Subject: Discussion of OSL/AFL version 2.1 section 10
From: "Lawrence E. Rosen" <lrosen@rosenlaw.com>
Date: Wed, 24 Mar 2004 22:39:17 -0800

 Wed, 24 Mar 2004 22:39:17 -0800
In a previous email to license-discuss, I submitted version 2.1 of the Open
Software License (OSL) and the Academic Free License (AFL) for OSI approval.
This is an explanation of the change. I'm purposely starting this separate
thread so that we can separate the OSI approval process (based on
compatibility with the OSD) from the policy concerns that prompted this
change.

The main criticism of section 10 of OSL/AFL version 2.0 is that it creates a
substantial business risk to licensees who own patents. If they someday seek
to assert one of their patents against the licensor, they may lose the right
to the software being licensed even if the patent is unrelated to that
software. They risk non-enforceability of their present patents - and even
perhaps their future patents - if they someday sue a licensor for patent
infringement relating to any software. That risk cannot easily be measured.

This concern was most strongly expressed in an email from Scott Peterson of
HP. Scott didn't actually name the OSL/AFL version 2.0. He was most
concerned at the time about a proposed Apache license (since modified to
satisfy HP's objection) and the Mozilla Public License (see MPL sections 8.2
and 8.3) and Common Public License (see CPL section 7). I recognized that a
similar problem exists in several other approved commercial open source
licenses from companies like IBM, Nokia, Apple and others. The OSL/AFL
version 2.0, which contains a patent termination provision I had
intentionally modeled on the one in the IBM Public License, had the same
"problem." (Caution: There are subtle differences among these license
termination provisions.) I contacted Scott directly to understand his
concern. I have since discussed this privately with attorneys for several
other companies. I agree with them that a change is needed to make these
licenses friendlier to companies that own large patent portfolios. 
 
The problem lies in subsection (i) of section 10 in OSL/AFL version 2.0 (and
in similar sections in the MPL, CPL and other licenses). Here for easy
reference is the provision from the earlier version of the license:  
 
   PREVIOUS VERSION OSL/AFL 2.0:
   10) Termination for Patent Action. This License shall terminate
   automatically and You may no longer exercise any of the rights 
   granted to You by this License as of the date You commence an 
   action, including a cross-claim or counterclaim, for patent 
   infringement (i) against Licensor with respect to a patent 
   applicable to software or (ii) against any entity with respect
   to a patent applicable to the Original Work (but excluding 
   combinations of the Original Work with other software or hardware).

Because of the phrase "patent applicable to software" in subsection (i), the
licensor is conditioning the license for this Original Work on the
licensee's not suing for patent infringement of any patent applicable to any
software. For a licensee with a big patent portfolio, there is no easy way
to assess that cost or limit that risk. Such a company may come to discover
that important unrelated patents in its portfolio have been emasculated
because the company has in-licensed some software under an open source
license containing this section 10. The company's patents relating to other
software can no longer effectively be asserted against infringers who happen
to be licensors of valuable open source software. Better, those companies
say, given the uncertainty of the risk, not to accept this software under
such licenses in the first place.
 
One of the difficult challenges in any license - open source or proprietary
- is to balance the interests and rights of licensees who own patents with
the interests and rights of licensors who own software. Parties to software
licenses traditionally negotiate license terms and conditions and, through
the process of negotiation, some acceptable balance is achieved between the
interests of the licensor and licensee. But mass market software licenses
are not negotiated and so, when you acquire Windows or Linux, for example,
you take the software under its license or leave it. It requires a
sophisticated licensee to stand up to a mass market software license and
say, "This isn't a fair provision, and I won't accept the software under
those terms."

Here again for easy reference is the new section 10:
 
   NEW VERSION OSL/AFL 2.1:
   10) Termination for Patent Action. This License shall terminate
   automatically and You may no longer exercise any of the rights 
   granted to You by this License as of the date You commence an 
   action, including a cross-claim or counterclaim, against Licensor
   or any licensee alleging that the Original Work infringes a 
   patent. This termination provision shall not apply for an action
   alleging patent infringement by combinations of the Original 
   Work with other software or hardware. 
 
The new section 10 defensive termination provision terminates the license to
this Original Work only if the licensee asserts a patent claim against this
Original Work. The condition relating to unrelated software is removed. The
termination provision now applies if an infringement lawsuit is filed
against Licensor or any licensee; the previous version included any entity. 

These differences meaningfully reduce the scope of the patent termination
provision and make it friendlier to patent-owning companies. That's the
whole point. Such companies can now feel more comfortable in-licensing open
source software. The community will grow and more open source software will
be created.
 
Private correspondence that I have received from several companies reassures
me that companies and open source projects will all feel more comfortable
with this compromise patent termination provision in OSL/AFL version 2.1.

I welcome public comments on license-discuss or private emails to me.

Lawrence Rosen
Rosenlaw & Einschlag, technology law offices (www.rosenlaw.com)   
General counsel, Open Source Initiative (www.opensource.org)
3001 King Ranch Road, Ukiah, CA 95482
707-485-1242 * fax: 707-485-1243
lrosen@rosenlaw.com

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