Open Source and Patents

A patent gives its owner the right to exclude others from making, using, and selling the claimed invention. Thus, patent rights give a patentee great control over who uses his invention. In contrast, the basic idea behind distributing software under an Open Source license is that anyone should be able to view and use the source code of the computer program and modify it for his own use. (The source code is the human readable version of the software.) A business decision to distribute software under an Open Source license affects how the author of the software may be able to use his patent rights, but does not affect whether he can or should apply for patent protection.

Defining Open Source Licenses

A large number of licenses are categorized by the term Open Source (see www.opensource.org/licenses/) and each has its own quirks. The Open Source license that I am asked about most frequently is the Gnu Public License (the gpl). A copy of the gpl can be obtained at www.opensource.org/licenses/gpl-license. This article focuses mainly on the gpl.

The gpl takes the Open Source concept that people should be able to view and use source code one step further, by requiring that any software that uses gpl'd code also be distributed under the gpl. Thus, the gpl'd software “infects” all software into which it is placed and forces it also to be distributed under the gpl. For this reason, most commercial code developments do not use gpl'd code developed by others since doing so would force distribution of the source code for the commercial product. (For completeness, I note that there is also a version of the gpl called the Library (or Lesser) gpl that does not have the infection property.)

Certain products, such as the Linux operating system, are distributed under the gpl. Companies and individuals can obtain the source code for the Linux operating system and can modify the code as long as they distribute the modified code under the gpl as well.

Patent Rights of the Author or Modifier

If a company plans to distribute its software under the gpl, does it make sense to obtain patent protection as well? Open Source licenses, and the gpl in particular, do not bar a software author from obtaining patent protection on inventive aspects of his software. Nor does the gpl bar a programmer from including his patented features when he modifies someone else's software previously distributed under the gpl.

But is patented open source code really any different from patented proprietary code? A company that distributes an Open Source program cannot sue its customers, but neither can a company that distributes under a proprietary license. Customers have either an explicit or implied license to the code they receive through a purchase. The difference between Open Source programs and proprietary programs lies in the fact that a distributee under some Open Source licensees, such as the gpl, cannot control what happens to the software after he distributes it. For example, Company A can distribute software under the gpl to Company B. Company B can then distribute the software to anyone, who can subsequently also distribute it to anyone. Another difference is that, under the gpl, Company A may not limit to whom Company B can distribute.

It seems clear that an author or modifier who distributes software under the gpl cannot assert his patent rights against subsequent users and redistributors of the gpl'd software. Thus, under the gpl, patent rights cannot be used as an offensive or defensive weapon against users and redistributors of the gpl'd code. When software is distributed under the gpl with the understanding that anyone can copy and modify it (as long as they then distribute under the gpl) there can be no argument that a patentee has the right to exclude others from making, using or selling.

Why then, would anyone want to obtain a patent on an invention that is going to be distributed under the gpl? There are several reasons: 1) the author may plan to license the patent to others to produce a revenue stream; 2) the author may want to assert his patent rights against redistributors who do not conform to the gpl license terms (for example, by failing to redistribute under the gpl); 3) the author may want to have patent rights to use as an offensive or defensive weapon against infringers who are not using the gpl'd software; and 4) the author may plan to also redistribute a non-gpl'd version of the software. For example, while the author may not use his patent rights against people who receive and redistribute his gpl'd software, the author can use these rights against his competitor who sells a competing product that incorporates the invention.

The gpl only precludes the patentee from asserting his rights against people who are practicing the invention by using his gpl'd code. People who independently create other software are not subject to this license. As an aside, it seems that the author could assert his patent rights against a competitor who is releasing independently developed software under the gpl! The fact that the author himself distributed under the gpl is irrelevant, since he is not asserting his patent rights against users of his own distribution. The author has not given permission for his competitor to use the patented technology.

Existing Licenses

What if the original author or modifier is a patent licensee under an existing license? For example, the original author might have a license from a third party for an invention included in the gpl'd software. If the author has been granted the right to sublicense, he may be able to include the patented technology in his gpl'd code since he can give a sublicense to the gpl'd code users. Conversely, of course, the author cannot distribute his software if he cannot sublicense subsequent users. The gpl addresses this issue, saying:

If you cannot distribute so as to satisfy simultaneously your obligations under this License and any other pertinent obligations, then as a consequence you may not distribute the Program at all. For example, if a patent license would not permit royalty-free redistribution of the Program by all those who receive copies directly or indirectly through you, then the only way you could satisfy both it and this License would be to refrain entirely from distribution of the Program.

Thus, if an author does not have the right to sublicense or if the sublicense would require the payment of royalties, the author must chose between not including the patented technology or not releasing the software. This raises the question whether companies planning to distribute gpl'd code should consider whether the code is subject to existing patent licenses. If so, and if sublicensing rights cannot be obtained, the patented technology should not be included in the distribution. If there are existing formal license agreements that cover technology in software that a company plans to distribute under the gpl, the existing license should be carefully reviewed to determine whether the license includes the right to sublicense.

What Is the Limit of an Implied License under the GPL?

