decoration decoration
Stories

GROKLAW
When you want to know more...
decoration
For layout only
Home
Archives
Site Map
Search
About Groklaw
Awards
Legal Research
Timelines
ApplevSamsung
ApplevSamsung p.2
ArchiveExplorer
Autozone
Bilski
Cases
Cast: Lawyers
Comes v. MS
Contracts/Documents
Courts
DRM
Gordon v MS
GPL
Grokdoc
HTML How To
IPI v RH
IV v. Google
Legal Docs
Lodsys
MS Litigations
MSvB&N
News Picks
Novell v. MS
Novell-MS Deal
ODF/OOXML
OOXML Appeals
OraclevGoogle
Patents
ProjectMonterey
Psystar
Quote Database
Red Hat v SCO
Salus Book
SCEA v Hotz
SCO Appeals
SCO Bankruptcy
SCO Financials
SCO Overview
SCO v IBM
SCO v Novell
SCO:Soup2Nuts
SCOsource
Sean Daly
Software Patents
Switch to Linux
Transcripts
Unix Books
Your contributions keep Groklaw going.
To donate to Groklaw 2.0:

Groklaw Gear

Click here to send an email to the editor of this weblog.


Contact PJ

Click here to email PJ. You won't find me on Facebook Donate Paypal


User Functions

Username:

Password:

Don't have an account yet? Sign up as a New User

No Legal Advice

The information on Groklaw is not intended to constitute legal advice. While Mark is a lawyer and he has asked other lawyers and law students to contribute articles, all of these articles are offered to help educate, not to provide specific legal advice. They are not your lawyers.

Here's Groklaw's comments policy.


What's New

STORIES
No new stories

COMMENTS last 48 hrs
No new comments


Sponsors

Hosting:
hosted by ibiblio

On servers donated to ibiblio by AMD.

Webmaster
Wallace's "Memorandum on Motion for SJ" in Wallace v. IBM
Sunday, July 03 2005 @ 02:47 PM EDT

I guess it's only fair to put up Daniel Wallace's Memorandum on Motion for Summary Judgment [PDF], as he calls it, since I posted IBM's Motion to Dismiss, although frankly, it feels a little unkind.

Our thanks to Henrik Grouleff for transcribing. He volunteered because English is not his first language, so he figured the impact on his well-being would be lighter.

: )

Thanks, Henrik. Behave yourselves, please, everyone.

*************************************

UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION

Daniel Wallace,

Plaintiff,

v.

Civil Complaint No. 1:05-cv-0678-SEB-VSS

INTERNATIONAL BUSINESS MACHINES CORPORATION;

RED HAT INC.;

NOVELL, INC.,

Defendants.

PLAINTIFF DANIEL WALLACE'S MEMORANDUM
ON MOTION FOR SUMMARY JUDGMENT

PRELIMINARY STATEMENT

Plaintiff Daniel Wallace has alleged a scheme of naked per se horizontal price-fixing among competitors:

"The Defendants INTERNATIONAL BUSINESS MACHINES CORPORATION, RED HAT INC. and NOVELL INC. have used or conspired to promote a copyright licensing scheme employing the GNU GENERAL PUBLIC LICENSE [H.I.] to fix the prices of computer programs." Plaintiff's Complaint.

Since at least the year 2002 the Defendants IBM et al. have employed a contract copyrighted and promoted by the FREE SOFTWARE FOUNDATION INC. known as the GNU GENERAL PUBLIC LICENSE (hereinafter GPL) to license collective or derivative computer programs for distribution. The GPL license contains a term that requires that an initial computer program that is modified as a compilation or derivative work to be distributed under the same GPL license "free of charge" for all subsequent third parties to the license.

The Defendants have also promoted and sold supplementary services directly related to the use of computer programs released under GPL license terms. These supplementary services provide the profit margin and motive for distributing computer programs at no charge.

To prevail in this controversy the Plaintiff Daniel Wallace must establish that the Defendants' use of the GPL to license computer programs used in the course of commerce constitutes an unfair restraint of trade in violation of the Sherman Act 15 U.S.C. section 1.

STATEMENT OF MATERIAL FACTS NOT IN DISPUTE

1.) Professor Eben Moglen of Columbia University Law School is pro bono publico General Counsel for the FREE SOFTWARE FOUNDATION INC. Professor Moglen has been primarily responsible for all worldwide enforcement activity in defense of the GNU GENERAL PUBLIC LICENSE since 1994 [Exhibit 7 Para. 24].

2.) By the terms of the GPL license, its purpose is to control the distribution of derivative or collective works based on an initial copyrighted computer program. [Exhibit 2 at sec. 2(b)]. The terms of the GPL require that any computer program that is in whole or in part based upon an initial computer program licensed under the GPL must be licensed at no charge to all third parties under the same GPL terms.

3.) The GNU/Linux operating system is one example of a collective "free software" work developed over the internet by Linus Torvalds in collaboration with Richard Stallman and the FREE SOFTWARE FOUNDATION INC. [Exhibit 7 Para. 13] and the Defendants IBM et al. and others [Exhibit 7 Para. 23] and is licensed under the GPL.

4.) The Defendant INTERNATIONAL BUSINESS MACHINES CORPORATION has created computer programs licensed by IBM under GPL license terms [Exhibit 7 Para. 23] that are included in derivative and collective works known as NOVELL SUSE LINUX PROFESSIONAL 9.3 [Exhibit 1] and Red Hat LINUX 9 [Exhibit 4]. The Defendant IBM Corporation assigns copyright to the FREE SOFTWARE FOUNDATION INC. in some of the programs it releases, for the purpose of empowering the FREE SOFTWARE FOUNDATION INC. to enforce the GPL against license violators. [Exhibit 7 Para. 23]
The Defendant IBM promotes and distributes the Linux operating system with new computer servers sold by IBM.

