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Summary:

When patent troll Acacia sued Red Hat in 2007, Acacia’s patents were invalidated by the court, and all software developers had one less legal risk to cope with. So, why is the outcome of Red Hat’s next tangle with Acacia being kept secret?

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When patent troll Acacia sued Red Hat in 2007, it ended with a bang: Acacia’s patents were invalidated by the court, and all software developers, open-source or not, had one less legal risk to cope with. So, why is the outcome of Red Hat’s next tangle with Acacia being kept secret, and how is a Texas court helping to keep it that way? Could the outcome have placed Red Hat in violation of the open-source licenses on its own product?

The suit in question — Software Tree LLC v. Red Hat, Inc. – claimed that JBoss, the well-known Java web software, infringed upon U.S. Patent No. 6163776 (PDF), which essentially claims invention of the object-relational database paradigm. In that paradigm, an object in an object-oriented software language represents a database record, and the attributes of the object represent fields in the database, making it possible for programmers to access a database without writing any SQL. It’s a common element in most web programming environments today.

The patent was originally filed by Software Tree Inc., a database software vendor. Acacia acquired Software Tree’s patent portfolio (with terms undisclosed) and formed the Acacia subsidiary Software Tree LLC, which pursues lawsuits against other companies and does not produce any products. Most of the press was misled by the similar names of the two companies and provided links to Software Tree Inc. in their reporting.

Soon after the judge produced a finding on claim language, a first step in such cases, Acacia filed a press release announcing that the parties had settled, while Red Hat gave a terse acknowledgment. But a month later, there has been no announcement of the terms of the settlement by either party. Open-source developers are especially concerned, because the license on the JBoss software, the Lesser General Public License (LGPL), contains language that prohibits one party from licensing a patent unless that license is available to all developers of the software.

Is Red Hat now violating these terms? Although Red Hat owns much of the JBoss copyright, it doesn’t own the whole thing, and is thus subject to the LGPL terms. They won’t say. I think they can’t say.

A month after the conclusion of the case, there isn’t any court paper about its conclusion. The only likely explanation is that Red Hat accepted that the case be sealed as part of the terms of its settlement with Acacia. Sealing a case is very common in such settlements; the parties agree to keep the specifics of the case quiet, and the judge enforces this with a court order binding both sides to secrecy for a lifetime. I’ve been subject of such an order as part of my expert witness practice: because my customer agreed to seal, there is an open-source case I can’t ever talk about without courting jail time. But it’s important to note that Red Hat, as defendant, would have had to agree to seal this case knowing its legal partners in the development of JBoss, the open-source community, would be forever kept in the dark regarding whether their own licenses were being violated.

Is the Open Source Community in Peril?

Should Acacia decide to prosecute the patent against them, open-source developers’ own standing has likely been damaged by Red Hat’s action. According to Heather Meeker, author of The Open Source Alternative: Understanding Risks and Leveraging Opportunities and A Primer on Intellectual Property Licensing, “Once Red Hat settles and pays for a license for the patent, any subsequent defendant will find it more difficult to convince a court that the patent should not be enforceable.”

So, it seems that Red Hat has left the open-source community that produces its product in the lurch. Not only would the JBoss developers be at increased risk, so would users of PHP, Ruby on Rails, and, indeed, most open source and proprietary web platforms. Perhaps Red Hat’s attorneys felt that things would be even worse for the community if they fought the case to its conclusion and lost. But we don’t know that, because it appears that they agreed not to tell us.

Perhaps this will come as a wake-up call to an open-source community that has been historically complacent about the elephant in its living room: Patent holders can shut down open source at any time, simply by bringing claims against individual developers and small companies that can not afford to defend themselves. The commercial success of Linux increases the likelihood of such action, especially in mobile telephony and other hotbeds of patent litigation. It is an unfortunate fact that there are so many software patents granted, on so much fundamental art, that all significant programs, open source or proprietary, are likely to exercise technology claimed in multiple software patents currently in force.

