Court Rules GPL Doesn't Violate Antitrust Laws

unix4reel writes "Internet Cases reports on a new decision from a federal court in Chicago holding that 'the GPL and open-source have nothing to fear from the antitrust laws. The suit was against IBM, Red Hat and Novell, arguing that by distributing Linux for free, they offered products at an unbeatably low price (free), thus discouraging new market entrants and stifling competition. The court took a different view, focusing instead on how the GPL fosters new development."

w00t

[thejrwr]

This just goes to show you, that the GPL is well written! Take that Microsoft!

Isn't that Wallace the Spam King?

[shankarunni]

Who's "plaintiff Wallace"? The Spam King?

Re:

[schon]

Who's "plaintiff Wallace"? The Spam King?

No; this is Daniel Wallace - net.kook, and inventor of "sciBSD", a purported OS, which in reality consisted of a (very) badly written HTML page.

GPL is a little tough guy

[mapkinase]

Long live common sense!

Re:

[IAmTheDave]

Long live common sense!

It's always uber-painful waiting for common sense to wake up. Look at Iraq, DRM, RIAA, GPL, NTP, etc., etc. - sometimes I feel like I have this ability to foreshadow common sense years into the future.

I know that everyone will eventually catch up, but it's so difficult to wait...

Unbeatable? I think not!

[thewiz]

The suit was against IBM, Red Hat and Novell, arguing that by distributing Linux for free, they offered products at an unbeatably low price (free), thus discouraging new market entrants and stifling competition.

Wrong, free is not unbeatable; they just need to pay the end user top use their software!

Unbeatable price?

[Anonymous Coward]

I would contend that OSS released under GPL does have a price.. that is, accepting of the GPL itself. I think that you will find that some people may find that a steep price indeed.

Re:

[ErroneousBee]

Users do not have GPL restrictions, only people modifying and distributing do.

The only restriction that might conceivably hit a user is if they give away Linux CDs, or sell PCs with Linux installed, as they become liable to distribute the source too.

Re:

[BranMan]

      Bzzzt! Wrong, thanks for playing. The GPL itself says, in plain english, that you did not have a chance to see the GPL beforehand, you did not sign anything, you do NOT have to 'accept' the GPL - the software is free to do with as you please. The only reason you need to accept the GPL is IF you are re-distributing it or distributing modified versions of the software - that is all the GPL covers. That's it. NO ONE just using GPL software has to accept the GPL at all.

Interesting thing about the opinion...

[Anonymous Coward]

See http://www.internetcases.com/library/cases/2006-11 -09_wallace_v_ibm.pdf [internetcases.com], where the judge goes off the rails of reality in the very first paragraph:

Authors who distribute their works under this license, devised by the Free Software Foundation, Inc., authorize not only copying but also the creation of derivative works--and the license prohibits charging for the derivative work.

If the Court makes a mistake that fundamental -- the idea that you can't charge for software derived from other GPL software -- then we should all consider ourselves lucky that the opinion in toto was correct. IANAL, but doesn't this kind of "bug" open up possible avenues for appeal?

Re:

[colinleroy]

The comments at http://lwn.net/Articles/208617/ [lwn.net] explain that quite well, I think. I thought the same as you initially, but it looks like the court did his homework in fact.

Re:

[Arnoud Engelfriet]

I read that as "prohibits the distributor from charging *those who create derivative works* for creating derivative works". That makes sense given the "no additional restrictions" language of the GPL. Even if the judge meant "no one may sell his own GPL-derivative work" it's not something to base an appeal on. And not just because this *is* the appeal. That part of the reasoning is not crucial to the judge's finding. Had he omitted that sentence, the rest of the verdict would be just as sensible. Arnoud

Re:Isn't that Wallace the Spam King?

[egarff]

The closest info I could find is here: http://en.wikipedia.org/wiki/Daniel_Wallace_(plain tiff) [wikipedia.org]

Victory over a paper tiger.

[Anonymous Coward]

The goodness of this victory is diluted by the fact that Wallace didn't have the money to properly argue his case. As such, it doesn't have much value as a precident. If someone with big bucks was making the argument, and if the GPL was being defended by someone with no resources, the decision could have gone the other way.

Note that the bully boys of the RIAA always go after people who don't have the resources to defend themselves. Even then they lose the occasional case. Justice in this country goes to whoever can hire the best lawyers.

