GPL “Liberty or Death!” Clause:
An Israeli Case Study
Eli Greenbaum a
(a) Attorney, Yigal Arnon & Co. Jerusalem
Abstract
This Article analyzes Section 12 of the GPL in light of a national statutory regime that directly conflicts with some of the core requirements of the license. The Israeli Encouragement of Industrial Research and Development Law restricts an entity's ability to disclose source code or provide certain licenses required under the GPL. This article analyzes the application of the GPL in this particular statutory setting, but also bears on broader interpretative issues raised when the GPL conflicts with local law. The article also discusses the purpose and scope of Section 12, and highlights the potential consequences of ignoring the impact of local regulatory issues in assessing the effect of the GPL.
Keywords
Law; Free and Open Source Software; GPL, Section 12
In full, Section 12 provides:
If conditions are imposed on you (whether by court order, agreement or otherwise) that contradict the conditions of this License, they do not excuse you from the conditions of this License. If you cannot convey a covered work so as to satisfy simultaneously your obligations under this License and any other pertinent obligations, then as a consequence you may not convey it at all. For example, if you agree to terms that obligate you to collect a royalty for further conveying from those to whom you convey the Program, the only way you could satisfy both those terms and this License would be to refrain entirely from conveying the Program.
Version 3 of the GPL made some minor changes to the previous formulation of this clause in version 2 of the license. First, the initial sentence of the clause was revised slightly to clarify that, in addition to the judgments of a court, the provision also covers contractual agreements and settlement arrangements that contradict the conditions of the license. Second, version 3 of the GPL omitted the severability provision which was previously included in the license. The severability provision had stated that:
If any portion of this section is held invalid or unenforceable under any particular circumstance, the balance of the section is intended to apply and the section as a whole is intended to apply in other circumstances.
This article examines the provisions of Section 12 in light of the specific requirements of the Israeli R&D Law. Section II provides a short summary of the goals and requirements of the R&D Law. Section III provides an in-depth discussion of how these requirements contradict the obligations of the GPL. Section IV discusses the operative effect of Section 12 given the contradicting requirements between the GPL and the R&D Law. Section V concludes by suggesting an explanation of the purpose served by Section 12.
The royalty obligations and transfer restrictions imposed by the OCS and the R&D law have become increasingly important for commercial entities seeking investment or looking to be acquired. International acquisitions of Israeli companies can involve extensive negotiations with the OCS regarding the transfer of intellectual property and the amount of “royalties” to be paid. In addition, investment agreements and merger or acquisition agreements typically incorporate representations that the company is in compliance with the R&D Law and any undertakings towards the OCS.
The requirements of the GPL clearly conflict with any obligations a company may have under the R&D Law or pursuant to any separate contractual undertaking to the OCS. Before describing the conflicts in more detail, it should be emphasized that the OCS has not expressed any public position nor promulgated any regulations regarding the effect of the R&D Law on FOSS. In informal conversations, however, individuals at the OCS have stated that under appropriate circumstances – for example, as part of an economically justified dual-licensing strategy – the office may consent to the GPL-licensing of funded software. Even so, in the absence of such consent, the OCS does seem to take the position that the R&D Law prohibits the release of grant funded software under the GPL.
Several conflicts may arise between the GPL and the requirements of the R&D Law. Of course, the most obvious tension between the two is the GPL's requirement that the source code of distributed works be disclosed. As noted, the position of the OCS is that funded source code may generally not be transferred without its consent. As such, recipients of OCS funds may not be permitted to provide source code under the GPL, or combine their software with GPL-licensed programs in a manner that would require disclosure of their own software code. Closely related to this conflict are the restrictions imposed by the OCS on the licensing terms of released source code. The GPL not only requires that distributors provide source code, but commands that this code be provided under the GPL's own licensing terms. The provision of source code pursuant to a more restrictive set of licensing terms is a violation of the GPL's requirements. As noted above, the OCS imposes substantial restrictions on the licensing terms pursuant to which source code may be released. These two conflicts would seem to clearly preclude use of the GPL and GPL-licensed software for release by OCS funded companies.
