Subject: The future of open source licenses
From: dlw <danw6144@insightbb.com>
Date: Thu, 26 Aug 2004 13:24:50 -0500

As I have studied open source licenses I have seen many examples of
contracts that are rock solid with respect to enforceability i.e. comply
with The Restatement (Second) of Contracts (all 385 sections God forbid).
Under contract law they seem solid.

When reviewing current preemption issues under Federal law I see an ominous
threat to open source licenses. The courts are becoming more and more
skeptical of the ProCD decision that abandoned the "extra element" 
requirement
for contracts involving copyrights.

The Sixth Circuit refused to adopt the ProCD holding:
"[37] In finding that appellants' state law contract claim is not 
preempted, we
do not embrace the proposition that all state law contract claims survive
preemption simply because they involve the additional element of 
promise. See,
e.g., Zeidenberg, 86 F.3d at 1454;[n6] Taquino v. Teledyne Monarch 
Rubber, 893
F.2d 1488, 1501 (5th Cir. 1990) (appendix). Under that rationale, a contract
which consisted only of a promise not to reproduce the copyrighted work 
would
survive preemption even though it was limited to one of the exclusive rights
enumerated in 17 U.S.C. § 106. If the promise amounts only to a promise to
refrain from reproducing, performing, distributing or displaying the 
work, then
the contract claim is preempted. The contrary result would clearly 
violate the
rule that state law rights are preempted when they would be abridged by 
an act
which in and of itself would infringe one of the exclusive rights of § 
106. As
the authors note in 1 Nimmer on Copyright § 1.01[B][1][a] at 1-22: 
"Although the
vast majority of contract claims will presumably survive scrutiny . . .
nonetheless pre-emption should continue to strike down claims that, though
denominated 'contract,' nonetheless complain directly about the 
reproduction of
expressive materials."
WRENCH LLC. v. TACO BELL CORP., 256 F.3d 446 (6th Cir. 2001)
http://laws.lp.findlaw.com/6th/01a0210p.html

The Indiana Supreme Court is in the Seventh Circuit where ProCD was decided.
The Indiana Court refused to adopt the ProCD holding --- a very unusual 
position
for a state court in the same Federal Circuit to assume. The Court took 
note of
"Nimmer on Copyright" as did the Sixth Circuit.

The Indiana Supreme Court held:
" ... In ProCD itself, the court found it “prudent to refrain from
adopting a rule that anything with the label ‘contract’ is necessarily 
outside
the preemption clause: the variations and possibilities are too numerous to
foresee.” Id. at 1455. Accordingly, although this case has been taken by 
some
to hold that any contract supplies the necessary “extra element,” we 
agree with
the courts that have rejected the view that ProCD stands for the universal
proposition “that no breach of contract action would ever be barred by § 
301 [of
the Copyright Act].” See, e.g., Ballas v. Tedesco, 41 F. Supp. 2d 531, 
536-37
n.14 (D.N.J. 1999). Further, to the extent ProCD suggests that no state
contract claim is preempted, that decision has met with harsh criticism. 
As one
leading commentator on copyright has noted, ProCD relied on three other 
cases,
each involving contract rights significantly broader than the simple 
promise not
to reproduce.1 Accordingly, “none supports the broad conclusion that the
Seventh Circuit ascribes to them.” 1 Nimmer on Copyright § 1.01[B][1][a], at
1-20. Thus, “pre-emption should continue to strike down claims that, though
denominated ‘contract,’ nonetheless complain directly about the 
reproduction of
expressive materials.” Id. at 1-22.
We conclude that federal law does not regard the rights the Greens seek to
vindicate under their agreement with Hendrickson as qualitatively 
different from
their federal copyright law rights. A naked promise not to infringe a 
copyright
does not provide the extra element necessary to avoid preemption because 
that
promise “is so inextricably entwined with the copyright that to permit the
promisee to sue upon it would undermine the preemption feature of the 
Copyright
Act.” Selby v. New Line Cinema Corp., 96 F. Supp. 2d 1053, 1060 (C.D. Cal.
2000). " --- See also note 1.
JAY GREEN, SR. and MARY GREEN v. HENDRICKSON PUBLISHERS, INC., (Supreme 
Court
of Indiana 2002)
http://www.in.gov/judiciary/opinions/wpd/06270201.trb.doc

The citations to Nimmer are ominous because the United States Supreme Court
constantly cites to Nimmer when deciding copyright cases and obviously 
holds the
Nimmer treatise in great respect.

I strongly suspect that the open source licenses that I have read will
ultimately be preempted for lack of an "extra element" should this question
reach the United States Supreme Court.

daniel wallace