5.) The Defendant NOVELL INC. has created computer programs licensed by Novell Inc. under GPL terms [Exhibit 2] that are included in derivative and collective works known as NOVELL SUSE LINUX PROFESSIONAL 9.3 [Exhibit 1] and has distributed the same in commercial business.

6.) The Defendant RED HAT INC. has created computer programs licensed by RED HAT INC. under GPL terms [Exhibit 5] that are included in derivative and collective works known as Red Hat LINUX 9 [Exhibit 4] and has distributed the same in commercial business.

7.) The FREE SOFTWARE FOUNDATION INC. has created computer programs licensed by the FREE SOFTWARE FOUNDATION INC. under GPL terms that are included in derivative and collective works known as NOVELL SUSE LINUX PROFESSIONAL 9.3 [Exhibit 1] and Red Hat LINUX 9 [Exhibit 4].

8.) The Defendants IBM et al. and the FREE SOFTWARE FOUNDATION INC. all have the same non-exclusive license rights to the computer programs contained in the compilations known as NOVELL SUSE LINUX PROFESSIONAL 9.3 [Exhibit 1] and Red Hat LINUX 9 [Exhibit 4] that are licensed under the GPL license. These rights include the right to make copies, modify and distribute the program source code as long as they obey the terms of the GPL license [Exhibit 11 Para. 25 - 28].

9.) Defendant INTERNATIONAL BUSINESS MACHINES CORPORATION admits that the intellectual property in computer programs distributed under the GPL terms must be licensed free of charge even if used by potential competitors [Exhibit 10 at Para. 65 and 66] and [Exhibit 11 at Para 28].

10.) The free software movement has used programmers throughout the world since the early 1980's to create the GNU/Linux operating system and related software. GNU/Linux has displaced the capitalist production of some software despite the vaunted incentives created by ownership and exclusionary intellectual property law [Exhibit 8 footnote 1].

11.) One goal of the FREE SOFTWARE FOUNDATION INC. and use of the GPL license is to destroy a company known as the Microsoft Corporation [Exhibit 9].

12.) The Linux distribution NOVELL SUSE LINUX PROFESSIONAL 9.3 distributed by the Defendant NOVELL INC. and the Linux distribution Red Hat LINUX 9 distributed by the Defendant Red Hat Inc. are competing commercial brands.

13.) Defendant INTERNATIONAL BUSINESS MACHINES CORPORATION has invested over one billion dollars promoting the use of the GPL licensed Linux operating system in commercial business.

14.) The Plaintiff Daniel Wallace purchased the CD media [Exhibit 1] and [Exhibit 4] offered into evidence herein in Marion County, IN during the year 2005.

LEGAL STANDARD

The Seventh Circuit has defined the standard of review on a motion for summary judgment as follows:

"We review the district court's grant of summary judgment de novo, drawing all reasonable inferences from the record in the light most favorable to the non-moving party." Johnson v. Runyon, 47 F.3d 911, 917 (7th Cir. 1995) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (198)). A motion for summary judgment should be granted only when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552,91 L.Ed.2d 265 (1986). "If no reasonable jury could find for the party opposing the motion, it must be granted." Hedberg v. Indiana Bell Tel. Co., 47 F.3d 928, 931 (7th Cir. 1995) (citing Anderson, 477 U.S. at 248). "Conclusory allegations by the party opposing the motion cannot defeat the motion." Id. The non-moving party must do more than simply "show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). Tyler v. Runyon, 70 F.3d 458 (7th Cir. 1995).

ARGUMENT

It should be noted that the legal definition of a computer program is incorporated into the Copyright Act:

"A 'computer program' is a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result." 17 U.S.C sec. 101.

The Copyright Act's definition of "computer program" defines a commodity for purposes of antitrust analysis. This definition is more narrowly drawn than the commonly accepted meaning of "software products" which often include other ancillary services such as training and maintenance that accompany the vending of computer programs.

Standard antitrust analysis applies to the intellectual property composing computer programs:

"2.1 Standard antitrust analysis applies to intellectual property.
The Agencies apply the same general antitrust principles to conduct involving intellectual property that they apply to conduct involving any other form of tangible or intangible property. That is not to say that intellectual property is in all respects the same as any other form of property. Intellectual property has important characteristics, such as ease of misappropriation, that distinguish it from many other forms of property. These characteristics can be taken into account by standard antitrust analysis, however, and do not require the application of fundamentally different principles."Antitrust Guidelines for the Licensing of Intellectual Property; U.S. Department of Justice and the Federal Trade Commission (April 6, 1995).

The Plaintiff Daniel Wallace has alleged acts in the restraint of trade among competitors in the relevant market of computer programs. The Sherman Act codified in 15 U.S.C section 1 declares:

"Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding ten years, or by both said punishments, in the discretion of the court."