The previous section detailed several possible conflicts that may arise when an OCS-funded entity wishes to distribute a work pursuant to the GPL. These conflicts impact different types of obligations under the GPL. The first conflict involved statutory restrictions on the freedom of an OCS-funded entity to provide source code with respect to OCS-funded technology. This conflict involves a clear legal restriction on the ability of the OCS-funded entity to comply with the core purpose of the GPL. The receipt of source code is central to the GPL: a downstream licensee that cannot receive the source code of licensed works will not be in any position to exercise its freedom to modify and redistribute GPL-licensed software. The second and third conflicts raised by the R&D Law, however, involve restrictions on the granting of legal license rights (source code and object code pursuant to GPL licensing terms and the GPL patent license) rather than a tangible item (the actual source code). The fact that a distributor is restricted from granting the required patent license, for example, may never have any actual practical effect on the recipient of any GPL-licensed source code. The fourth potential conflict relates to the inability of an OCS-funded entity to grant a right under the LGPL, a right that seems less central to the goals of FOSS than the obligations listed above. The fourth conflict only limits a licensee's legal right to reverse-engineer programs that make use of LGPL-licensed works, but does not restrict the freedom to use the LGPL-licensed work itself. Again, the fact that a distributor is restricted from granting such permissions may never have any practical effect on the recipient of the LGPL-licensed code.
What happens if the licensed work is conveyed in violation of Section 12? First, such distribution would result in the termination of all rights under the license. Section 8 of the GPL expressly provides that attempts to “propagate or modify” a work in violation of the license “will automatically terminate your rights”. On the one hand, Section 12 would not seem to affect the rights of any downstream recipients of the licensed work. Section 10 of the GPL provides that “[e]ach time you convey a licensed work, the recipient automatically receives a license from the original licensors to run, modify, and propagate that work, subject to this License.” Section 10 does not differentiate between situations in which the conveyor has or does not have the rights to distribute the licensed work. In addition, Section 8 provides that “[t]ermination of your rights under this section does not terminate the licenses of parties who have received copies or rights from you under this License.” As such, it seems that any actual downstream recipient continue to receive all applicable rights under the GPL, even if Section 12 prohibits the distribution of that work by a particular recipient. On the other hand, and especially with respect to the patent licenses granted under Section 11 of the license, it is difficult to see a local court enforcing a license granted in violation of applicable law.
One of initial questions raised by this article concerned the operative purpose of Section 12. The discussion has shown that Section 12 operates as an anti-severability clause. In other words, according to Section 12 a court may not pick and choose among the distribution rights granted by the GPL and the conditions imposed on the exercise of those rights. If any condition is unenforceable, whether as a result of statute, contract or judicial decision, then no distribution rights are granted under the license. The effect and interpretation of severability and anti-severability clauses will obviously vary depending on the jurisdiction and the specific facts and circumstances. In Israel at least, a court will generally give effect to the wishes of the parties concerning the severability of the provisions in an agreement.
Eli Greenbaum is an attorney at Yigal Arnon & Co. in Jerusalem, Israel, specializing in intellectual property law and transactions.
Licence and Attribution
This paper was published in the International Free and Open Source Software Law Review, Volume 4, Issue 1 (March 2012). It originally appeared online at http://www.ifosslr.org.
This article should be cited as follows:
Greenbaum, Eli (2012) 'GPL “Liberty or Death!” Clause: An Israeli Case Study', IFOSS L. Rev., 4(1), pp 19 - 28
DOI: 10.5033/ifosslr.v4i1.63
Copyright © 2012 Eli Greenbaum.
This article is licensed under a Creative Commons UK (England and Wales) 2.0 licence, no derivative works, attribution, CC-BY-ND available at
http://creativecommons.org/licenses/by-nd/2.0/uk/
As a special exception, the author expressly permits faithful translations of the entire document into any language, provided that the resulting translation (which may include an attribution to the translator) is shared alike. This paragraph is part of the paper, and must be included when copying or translating the paper.
1 The first draft of Version 3 of the GPL titled this section “Liberty or Death for the Program,” but this colourful title was changed to the only slightly less provocative “No Surrender of Others' Freedom” in the second draft of the license. Unless stated otherwise, all section references in this article are to version 3 of the GPL.
2 The Canadian Province of Ontario, for example, has considered imitating this Israeli regime. See http://www.thestar.com/news/ontario/article/814123--israeli-scientific-success-convinces-premier-mcguinty-to-name-a-chief-scientist-to-advise-government.
3 The threat posed to free and open source software by the possibility that patent license agreements may require the collection of royalties for the distribution of such software is a motif than runs through the GPL. For example, the third through fifth paragraphs of Section 11 of the GPL address the issues raised by the Microsoft/Novell patent settlement of 2006, pursuant to which Novell agreed to pay royalties to Microsoft in consideration for Microsoft not bringing patent litigation against Novell's Linux software. For a broader discussion of this topic, see Free Software Foundation, GPLv3 Third Discussion Draft Rationale, at Section 3.4.4, available at gplv3.fsf.org/gpl3-dd3-rationale.pdf.