As discussed above, users and modifiers of gpl'd software have at least an implied license to use patented inventions included in the gpl'd software. The users do not, however, have a blanket license to use the invention in other circumstances. Thus, if a programmer who uses gpl'd software independently develops software that uses the patented invention, he arguably does not have a license to use the invention in this manner. If a user copies a portion of the gpl'd software and includes it in this software, he may arguably have a license since his new software is based on gpl'd software.

Patents in Other Countries

There is no such thing as a worldwide patent. Patents are granted on a country-by-country basis. The gpl states:

If the distribution and/or use of the Program are restricted in certain countries either by patents or by copyrighted interfaces, the original copyright holder who places the Program under this License may add an explicit geographical distribution limitation excluding those countries, so that distribution is permitted only in or among countries not thus excluded. In such case, this License incorporates the limitation as if written in the body of this License.

The gpl seems to be referring to the situation where the patent is owned by a third party. It does not address the possibility that a patent holder and author of the program are the same. This assumption seems correct since, if the patent holder and author are the same entity, the users of the program would have an implied license to use the patented invention and would have an implied license to distribute and modify the software since this is the whole purpose of the gpl. Under those circumstances, the distribution or use would not be restricted.

Patent Damages

Damages for patent infringement are usually based on some variation of a reasonable royalty or lost profits. A company that chooses to release open source software needs to factor potential damages that it might owe for patent infringement into its risk-benefit equation. For example, suppose Company X distributes a software product under the gpl. It distributes only one copy to a trusted customer. The gpl does not allow Company X to place limitations on the customer's later redistribution of the product. Therefore, the customer would be within its rights to re-release the product (still under the gpl) to thousands of additional customers. Company X has no way of foreseeing how many downstream entities will receive the software. If Company X is sued for patent infringement, an analysis based on lost profits might consider the thousands of downstream customers in either the lost profits or reasonable royalty calculation. It is possible that a court would take into consideration whether Company X knew or could foresee the later distribution, but there is scant case law on the question.

In Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538 (Fed Cir. 1995), the court stated that “if a particular injury was or should have been reasonably foreseeable by an infringing competitor in the relevant market, broadly defined, that injury is generally compensable absent a persuasive reason to the contrary.” Whether redistribution of open sourced software to additional customers was foreseeable will probably turn on the specific facts of the case. For example, it may be that Company X knew of the planned redistribution. Or it may be that Company X believed that its customer was only going to use the software internally. Whether a court will take such facts into consideration in a patent case involving redistribution of open source is largely unknown at this point, and that legal unknown compounds the factual unknown of how many entities might receive the software in redistribution.

A patent gives its owner the right to exclude others from making, using, and selling the claimed invention. Thus, patent rights give a patentee great control over who uses his invention. In contrast, the basic idea behind distributing software under an Open Source license is that anyone should be able to view and use the source code of the computer program and modify it for his own use. (The source code is the human readable version of the software.) A business decision to distribute software under an Open Source license affects how the author of the software may be able to use his patent rights, but does not affect whether he can or should apply for patent protection.

Defining Open Source Licenses

A large number of licenses are categorized by the term Open Source (see www.opensource.org/licenses/) and each has its own quirks. The Open Source license that I am asked about most frequently is the Gnu Public License (the gpl). A copy of the gpl can be obtained at www.opensource.org/licenses/gpl-license. This article focuses mainly on the gpl.

The gpl takes the Open Source concept that people should be able to view and use source code one step further, by requiring that any software that uses gpl'd code also be distributed under the gpl. Thus, the gpl'd software “infects” all software into which it is placed and forces it also to be distributed under the gpl. For this reason, most commercial code developments do not use gpl'd code developed by others since doing so would force distribution of the source code for the commercial product. (For completeness, I note that there is also a version of the gpl called the Library (or Lesser) gpl that does not have the infection property.)

Certain products, such as the Linux operating system, are distributed under the gpl. Companies and individuals can obtain the source code for the Linux operating system and can modify the code as long as they distribute the modified code under the gpl as well.

Patent Rights of the Author or Modifier

If a company plans to distribute its software under the gpl, does it make sense to obtain patent protection as well? Open Source licenses, and the gpl in particular, do not bar a software author from obtaining patent protection on inventive aspects of his software. Nor does the gpl bar a programmer from including his patented features when he modifies someone else's software previously distributed under the gpl.

But is patented open source code really any different from patented proprietary code? A company that distributes an Open Source program cannot sue its customers, but neither can a company that distributes under a proprietary license. Customers have either an explicit or implied license to the code they receive through a purchase. The difference between Open Source programs and proprietary programs lies in the fact that a distributee under some Open Source licensees, such as the gpl, cannot control what happens to the software after he distributes it. For example, Company A can distribute software under the gpl to Company B. Company B can then distribute the software to anyone, who can subsequently also distribute it to anyone. Another difference is that, under the gpl, Company A may not limit to whom Company B can distribute.

