Contemporary Intellectual Property, Licensing & Information Law

I truly enjoy it when a court catches an administrative agency expanding their scope to advocate a particular view of what economic or political life should entail, and then tells the agency that it cannot rewrite law to suit its own preferences.  That happened to the FTC in Rambus, Inc. v. FTC dealing with standards-setting.  In most cases, conduct by an individual firm in an SSO creates no antitrust issues even if the firm failed to disclosure patents or other potential proprietary rights related to the standard. The Rambus court reaffirmed this rule.

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Licensing unrelated to any intellectual property right has been a common practice for generations - since at least the time of the civil war.  But there are some who think of licensing as only appropriate if there are rights to license and that, if the rights do not exist, the contractual license terms must be abrogated.  This is wrong, but a recent case indicates that drafting agreements in this context must be done with care.

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The Supreme Court has accepted cert in the LG Electronics case.  The issue involves patent exhaustion doctrine.  This is an opportunity for the Court to affirm the right of a patent (or copyright) property owner to control the terms on which its invention or work is provided to the public – by license or sale.  But unless the rights-owner community pitches in, the Court may get it wrong.

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U.S. law has long held that non-negotiated, standard-form contracts are fully enforceable unless they smack of both procedural and substantive unconscionability. But the Ninth Circuit has embarked on a new path equating procedural unconscionability to mere use of standard forms without deception, and even though there is no lack of notice, no lack of choice and no other indicia of procedural unconscionability; other courts should reject this path and the Ninth Circuit should retract it.

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The idea that licensed software should be treated the same in law as a refrigerator that has been sold is absurd and has drawn increasing levels of rejection. Now, one state and two additional appellate courts have joined in understanding that software is intangible.

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The final version of the GPL 3.0 has been released. Third party patent holders should not care unless they themselves make and transfer works containing software licensed under this new license, but if they do, they may risk losing enforcement not only of current, but of future obtained patents.

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We wake up one morning and discover that a question we have been asking for the last decade or two may now be the wrong one.  The question was – how can we use law to enable businesses to use e-commerce? The question now seems to be: how can we shape law to support but to avoid over-regulating it?

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With the noise about the likely to fail GPL 3.0, it is easy to forget that we are still dealing today with existing GPL and its infectious brethren. The issue for those licenses is: can other software coexist with free and open source licenses? The answer is yes, but only with care.

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The Supreme Court has put to rest a lingering remnant of an age of hostility to IP - the fiction that a patent or copyright gives market power sufficient to support an antitrust tying claim when a license is conditioned on the licensee taking other property or rights.

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The ability to reverse engineer a product and the amorphous fair use privilege are not inviolate. They can be waived or supplanted by agreement. Contracts control subject only to ordinary standards that might find them anti-competitive or unconscionable in very limited cases.

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The Houston Intellectual Property and Information Law Institute has recently launched a new website providing information about selected cases and articles relating to licensing transactions.

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The desire of OSI to curb "license proliferation" by changing its policies and the effort of FSF to draft a new version of GPL should cause many to pause. Why are these changes being considered? Is it finally time to understand FSOS on terms other than the communities own, self-defined terms given that those terms may change over time? Is it time to recognize 'Free Software" and "Open Software" (FSOS) as inherently a heterogeneous phenomenon that is part of a continuum of software licensing styles, rather than entirely separate and apart from other means of software distribution? I think so.

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Are the GPL and other free software and open source licenses contracts? Although often-asked, this is the wrong question and easily answered. Pieces of paper and digital files are not, themselves, contracts. Thus, the answer is that none of these license forms standing alone are contracts. But, of course, there is more to it than that.

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The vast majority of courts enforce shrinkwrap and "clickwrap" licenses even though the individual terms are not negotiated and even if the licensee did not read them. Since that is true, and has been true for a number of years in a number of settings, it is interesting still to see statements like "shrinkwrap contracts are unenforceable." The statement and others like it are simply wrong as a matter of law and of practice. There are few exceptions to enforceability in the cases and they most often can be explained by flaws in how terms were presented.

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