What Can Be Done?

There are litigation funds said to be available to protect open source developers, but they were not made available in Jacobsen v. Katzer, one of the few cases so far in which an individual open-source developer and his non-profit project, rather than a corporation, was subjected to a patent claim. That developer came very close to losing his job, and is still coping with the debt created by his successful effort to protect his project. The amount said to be available to defend open source developers is only sufficient for a handful of cases. At upward of $5 million per case, according to the American Intellectual Property Law Association’s Economic Study, it might be that the community can only sustain two or three cases.

Richard Stallman has said, “There’s no way to cure malaria by swatting mosquitoes — you have to drain the swamp.” Meaning that the solution is to fundamentally change the law so that free software and open source are protected from software patenting. But even Stallman’s legal counsel, Eben Moglen, acknowledges this is a lofty goal: “We can’t drain the swamp in the near future. So we need effective public hygiene that isn’t based on draining the swamp. What it will take is careful, constant, expensive, and difficult attempts to make the patent system part of the coexistence between freedom and business instead of a constant irritant and threat.”

For leaders like Moglen to discourage direct lobbying against software patenting probably won’t help to drain the swamp, either. The open-source community must start to take the problem of software patenting seriously, and must hold its commercial partners responsible to invest more of the profits made from open source into protection of the right to produce it.

Disclosure: Bruce Perens sat on the board of Telkel, the previous attempt at a JBoss company by JBoss founder Mark Fleury, and advised the company on its choice of open-source license. Perens realized no income from Telkel, and the company has been dissolved, but it is possible that he holds some fractional ownership interest in its copyrights.

Bruce Perens is a co-founder of the open-source movement in software, and the creator of the Open Source Definition, the rule-set for open source licensing. Today, he advises companies and law firms on issues regarding open source.

  1. Here’s one solution for serious FLOSS developers: Leave the US.

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    1. @RK: Software patents aren’t an exclusively American phenomenon. They exist around the globe. Take a look at these examples of non-US software patents:
      http://fosspatents.blogspot.com/2010/08/international-equivalents-of-apples.html

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      1. @FM: Still it’s misrepresentative to portray software patents as a given. While some gullible and 3rd world countries have them to, it’s foremost and primarily an US problem. Also I’d ask that we be specificly and rigorously use the term “software patents” when we don’t refer to real patents. Otherwise it’s implicitely acknowledgig their validity.

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      2. florianmueller2 Friday, November 12, 2010

        @mario: The countries I listed in that blog post aren’t just “gullible and 3rd world countries”. I listed the EU, China, Japan, South Korea. Those are sophisticated countries.

        What you may draw the wrong conclusions from is the fact that most software patent litigation takes place in the US. If the EU had a single patent court in place that could issue injunctions and determine damages for the entire EU single market (an even bigger economy in total than the US market), but for now the US market is the single biggest market in which you can get a ruling in a single court proceeding. Plus, most of the plaintiffs are based there. But as my blog post demonstrated, those plaintiffs usually do own software patents around the globe. If they prevail in the US, you can be sure they also collect royalties in the rest of the world wherever they own such patents.

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    2. Here’s a solution for RK: Kill yourself.

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      1. I live in Europe and we have _not_ software patents. we can’t patent any software thing as it is subject to copyright only (as book are).

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      2. @matte, in Europe, I guess the confusion comes from the fact the EPO (the European Pattent Office) do deliver software pattents, even if they are not (yet) valid. Hopefully, the current mess in the US has frozen the legalization of software pattents in EU.

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  2. Seriously, this is the best opinion piece on open source and patents that I’ve read in a long long time. And as the founder and former director of the NoSoftwarePatents campaign and author of the FOSS Patents blog, I read (and write) a lot about that subject.

    There’s no question that Red Hat is a very hypocritical organization. In the EU they claim that open source licenses require royalty-free patent license deals. But that’s not true. It’s also a disingenuously narrow focus because royalties are less of a problem than some other restrictions would be.