Am I cynical? Yep.

What was the Plaintiff thinking?

[parvenu74]

This should have been a really easy case in which prove a lack of harm to the marketplace: simply copy the GPL software released by IBM, Red Hat, and Novell onto a DVD, write your own label on the disk with a Sharpie (Sam's Software Stack, perhaps?) and then sell it to someone right there in the court room and ask the judge and the defendants if there is anything in the GPL license or the law which makes that act illegal. Case closed.

This isn't obvious

[MobyDisk]

(IANAL)

It sounds like the case didn't deal with the GPL directly. The case dealt with selling software below cost. This is important, because in some states it is illegal to sell commodities below cost. (This was to deal with Wal-mart offering loss-leaders and driving small companies out of business). So it is a valid question to ask: Is it legal to sell software below cost? The court found that unlike commodities, the software industry can thrive with companies offering free software. That makes sense to me.

To put a fine point on this, it has little to do with the GPL (a copyright) since this was not an analysis of copyright. And it had little to do with open-source, since I can sell open-source software. It deals with free (as in beer) software.

Guy with no case loses to well funded corporation.

[Anonymous Coward]

So, some guy with no legal case loses to IBM's well paid legal team.

IBM has both the law itself, and reams of money on their side. The other guy doesn't.

This is about as close as it gets to an "open and shut" case.

What's this?

[keesh]

What's this? A court that gets it and actually understands technology issues? Amazing.

Re:Unbeatable price?

[Roger_Wilco]

Wrong.

Like copyright law, the GPL says nothing about users. It merely grants people the right to make copies under certain conditions. Since using it does not require any permissions you do not already have, you do not need to accept the license to use it.

The same would be the case for non-free software, except for the existance of EULAs. (And they may be on shaky legal ground.)

Seriously, folks, read it sometime. It's the clearest bit of legalese you're likely to find.

What Price?

[CastrTroy]

I would contend that OSS released under GPL does have a price.. that is, accepting of the GPL itself. I think that you will find that some people may find that a steep price indeed

Unless you are comparing it to the BSD license, then there is no price. The GPL only restricts how you may redistribute the product. Most commercial software cannot be redistributed, so this is a non-issue. The GPL in no way inhibits your abilities to use the software.

Re: Victory over a paper tiger

[geoffspear]

Umm, if you think that someone with no resources could be successfully prosecuted for violating antitrust laws, you probably don't understand antitrust law at all. If you're too small to harm your competitors though anti-competitive activity, then by definition you can't violate antitrust law.

Re:

[hesiod]

So you are saying that you are writing software that depends on some free software and you are mad that you can't use the free software in your non-free software? If you're a good software developer, then you can rewrite it.

Challenge was doomed because of the Constitution.

[Zaphod-AVA]

Challenging the GPL on those grounds was doomed to fail, because the GPL's intent, and the intent of copyright are the same.

From the good ol' Constitution, Section 8:

"Congress shall have the Power"... "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries"

The whole reason we have copyright is to promote the useful sciences and arts, which is exactly what the GPL is for as well, they simply use different methods.

Re:Challenge was doomed because of the Constitutio

[theonetruekeebler]

Now try telling the RIAA and MPAA their copyrights are secured "for limited Times." That limited time has been bumping up decade after decade. There's a (MS Word) paper [vaughnbox.net] tracing the history of copyright in the U.S., noting how copyright profiteers have lobbied relentlessly for increased control and rights they never had before.

To be honest, I think the GPL actually protects re-users because otherwise copyright would work against them. The Linux kernel, for example, contains the original work of hundreds

That's Daniel Wallace

[darthlurker]

Not Spamford. Sounds like another "entrepreneur" who's considerable initiative and risk appears to be the extremely dangerous task of filing lawsuits. http://en.wikipedia.org/wiki/Daniel_Wallace_(plain tiff) [wikipedia.org]

Those pinky-commie judges!

[Opportunist]

It simply isn't American to charge nothing for nothing! How could they rule that it's ok to give stuff away for free?

Not an unbeatable price.

[Aqws]

Free isn't an unbeatably low price. You could always pay people to use your software.:p

Stifling market entry?

[Miseph]

Admittedly, I didn't RTFA, but if the summary above is at all accurate, and part of the argument is that GPL software being "sold" for free prevents new competition, then isn't the entire argument obviously flawed? Microsoft, Apple, Oracle, Blizzard, Adobe, etc. all make a killing on non-GPL software; is someone really going to try and tell me that GPL licensed software has made it too hard for them to compete?