The Seventh Circuit has defined the elements of a claim under the Sherman Act's section 1:

"To state a claim for relief under section 1, a plaintiff must allege either that the contract, combination, or conspiracy resulted in a per se violation of the Sherman Act or that it unreasonably restrained competition in a relevant market. See Denny's Marina, Inc. v. Renfro Prods., Inc., 8 F.3d 1217, 1220 (7th Cir. 1993); Banks v. National Collegiate Athletic Ass'n, 977 F.2d 1081, 1088 (7th Cir. 1992), cert. denied, 113 S. Ct. 2336 (1993); Dos Santos v. ColumbusCabrini Med. Ctr., 684 F.2d 1346, 1352 (7th Cir. 1982)." MCM Partners, Inc. v. Andrews-Bartlett & Associates, Inc., 62 F.3d 967, (7th Cir. 1995);

The Supreme Court has described the per se doctrine as follows:

"However, there are certain agreements or practices which because of their pernicious effect on competition and lack of any redeeming virtue are conclusively presumed to be unreasonable and therefore illegal without elaborate inquiry as to the precise harm they have caused or the business excuse for their use. This principle of per se unreasonableness not only makes the type of restraints which are proscribed by the Sherman Act more certain to the benefit of everyone concerned, but it also avoids the necessity for an incredibly complicated and prolonged economic investigation into the entire history of the industry involved, as well as related industries, in an effort to determine at large whether a particular restraint has been unreasonable - an inquiry so often wholly fruitless when undertaken. Among the practices which the courts have heretofore deemed to be unlawful in and of themselves are price fixing, United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 210 ... "
NORTHERN PAC. R. Co. v. UNITED STATES, 356 U.S. 1, 5 (1958).

See also ARIZONA v. MARICOPA COUNTY MEDICAL SOCIETY, 457 U.S. 332 (1982) for an exhaustive review of the per se doctrine and horizontal price fixing restraints.

1.) CONTRACT, COMBINATION OR CONSPIRACY

It goes without saying that an intellectual property license such as the GPL is a contract:

"A license is governed by the laws of contract. See McCoy v. Mitsuboshi Cutlery, Inc., 67 F.3d 917, 920, 36 USPQ 2d 1289, 1291 (Fed. Cir. 1995) ("Whether express or implied, a license is a contract governed by ordinary principles of state contract law.")." JAZZ PHOTO, ET AL. v ITC, 264 F.3d 1094 (Fed. Cir. 2001).

See also Sun Microsystems Inc. v. Microsoft Corp., 188 F.3d 1115 (9th Cir. 1996), Graham v. James, 144 F.3d 229 (2nd Cir. 1998) and Jacob Maxwell Inc., v. Veeck, 110 F.3d 749 (11th Cir. 1997) in the context of copyright.

The term 2(b) of the GPL license:

"You must cause any work that you distribute or publish, that in whole or in part contains or is derived from the Program or any part thereof, to be licensed as a whole at no charge to all third parties under the terms of this license."

This is a reciprocal and universal "grant-back" term of the GPL license which places all who use the license commercially on an equal footing as co-licensor / co-licensee and defines a "horizontal" (in contrast to "vertical") potential competitor relationship as the term is used in antitrust law.

It is a fact without dispute that the Defendants IBM et al. and the FREE SOFTWARE FOUNDATION INC. have agreed to license their copyrighted material involving computer programs in the Linux operating system under GPL terms and that said computer programs have further been employed in the course of commerce.

2.) PER SE VIOLATION OF THE SHERMAN ACT

An examination of the GPL license term sec. 2(b) reveals:

"You must cause any work that you distribute or publish, that in whole or in part contains or is derived from the Program or any part thereof, to be licensed as a whole at no charge to all third parties under the terms of this License,"

The effect of this term is such that an initial author of a computer program licensed under the GPL extends his original limited monopoly to control the independently copyrighted works of "all third parties" to the license in any subsequent compilations or derivative computer programs.

This license (GPL) defines a new copyright regulation that is a "right against the world" (against all third parties who accept the license) as dictated by the original licensor. This GPL agreement is in direct contravention to 17 U.S.C sec. 301. But see EEOC v. Waffle House; 534 US 279(2002), "It goes without saying that a contract cannot bind a non-party".

This term (GPL sec. 2(b)) also constitutes a blatant misuse of copyright. A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001); see also Alcatel USA, Inc. v. DCI Technologies, Inc., 166 F.3d 772 (5th Cir. 1999); Practice Management Information Corp. v. American Medical Ass'n, 121 F .3d 516 (1997), amended, 133 F.3d 1140 (9th Cir. 1998); DSC Communications Corp. v. DCI Technologies, Inc., 81 F.3d 597 (5th Cir. 1996); Lasercomb America, Inc. v. Reynolds, 911 F.2d 970 (4th Cir. 1990).

The requirement "to be licensed as a whole at no charge to all third parties" is an explicit license term that defines a fixed price for a "computer program", which is a distinct commodity composed of intellectual property. This requirement is a naked per se violation of the Sherman Act's sec. 1 when used by potential competitors to control the price of a commodity in the course of commerce.

The defendants have all contributed copyrighted computer programs to compilations known as Red Hat LINUX 9 and NOVELL SUSE LINUX PROFESSIONAL 9.3 that are used for commercial business purposes.

Pricing-fixing computer programs at "no charge to all third parties" has no pro-competitive market purpose whatsoever except to destroy non-conspiring competitors who allow their commodity computer programs to be set by unimpeded free market forces. This price-fixing policy is a patently unreasonable restraint of commerce:

"Our view of what is a reasonable restraint of commerce is controlled by the recognized purpose of the Sherman Law itself. Whether this type of restraint is reasonable or not must be judged in part at least, in the light of its effect on competition, for, whatever difference of opinion there may be among economists as to the social and economic desirability of an unrestrained competitive system, it cannot be doubted that the Sherman Law and the judicial decisions interpreting it are based upon the assumption that the public interest is best protected from the evils of monopoly and price control by the maintenance of competition."; United States v. Trenton Potteries Co., 273 U.S. 392 (1927)

The naked price-fixing term foregoes any further requirement for analysis under antitrust law as to business use or resultant harm:

"However, there are certain agreements or practices which because of their pernicious effect on competition and lack of any redeeming virtue are conclusively presumed to be unreasonable and therefore illegal without elaborate inquiry as to the precise harm they have caused or the business excuse for their use"; NORTHERN PAC. R. Co., supra.

