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Marc Temin, Foley Hoag LLP ABA Litigation Section, Copyright Litigation Subcommittee, May 6, 2010 - page 9 / 12





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Graham v. James, 144 F.3d 229 (2d Cir. 1998) – nonpayment of license royalties, due after software was turned over to licensee, constitutes breach of covenant, not condition, of license agreement -- presumption under New York law that contract terms are covenants, not conditions -- material breach entitles licensor to rescind license, but rescission requires affirmative step by licensor – so breach of contract but no copyright infringement

Jacobsen v. Katzer, 535 F.3d 1373 (Fed. Cir. 2008)


Defendant breached terms of open source Artistic License by using parts of software (definition files) in its software without (i) including authors’ names, (ii) copyright notices, (iii) references to files with terms of Artistic License, (iv) identification of original source of copied files (v) description of changes from the original


Artistic License provides “The intent of this document is to state the conditions under which a Package may be copied” and notes that the rights to copy, modify, and distribute are granted “provided that” the conditions are met. Under California contract law, “provided that” typically denotes a condition.


Court held that the “clear language of the Artistic License creates conditions to protect the economic rights at issue in the granting of a public license. These conditions govern the rights to modify and distribute the computer programs and files included in the downloadable software package. The attribution and modification transparency requirements directly serve to drive traffic to the open source incubation page and to inform downstream users of the project, which is a significant economic goal of the copyright holder that the law will enforce. Through this controlled spread of information, the copyright holder gains creative collaborators to the open source project; by requiring that changes made by downstream users be visible to the copyright holder and others, the copyright holder learns about the uses for his software and gains others' knowledge that can be used to advance future software releases.”

and that CHE did not destroy the copy of the maintenance code after its service and repair session was completed. 431 F.3d at 1321-22. In response to the dissent and a petition for rehearing, the court issued another opinion denying the petition, emphasizing again that because of the way Storage Tech had written the maintenance code intertwined with the functional code, it must be loaded into RAM in order for the system to be activated. Storage Tech. Corp. v. Custom Hardware Eng'g & Consulting, Inc., 431

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    3d 1374, 1376 (Fed. Cir. 2005).

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    License Conditions and Covenants



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Marc Temin, Foley Hoag LLP ABA Litigation Section, Copyright Litigation Subcommittee, May 6, 2010

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