6.5 The "Negative Effects" of Open Source and Free Software Licensing
Another effect of open source and free software licensing that has already been touched upon is the obstacle that violations of applicable licenses create for the violator of that license. Such violators will find that their own ability to enforce copyrights that arise out of or are related to infringements of the terms of an open source or free software license is seriously compromised. Violations of such licenses put the violators at risk of surrendering the benefits of any actual, copyrightable work that they may have invested in modifying or improving a licensed program.
Taking again one of the least restrictive examples of open source licenses as an example, it becomes apparent that violation of its terms undermines any future copyright enforcement relating to the modified work. The MIT License, described in Chapter 2, imposes the following restriction on licensees:
The above copyright notice and this permission notice shall be included in all copies or substantial portions of the Software.
This example is equally applicable to the other open source and free software licenses already described in this book, although, obviously, what constitutes such a violation of the license will vary.
Assume that XYZ Corporation develops software based on a program called Duchess, licensed under a license with terms identical to the MIT license. XYZ incorporates large amounts of the Duchess code into its own program, called Vulcan, which is a use clearly permitted by the Duchess license. For purposes of promotion, however, XYZ decides that it would be better served in marketing Vulcan without acknowledging the efforts of the creators of Duchess and launches Vulcan into the market under a proprietary license without including the required copyright and permission notices. After all, XYZ reasons, Vulcan will be released under a proprietary license, without giving anyone else access to Vulcan's source code. The operations and appearance of Vulcan are sufficiently distinct from those of Duchess that it is not apparent that Vulcan is based on Duchess and the functions it performs are dissmilar to those of Duchess. At the time of the software's launch, it seems remote at best that it will ever come to light that XYZ has infringed upon the Duchess copyright by ignoring the MIT License's requirement that the copyright and permission notice be included in Vulcan.
Years pass, and XYZ prospers thanks to sales of Vulcan. One day, another software company, ABC Corp., brings to market a new program, Virgo, that fulfills the same functions as Vulcan but at a lower price. This Virgo software is also based on the Duchess code, but it complies with the Duchess license's requirement that it provide the copyright and permission notice. Virgo, however, has several features that mirror those in Vulcan strongly suggesting to XYZ that a substantial portion of Virgo's code was taken directly from Vulcan. Moreover, approximately a year before Virgo's release, ABC had hired several of XYZ's programmers who had access to Vulcan's source code.
XYZ now hires lawyers and seriously considers bringing a copyright infringement suit against ABC for infringing its copyright to Vulcan. Seeing Vulcan's market share erode rapidly to Virgo, XYZ begins drafting a complaint against ABC, the first step in initiating litigation. But in the midst of this process, XYZ's lawyers discover XYZ's failure to comply with the Duchess license. They advise XYZ not to bring the lawsuit.
XYZ asks why. The answer is simple. By failing to comply with the requirements of the Duchess license, XYZ has seriously compromised its ability to enforce its copyright to those portions of Vulcan that really are XYZ's own work. Moreover, upon the discovery of XYZ's violation of the Duchess license, Duchess's creators, could sue XYZ for infringement, and one of the potential measures of damages in such a case would be all, or a substantial portion, of the profits that XYZ had realized through sales of Vulcan.
The first result, the compromising of XYZ's ability to enforce its own copyright claims, comes from the equitable doctrine of unclean hands. This doctrine holds that a party seeking relief from a court should have engaged in the transaction from which the lawsuit derives fairly and equitably. Following this doctrine, federal courts have held that a copyright claim can be defeated if that copyright was obtained unfairly or inequitably. While not a foregone conclusion, if XYZ brought such an infringement suit, it would almost certainly be discovered that XYZ itself had infringed on the Duchess copyright by distributing Vulcan without complying with the license. This could result in the invalidation of XYZ's copyright to Vulcan. Having lost the copyright, XYZ would lose its exclusive right to distribute Vulcan.
 Wrongful action taken in securing a copyright can invalidate that copyright. See Lasercomb Am., Inc. v. Reynolds, 911 F.2d 970, 977-79 (4th Cir. 1990). In at least one case, Ashton-Tate had sued Fox Software and the Santa Cruz Operation, alleging that the defendants had infringed upon its dBase line of programs with the sale of their competing FoxBase software, a federal court found that Ashton-Tate had obtained its own copyright deceptively by failing to inform the Copyright Office that its own software was based in significant part on JPLDIS, a public domain program. As a result, the court voided Ashton-Tate's copyright and dismissed the suit. While the court soon reversed itself, the potential for such a severe sanction is real.