3.) THREATENED INJURY

The Plaintiff Daniel Wallace, a trained computer programmer, has claimed a plausible and likely future injury from a violation of antitrust law:

"This scheme is implemented nationwide in the sale and promotion of computer software products in the United States. This scheme denies the plaintiff Daniel Wallace an opportunity to earn future revenue in the field of computer programming."; Plaintiffs Complaint.

Quantifiable damages need not be proven for equitable relief:

"What is true and misled the district judge is the principle that there is no tort without an injury. E.g., Janmark, Inc. v. Reidy, 132 F.3d 1200, 1202 (7th Cir. 1997); Rozenfeld v. Medical Protective Co., 73 F.3d 154, 156 (7th Cir. 1996). A private suit under the antitrust laws is a suit seeking relief against a statutory tort, and the principle that there is no tort without an injury is applicable to it. See Clayton Act, sec. 4, 15 U.S.C. sec. 15(a). But all that this implies, so far as equitable relief is concerned, is that a plaintiff has to prove that he is likely to be harmed by the defendant's wrongful conduct unless that conduct is enjoined. This is clear from the text of the Clayton Act, which, evoking traditional principles of equity, Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 130 (1969), requires proof only of "threatened loss or damage." Clayton Act, sec. 16, 15 U.S.C. sec. 26 (emphasis added); see California v. American Stores Co., 495 U.S. 271, 282 n. 8 (1990); Ohio-Sealy Mattress Mfg. Co. v. Sealy, Inc., 585 F.2d 821, 844 (7th Cir. 1978). )."; BLUE CROSS, ET AL. v MARSHFIELD CLINIC, ET AL.; No. 94-C-0137-C (7th Cir. 1998).

The Plaintiff Daniel Wallace is trained in the art and science of computer programming. Over the course of the past five years the Plaintiff has witnessed the demand for newly created proprietary computer programs, including operating systems, rapidly being destroyed in the competitive market place. The remaining market segment open to the small entrepreneur and developer is quickly vanishing due to the explosion of GPL licensed software that is being distributed free of charge by potential competitors IBM et al.

CONCLUSION

The evidence offered by Plaintiff Daniel Wallace demonstrates there exists no genuine issue as to any material fact and Plaintiff Daniel Wallace is entitled to judgment as a matter of law.

WHEREFORE, Plaintiff Daniel Wallace respectfully requests the Court grant summary judgment for him and issue injunctive relief against the Defendants INTERNATIONAL BUSINESS MACHINES CORPORATION, RED HAT INC., and NOVELL, INC.

___[signed]___
Daniel Wallace, pro se
[address, phone]

Dated: June 30, 2005


  


Wallace's "Memorandum on Motion for SJ" in Wallace v. IBM | 132 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
GPL as a contract
Authored by: Anonymous on Sunday, July 03 2005 @ 03:26 PM EDT
I don't think there's any grand conspiracy here -- I think Wallace is acting on
his
own. That said, the only dangerous part here is that he's trying to get people

thinking of the GPL as a contract.

Clearly, the GPL is a *license*. Wallace is right that third parties are not
bound
by the terms of the GPL. However, nothing other than the GPL grants them the
right to copy, modify, or distribute software which they received under the
GPL.

[ Reply to This | # ]

Corrections here
Authored by: zcat on Sunday, July 03 2005 @ 03:27 PM EDT
TYPOS, not errors in the original document...

[ Reply to This | # ]

Off-Topic goes here
Authored by: zcat on Sunday, July 03 2005 @ 03:30 PM EDT
Links should be made clickable. Use html format, and remember that if you do,
you'll also have to add markups for paragraphs and stuff too.

[ Reply to This | # ]

Wallace on copyright misuse - version 2 (extended)
Authored by: Anonymous on Sunday, July 03 2005 @ 03:32 PM EDT
This is a longer more detailed version, with more references, of something I've posted a couple of stories back...


According to Wallace, the GPL's limited permission allowing others to prepare and distribute derivative works, is somehow "copyright misuse"

This license (GPL) defines a new copyright regulation that is a "right against the world" (against all third parties who accept the license) as dictated by the original licensor. This GPL agreement is in direct contravention to 17 U.S.C sec. 301. But see EEOC v. Waffle House; 534 US 279(2002), "It goes without saying that a contract cannot bind a non-party".

This term (GPL sec. 2(b)) also constitutes a blatant misuse of copyright. A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001); see also Alcatel USA, Inc. v. DCI Technologies, Inc., 166 F.3d 772 (5th Cir. 1999); Practice Management Information Corp. v. American Medical Ass'n, 121 F .3d 516 (1997), amended, 133 F.3d 1140 (9th Cir. 1998); DSC Communications Corp. v. DCI Technologies, Inc., 81 F.3d 597 (5th Cir. 1996); Lasercomb America, Inc. v. Reynolds, 911 F.2d 970 (4th Cir. 1990).


but... what he doesn't seem to understand is he otherwise has no right to prepare or distribute derivative works without permission of the copyright holder.

