  Paragraph 4 is a contract term, not a license term.  Because Microsoft and companies like them are not parties to the contract, they are not bound by it. 

What that means is that a non-participant is now part of the agreement; we have transcended a license and moved into the realm of contracts.  The third party is not being given any rights, only obligations.  Obligations that they haven’t agreed to assume.

As seen in the decision in Specht v. Netscape (SDNY 2001) “The case law on software licensing has not eroded the importance of assent in contract formation.  Mutual assent is the bedrock of any agreement to which the law will give force.”

Read the whole analysis for the full skinny