The second result, following naturally from the first, is that upon the disclosure of XYZ's violation of the Duchess license, Duchess's creators could sue XYZ for infringing the Duchess copyright. Having disregarded the terms of the license, XYZ is in the same position as any other infringer. One possible remedy for such a violation is a measure of damages called unjust enrichment. This measure would award in damages those profits that could reasonably be said to flow from XYZ's infringement of the Duchess copyright; a measure that could result in XYZ having to pay over a substantial portion of the profits it earned since it had begun to distribute Vulcan. Again, while such a result is not a foregone conclusion, it is an outcome that XYZ would have to consider in deciding whether to bring a lawsuit.
Given the reasonable possibility that one or both of these results would flow from the lawsuit, either of which would be sufficient to put XYZ out of business, and given the uncertainty involved in bringing a copyright infringement action under even the best of circumstances, the lawyers see no alternative to foregoing the lawsuit. XYZ simply must compete in the marketplace the best it can with the potentially infringing Virgo program. XYZ's lawyers would also likely recommend that XYZ quietly add the permission and copyright notices required by the MIT license to avoid future infringement.
Thus, the failure to comply with the Duchess license, while providing potentially significant short-term benefits to XYZ, ultimately threatened the viability of XYZ's ability to continue an ongoing operation. While such license violations may never be directly discovered, they significantly compromise, as just described, the violator's ability to enforce its own copyright, with potentially dire consequences.
The consequences that flow therefrom can be even more serious depending on the license being violated. Under a "copyleft" license like the GPL, a company like XYZ would be in an even more tenuous position. As described in Chapter 3, "copyleft" is a variety of the generational limitation described in Chapter 1, which requires that derivative works be subject to the terms of the GPL and only the terms of the GPL. This requirement is embodied in Section 2(b) of the GPL.
2. You may modify your copy or copies of the Program or any portion of it, thus forming a work based on the Program, and copy and distribute such modifications or work under the terms of Section 1 above, provided that you also meet all of these conditions:
[. . .]
b) You must cause any work that you distribute or publish, that in whole or in part contains or is derived from the Program or any part thereof, to be licensed as a whole at no charge to all third parties under the terms of this License.
The GPL explicitly provides that failure to comply with the terms of the license voids any rights granted by the license.
4. You may not copy, modify, sublicense, or distribute the Program except as expressly provided under this License. Any attempt otherwise to copy, modify, sublicense or distribute the Program is void, and will automatically terminate your rights under this License. However, parties who have received copies, or rights, from you under this License will not have their licenses terminated so long as such parties remain in full compliance.
Assuming that the Duchess program from the previous example were licensed under the GPL instead of the MIT License, these provisions of the GPL License would place a company in the position of XYZ in an even more precarious position. If XYZ takes the position that it is not bound by the GPL License, it has no right to incorporate code derived from it in its own program, Vulcan. If XYZ takes the position that it is bound by the GPL License, it must cease distributing Vulcan under anything but the GPL License and must also concede that its previous distributions under a non-compliant license constituted an infringement of the Duchess copyright. In such a scenario, XYZ is in an even worse position that it would be in the MIT scenario. Unlike the MIT License, there is no "quiet" way for XYZ to ensure compliance with the terms of the Duchess license in the future. XYZ's lawyers are in the difficult position, once the infringement has come to light, of informing XYZ that it must either cease distribution of Vulcan or immediately release it under the GPL (and only the GPL) License. Because criminal as well as civil penalties attach to copyright infringement, the continued distribution of Vulcan under a proprietary license could potentially involve XYZ's lawyers in XYZ's own wrongdoing, a result most lawyers seek to avoid.
 XYZ's lawyers are not obligated to inform anyone of XYZ's wrongdoing and in most jurisdictions would be barred, by the attorney-client privilege, from doing so. However, continuing to aid an ongoing criminal violation is both unethical and dangerous.
While only examples using the MIT and GPL Licenses are described, similar results would follow from distributions of licensed software inconsistent with the terms of the applicable open source or free software license.