Subject: Use Restrictions and UCITA
From: "Lawrence E. Rosen" <lrosen@rosenlaw.com>
Date: Thu, 8 Aug 2002 09:33:28 -0700

Carol,

You made two statements in recent emails with which I must take
exception.  The first dealt with the currently circulating proposals to
add an OSD provision to prohibit certain restrictions on use.  You
wrote:

  Why not subsume elements 5 and 6 of the OSD within
  a broader element which prohibits any discrimination
  against use, including use for any reason or by anyone.

Your proposal would prevent most patent grants in open source licenses,
because patents are granted for *use*, and all patent grants I've seen
so far are field-of-use restricted.  The open source community would be
far worse off without grants of patent rights.  

So, too, are defensive suspension provisions a (possible) restriction on
use in the event of a (future) patent lawsuit.  Is an export clause that
requires the licensee to obey his country's laws?  Is a requirement that
the user not remove copyright notices?  Is a government restricted
rights statement?  What about licenses like the AFPL that grant
different rights for R&D purposes?

And far more serious a problem would be some of the recent proposals to
impose source code reciprocity obligations when software is *used* to
deliver services or content over the Internet.  While such proposed
license provisions are couched in terms like "externally deploy," they
are indeed limitations on the right of a company to use the software
without actually copying and distributing it.  

We must be careful in drafting a use-related provision of the OSD so
that we don't kill the patient while we treat him.

Your second statement dealt with a new provision in UCITA.  You wrote:

   UCITA now acknowledges notice licenses based on IP
   rights that are not contracts and notes that UCITA
   does not apply to the terms of such a notice. 
   The language is:

   "Section 105(d) [Intellectual Property Notices]
   This [Act] does not apply to an intellectual 
   property notice which is based solely on
   intellectual property rights and is not part of
   a contract. The effect of such a notice is
   determined by law other than this [Act]."

This late addition to UCITA is a whitewash and legally meaningless.  It
would be like saying that UCITA does not apply to a first amendment
right, or to the NAFTA treaty.  As you know, federal copyright law
preempts state contract law, and so nothing "based solely on
intellectual property rights" (assuming UCITA means "copyright" or
"patent" but not also "trade secrets") could possibly be affected by
UCITA -- regardless of whether the UCITA drafters put their blessing on
it.

Furthermore, this clause is of no value whatsoever for the many
OSI-approved licenses that are unabashedly and unashamedly contracts.
While those licenses obviously grant licenses to copyrights (and some
also to patents), those licenses are written as contracts and are
intended by their drafters to be interpreted as contracts, and so would
fall under UCITA if that flawed law were ever to be adopted by enough
states to make its effects felt.

/Larry

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