GPL survives antitrust challenge - again

Posted Nov 17, 2006 2:02 UTC (Fri) by bojan (subscriber, #14302) [Link]

Have a look at footnote 80 of this document written by FSF:

http://gplv3.fsf.org/rationale

It is an explanation of the difference between "charging for distribution of copies" (judge addressed this in Red Hat's example, which I quoted) and "collect royalties from third parties" (judge addressed this with "limiting reproduction" comment, which I quoted; to limit reproduction, one needs a licence).

To avoid confusion entirely, GPLv3 draft has this text:

> Therefore, you may not impose a license fee, royalty, or other charge for exercise of rights granted under this License.

Licence is a document used for the purposes of "limiting reproduction". It is an authorisation, as defined in the copyright law. A fee (charge, payment - whatever you want to call it) is a licensing fee there. That is copyright royalty - a *mandatory* fee, that must be paid for reproduction every single time a copy is made - not something you can donate if you feel like it.

And just to be clear, a one-off fee charged for a copy of some work, accompanied by a licence to make as many copies as you like is not a royalty payment. It is quite obviously a payment for that one copy (since you can make as many as you like later for nothing).

From that footnote 80, it is clear what FSF have in mind when addressing GPL covered software and royalties:

> We therefore have added a new explicit prohibition on imposition of licensing fees or royalties in section 10. This section is an appropriate place for such a clause, since it is a specific consequence of the general requirement that no further restrictions be imposed on downstream recipients of GPL-covered code.

The "general requirement that no further restrictions be imposed" applies equally to GPLv2, which was under consideration in the ruling.

Also, footnote 41 is instructive:

> The original wording of this clause was meant to make clear that the GPL permits one to charge for the distribution of software. Despite our eforts to explain this in the license and in other documents, there are evidently some who believe that the GPL allows charging for services but not for selling software, or that the GPL requires downloads to be gratis. We referred to charging a “fee”; the term “fee” is generally used in connection with services. Our original wording also referred to “the physical act of transferring.” The intention was to distinguish charging for transfers from attempts to impose licensing fees on all third parties. “Physical” might be read, however, as suggesting “distribution in a physical medium only.” In our revised wording we use “price” in place of “fee,” and we remove the term “physical.”

I'll refer to this footnote later on.

Now, back to the Linux kernel example. Say Linus distributes a copy of Linux to me for $1,000. The royalty payment I need to make to him is exactly $0 - that's because he's giving me (free of charge) a licence to make as many copies as I like (i.e. he's *not* "limiting reproduction in order to collect a fee" - exactly what the judge is referring to; if he was, I wouldn't get a free of charge, unlimited licence, now would I?). However, that particular copy (obtained either as a download, on CD etc.) cost $1,000.

If I then make a copy of this kernel, I need to pay Linus $0 in royalties. If I patch the kernel and then make a copy, I still need to pay $0 to Linus.

If I sell a copy that I made to you for $10,000, you also pay $0 royalty. In other words, I also cannot be "limiting reproduction in order to collect a fee", because the GPL explicitly prohibits that.

So, let me explain judges words once more:

> Copyright law, usually the basis of limiting reproduction in order to collect a fee, ensures that open-source software remains free: any attempt to sell a derivative work will violate the copyright laws, even if the improver has not accepted the GPL.

- "Copyright law": the lever used for conspiracy by IBM and others, through the copyright licence that GPL is

- "usually the basis of limiting reproduction in order to collect a fee": this is what most copyright holders do - charge licensing fees (royalties) for each reproduction; mentioned to contrast that behaviour with what GPL requires - no limited reproduction, no collection of a fee for each reproduction

- "ensures that open-source software remains free": open-source means GPL licensed software here - just one example of liberal use of language by the judge; also means, clever hack boys

- "any attempt to sell a derivative work": meaning, if you think you can charge licensing fees for your bits, think again, you are distributing parts of the original work too and GPL doesn't allow charging fees for each reproduction, so you either license the lot free of charge or see below

- "will violate the copyright laws": GPL is a copyright licence and its power comes from the copyright law; it comes into effect when acts from copyright law are performed (copying, distribution, creation of derivatives etc.)

- "even if the improver has not accepted the GPL": if you think you can outsmart the GPL by saying you haven't accepted it, you will face the harsh reality of bare copyright law

As for terminology used by the judge, he knows that "selling software" for most people and lawyers means "charging licensing fees", not "selling one copy for a fee, accompanied by free of charge licence to make as many copies as you like". If you examine carefully his statement, "limiting reproduction in order to collect a fee" is the definition of "sell" in that sentence, as this is the very reason "any attempt to sell a derivative work" is not possible - since GPL doesn't allow "limiting reproduction in order to collect a fee".

He even gets away with calling GPL licensed software open source software, although we all know that there are many other examples of open source software licences which don't facilitate copyleft. But, he's the judge - he gets to do those things.

To put things in context of terminology used in this ruling, Microsoft is in the busines of selling software. Linus is not. Neither is Red Hat. That's because Microsoft is "limiting reproduction in order to collect a fee" and Linus and Red Hat are not. Microsoft is collecting royalties, Linus and Red Hat are not.

Now, I'm pretty sure that if I want a boxed copy or RHEL, I have to pay the money to Red Hat. And the judge explicitly says that. However, Red Hat are not "selling software", because they are not charging licensing fees by "limiting reproduction in order to collect a fee". The judge quite clearly contrasted that in his statement. Otherwise, they would be violating the copyright law, according to his statement, since they "attempt to sell a derivative work". And yet, he never said they are violating the law.

So, what FSF calls "selling software" in footnote 41 when they refer to selling copies, is not what judge had in mind in the ruling, as Red Hat would clearly fall prey to the GPL and the copyright law. So, it is not possible that the judge thinks that "no charge" refers to "selling copies of GPL licensed software". Therefore, he must understand that charging for copies of GPL licensed software is OK.

The only other possible interpretation left is as I described - he means that charging royalties for GPL licensed software is not permitted.

But, as I said before, you can believe what you like. Free country and all that :-)