United States Court of Appeals for the Federal Circuit
2008-1001
ROBERT JACOBSEN,
Plaintiff-Appellant,v.
MATTHEW KATZER and
KAMIND ASSOCIATES, INC. (doing business as KAM Industries),
Defendants-Appellees.

Victoria K. Hall, Law Office of Victoria K. Hall, of Bethesda, Maryland, argued forplaintiff-appellant.
R. Scott Jerger, Field Jerger LLP, of Portland, Oregon, argued for defendantsappellees.
Anthony T. Falzone, Stanford Law School, Center for Internet and Society, of
Stanford, California, for amici curiae Creative Commons Corporation, et al. With him on
the brief was Christopher K. Ridder.
Appealed from: United States District Court for the Northern District of California
Judge Jeffrey S. WhiteUnited States Court of Appeals for the Federal Circuit
2008-1001

ROBERT JACOBSEN,
Plaintiff-Appellant,v.
MATTHEW KATZER and
KAMIND ASSOCIATES, INC. (doing business as KAM Industries),
Defendants-Appellees.

Appeal from the United States District Court for the Northern District of California incase no. 06-CV-1905, Judge Jeffrey S. White.
__________________________
DECIDED: August 13, 2008__________________________

Before MICHEL, Chief Judge, PROST, Circuit Judge, and HOCHBERG, * District Judge.
HOCHBERG, District Judge.
We consider here the ability of a copyright holder to dedicate certain work to freepublic use and yet enforce an Aopen source@ copyright license to control the future
distribution and modification of that work. Appellant Robert Jacobsen (AJacobsen@) appeals
from an order denying a motion for preliminary injunction. Jacobsen v. Katzer, No. 06-CV01905 JSW, 2007 WL 2358628 (N.D. Cal. Aug. 17, 2007). Jacobsen holds a copyright tocomputer programming code. He makes that code available for public download from a*

The Honorable Faith S. Hochberg, District Judge, United States District Court
for the District of New Jersey, sitting by designation.

website without a financial fee pursuant to the Artistic License, an Aopen source@ or public
license.

Appellees Matthew Katzer and Kamind Associates, Inc. (collectively

AKatzer/Kamind@) develop commercial software products for the model train industry andhobbyists. Jacobsen accused Katzer/Kamind of copying certain materials from Jacobsen=s
website and incorporating them into one of Katzer/Kamind=s software packages without
following the terms of the Artistic License. Jacobsen brought an action for copyright
infringement and moved for a preliminary injunction.
The District Court held that the open source Artistic License created an Aintentionallybroad@ nonexclusive license which was unlimited in scope and thus did not create liability
for copyright infringement. The District Court reasoned:
The plaintiff claimed that by modifying the software the defendant had
exceeded the scope of the license and therefore infringed the copyright.
Here, however, the JMRI Project license provides that a user may copy thefiles verbatim or may otherwise modify the material in any way, including aspart of a larger, possibly commercial software distribution. The license
explicitly gives the users of the material, any member of the public, Athe rightto use and distribute the [material] in a more-or-less customary fashion, plus
the right to make reasonable accommodations.@ The scope of thenonexclusive license is, therefore, intentionally broad. The condition that theuser insert a prominent notice of attribution does not limit the scope of thelicense. Rather, Defendants’ alleged violation of the conditions of the license
may have constituted a breach of the nonexclusive license, but does notcreate liability for copyright infringement where it would not otherwise exist.
Jacobsen, 2007 WL 2358628 at *7 (internal citations omitted).
On this basis, the District Court denied the motion for a preliminary injunction. We
vacate and remand.
I.
Jacobsen manages an open source software group called Java Model Railroad
Interface (AJMRI@). Through the collective work of many participants, JMRI created a

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computer programming application called DecoderPro, which allows model railroad
enthusiasts to use their computers to program the decoder chips that control model trains.
DecoderPro files are available for download and use by the public free of charge from an
open source incubator website called SourceForge; Jacobsen maintains the JMRI site on
SourceForge. The downloadable files contain copyright notices and refer the user to a
ACOPYING@ file, which clearly sets forth the terms of the Artistic License.
Katzer/Kamind offers a competing software product, Decoder Commander, which isalso used to program decoder chips. During development of Decoder Commander, one ofKatzer/Kamind=s predecessors or employees is alleged to have downloaded the decoder
definition files from DecoderPro and used portions of these files as part of the Decoder
Commander software. The Decoder Commander software files that used DecoderProdefinition files did not comply with the terms of the Artistic License. Specifically, theDecoder Commander software did not include (1) the authors= names, (2) JMRI copyrightnotices, (3) references to the COPYING file, (4) an identification of SourceForge or JMRI as
the original source of the definition files, and (5) a description of how the files or computercode had been changed from the original source code. The Decoder Commander software
also changed various computer file names of DecoderPro files without providing areference to the original JMRI files or information on where to get the Standard Version. 1