    Red Hat definitely paid royalties when it settled the FireStar case. It published a misleading FAQ on its website trying desperately to divert attention from what really happened. The non-confidential part of that settlement was published and leaves no doubt that Red Hat entered into an obligation to pay (even Groklie arrived at that conclusion, a website that I very rarely agree with). That payment was probably not on a per-unit basis. They might have made a one-off payment, or a royalty on revenues/profits, or some combination of both.

    Concerning Moglen’s discouraging anti-software-patent lobbying, it’s interesting that he gets away with it while I get criticized for calling on people to be pragmatic. The first time I met him (together with a MySQL VP), he told us not to do it. Instead he wanted money for his patent-busting efforts, which failed miserably (Microsoft’s FAT patents are still in force).

    I tried very hard to fight against software patents (in the EU) at the legislative level. I said on my new blog several times that at some point (more than four years ago, in fact) I couldn’t help but arrive at the conclusion that it’s impossible. It won’t happen simply because the collateral damage caused to other industries is huge (you either have to do away with the largest part of the patent system, or you have to live with software patents) and there simply isn’t any serious, meaningful support for the anti-software-patent cause by businesses. On LWN I gave an example of what a staffer of the conservative group in the European Parliament once said: unless you bring in those middle-aged closed-source entrepreneurs with beards, bellies and glasses talking about how they suffer from software patents and how they may have to lay off employees because of software patents, there’s no way that a political majority will do what the FOSS community asks for.

    While my focus is on how to deal with the most important threat (exclusionary strategic use of software patents), Moglen never talks about that because he’s been loyal to IBM throughout his professional life and gets too much money from them to speak out the truth. Instead, he always talks about IBM’s (and consequently, his) favorite bogeyman.

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    1. You changed sides, Florian! You burned your legacy! You promote patent FUD, you favour RAND licensing and smear the most respected members of the free software community. Do you get paid well?

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      1. @Kurt Your user name here links to http://www.soros.org, so people might as well ask you what you get paid for linking to a (very successful) speculator’s website.

        I’d rather talk about the real issues. None of your claims is right. Concerning “burned … legacy”, as you can see I’m still against software patents, but I recognize that we have to deal with their existence and that we will have to do so for a long time to come. It’s not “FUD” to talk about problems and potential solutions. I don’t “favour RAND licensing”. I prefer to have no software patents, which would take care of the problem. But since they are there, RAND is far better than the way companies like IBM, Google and Apple treat their strategically most important patents. Finally, I don’t “smear the most respected members of the free software community”. I do, however, reserve the right to contradict anyone in the community if necessary in order to speak out the truth.

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    2. “Groklie arrived at that conclusion, a website that I very rarely agree with”

      So you think Linux violates the Unix copyrights? And you think SCO owns Unix? You should publish something to make your case.

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      1. If we’re going to have a detailed discussion of GroklXX’s countless inaccuracies over the last years, we stray too far from the actual topic here. However, let me make it perfectly clear that I never supported SCO, but GroklXX having been right on the merits of that particular case is one thing and its being off base on various other issues (such as Oracle/MySQL, where GroklXX claimed Oracle was going to be a safe home for Sun’s patents that could be used against open source; IBM/TurboHercules, a matter that the European Commission has meanwhile decided to investigate) is another. I have published rebuttals of certain Groklies before, such as http://fosspatents.blogspot.com/2010/08/oracle-vs-google-licensing-issues.html#gplmysql (debunks with several documents those false claims that I wanted to un-GPL MySQL) and http://fosspatents.blogspot.com/2010/08/munichs-linux-migration-and-concerns.html (debunks allegations that I caused a major delay to Munich’s Linux migration).

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      2. The reason I thought you support SCO is that 90 percent of Groklaw articles concern it, and you said you very rarely agree with Groklaw.

