Subject: RE: click once, accept all licenses.
From: "Lawrence E. Rosen" <lrosen@rosenlaw.com>
Date: Sun, 11 Aug 2002 13:32:24 -0700

> Carol A. Kunze wrote:
>
> I don't think this can work.   A third party - in this case 
> the distributor
> - cannot cause a contract to be entered into between two 
> parties, one of whom is not "present."

This points out one of the confusing aspects of different open source
licenses.  Some licenses are sublicenseable, meaning that the
distributor has been given the right to offer licenses directly from the
distributor to the licensee.  Other licenses are non-sublicenseable,
meaning that a license passes directly from the original author/licensor
to the licensee, even though the distributor handles the distribution
and exchange of the software.

This is important for the legal principle of "privity," under which
parties can sue each other only if they are in privity with each other.
Here's a definition from Merriam-Webster:

   Privity: The direct connection or relationship 
   between parties to a contract or transaction 
   (as a purchase) (privity of contract) 
   - Formerly a suit for breach of warranty or 
   negligence arising from a product could only 
   be brought by a party to the original contract
   or transaction, and only against the party 
   (as a retailer) directly dealt with. Only these 
   parties had privity. Under modern laws and
   doctrines of strict liability and implied
   warranty, however, the right to sue has been
   extended to those, such as third-party
   beneficiaries and members of a purchaser's
   household, whose use of a product is foreseeable.

When you obtain software from a computer store, there is not an
in-person transaction between the original author/licensor and you.
Nevertheless, you have received a license to which you must assent (in
those cases a shrink-wrap license).  The licensor and the licensee can
sue each other over the license without interference by the distributor,
even though the licensor and licensee have never dealt directly with
each other.

I am now explicit in licenses I draft (see, e.g.,
www.rosenlaw.com/afl.html and www.rosenlaw.com/osl.html) that my
licenses are non-sublicenseable and are direct from the licensor to the
licensee.  [There is a separate legal issue in these licenses relating
to the licensing of derivative works; I do not address that point in
this email.]

The Click-Wrap Notice addresses the issue of privity in the following
ways:

* The first paragraph makes it clear that the user/licensee "will be
permitted to install and use the software programs included on this
distribution only if you click 'I AGREE' below."  The phrase "I AGREE"
is meant to indicate "your acceptance of the software programs included
on this distribution under the terms and conditions of the licenses
applicable to each of them," not acceptance of the Click-Wrap Notice
itself.  

* The first point is repeated in the second paragraph of the Click-Wrap
Notice, by which the user/licensee agrees that "the installation, use,
copying, modification, and distribution of this software may be
prohibited by law unless you agree to the applicable licenses."  This is
a restatement of basic copyright and patent law and, quite frankly, does
not need to be agreed with to be valid.  (This is one reason why the
Click-Wrap Notice is a *notice* rather than a *contract*.)  If the
user/licensee does not accept the license, he is subject to copyright
and patent law.  See, e.g., Sun v. Microsoft.  The notice merely informs
him of that legal fact.  The GPL relies on that primacy of copyright
law, which is why the Click-Wrap Notice does not need to be accepted in
order for the GPL to be effective; Eben Moglen has suggested that I add
a sentence to the Click-Wrap Notice to make this point clearer.  

* The user/licensee acknowledges that "SOME OR ALL OF THESE SOFTWARE
PROGRAMS ARE PROVIDED BY THE LICENSOR AS-IS, WITHOUT ANY WARRANTY,
INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, AND NON-INFRINGEMENT, AS STATED IN THE APPLICABLE LICENSES."
This makes it clear that the relationship (privity) is between the
user/licensee and the licensor.
 
* To protect the distributor in such situations, I believe it is also
important for the distributor to disclaim its own warranties (or, as an
alternative, to promise warranties that make its distribution more
valuable than the distributions of the same software by other
companies).  That is stated in the Click-Wrap Notice as follows: "[YOU
FURTHER ACKNOWLEDGE THAT THE DISTRIBUTOR IS PROVIDING THIS DISTRIBUTION
AS-IS, WITHOUT ANY WARRANTY, INCLUDE THE WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT.] [THE
DISTRIBUTOR'S WARRANTY TERMS FOR THIS DISTRIBUTION ARE SPECIFIED AT
www.xxxxxx.com.]"  This statement, expressing a relationship between the
distributor and the user/licensee, is a form of contract and therefore
*must* be agreed to.  In that sense, the Click-Wrap Notice can create a
contractual relationship, but it is one expressly between two parties
dealing directly with each other.

/Larry Rosen

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