The law here:

Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:
(1) to reproduce the copyrighted work in copies or phonorecords;
(2) to prepare derivative works based upon the copyrighted work;
(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;
(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;
(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and
(6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission. In Wallace's summary judgement motions, he cites the Lasercomb case, without realising that it is not about his issue at all (it's about copyright misuse as a defense to infringement claims) and secondly what it does say undermines his position entirely:

For example, it recognizes that "copyright misuse" is not inherently the same as a violation of anti-trust law
So while it is true that the attempted use of a copyright to violate antitrust law probably would give rise to a misuse of copyright defense, the converse is not necessarily true – a misuse need not be a violation of antitrust law in order to comprise an equitable defense to an infringement action. The question is not whether the copyright is being used in a manner violative of antitrust law (such as whether the licensing agreement is “reasonable”), but whether the copyright is being used in a manner violative of the public policy embodied in the grant of a copyright.
And secondly the "copyright misuse" in Lasercomb wasn't AT ALL about copying the original work, or derivative works, but extending copyright's limited monopoly to entirely new works (this is summarised best in the section I have bold underlined at the end):
Lasercomb undoubtedly has the right to protect against copying of the Interact code. Its standard licensing agreement, however, goes much further and essentially attempts to suppress any attempt by the licensee to independently implement the idea which Interact expresses.19 The agreement forbids the licensee to develop or assist in developing any kind of computer-assisted die-making software. If the licensee is a business, it is to prevent all its directors, officers and employees from assisting in any manner to develop computer-assisted die-making software. Although one or another licensee might succeed in negotiating out the noncompete provisions, this does not negate the fact that Lasercomb is attempting to use its copyright in a manner adverse to the public policy embodied in copyright law, and that it has succeeded in doing so with at least one licensee. See supra note 8 and accompanying text. Cf. Berlenbach v. Anderson & Thompson Ski Co., 329 F.2d 782, 784-85 [141 USPQ 84] (9th Cir.), cert. denied, 379 U.S. 830 [143 USPQ 464] (1964).

The language employed in the Lasercomb agreement is extremely broad. Each time Lasercomb sells its Interact program to a company and obtains that company’s agreement to the noncompete language, the company is required to forego utilization of the creative abilities of all its officers, directors and employees in the area of CAD/CAM die-making software. Of yet greater concern, these creative abilities are withdrawn from the public.20 The period for which this anticompetitive restraint exists is ninety-nine years, which could be longer than the life of the copyright itself.21<15 USPQ2d 1854>

...

We think the anticompetitive language in Lasercomb’s licensing agreement is at least as egregious as that which led us to bar the infringement action in Compton, and therefore amounts to misuse of its copyright. Again, the analysis necessary to a finding of misuse is similar to but separate from the analysis necessary to a finding of antitrust violation. The misuse arises from Lasercomb’s attempt to use its copyright in a particular expression, the Interact software, to control competition in an area outside the copyright, i.e., the idea of computer-assisted die manufacture, regardless of whether such conduct amounts to an antitrust violation.


Wallace also cites A&M Records, Inc. v. Napster. This doesn't support his copyright misuse theory.

First it says nothing about anti-trust law. It's about whether copyright misuse was a valid defense to copyright infringement.

Second, in any case, it REJECTED the copyright misuse claim by Napster (which was an attempt to defend against charges of copyright infringement).

Napster contends that even if the district court’s preliminary determinations that it is liable for facilitating copyright infringement are correct, the district court improperly rejected valid affirmative defenses of waiver, implied license and copyright misuse. We address the defenses in turn.

...

C. Misuse

The defense of copyright misuse forbids a copyright holder from “secur[ing] an exclusive right or limited monopoly not granted by the Copyright Office.” Lasercomb Am., Inc. v. Reynolds, 911 F.2d 970, 977-79 (4th Cir. 1990), quoted in Practice Mgmt. Info. Corp. v. American Med. Ass’n, 121 F.3d 516, 520 (9th Cir.), amended by 133 F.3d 1140 (9th Cir. 1997). Napster alleges that online distribution is not within the copyright monopoly.
According to Napster, plaintiffs have colluded to “use their copyrights to extend their control to online distributions.” We find no error in the district court’s preliminary rejection of this affirmative defense. The misuse defense prevents copyright holders from leveraging their limited monopoly to allow them control of areas outside the monopoly. See Lasercomb, 911 F.2d 970 at 976-77; see also Religious Tech. Ctr. v. Lerma, No. 95-1107A, 1996 WL 633131, at *11 (E.D. Va. Oct. 4, 1996) (listing circumstances which indicate improper leverage). The district court correctly stated that “most of the cases” that recognize the affirmative defense of copyright misuse involve unduly restrictive licensing schemes. See Napster, 114 F. Supp. 2d at 923; see also Lasercomb, 911 F.2d at 973 (stating that “a misuse of copyright defense is inherent in the law of copyright”). We have also suggested, however, that a unilateral refusal to license a copyright may constitute wrongful exclusionary conduct giving rise to a claim of misuse, but assume that the “desire to exclude others . . . is a presumptively valid business justification for any immediate harm to consumers.” See Image Tech. Servs. v. Eastman Kodak Co., 125 F.3d 1195, 1218 (9th Cir. 1997). But see Intergraph Corp. v. Intel Corp., 195 F.3d 1346, 1362 (Fed. Cir. 1999) (“[M]arket power does not ‘impose on the intellectual property owner an obligation to license the use of that property to others.’” (quoting United States Dep’t of Justice & Fed. Trade Comm’n, Antitrust Guidelines for the Licensing of Intellectual Property 4 (1995)). There is no evidence here that plaintiffs seek to control areas outside of their grant of monopoly. Rather, plaintiffs seek to control reproduction and distribution of their copyrighted works, exclusive rights of copyright holders. 17 U.S.C. § 106; see also, e.g., UMG Recordings, 92 F. Supp. 2d at 351 (“A [copyright holder's] ‘exclusive’ rights, derived from the Constitution and the Copyright Act, include the right, within broad limits, to curb the development of such a derivative market by refusing to license a copyrighted work or by doing so only on terms the copyright owner finds acceptable.”). That the copyrighted works are transmitted in another medium–MP3 format rather than audio CD–has no bearing on our analysis. See id. at 351 (finding that reproduction of audio CD into MP3 format does not “transform” the work).


Next Practice Management Association.

Again, it's not about anti-trust. It's about copyright misuse as a defense to charges of infringement. And it's also mainly about whether standards referenced by law are copyrightable.

