Settlement in benchmark case means FOSS licenses can be enforced

There will be no further legal action in a case whose outcome was already upheld in August 2008 by a US appeals court. As a result, legal precedent has now been made permanent for the right of open source software developers to seek monetary damages for infringement of their copyrights, even if their products were being distributed freely.

Settlement documents in the case of Jacobsen v. Katzer were filed early this morning in US District Court in Northern California, as Linux Foundation attorney Andrew Updegrove informed Betanews just hours later. A pending appeal of the US Court of Appeals for the Federal Circuit ruling last August is now terminated. In the judgment that was being appealed, the Circuit panel ruled that the right to declare software free, could be given monetary value: "There are substantial benefits, including economic benefits, to the creation and distribution of copyrighted works under public licenses that range far beyond traditional license royalties," that court ruled. "For example, program creators may generate market share for their programs by providing certain components free of charge. Similarly, a programmer or company may increase its national or international reputation by incubating open source projects. Improvement to a product can come rapidly and free of charge from an expert not even known to the copyright holder."

The case itself was somewhat simple: Model railroad software developer Robert Jacobsen discovered that a commercial railroad parts maker was using his software without his permission, his license, or his original copyright attached. The point of contention had been whether the copyright that protects open source software is entitled to the same monetary evaluation as the copyright for commercial software. It was a fair question, since judgments in commercial software copyright violation cases are typically evaluated based on how much revenue the software would have earned in a normal market, had copyright not been violated.

Knowing that the Appeals Court had decided open source software was entitled to something, the remaining question was, how much? Rather than leave that for a judge or panel of judges to determine -- especially since luck appeared to be on the plaintiff's side up to now -- parties agreed to set the precedent themselves.

The terms of the settlement award the plaintiff $100,000 plus costs, payable in installments over an 18-month period. Though arbitration is still binding with regard to ensuring payments are made, both sides have agreed to dismiss any pending and future action on this matter.