Besides, Linux "vendors" are really in the support business. Nobody is stopping anybody from opening up their own support business for any distro they want. It can't even be argued that the 'vendors" have some sort of unfair advantage because of exclusive access t5o the source code... because they are required to distribute it, for free, to anyone who wants it. Even direct competitors! The only barrier to entry for me from slapping a decal on my car and declaring myself a traveling Linux support tech for hire is that, well, I'd be a thoroughly useless Linux support tech. And blaming that on IBM just won't fly no matter how good my lawyer is.

Same person that sued FSF

[Dr_Art]

This is the same person [wikipedia.org] that unsuccessfully sued the FSF, also for alleged antitrust reasons.

RE: This isn't obvious

[Vexo]

(IANAL) It seems completely obvious to me that prohibitions to selling below cost do not apply to free software. Ignoring the whole "software is not an actual good" argument, charities and other "freebie" programs offer things below cost all the time. Even calling these cases "sales" is dubious, and the same distinction should hold for F/OSS. A law designed to prevent anti-competition by banning loss-leaders and the like should only apply to an entity that can compete! Charging for service or distribution i

antitrust

[mikeee]

The interesting point the court made is that antitrust law is made to protect consumers, not businesses. Selling below cost violates antitrust only if it's part of a plan to drive out your competitors and jack up prices later. Since the GPL doesn't allow the 'jack up prices later' part, there's no anti-trust harm to consumers, and no grounds for action.

My question...

[FuzzyDaddy]

was Grommit also a plantiff?

GPL has no price

[DragonWriter]

I would contend that OSS released under GPL does have a price.. that is, accepting of the GPL itself.

And you would be wrong, since accepting the GPL is not required to receive or use GPL'd software, by the terms of the GPL itself. It is only required to have the privilege of modifying or distributing software distributed under the GPL. Its not an EULA. You lose no right that you had without the GPL when you accept the GPL, you simply gain limited privileges that you did not have before.

Re:

[strikethree]

It is only required to have the privilege of modifying or distributing software distributed under the GPL.

IIRC, this statement is not true either. If you change your "or" to an "and" it should fix it though. You are explicitly allowed to modify GPL software with no obligations incurred until you decide to distribute.

strike

Re:

[DragonWriter]

You are explicitly allowed to modify GPL software with no obligations incurred until you decide to distribute.

Well, its unlikely that anyone is going to know or take any action if you modify a copy without distributing it, but see paragraph 4 & 5 of the GPL:

4. You may not copy, modify, sublicense, or distribute the Program except as expressly provided under this License. Any attempt otherwise to copy, modify, sublicense or distribute the Program is void, and will automatically terminate your rights und

Re: Interesting thing about the opinion...

[frankie]

and the license prohibits charging for the derivative work.

Mr Coward misinterprets what that sentence is saying. It's not saying you can't sell derivative copies (pretty sure none of these [google.com] are directly from Mr Torvalds); it's saying the licenser (original seller) isn't allowed to charge the licensee (new buyer) royalties if the buyer wants to sell their own version. Which is exactly correct.

Reply to geoffspear

[Eric Damron]

Sorry, because of the database error we can't reply in a thread so I'll just reply here.

geoffspear wrote: "Umm, if you think that someone with no resources could be successfully prosecuted for violating antitrust laws, you probably don't understand antitrust law at all. If you're too small to harm your competitors though anti-competitive activity, then by definition you can't violate antitrust law."

IANAL but I don't think your statement is entirely accurate. I don't think a monopoly has anything to do with

Cheaper than Free

[Nom du Keyboard]

You can go cheaper than the low low price of Free.

Pay people to buy it.

Or, under some definitions, sell below costs ala XBox360, PS3, Zune...

Call In Ballmer

[Anonymous Coward]

The suit was against IBM, Red Hat and Novell, arguing that by distributing Linux for free, they offered products at an unbeatably low price (free), thus discouraging new market entrants and stifling competition.

They should've just got Microsoft to explain how the Total Cost of Ownership (TCO) is much higher with OSS than with Windows - the case would have been thrown out there and then!

Re:

[mark-t]

You don't have to accept the terms of the GPL if you only want to use the software... you only need to accept them if you want to create derivative works (since the only way the GPL denies you permission to copy the original work is if you try to create a derivative work without agreeing to the license).