As regards misuse, again it is established, by an attempt to extend the limited copyright monopoly. This is the crucial part:
the AMA misused its copyright by entering into the agreement that HCFA would require use of the CPT to the exclusion of any other code.
I haven't been able to find the other two cases online, regarding DSC Communications Corp. v. DCI Technologies, Inc, there is a summary which I found.

From the summary, again it's about copyright misuse as a defense to infringement charges. Again it draws a distinction between copyright misuse and antitrust violations. And again, copyright misuse arises from an attempt to extend the limited copyright monopoly:
The copyright misuse defense can also apply to more narrow license prohibitions, such as those preventing reverse engineering of software (the interim copying of and running software to understand how it works, so compatible software can be developed). In DSC Communications Corp. v. DCI Technologies, Inc., the license agreement prohibited the licensee from copying and using the telephone switch operating system software on non-DSC equipment. DGI did what was contractually prohibited in order to reverse engineer DSC’s operating system software and make a microprocessor card that was compatible with the operating system. The microprocessor cards contained embedded software that, if compatible with the telephone switch operating system, enabled the telephone switches to process the telephone line data. The Fifth Circuit (without a finding of antitrust violation) said, "DGI may well prevail on the defense of copyright misuse, because DSC seems to be attempting to use its copyright to obtain a patent-like monopoly over unpatented microprocessor cards."34 On remand, the district court issued an injunction against sale of any DGI microprocessor card that infringed DSC’s copyright. On another appeal, the Fifth Circuit, without requiring the existence of an antitrust violation, reversed the injunction, due to a finding of copyright misuse resulting from the prohibition on reverse engineering.35


Quatermass
IANAL IMHO etc.

[ Reply to This | # ]

Isn't Wallace getting ahead of himself?
Authored by: Jude on Sunday, July 03 2005 @ 03:38 PM EDT
IANAL, but I think it's odd that Wallace should include a STATEMENT OF MATERIAL
FACTS NOT IN DISPUTE in a motion that was filed before any of the defendants had
responded to his complaint. How exactly does he know they aren't in dispute?

For that matter, I don't think he even alleged these facts in his original
complaint.

FWIW, I'm not even sure all of his "facts" are correct.

[ Reply to This | # ]

My favorite FACT
Authored by: Anonymous on Sunday, July 03 2005 @ 04:10 PM EDT
"10.) The free software movement has used programmers throughout the
world since the early 1980's to create the GNU/Linux operating system and
related software. GNU/Linux has displaced the capitalist production of some
software despite the vaunted incentives created by ownership and exclusionary
intellectual property law [Exhibit 8 footnote 1]."

There you have it. It is one of the 'MATERIAL FACTS NOT IN DISPUTE'. Patents and
other 'exclusionary intellectual property (yuck) law' just don't work as well as
the GPL as incentives to produce software.

--RFMuller

[ Reply to This | # ]

LOL
Authored by: rm6990 on Sunday, July 03 2005 @ 04:36 PM EDT

You know, I'm never going to enjoy watching the comedy channel again. This legal filing is the biggest joke I have ever seen.

11.) One goal of the FREE SOFTWARE FOUNDATION INC. and use of the GPL license is to destroy a company known as the Microsoft Corporation [Exhibit 9].

You're kidding me, right Wallace? What is your goal, to make everyone at the FSF die from laughing too hard because you know you can't beat them in court?

It's a good thing you decided to become a programmer and not a lawyer, although you don't seem to be doing so well in either department.

I know I hope you lose and all, but seriously man, get a lawyer.

[ Reply to This | # ]

Selling below cost/
Authored by: micheal on Sunday, July 03 2005 @ 04:55 PM EDT
About 35-40 years ago Safeway (largest? at the time grocery store chain) would
esatablish a store in a neighborhood and sell at below cost until the local
competitors were driven out of business, Safeway would then raise their prices
above that of the previous neighborhood stores, Safeway eventually lost a
lawsuit for that practice.

Now,if IBM and alleged co-conspirators were selling below cost and below that of
competitors (say Microsoft) they may be guilty of something.

I don't think IBM is selling below cost except, perhaps, the software they write
themselves. Even that is probably not sold below cost because they receive(d)
payment in kind from authors of other GPLed software (Linux, in particular).

---
LeRoy

If I have anything to give, made of this life I live, it is this song, which I
have made. Now in your keeping it is laid.
Anon

[ Reply to This | # ]

It Goes Without Saying......
Authored by: davcefai on Sunday, July 03 2005 @ 05:26 PM EDT
Wallace he say: " It goes without saying that an intellectual property
license such as the GPL is a contract."

1. When used in an argument, "It goes without saying" usually means
"this is a very weak point in my argument".

2. I recall a _lot_ of discussion on Groklaw about this very point.

[ Reply to This | # ]

Wallace on per-se price limits, versus what the Supreme Court said
Authored by: Anonymous on Sunday, July 03 2005 @ 06:21 PM EDT
Wallace believes his complaint about the vertical price limit should be considered on per-se treatment.

He is incorrect.

As IBM points, since at least 1997, maximum vertical price limits are governed by the rule of reason.

From the US Supreme Court, State Oil vs Khan & Khan

It's a long decision replete with history, but this is the key paragraph, 2nd to last:
In overruling Albrecht, we of course do not hold that all vertical maximum price fixing is per se lawful. Instead, vertical maximum price fixing, like the majority of commercial arrangements subject to the antitrust laws, should be evaluated under the rule of reason. In our view, rule-of-reason analysis will effectively identify those situations in which vertical maximum price fixing amounts to anticompetitive conduct.
Quatermass
IANAL IMHO etc

[ Reply to This | # ]

Wallace's "Memorandum on Motion for SJ" in Wallace v. IBM
Authored by: Anonymous on Sunday, July 03 2005 @ 07:04 PM EDT
These supplementary services provide the profit margin and motive for distributing computer programs at no charge.