4 See Free Software Foundation, GPLv3 First Discussion Draft Rationale, Section 2.1, available at http://gplv3.fsf.org/gpl-rationale-2006-01-16.html.
5 Section 7 of version 2 of the GPL had provided that “[i]t is not the purpose of this section to induce you to infringe any patents or other property right claims or to contest validity of any such claims; this section has the sole purpose of protecting the integrity of the free software distribution system, which is implemented by public license practices. Many people have made generous contributions to the wide range of software distributed through that system in reliance on consistent application of that system; it is up to the author/donor to decide if he or she is willing to distribute software through any other system and a licensee cannot impose that choice.” While this provision did state that the purpose of the section was “protecting the integrity of the free software distribution system,” this does not help to explain the operative necessity of the provision in the context of the license.
6 The OCS has provided an unofficial translation of the R&D Law, which is available at http://www.tamas.gov.il/NR/exeres/9F263279-B1F7-4E42-828A-4B84160F7684.htm. This unofficial translation has not yet been updated to reflect all current amendments to the law.
7 http://www.moit.gov.il/NR/rdonlyres/83C79A59-DCCE-4950-8257-DE48B9D0B9DC/0/IncentivePrograms.pdf
8 It should be noted that this requirement for the payment of royalties to the OCS does not seem to violate the GPL. Sections 10 and 12 of the GPL only address the collection of royalties by the distributing entity, not the payment of royalties by the distributing entity for the right to distribute the licensed work. In addition, section 11 of the GPL only prohibits the payment of royalties to a “third party that is in the business of distributing software”, such as with regard to Novell's 2006 agreement to make royalty payments to Microsoft.
9 Section 19(b1) of the R&D Law provides that with respect to OCS-funded research that “[k]now-how … and any right deriving therefrom will not be transferred to another outside of Israel except in accordance with the provisions of section 19B.” Section 19(c) of the R&D Law also provides that the approval of the applicable committee of the OCS, as well as the satisfaction of certain other requirements, is required for the transfer of OCS-funded intellectual property within Israel.
10 Section 19(j) of the R&D Law provides that regulations shall be promulgated regarding the grant of licenses for the use of OCS-funded technology outside of Israel. No regulations have as of yet been enacted pursuant to this provision. As such, it can be difficult to obtain authorization from the OCS for licensing transactions.
11 For an English translation of the OCS letter setting forth its position, see http://www.moit.gov.il/NR/rdonlyres/C4BD683E-D888-4929-B819-FBA809C3A179/0/nemanuteng.doc
12 Section 11 defines “control” as the “right to grant patent licenses in a manner consistent with the requirements” of the GPL. As such, under the GPL, an OCS-funded entity which also licenses third party patents would not be required to grant licenses to such patents if it is legally unable to do so according to the R&D Law. The GPL, however, contains no similar exception for owners of patents, who are required to grant the Section 11 patent license in respect of all patents to which they hold title.
13 While this article focuses on the restrictions that the R&D Law imposes with respect to the GPL itself, it should be noted that the inability of an OCS-funded entity to grant patent licenses may affect the ability of such entity to contribute code to any open source software project. The contribution agreements required by many open source projects contain express patent license provisions which an OCS-funded entity may not be able to grant. See, for example, Section 3 of the standard Apache Software Foundation Software Grant and Corporate Contributor License Agreement, available at http://www.apache.org/licenses/cla-corporate.txt.
14 This latter requirement would apply when distributing the LGPL-licensed library statically linked to other code. Alternatively, Section 4(d)(1) of the LGPL may allow distributors to dynamically link to the LGPL-licensed library with “a suitable shared library mechanism,” as that term is defined in the license.
15 But see Lawrence Rosen, Open Source Licensing: Software Freedom and Intellectual Property Law 134 (2005) (interpreting the parallel provision in version 2 of the GPL to mean that “it will take more than the threat of patent infringement to invoke this provision. An actual patent dispute has to be alleged and either litigated or settled”). This interpretation of version 2 of the GPL may be correct with respect to obligations imposed as a result of patent litigation. The broader language of version 3 of the GPL, however, as interpreted in the context of a clear legal restriction on complying with the obligations of the GPL, would seem to imply that the mere existence of statutory restrictions (even without a court order that requires the party to comply with these restrictions) would be enough to invoke the “Liberty or Death” clause.