It seems clear that an author or modifier who distributes software under the gpl cannot assert his patent rights against subsequent users and redistributors of the gpl'd software. Thus, under the gpl, patent rights cannot be used as an offensive or defensive weapon against users and redistributors of the gpl'd code. When software is distributed under the gpl with the understanding that anyone can copy and modify it (as long as they then distribute under the gpl) there can be no argument that a patentee has the right to exclude others from making, using or selling.

Why then, would anyone want to obtain a patent on an invention that is going to be distributed under the gpl? There are several reasons: 1) the author may plan to license the patent to others to produce a revenue stream; 2) the author may want to assert his patent rights against redistributors who do not conform to the gpl license terms (for example, by failing to redistribute under the gpl); 3) the author may want to have patent rights to use as an offensive or defensive weapon against infringers who are not using the gpl'd software; and 4) the author may plan to also redistribute a non-gpl'd version of the software. For example, while the author may not use his patent rights against people who receive and redistribute his gpl'd software, the author can use these rights against his competitor who sells a competing product that incorporates the invention.

The gpl only precludes the patentee from asserting his rights against people who are practicing the invention by using his gpl'd code. People who independently create other software are not subject to this license. As an aside, it seems that the author could assert his patent rights against a competitor who is releasing independently developed software under the gpl! The fact that the author himself distributed under the gpl is irrelevant, since he is not asserting his patent rights against users of his own distribution. The author has not given permission for his competitor to use the patented technology.

Existing Licenses

What if the original author or modifier is a patent licensee under an existing license? For example, the original author might have a license from a third party for an invention included in the gpl'd software. If the author has been granted the right to sublicense, he may be able to include the patented technology in his gpl'd code since he can give a sublicense to the gpl'd code users. Conversely, of course, the author cannot distribute his software if he cannot sublicense subsequent users. The gpl addresses this issue, saying:

If you cannot distribute so as to satisfy simultaneously your obligations under this License and any other pertinent obligations, then as a consequence you may not distribute the Program at all. For example, if a patent license would not permit royalty-free redistribution of the Program by all those who receive copies directly or indirectly through you, then the only way you could satisfy both it and this License would be to refrain entirely from distribution of the Program.

Thus, if an author does not have the right to sublicense or if the sublicense would require the payment of royalties, the author must chose between not including the patented technology or not releasing the software. This raises the question whether companies planning to distribute gpl'd code should consider whether the code is subject to existing patent licenses. If so, and if sublicensing rights cannot be obtained, the patented technology should not be included in the distribution. If there are existing formal license agreements that cover technology in software that a company plans to distribute under the gpl, the existing license should be carefully reviewed to determine whether the license includes the right to sublicense.

What Is the Limit of an Implied License under the GPL?

As discussed above, users and modifiers of gpl'd software have at least an implied license to use patented inventions included in the gpl'd software. The users do not, however, have a blanket license to use the invention in other circumstances. Thus, if a programmer who uses gpl'd software independently develops software that uses the patented invention, he arguably does not have a license to use the invention in this manner. If a user copies a portion of the gpl'd software and includes it in this software, he may arguably have a license since his new software is based on gpl'd software.

Patents in Other Countries

There is no such thing as a worldwide patent. Patents are granted on a country-by-country basis. The gpl states:

If the distribution and/or use of the Program are restricted in certain countries either by patents or by copyrighted interfaces, the original copyright holder who places the Program under this License may add an explicit geographical distribution limitation excluding those countries, so that distribution is permitted only in or among countries not thus excluded. In such case, this License incorporates the limitation as if written in the body of this License.

The gpl seems to be referring to the situation where the patent is owned by a third party. It does not address the possibility that a patent holder and author of the program are the same. This assumption seems correct since, if the patent holder and author are the same entity, the users of the program would have an implied license to use the patented invention and would have an implied license to distribute and modify the software since this is the whole purpose of the gpl. Under those circumstances, the distribution or use would not be restricted.

Patent Damages

Damages for patent infringement are usually based on some variation of a reasonable royalty or lost profits. A company that chooses to release open source software needs to factor potential damages that it might owe for patent infringement into its risk-benefit equation. For example, suppose Company X distributes a software product under the gpl. It distributes only one copy to a trusted customer. The gpl does not allow Company X to place limitations on the customer's later redistribution of the product. Therefore, the customer would be within its rights to re-release the product (still under the gpl) to thousands of additional customers. Company X has no way of foreseeing how many downstream entities will receive the software. If Company X is sued for patent infringement, an analysis based on lost profits might consider the thousands of downstream customers in either the lost profits or reasonable royalty calculation. It is possible that a court would take into consideration whether Company X knew or could foresee the later distribution, but there is scant case law on the question.

In Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538 (Fed Cir. 1995), the court stated that “if a particular injury was or should have been reasonably foreseeable by an infringing competitor in the relevant market, broadly defined, that injury is generally compensable absent a persuasive reason to the contrary.” Whether redistribution of open sourced software to additional customers was foreseeable will probably turn on the specific facts of the case. For example, it may be that Company X knew of the planned redistribution. Or it may be that Company X believed that its customer was only going to use the software internally. Whether a court will take such facts into consideration in a patent case involving redistribution of open source is largely unknown at this point, and that legal unknown compounds the factual unknown of how many entities might receive the software in redistribution.