How to compete with free

[phorm]

Offer a consistently superior contract. In the OS business would, offer a consistently superior product for free, and charge for a good service contract.

Re:Victory over a paper tiger.

[kilgortrout]

The author of this opinion, Judge Easterbrook of the Seventh Circuit Court of Appeals, is from the University of Chicago and is very highly respected, particularly for his opinions dealing with economic issues. He is a Reagan appointee and is noted as a very intelligent and intellectual free market proponent, in keeping with his U of C econ background. His opinions carry a lot of weight among other judges within the federal judiciary, particularly on commercial and antitrust issues.

He also has a reputation of not suffering fools lightly and he can be extremely confrontational in oral argument. I've argued two appeals before him and it's an experience I'll never forget. At any rate, the fact that this opinion came from Judge Easterbrook will carry a great deal of weight. The precedent isn't tarnished by the lackluster plaintiff. Nobody else would have the balls to contend the GPL violates antitrust laws; it's a frivolous argument from a nut. I'm sure Easterbrook tore this guy a new one in oral argument.

Re:

[karlto]

If the Court makes a mistake that fundamental -- the idea that you can't charge for software derived from other GPL software ...

I'm not sure that's what it says - I read it as not being able to charge other parties for the derivative works they create.

Paper Tiger?

[mutube]

Reply to this [slashdot.org].

While this may have been a fairly gentle attempt at testing the GPL under antitrust, I doubt the GPL would be in much danger regardless of who it faced. There are enough people with investment (monetary, ideological or otherwise) in the survival of the GPL to stump up the cash should it depend on it. If we all gave a fiver...

can this be appealed?

[gravesb]

IANAL, but a law student. If the judgment is in your favor, even if all of the underlying facts or statements by the judge are incorrect, you cannot appeal. So, even if the judge misstated the GPL, the fact that he ruled in the favor of the parties defending the GPL means that they can't appeal to get his statements fixed.

Re:In response to the FUD spreader up above...

[Xtifr]

> Under the upcoming GPL v. 3, accepting e.g. a GPLd webserver will force me to distribute the source of my programs that run ON TOP OF IT

Pure and unmitigated bullshit! That's not even possible, since the GPL doesn't force anything! It relies on copyright law for its teeth, and your programs on top of the web server would not be derivative works as defined by copyright law, so there's no way for the GPL to affect them! What will change in the GPLv3 is that if the webserver (or a webapp) comes with a b

Re:GPL is a little tough guy

[Mahler]

Indeed, it should be called CSL, the Common Sense License

Publish OpenOffice.Org documents?

[JoeInnes]

There are a number of reasons this is not legally required. Number 1, a document produced using a program licenced under the GPL does NOT constitute a derivative work, and as such, these documents are not required to be licenced under the GPL. Number 2, the GPL does not give the user an obligation to distribute his or her work. Admittedly, it's not ideal, but you would not be required to release copies of anything. You could keep all of the document on your computer, and then not be subject to the terms of

Re: can this be appealed?

[Dr_Art]

(IANAL) The case was dismissed "with prejudice" and the dismissal was based on the failure of the plaintiff to show that he suffered damages or that antitrust law applied to him since he was a "producer" and not a "consumer". "With prejudice" means the plaintiff has lost and can't appeal. The statement about the GPL was not a finding, but simply some explanation used by the judge. So there'd be no reason for the defendant to appeal to correct the explanation.

For example, if the judge said "I find that

Re: can this be appealed?

[JoeInnes]

IANAL either, but surely linguistically the first statement makes an assumption about the plaintiff based on a fact that not only is obviously untrue but is irrelevant. Therefore, logically, the plaintiff should (whether or not he does) be allowed to appeal, either on grounds of the judge being biased, mentally unstable, or both? The second statement makes two seperate assertions, that are not dependent on each other. There is no logical need to dispute the sky being green, even if it's wrong, as it's a com

Re:In response to the FUD spreader up above...

[Tacvek]

Idiocy. Under the upcoming GPL v. 3, accepting e.g. a GPLd webserver will force me to distribute the source of my programs that run ON TOP OF IT even when no modification has been made to the server itself. So, by accepting GPLd software, you will have to distribute not only the source of any modified version (if you distribute it at all), but also the results of your work if you used the software to actually DO something.