16 While this Article focuses on the effect of Section 12 under Israeli law, it is possible that suits regarding the conflict between the GPL and the Israeli R&D Law would be brought in non-Israeli courts. For example, a suit to obtain an injunction to prevent a foreign licensee from using OCS-funded software pursuant to the GPL may need to be brought in the jurisdiction of such foreign licensee. Such cases would raise complex questions of illegality under foreign law.
17 See Section 30 of the Law of Contracts – 1973 (the “Law of Contracts”). This discussion skirts the question of whether the GPL should be considered a contract or a license. In any event, the principles for interpretation of licenses under Israeli law likely does not differ very much from the principles for the interpretation of contracts. See TONY GREENMAN, ZEHUYOT YOZRIM, “Copyright”, 2nd ed. 2008, at 573.
18 Sections 19 and 31 of the Law of Contracts provide that an illegal contract may be severable. Gabriella Shalev, Contract Law 268 (1990), notes that the question of whether a particular contract is severable depends on the parties' intent.
19 This article has focused on the interpretation of the GPL. Of equal practical importance, however, are the consequences to an OCS-funded company that has violated its statutory obligations to the OCS by granting licenses or source code pursuant to the GPL. The R&D Law does not expressly address the effect of licenses (or other rights in intellectual property) granted in violation of the law. For example, the R&D Law does not expressly provide that a license granted in violation of the R&D Law should be “unwound.” Nevertheless, such contracts may be deemed void under Section 30 of the Contracts Law. See supra text accompany note 17. In addition, section 45 of the R&D Law does provide that violations of the law may result in the requirement to return OCS grant money plus interest, and may preclude a violator from obtaining any further grant money. In addition, the OCS may potentially attempt to obtain additional amounts from the OCS-funded company in respect of any economic benefit received from the grant of the prohibited license. While licenses under the GPL will generally be granted at no or minimal cost, Section 19B(6) grants the OCS broad powers to recalculate due amounts based on any actual economic benefit gained by the OCS-funded company by granting the license. In addition, it should definitely be noted that Section 47A of the R&D Law provides that individuals who transfer know-how in violation of the R&D Law can be subject to three years imprisonment.
20 Similarly, the loss of distribution rights pursuant to Section 12 in one specific situation will not lead to the loss of distribution rights in other factual situations in which Section 12 is not implicated. Section 17 of the GPL provides an addition example of how the Section 12 anti-severability clause does not apply to all rights under the license. Section 17 provides that if the disclaimer of warranty and limitation of liability provisions in the license “cannot be given local legal effect according to their terms, reviewing courts shall apply local law that most closely approximates an absolute waiver of all civil liability in connection with the Program, unless a warranty or assumption of liability accompanies a copy of the Program in return for a fee.”
21 This understanding of Section 12 as a “limited” anti-severability clause may help in interpreting Section 7 of version 2.0 of the GPL, which contained both an earlier version of Section 12 (which this article has interpreted as an “anti-severability clause”) as well as a standard severability clause. See supra text accompanying note 4. As with our understanding of Section 12 in GPLv3, the effect of the two somewhat contradictory clauses in GPLv2 may be to withhold rights of distribution even while continuing to grant rights of use.
22See Free Software Foundation, GPLv3 Second Discussion Draft Rationale, n.70, available at gplv3.fsf.org/gpl3-dd1to2-markup-rationale.pdf (stating that choice of law clauses “are typically found in license documents drafted from a contract-oriented perspective” but are in the opinion of the Free Software Foundation incompatible with the GPL).
23 Other commentators have pointed out other possible conflicts between the GPL and local law. Such conflicts would of course also raise questions under Section 12. Rosen, supra note 12 at 132, points out that the GPLv2 requirement that licensed works be distributed “at no charge” could raise another potential conflict between the GPL and local antitrust law. Section 10 of GPLv3 imposed a similar requirement that conveyors may not “impose a license fee, royalty, or other charge for the exercise of rights” under the license. But see Wallace v. International Business Machines, 467 F.3d 1104 (7th Cir. 2006) (stating that “[t]he GPL and open-source software have nothing to fear from the antitrust law”). As the requirements of antitrust law can be vague and hard to apply without the guidance of a court decision, especially in the context of open source licensing, it would be difficult to pronounce how Section 12 should be interpreted in these circumstances.