Understanding the "GPL is a Contract" court case

There’s been a lot of confusion about the recent Artifex v. Hancom case, in which the court found that the GPL was an enforceable contract. I’m going to try to explain the whole thing in clear terms for the legal layman.

Artifex is the current owner of the Ghostscript software. Ghostscript is an interpreter of the Postscript language, it renders Postscript and PDF to print and images, and it translates Postscript and PDF to a plethora of other file formats. Ghostscript was created by L Peter Deutsch (“L” is his first name, not an initial) known online as “Ghost”. Peter created the software in 1984 to be dual-licensed, in other words to have both an Open Source license (originally the Open-source-like Aladdin Free Public License, later the GPL) and a commercial license. Thus, Peter made Ghostscript available without charge for people who were using it in Free systems and were willing to share their modifications to it with him and the world, and he made it available for a fee to companies that were putting Ghostscript in their printers or commercial software and weren’t interested in sharing their own code as Open Source.

Peter was the pioneer of dual-licensing, although MySQL usually gets credit for that. He closed the first commercial contract for Ghostscript years before MySQL existed. This was, however, using the Aladdin license, which, although inspired by the GPL, is just short of qualifying as Open Source or Free Software license because it prohibits sale or a fee for distribution. Peter also released each version of Ghostscript with the GPL after a one-year delay, since the code was evolving rapidly and his intent with the Aladdin license was only to prevent proprietary software products from having a “free ride” on code with immediate commercial value.

Peter retired from software development in 2002 to become a composer and musician and sold Ghostscript to Artifex.  Artifex later stopped using the Aladdin license, and switched to releasing each version of Ghostscript under the GPL without delay, having concluded that the “free rider” problem was no longer commercially significant and that straightforward use of the GPL alone would simplify Artifex’s story to the world and improve relationships with the Open Source / Free Software community.

Artifex recently brought suit against Hancom, which Artifex alleges was using Ghostscript in one of its products, without either purchasing a commercial license or complying with the GPL. This case is still in progress. What’s made news recently is that the court found that the GPL was an enforceable contract, and is allowing the case to proceed as a complaint of breach of contract, not just copyright infringement (as most similar cases have).

The actual text of the Magistrate’s finding is:
 
Defendant contends that Plaintiff’s reliance on the unsigned GNU GPL fails to plausibly demonstrate mutual assent, that is, the existence of a contract. Not so. The GNU GPL, which is attached to the complaint, provides that the Ghostscript user agrees to its terms if the user does not obtain a commercial license. Plaintiff alleges that Defendant used Ghostscript, did not obtain a commercial license, and represented publicly that its use of Ghostscript was licensed under the GNL GPU. These allegations sufficiently plead the existence of a contract. See, e.g., MedioStream, Inc. v. Microsoft Corp., 749 F. Supp. 2d 507, 519 (E.D. Tex. 2010) (concluding that the software owner had adequately pled a claim for breach of a shrink-wrap license).
The entire court document is here.

This finding confused a lot of people. Was the GPL not enforceable before this case? The FSF has claimed the GPL is a license, not a contract, so is the court contradicting the FSF?
The GPL was found to be an enforceable set of copyright terms (a license) in a previous case, Jacobsen v. Katzer. I had the privilege of being pro-bono (no fee, for the public good) expert witness on that case. What has changed now is that for the purposes of the court, the GPL is both a license, which can be enforced through a claim of copyright infringement, and a contract, which can be enforced through a claim of breach of contract. You can allege both in your court claim in a single case, and fall back on one if you can’t prove the other. Thus, the potential to enforce the GPL in court is somewhat stronger than before this finding, and you have a case to cite rather than spending time in court arguing whether the GPL is a contract or not. If you are in Federal Court in the Northern District of California, the court must consider this finding, other courts can consider it and in general will.

That the GPL is a contract hardly came as any surprise to people familiar with the law. Lawyers and judges view any collection of terms as a contract, and tear-open licenses are the norm these days. But the FSF had its own reasons to say it’s a license, reasons that might be more important to the philosophy of Free Software than the court.
Contracts require consent between two parties who join in the contract, if they are to be enforced. The GPL (and many other licenses that come with products) doesn’t have a signature page, so there is no explicit consent. If there is consent at all, it’s the implied consent that has become standard for “tear-open” licenses. Your acceptance of the license is indicated by some action, in this case integrating the code into your product.

The default under copyright law is all rights reserved, which means “you can’t do anything with this” with some minor exceptions that are called “fair use”Thus, if you integrate the software into your product, distribute it, or perform some other action that is restricted by copyright, you must have accepted the license because your alternative would be all rights reserved. Thus, the FSF asserts that the GPL is a license because they feel consent isn’t really necessary, they don’t want to argue about consent in court, and they believe that they can do all of the enforcement they need using a complaint of copyright infringement. Also, tear-open licenses were a much more foggy issue in law when the GPL came about. And then there’s the philosophical matter:

The Free Software Foundation is all about Your Software Freedom. So, they wouldn’t want to take away your freedom in any way. Contracts are a means by which people trade some rights which they could otherwise exercise for some rights they don’t have – but which FSF feels they should have by default. FSF wants you to have the right to use, modify, and redistribute all software without restriction, and this means you should get the source code for all software. In the proprietary software world, you contract for the right to run one copy of the software while giving up your rights to examine, modify, or redistribute it, and often even the right to talk about it freely – for example the right to publish a critical review or a performance benchmark of the software. FSF doesn’t like the idea of people giving up their own rights. So, they very carefully constructed the GPL so that it does not ask you to give up any rights you already have, and only grants rights which you would not otherwise have. So, it’s “freedom positive”, it only gives freedom without taking any away. Thus, FSF feels that the GPL doesn’t need to be a contract. It only needs to be a license because it does not need the contract’s feature of having you make promises to give up some rights.

If the FSF philosophy seems unusual to you, sit down and consider how much software violates your privacy these days, how it can actually control you, and how you are at the mercy of criminals who understand the software better than you and send “viruses” to mess up your computer. My computer running the GNU and Linux software isn’t entirely virus-proof, but it’s immune to “Wannacry” and a lot of the garbage that most of you tolerate. I am in control of all of my software. Are you?

Does the FSF lose anything because the court said the GPL is a contract? I don’t see how. The court didn’t say it’s not a license.

Another interesting point in the case is that the court found Artifex’s claim of damages to be admissible because of their use of dual-licensing. An economic structure for remuneration of the developer by users who did not wish to comply with the GPL terms, and thus acquired a commercial license, was clearly present. In Jacobsen v. Katzer, the lower court found that Jacobsen had not adequately pleaded damages resulting from the breach by stating “by reason of the breach, Plaintiff has been harmed”, although my testimony to the Appeals court laid out Jacobsen’s damages in greater detail. This is further reason for developers to offer dual-licensing (which I generally recommend).

The case is not over, and one attorney I work with remains adamant that the GPL is still not a contract, while others are just as adamant that it is. It’s possible that the district court might not find for Artifex’s contract claim, or that we could see an appeals court rule again on whether the GPL is a contract or not.