Isn't that already being done by MS? Or am I missing the boat,again?

wb

[ Reply to This | # ]

Problems with the "facts"
Authored by: rsmith on Sunday, July 03 2005 @ 07:24 PM EDT

Some of the things that Mr. Wallace presents as undisputed facts are clearly not true or disputed:

Professor Moglen has been primarily responsible for all worldwide enforcement activity in defense of the GNU GENERAL PUBLIC LICENSE since 1994

  • As counsel for the FSF, professor Moglen can enforce the GPL for software for which the FSF has the copyright. That's way short of "all worldwide enforcement activity".
  • Other copyright holders have also "enforced" the GPL, see e.g. the netfilter case in germany.

The GNU/Linux operating system is one example of a collective "free software" work developed over the internet by Linus Torvalds in collaboration with Richard Stallman and the FREE SOFTWARE FOUNDATION INC. [Exhibit 7 Para. 13] and the Defendants IBM et al. and others [Exhibit 7 Para. 23] and is licensed under the GPL

  • There is no such thing as "the" GNU/Linux OS. A GNU/Linux distribution is a combination of the Linux kernel, the GNU compiler suite, various utilities some of which are from the FSF and lots of other software.
  • Not all of the programs that can make up a GNU/Linux distribution are licensed under the GPL, nor do they need to be.
  • RMS and the FSF are involved in the GNU project, not in the Linux kernel.

GNU/Linux has displaced the capitalist production of some software despite the vaunted incentives created by ownership and exclusionary intellectual property law [Exhibit 8 footnote 1].

  • Although technically true, this sentence is clearly crafted to make free and open source software appear in an unfavorable light.
  • There are lots of other incentives for creating software than just monetary ones.
  • Besides, using free and open source software is exactly what a capitalist should do if it's available; it provides clear benefits in terms of license costs. (among others)

One goal of the FREE SOFTWARE FOUNDATION INC. and use of the GPL license is to destroy a company known as the Microsoft Corporation.

  • There are surely GPL users that would not shed a tear over Microsoft's demise.
  • But the FSF does not have destroying microsoft as it's goal: "The Free Software Foundation (FSF), established in 1985, is dedicated to promoting computer users' rights to use, study, copy, modify, and redistribute computer programs. The FSF promotes the development and use of free software, particularly the GNU operating system, used widely in its GNU/Linux variant. The FSF also helps to spread awareness of the ethical and political issues surrounding freedom in the use of software." There is no mention about destroying Microsoft.
  • Sounds like Mr. Wallace has been hanging out on /. too much.

---
Intellectual Property is an oxymoron.

[ Reply to This | # ]

What reality does this guy live in?
Authored by: Latesigner on Sunday, July 03 2005 @ 08:23 PM EDT
"The remaining market segment open to the small entrepreneur and developer
is quickly vanishing due to the explosion of GPL licensed software that is being
distributed free of charge by potential competitors IBM et al."

Or maybe he's just copied the SCO habit of lieing to the court?





---
The only way to have an "ownership" society is to make slaves of the rest of us.

[ Reply to This | # ]

Wallace's "Memorandum on Motion for SJ" in Wallace v. IBM
Authored by: blacklight on Sunday, July 03 2005 @ 09:06 PM EDT
"The effect of this term is such that an initial author of a computer
program licensed under the GPL extends his original limited monopoly to control
the independently copyrighted works of "all third parties" to the
license in any subsequent compilations or derivative computer programs."

Well, Danny boy, the answer to your problem is obvious: stay away from the GPL
code and write your own. How's that for an outrageous idea?


"Pricing-fixing computer programs at "no charge to all third
parties" has no pro-competitive market purpose whatsoever except to destroy
non-conspiring competitors who allow their commodity computer programs to be set
by unimpeded free market forces"

Unfortunately for you, Danny boy, the only real alternative to the Microsoft
monopoly is the GPL'ed software. And since Microsoft is making piles of money
and you clearly are not, you don't have what it takes to compete and survive.
Again, no one owes you a living. However, I am convinced that you'll make a
financial killing living on the dole and off the rest of us taxpayers.


Danny boy, I really appreciate you educating me on the penalties associated with
the Sherman Act - We would all be shaking in our boots, except that (a) you
don't have standing to sue; (b) you haven't proven your case; (c) you have
misstated the facts; and (d) your attachments disprove your case. Other than
that and you don't have a license to practice law and you don't have a clue
about what you arguing about, you are one mighty fine lawyer. I'll be sure to
recommend your services to SCOG if they ever ask me for a lawyer.

[ Reply to This | # ]

GPL is pro competition.
Authored by: rsteinmetz70112 on Monday, July 04 2005 @ 12:03 AM EDT
The GPL effectively encourages competition and enhances the ability of the
consumers to obtain GPLed products at the best possible price.

By allowing redistribution of the software the GPL effectively prevents any
anti-competitive combination. Any person obtaining a copy of any GPL software
may redistribute that software at a profit if the market offers a similar
product at prices which presents a profit opportunity.

By its very nature the GPL increases the potential for competition by creating
many potential competitors. All that prevents these potential competitors from
entering the market is the presence of sufficient competitive activity to
increase the risk of failure beyond the tolerance of these potential
competitors. The presence of these potential competitors acts to moderate the
behavior of the existing commercial vendors by presenting them with both legal
informal non-commercial competition and the threat of rising commercial
competition.

---
Rsteinmetz - IANAL therefore my opinions are illegal.