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      3. @eduardo Now I understand. I actually don’t follow the SCO story. I never followed it in detail, and I got the impression years ago that it wasn’t getting anywhere, so now I don’t read anything at all about it. I focus on patents and SCO was about copyright. The only exception on my blog: yesterday I commented on the copyright part of Oracle vs. Google (http://fosspatents.blogspot.com/2010/11/copyright-part-of-oracle-vs-google.html) but only because it’s part of a mostly patent-focused lawsuit.

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  3. [...] Perens has an article over at Gigaom about the lack of transparency in the recent settlement between Software Tree and [...]

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  4. Bruce,

    Interesting article. “Sit around and wait to get sued” is probably not the business advice that developers are hoping for, but it may be all they’re likely to get until there’s more disclosure.

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  5. Florian Mueller does not blog for free.

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    1. @Jan Leusing: You may find it hard to believe, but I even make free contributions to other publications than my own blog (most of the ones listed on http://fosspatents.blogspot.com/2010/11/journalistic-endeavors.html were done for free). Do you have anything substantive to contribute to this discussion here?

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      1. Jan means you are a paid lobbyist who refuses to disclose who is paying him at the moment to write these “free” articles attacking people and organisations that promote free software against patent abuse.

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      2. @Mark
        Are you Jan Leusing or do you claim you can read his mind? :-)

        Anyway, what you, Mark, write is completely wrong.

        I am not a lobbyist. I haven’t done any lobbying in more than three years, and that last lobbying project was on sports policy — but no IT lobbying in more than four years.

        Since I don’t lobby, I don’t have anything to hide or disclose. It’s as simple as that.

        I don’t attack people and organizations that “promote free software against patent abuse.” On the contrary, GroklXX actively promotes patent aggression against open source, and Eben Moglen distracts people from the real software patent issues (he’s part of the software patent problem, not part of the solution, unfortunately).

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  6. While we can’t see the terms, it’s possible that the settlement was completely legal, even if Red Hat made a payment. If, in exchange for the payment, the plaintiff agreed not only not to sue Red Hat for infringement, but also not to sue anyone who takes the JBoss code, makes other changes, and distributes the result, then Red Hat isn’t relying on a patent license not available to others, so they are complying with the license. Keeping the terms confidential could allow the plaintiff to engage in FUD.

    I suppose that if anyone is worried about this, s/he could basically treat Red Hat’s conduct as a promise from Red Hat that JBoss is safe from Acacia, because if it isn’t, that means that Red Hat isn’t in compliance with the license.

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  7. @Florian: Yes, Red Hat did pay money to FireStar. They payed for all of the open source community to have access to the IP in questions. They also, along with Novel, successfully fought a company claiming to have the patent on multiple workspaces. Maybe you should give them the benefit of the doubt….

    As for royalties on open source software, it pretty much removes the ability of the software to be given away freely by anyone, doesn’t it. So while it may be technically possible, it violates the essence of the GPL, which you should understand.

    @Bruce: Red Hat may have been painted into a corner. They may have had to agree to silence to minimize the award settlement. The real question is, are they still shipping the infringing code? If yes, and it endangers other community members, then they need to called out on it. But until we know what happened, it should still be innocent until proven guilty. Personally, I think that it should be illegal to silence any case on patent infringement. Patents are supposed to be open to the public and so should all court proceedings pertaining to them, except for private corporate data.

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    1. Gary,
      Anything except business confidential information is public. But, when the parties reach a private agreement to resolve the case, the court is only concerned with the fact that the parties agree that all claims and counterclaims in the case can be dismissed with prejudice and each party is to pay its own costs. The court does not concern itself with what the parties have agreed to between themselves. (A notable exception to this is a class action, where the agreement binds more than just the parties to the case.)