1

Katzer/Kamind represents that all potentially infringing activities using any ofthe disputed material have been voluntarily ceased. The district court held that it could not
find as a matter of law that Katzer/Kamind=s voluntary termination of allegedly wrongfulactivity renders the motion for preliminary injunction moot because it could not find as amatter of law that it is absolutely clear that the alleged behavior could not recur. Jacobsen,
2007 WL 2358628 at *5. We agree that this matter is not moot. See also Adarand
Constructors, Inc. v. Slater, 528 U.S. 216, 222 (2000) (AVoluntary cessation of challenged
conduct moots a case . . . only if it is absolutely clear that the allegedly wrongful behavior
could not reasonably be expected to recur.@ (emphasis in original)).
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Jacobsen moved for a preliminary injunction, arguing that the violation of the termsof the Artistic License constituted copyright infringement and that, under Ninth Circuit law,
irreparable harm could be presumed in a copyright infringement case. The District Court
reviewed the Artistic License and determined that ADefendants’ alleged violation of theconditions of the license may have constituted a breach of the nonexclusive license, butdoes not create liability for copyright infringement where it would not otherwise exist.@ Id. at*7. The District Court found that Jacobsen had a cause of action only for breach ofcontract, rather than an action for copyright infringement based on a breach of theconditions of the Artistic License. Because a breach of contract creates no presumption of
irreparable harm, the District Court denied the motion for a preliminary injunction.
Jacobsen appeals the finding that he does not have a cause of action for copyright
infringement. Although an appeal concerning copyright law and not patent law is rare in our
Circuit, here we indeed possess appellate jurisdiction. In the district court, Jacobsen’s
operative complaint against Katzer/Kamind included not only his claim for copyright
infringement, but also claims seeking a declaratory judgment that a patent issued to Katzer
is not infringed by Jacobsen and is invalid. Therefore the complaint arose in part under thepatent laws. See 28 U.S.C. § 2201(a); Golan v. Pingel Enter., 310 F.3d 1360, 1367 (Fed.
Cir. 2002) (explaining that “[i]n the context of a complaint seeking a declaration ofnoninfringement, the action threatened by the declaratory defendant . . . would be an action
for patent infringement,” and “[s]uch an action clearly arises under the patent laws”). Thus
the district court’s jurisdiction was based, at least in part, on 28 U.S.C. § 1338(a) as it
relates to the patent laws, and we have appellate jurisdiction under 28 U.S.C. § 1292(c)(1).
See 28 U.S.C. § 1338(a) (“The district courts shall have original jurisdiction of any civil

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action arising under any Act of Congress relating to patents, plant variety protection,
copyrights and trademarks.”); id. at § 1295(a)(1) (The Federal Circuit shall have exclusive
jurisdiction “of an appeal from a final decision of a district court of the United States” if (1)“the jurisdiction of that court was based, in whole or in part, on section 1338 of this title” and(2) the case is not “a case involving a claim arising under any Act of Congress relating tocopyrights, exclusive rights in mask works, or trademarks and no other claims under
section 1338(a).”); id. at § 1292(c)(1) (Federal Circuit shall have jurisdiction over appeals
from interlocutory orders of the district courts refusing injunctions “in any case over which
the court would have jurisdiction of an appeal under section 1295”).
II.
This Court looks to the interpretive law of the regional circuit for issues not
exclusively assigned to the Federal Circuit. Hutchins v. Zoll Med. Corp., 492 F.3d 1377,
1383 (Fed. Cir. 2007). Under Ninth Circuit law, an order granting or denying a preliminary
injunction will be reversed only if the district court relied on an erroneous legal premise orabused its discretion. Wright v. Rushen, 642 F.2d 1129, 1132 (9th Cir. 1981). A district
court=s order denying a preliminary injunction is reversible for factual error only when the
district court rests its conclusions on clearly erroneous findings of fact. Sports Form, Inc. v.
United Press Int=l, Inc., 686 F.2d 750, 753 (9th Cir. 1982).
In determining whether to issue a preliminary injunction, the Ninth Circuit requires
demonstration of (1) a combination of probability of success on the merits and thepossibility of irreparable harm; or (2) serious questions going to the merits where thebalance of hardships tips sharply in the moving party=s favor.

Perfect 10, Inc. v.

Amazon.com, Inc., 487 F.3d 701, 713-14 (9th Cir. 2007); Dep=t of Parks & Recreation v.

