Bare Licenses

I now address a topic that is a kind of Heisenberg Uncertainty Principle of open source: Are open source licenses bare licenses or are they contracts? The answer to this question depends on how you look and what you're trying to measure. Open source licenses, it turns out, can be both bare licenses and contracts. Adding to the confusion, the parties to open source licenses are typically referred to as licensor and licensee regardless of whether the licenses are bare licenses or contracts.

Among the examples I cited in the previous section was one about drivers' licenses. A driver's license is issued by a government agency, but it does not constitute an agreement of any sort between the driver and the agency. There is no contract; the driver's license is merely a permission slip. The licensor has made no promises and neither has the licensee.

Private parties also can grant licenses. In the software licensing context this is what we mean:

Bare license: A grant by the holder of a copyright or patent to another of any of the rights embodied in the copyright or patent short of an assignment of all rights. (Merriam-Webster's Dictionary of Law 1996.)

It is possible for a copyright owner to grant a license to copy, modify, and distribute software without signing a contract between the parties. The argument goes like this: Since those exclusive rights cannot be exercised without the permission of the copyright owner, a licensee must either obey the terms of the license or not exercise the rights. Anything else is copyright or patent infringement.

Here is how one open source license, the GPL, expresses this point:

You are not required to accept this License, since you have not signed it. However, nothing else grants you permission to modify or distribute the Program or its derivative works. These actions are prohibited by law if you do not accept this License. Therefore, by modifying or distributing the Program (or any work based on the Program), you indicate your acceptance of this License to do so, and all its terms and conditions for copying, distributing, or modifying the Program or works based on it. ( GPL section 5.)

This reference to acceptance in the GPL involves a concept from contract law. Quite simply, a contract cannot be formed unless there is both an offer (from the licensor) and acceptance (by a licensee). Licensees are not required to accept the GPL, and if they don't accept, a contract is not formed. But a bare license has been granted ”a bare license that ceases to exist if the terms and conditions are not obeyed.

The law governing an open source license in the absence of a contract is the Copyright Act, Title 17, of the U.S. Code, the equivalent laws of other countries, and international copyright treaties . To the extent that patent rights are implicated, the law governing the license is the Patent Act, Title 35, of the U.S. Code, the equivalent laws of other countries , and international patent treaties.

Those laws forbid anyone from exercising the exclusive rights of a copyright or patent owner without a license. If such a person doesn't have a license, he is an infringer subject to substantial penalties. (See Chapter 12 for a discussion of open source litigation.)

One problem with treating open source licenses as bare licenses is that intellectual property law does not say much about how to interpret license terms. Attorneys and courts are familiar with licenses that are contracts and they regularly apply the well-developed law of contracts to handle issues of license interpretation. In the absence of contract law, there is no ready framework for license language interpretation.

This practical interpretation problem can take many forms. When a license like the GPL doesn't even demand acceptance, can a licensor assume that licensees have agreed to all of those terms? What about terms that are inconsistent with consumer protection laws such as certain warranty disclaimers? What about terms in a license that are inconsistent with the definitions of terms of art in copyright law, such as derivative work or distribution? If there is no express agreement by the parties to a common set of terms and conditions, can the licensor's interpretation of the terms and conditions be enforced against the licensee? Did the licensee accept the differing definitions?

There is no body of cases and statutes to help us answer those questions. In the absence of a contract, the terms and conditions of a bare license may be subject to varying court interpretations around the world. Some legal scholars even argue that terms and conditions of bare licenses like the GPL are completely unenforceable, although the legitimacy of the GPL has never been tested in any court. Neither have any other open source licenses. This vague uncertainty hovering over bare licenses like the GPL has not been much of an obstacle to the adoption of GPL-licensed software, but it is unpleasant for attorneys nonetheless.

Another practical problem with bare copyright licenses is that only the owners of copyrights and patents can enforce those copyrights and patents in court. The cause of action for a refusal to comply with the terms and conditions of a bare copyright or patent license is just infringement rather than also breach of contract. This causes open source distributors to concern themselves with "who owns the copyrights or patents," rather than "who licensed this software." (This topic is also discussed more fully in Chapter 12.)

A third problem with bare licenses is that they may be revocable by the licensor. Specifically, a license not coupled with an interest may be revoked . The term interest in this context usually means the payment of some royalty or license fee, but there are other more complicated ways to satisfy the interest requirement. For example, a licensee can demonstrate that he or she has paid some consideration “a contract law term not found in copyright or patent law “in order to avoid revocation. Or a licensee may claim that he or she relied on the software licensed under an open source license and now is dependent upon that software, but this contract law concept, called promissory estoppel, is both difficult to prove and unreliable in court tests. (The concepts of consideration and promissory estoppel are explained more fully in the next section.) Unless the courts allow us to apply these contract law principles to a license, we are faced with a bare license that is revocable.

Most of those issues about bare licenses have never been addressed directly in a court so lawyers have no good way to predict how they will ultimately be answered . In the absence of a court decision interpreting bare open source copyright licenses, distributors of software under such licenses should ask their attorneys whether they have adequate protection.

In my opinion, it is safer for a licensor and his licensees to enter into enforceable contracts. That usually doesn't require any changes to the license text; it only requires that the license be offered and accepted as a contract, and that there be an understanding between the parties about the consideration paid for the license.