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      1. There are a number of bad effects here. Acacia will be able to shake down more companies into licensing that particular patent, on the assumption that they won and were paid off by Red Hat. Anyone who actually wants to find out has to spend a lot of money in court over dueling motions with Acacia before they find out, and then they too have to keep it secret.
        I agree with other posters that the lack of sunshine on the parties agreement with each other is harmful to anyone else who might have standing.

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    2. @Gary: At the end of the very same paragraph in which you yourself say they “did pay money to FireStar”, you then tell me I “should give them the benefit of the doubt”. So with respect to *what* should I give them the benefit of the doubt?

      GPL philosophy is one thing, but Red Hat all the time claims in the EU interoperability debate that it just isn’t possible under the license. I wouldn’t criticize them for saying it’s against a particular philosophy. What I’m against is using unreasonable interpretations of the GPL (particularly if a company’s actual licensing practice runs counter to them) as an argument in a political debate just because that incorrect legal argument is considered stronger than a purely philosophical argument would be.

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  8. One other thing I just noticed: the time limit on the patent is pretty much up. Maybe Red Hat did pay up but they were the only ones who Acacia decided to sue. Even if Red Hat was infringing, if the patent is expired, it won’t affect the rest of the open source community.

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    1. You can get damage awards for past infringement even after the expiration of a patent. Obviously, those damages then relate to the period during which the patent was in force.

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    2. If the time limit is close, look for Acacia to file a thicket of patents around similar techniques.

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  9. Until Acacia actually sues someone else, it is all speculation. If Acacia is in such a strong position, why settle? What good is it to Red Hat if JBoss developers (and customers!) are left vulnerable in the settlement?

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  10. Even though I am an Engineer and not a Lawyer, it seems obvious to me that Heather Meeker, author of The Open Source Alternative: Understanding Risks and Leveraging Opportunities and A Primer on Intellectual Property Licensing,
    may be wrong when she says
    “Once Red Hat settles and pays for a license for the patent, any subsequent defendant will find it more difficult to convince a court that the patent should not be enforceable.”
    if she is making reference to GPL software distributed by Red Hat.

    The reason I make this assertion is simple …
    We cannot see the terms of the settlement but we know that Red Hat understands their legal commitment under the GPL to only distribute unencumbered (redistributable) software. Redistribution rights are provided specifically in the GPL and LGPL licenses.

    – so IF Red Hat continues to distribute software that Acacia claimed infringes their patent. (and it is GPL licensed.)

    – We can reasonably conclude that in the agreement Acacia specifically agreed to allow Red Hat to legally distribute the GPL software at issue under the GPL license. (As that is the only license that Red Hat can distribute under.)
    – Or Red Hat would not be able to legally distribute the GPL code at issue.

    We can only assume that (an intellectual property based business such as) Acacia (are experts in this area and) did appropriate due diligence on the deal and knew that by agreeing to allow Red Hat to continue distribution that all other redistribution must be allowed (unencumbered). Otherwise they are asserting that they have a right to modify a third parties software license agreement unilaterally. (A felony under the computer crimes act if I have read the laws properly.) In other words they cannot provide to Red Hat a right to distribute encumbered GPL software as long as there are third party copyright holders with partial ownership of the software.

    So by their (Red Hat and Acacia) actions they are asserting that redistribution rights exists without any further encumbrance to other parties.

    (Note that Acacia may have been sloppy in their due diligence. But if they were that is their problem.)

    If we could see the agreement we would know if it specifically allowed Red Hat to continue distribution, although again the actions of the companies might still allow a solid defense for others if Red Hat continued distribution of the software.

    (Lawyers, please feel free to pick holes in this it is only a slightly informed opinion based on laws I’ve read, not on actual existing case law.)

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    1. Curtis,
      I’m not going to poke any holes. Rather, assume your assesment is correct. If a developer gets sued for using jboss, their remedy then would be to pursue a breach of license claim against Red Hat. (Assuming Red Hat wouldn’t simply agree to indemnify the developer.)

      Most clients don’t like being told that their recourse for being sued is to go air someone else.

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