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Versata Litigation Summary

Disclaimer: I have not read the pleadings for this case. The summary below is based on secondary sources that I believe to be reliable. I thought it would be useful to boil things down a bit, and say why it matters to software producers who are not distributing GPL code.

Background

Versata Software licensed its distribution channel management software to Ameriprise.

Ameriprise used a third party contractor to modify the Versata software, which entailed decompiling Versata’s software.

Versata sued Ameriprise for breach of the license agreement.

During the discovery phase of the lawsuit, Ameriprise discovered that the Versata software included GPL v2 software (a utility called VTD XML produced by a company called XimpleWare; XimpleWare has a dual license strategy for the utility and makes the software available via GPL or a proprietary license; Versata did not have a proprietary license).

Ameriprise countersued claiming that the Versata software as a whole was brought under the GPL by virtue of the inclusion of the XimpleWare software (the FUD ridden “viral infection” argument).

I believe this issue is being litigated, but it doesn’t appear likely that the “viral infection” claim will hold up.   Also, the case is now pending in State court in Texas so any ruling along those lines would not set up a powerful precedent as would a federal court opinion.

The part that is more interesting for non-GPL licenses…

A few weeks after Ameriprise brought its countersuit against Versata, XimpleWare brought claims of copyright infringement against both Versata and Ameriprise (and all of Versata’s customers!) based on their failure to make source code for the modified version of the software available as required by the GPL.  The case hinges largely on whether there was a “distribution” triggering the GPL requirements, but that is not necessarily the interesting part of this case for companies who only distribute permissive licensed open source.

There are two take-aways for permissive licensed code:

1. For the first time in a long time someone has brought a claim for money damages based on failure to comply with license terms. In the past, open source litigation has been brought primarily by groups like the Software Freedom Law Center seeking compliance rather than money damages.

2. Many of the permissive licenses contain requirements that may seem trivial in the practical sense but are of equal legal stature to the source code publication requirement of the GPL.  I am referring to license requirements that that the copyright notice and license terms be reproduced with the distribution.  If these requirements are conditions on the license, then the claims that can be made by the software producers for breach of these requirements is potentially as serious as the claims that can be brought for failing to release source code under the GPL.  And if the Versata case is sign of things to come, those producers may be looking for more than just a correction – they may want money damages.

It may be a pain, but it is critical to correctly comply with all of the technical details of requirements for  attribution and reproduction of license terms, even where the source had not been modified.

See http://opensource.com/law/14/7/lawsuit-threatens-break-new-ground-gpl-and-software-licensing-issues

Mark Radcliffe of DLA Piper has a nice posting on Linked In on the Versata litigation https://www.linkedin.com/pulse/free-open-source-software-keep-mark?trk=prof-post.  He references two FOSS compliance guides – one published by the Software Freedom Law Center http://www.softwarefreedom.org/resources/2012/ManagingCopyrightInformation.html
and the other by the Software Conservancy and Free Software Foundation http://www.copyleft.org/guide/

Legal Terms Scorecard for IaaS – Amazon (AWS), Microsoft Azure, Google Compute Engine

Lawyers, do you hate it when you are asked to review multiple vendors legal terms as part of a vendor evaluation?

A company shopping for an IT service will compare many offerings before it selects the winner. The company may develop some rigorous “scorecard” criteria to compare the different options. The provider’s legal terms are material and should be part of the overall evaluation process, but in house legal departments are too busy to compare multiple sets of legal terms as part of the evaluation process.  Lawyers want to wait and review the terms after the provider has been selected. This can be a small disaster if the chosen provider’s terms are unacceptable and the provider won’t negotiate.

Even if they have the time and inclination, lawyers lack a framework for scoring legal terms of competing providers. It is difficult to identify and compare complex variables when  represented by different legal approaches.

Here’s my shot at such a scorecard for three Cloud infrastructure providers. This scorecard is not comprehensive across all issues, but touches on some key legal points. It reflects my subjective opinion on how different issues should be weighted. It is not legal advice! It is not intended for use by non-lawyers.   I hope it will help my colleagues avoid another contractual fait accompli.  Click here for scorecard.