"I could be wrong now, but I don't think so."
Randy Newman - The Title Theme from Monk

[ Reply to This | # ]

Is Wallace PRO-trust?
Authored by: Anonymous on Monday, July 04 2005 @ 01:46 AM EDT
This just hit me ...

Wallace (and others of his ilk) object to free software because, primarily, it
undercuts the pricing of their proprietary software.

Therefore, software should be non-free (as in beer) in order to maintain a
market for people like Wallace to sell their software in.

This would require an agreement among software developers to set a minimum price
for their products.

Wallace is bringing a supposed anti-trust suit, but what he wants out of it,
near as I can tell, is the CREATION of a cartel to artificially inflate the
price of software to a level that Mr. Wallace personally finds profitable.

In other news, peace is war, freedom is slavery, and truth is lies.

[ Reply to This | # ]

Love Danny's work!
Authored by: Anonymous on Monday, July 04 2005 @ 02:01 AM EDT
Isn't that a nice summary of all the gibberish that Danny has been feeding us
throughout the years? I simply love it!

My favourite? Well, of course, "new right against the world" bit.
Nice, really nice :-) I even came up with a name for this new right - how about
copyright?

He, he, gotta love Danny. He never gives up.

[ Reply to This | # ]

Mr Wallace likes to say "naked", doesn't he?
Authored by: Anonymous on Monday, July 04 2005 @ 06:20 AM EDT
Just, you know, mentioning.

[ Reply to This | # ]

what is Wallace's 'real' standing?
Authored by: DWitt_nyc on Monday, July 04 2005 @ 11:10 AM EDT
The Plaintiff Daniel Wallace is trained in the art and science of computer programming. Over the course of the past five years the Plaintiff has witnessed the demand for newly created proprietary computer programs, including operating systems, rapidly being destroyed in the competitive market place. The remaining market segment open to the small entrepreneur and developer is quickly vanishing due to the explosion of GPL licensed software that is being distributed free of charge by potential competitors IBM et al. Does anybody know if Wallace is a 'real' programmer? I've heard he's a member of the FSF, but the above paragraph makes it seem like he's some sort of dilettante--afaik, there's no university that offers a degree in the 'art and science of computer programming' (BASCP?). Also, the lack of any academic or professional achievements/accreditations seems conspicuous-- perhaps he's having a hard time finding work because of the lack of relevant experience?

Finally, the biggest red herring is his statement conflating programming applications with OS design and programming--it seems to me that these are pretty segmented communities, that is, people that do OS design pretty much work at it exclusively (check me if i'm wrong here).

Anybody have the scoop on Wallace's standing/work history? Or is all as it seems at the surface, a 'gadfly' lawsuit by somebody looking for some free publicity?

[ Reply to This | # ]

I wish I could afford to visit the States for a month ...
Authored by: Anonymous on Monday, July 04 2005 @ 03:16 PM EDT

... so I could stand on a street corner near Mr Wallace's house handing out free
copies of a Linux distro and a printed copy of the GPL.

It'd be worth the investment in CDs just to get his, no doubt hilarious,
reaction first hand!

[ Reply to This | # ]

Wallace's excruciating "Memorandum on Motion for SJ" in Wallace v. IBM
Authored by: Anonymous on Monday, July 04 2005 @ 08:57 PM EDT
Perusing Daniel Wallace's legal pleadings, I have a reaction similar to PJ's -- it's agony to read this stuff. The pain comes from wanting to develop an argument countering what he wrote, and being unable to decide what he wrote, because it studiously avoids making any testable points. It has many of the trappings of argument, but at bottom, it is not argument. It is mere contumely.

I don't usually waste much time on a person who practices this Cargo Cult Reasoning, and I resent Wallace's abuse of our purposely approachable courts to force me to pay attention to his excrable blather. I hope suitably horrid things happen to him.

-Wang-Lo.

[ Reply to This | # ]

Free - as in Water
Authored by: Anonymous on Tuesday, July 05 2005 @ 02:26 AM EDT
Wallace's suit is so beyond the pale that it shouldn't be necessary to use a
metaphor.

However, the one I find the most fitting, is that of some slob in Poland Main
(Home of Poland Springs Spring Water).

Let's say the town has 2 water sources.
Poland Springs, which is owned by the corp,
plus a muncipal well, owned by the town (muncipality).
the terms for using the muncipal well, is that it is for muncipal use, and not
for profit. Plus you can give free water to anyone who visits of course.

Wallace seeing how much PS makes, decides to have is own water business, and
intends to bottle and sell muncipal water from the muncipal well.

But since that is against the terms of the muncipal license, he sues the town
for antitrust violations.

Since he is not allowed to do whatever he wants, he wants to force the town to
give the water to him unencumbered by license, or to make sure nobody ever gets
free water in that town again.

Now the funny bit is that the voiding of such a licenses could only achieve two
things:
1)Either the town decides on a new license, in which case Wallace would have to
pay full market price for his use of muncipal water.

2)Or the water becomes license free, in which case, Wallace will just have to
wait at the end of the line of local yokels who want to start a bottle
business.

3)At which point, the resource would quickly be tapped with hardly any profit,
plus the town would not be able to afford maintaining and upgrading the resource
to handle the demand.

4)Plus the market would be so flooded by PS clones from bottlers driving prices
down so they wouldn't even be able to recover the cost of transortation.

The funny thing is not that Wallace is trying to piss in his own well. The fun
thing is that Wallace is crazy enough to go up to a judge and present such a
crackpot case.

[ Reply to This | # ]

Groklaw © Copyright 2003-2013 Pamela Jones.
All trademarks and copyrights on this page are owned by their respective owners.
Comments are owned by the individual posters.

PJ's articles are licensed under a Creative Commons License. ( Details )