What type of non-sense is that? TTBOMK, There is no clause that says anything at al

'Victory over a paper tiger' NO NO NO

[Mammothrept]

Anonymous Coward asserted:

"The goodness of this victory is diluted by the fact that Wallace didn't have the money to properly argue his case. As such, it doesn't have much value as a precident. If someone with big bucks was making the argument, and if the GPL was being defended by someone with no resources, the decision could have gone the other way.

Note that the bully boys of the RIAA always go after people who don't have the resources to defend themselves. Even then they lose the occasional case. Ju

Threadless reply

[MrCopilot]

This should have been a really easy case in which prove a lack of harm to the marketplace: simply copy the GPL software released by IBM, Red Hat, and Novell onto a DVD, write your own label on the disk with a Sharpie (Sam's Software Stack, perhaps?) and then sell it to someone right there in the court room and ask the judge and the defendants if there is anything in the GPL license or the law which makes that act illegal. Case closed.

Ahem, please remove all copyrighted artwork and trademarks before redis

Antitrust?

[linuxhansl]

The court took a different view, focusing instead on how the GPL fosters new development.

Why does it even matter what the court thinks about beneficial or detrimental effects to the software business? There are some folks who work on software in their own time and release it for free. Who will deny them their right to release whatever they own for free?

What's next? A writer releasing short stories or books for free... Will we also need a court musing about whether this is violates antitrust law?

This case should have been thrown out in the beginning.

Re:Unbeatable price?

[volpe]

It's not a very steep price if you're just *using* the software.

Re: can this be appealed?

[Dr_Art]

(IANAL) I don't suppose there would be anything to prevent a plaintiff from filing an appeal even if their suit were dismissed "with prejudice". If the plaintiff could show the judge was obviously biased, mentally unstable, or both, then the appellate court would theoretically be able to remedy it (e.g., vacate the judge's ruling). But to be more precise, the "with prejudice" means the original judge won't hear any additional motions by the plaintiff on the case. If the appellate court (and so on up the

assholes change tune to suit themselfs

[timmarhy]

honestly the GPL hating pricks out there need to STFU. on the one hand they put out bullshit "proving" that linux costs more, on the other they go to court claiming linux is unbeatably cheap - make your fucking minds up.

this will become a problem when...

[3seas]

....consumer choice becomes illegal.

For that is what teh GPL is alll about.... comsumer choice, be the consumer a developer or an end user

Re:Unbeatable price?

[nhaines]

Hardly. The GPL is not an end user license. It's something you only have to accept if you distribute the software verbatim or modified.

You're free to do all the usage and private modification you like.

Dan Wallace's Online Rantings

[bmo]

http://search.messages.yahoo.com/search?.mbintl=f i nance&q=walter_oak_night&action=Search&r=Huiz75WdC YfD_KCA2Dc-&within=author&within=tm [yahoo.com]

Or use this url:

http://preview.tinyurl.com/t9uxc [tinyurl.com]

Otherwise known as "how so many brain cells can get so much wrong"

Laughter inducing.

--
BMO

Re:Unbeatable price?

[Eivind]

That doesn't work. Because they're talking of the terms for *using* the software, not the terms for *redistributing* the software.

The terms for *using* GPL-software are very simple: You may use GPL-software in any way you want.

You are not even required to accept the GPL if you are only *using* the software.

Doesn't get much simpler than that.

So, no. *using* GPL software has no price. And no conditions whatsoever imposed by the GPL.

It *is* ofcourse subject to the limitations in laws. If you do somet

Another Wallace

[Per Abrahamsen]

Sanford Wallace [wikipedia.org], the "spam king".

Daniel Wallace [wikipedia.org], who might have helped FSF by giving them a valuable prior case.

Unbeatable price? Yes, for end users.

[Per Abrahamsen]

You don't have to accept the GPL if you are an end-user.

The only people who have to worry about the GPL are those who are going to redistribute the code.

Re: Victory over a paper tiger

[ChetOS.net]

Perhaps I am misunderstanding what you are saying, but it was *against* IBM, Redhat, and Novell.

The little guy with no resources was suing them, not the other way around.

Re:

[geoffspear]

Yes, and it literally couldn't be the other way around; Microsoft couldn't try to sue a little guy with no resources for selling GPL'ed software based on antitrust law, because by definition nothing the little guy with no resources does can possibly violate antitrust law.