Artifex Software, Inc. v. Hancom, Inc. – OSS Licenses as Contracts

On April 25th, the District Court for the Northern District of California issued an order regarding Hancom, Inc.’s (“Hancom”) motion to dismiss the claim from Artifex Software (“Artifex”). In brief, Artifex is the developer of the Ghostscript software that is dual licensed under: (1) a commercial license; or (2)  under GPLv3 (though today Ghostscript is licensed under the AGPL). Hancom used the GPLv3 version of GhostScript but, among other requirements, did not comply with the source code disclosure obligations of GPLv3.  As a result, Artifex sued for breach of contract and copyright infringement.

Up until now,  the notorious open source case, Jacob v. Katzer, which affirmed the enforceability of open source licenses under copyright law but left open the question of whether open source licenses were enforceable under contract law.  This order demonstrates that open source licenses can, depending on the circumstances, be enforceable under contract law, thus opening up additional categories of damages and the possibility of specific performance.

The question is whether the there was mutual assent to the terms of the GPLv3, and in this case, the allegations sufficiently plead as much.  As to the question of damages, GPLv3, like many open source license, grants a royalty-free license.  Nevertheless, the lack of monetary exchange does not preclude a claim for damages as there may still be “substantial benefits, including economic benefits, to the creation and distribution of copyrighted works under public licenses that range far beyond traditiona license royalties” (the courts citing Jacobsen and Katzer).  In any case, the dual-licensing structure of GhostScript makes a claim for damages more compelling.

The full text of the motion can be found here: Artifex Software v. Hancom: Order re Defendant’s Motion to Dismiss

Posted on by Sam Posted in Uncategorized

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