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Bazaar Del Mundo, Inc., 448 F.3d 1118, 1123 (9th Cir. 2006). In cases involving copyrightclaims, where a copyright holder has shown likelihood of success on the merits of a
copyright infringement claim, the Ninth Circuit has held that irreparable harm is presumed.
LGS Architects, Inc. v. Concordia Homes of Nev., 434 F.3d 1150, 1155-56 (9th Cir. 2006).
But see MGM Studios, Inc. v. Grokster, Ltd., 518 F. Supp. 2d 1197, 1212 (C.D. Cal. 2007)(noting that “the longstanding rule that irreparable harm can be a presumed after a showingof likelihood of success for purposes of a copyright preliminary injunction motion may itself
have to be reevaluated in light of eBay [Inc. v. MercExchange, L.L.C., 547 U.S. 388(2006)]”). Thus, for a preliminary injunction to issue, Jacobsen must either show (1) alikelihood of success on the merits of his copyright infringement claim from which
irreparable harm is presumed; or (2) a fair chance of success on the merits and a clear
disparity in the relative hardships that tips sharply in his favor.
A.
Public licenses, often referred to as Aopen source@ licenses, are used by artists,
authors, educators, software developers, and scientists who wish to create collaborative
projects and to dedicate certain works to the public. Several types of public licenses havebeen designed to provide creators of copyrighted materials a means to protect and control
their copyrights. Creative Commons, one of the amici curiae, provides free copyrightlicenses to allow parties to dedicate their works to the public or to license certain uses of
their works while keeping some rights reserved.
Open source licensing has become a widely used method of creative collaborationthat serves to advance the arts and sciences in a manner and at a pace that few could
have imagined just a few decades ago. For example, the Massachusetts Institute of

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Technology (AMIT@) uses a Creative Commons public license for an OpenCourseWare
project that licenses all 1800 MIT courses. Other public licenses support the GNU/Linux
operating system, the Perl programming language, the Apache web server programs, theFirefox web browser, and a collaborative web-based encyclopedia called Wikipedia.
Creative Commons notes that, by some estimates, there are close to 100,000,000 works
licensed under various Creative Commons licenses. The Wikimedia Foundation, another of
the amici curiae, estimates that the Wikipedia website has more than 75,000 active
contributors working on some 9,000,000 articles in more than 250 languages.
Open Source software projects invite computer programmers from around the world
to view software code and make changes and improvements to it.

Through suchcollaboration, software programs can often be written and debugged faster and at lower
cost than if the copyright holder were required to do all of the work independently. In
exchange and in consideration for this collaborative work, the copyright holder permits
users to copy, modify and distribute the software code subject to conditions that serve toprotect downstream users and to keep the code accessible. 2 By requiring that users copy
and restate the license and attribution information, a copyright holder can ensure thatrecipients of the redistributed computer code know the identity of the owner as well as thescope of the license granted by the original owner. The Artistic License in this case also
requires that changes to the computer code be tracked so that downstream users knowwhat part of the computer code is the original code created by the copyright holder andwhat part has been newly added or altered by another collaborator.

2

For example, the GNU General Public License, which is used for the Linux
operating system, prohibits downstream users from charging for a license to the software.
See Wallace v. IBM Corp., 467 F.3d 1104, 1105-06 (7th Cir. 2006).
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Traditionally, copyright owners sold their copyrighted material in exchange formoney. The lack of money changing hands in open source licensing should not be
presumed to mean that there is no economic consideration, however.

There aresubstantial benefits, including economic benefits, to the creation and distribution of
copyrighted works under public licenses that range far beyond traditional license royalties.
For example, program creators may generate market share for their programs by providing
certain components free of charge. Similarly, a programmer or company may increase its
national or international reputation by incubating open source projects. Improvement to a
product can come rapidly and free of charge from an expert not even known to the
copyright holder. The Eleventh Circuit has recognized the economic motives inherent inpublic licenses, even where profit is not immediate.

See Planetary Motion, Inc. v.

Techsplosion, Inc., 261 F.3d 1188, 1200 (11th Cir. 2001) (Program creator Aderived value
from the distribution [under a public license] because he was able to improve his Software
based on suggestions sent by end-users. . . . It is logical that as the Software improved,
more end-users used his Software, thereby increasing [the programmer=s] recognition in his
profession and the likelihood that the Software would be improved even further.@).
B.
The parties do not dispute that Jacobsen is the holder of a copyright for certain
materials distributed through his website. 3 Katzer/Kamind also admits that portions of the
DecoderPro software were copied, modified, and distributed as part of the Decoder
Commander software.

Accordingly, Jacobsen has made out a prima facie case of

copyright infringement. Katzer/Kamind argues that they cannot be liable for copyright3

2008-1001

Jacobsen=s copyright registration creates the presumption of a valid copyright.

8infringement because they had a license to use the material. Thus, the Court mustevaluate whether the use by Katzer/Kamind was outside the scope of the license. See
LGS Architects, 434 F.3d at 1156.

The copyrighted materials in this case aredownloadable by any user and are labeled to include a copyright notification and a
COPYING file that includes the text of the Artistic License. The Artistic License grants
users the right to copy, modify, and distribute the software:
provided that [the user] insert a prominent notice in each changed file stating
how and when [the user] changed that file, and provided that [the user] do atleast ONE of the following:a) place [the user=s] modifications in the Public Domain or otherwise makethem Freely Available, such as by posting said modifications to Usenet or anequivalent medium, or placing the modifications on a major archive site suchas ftp.uu.net, or by allowing the Copyright Holder to include [the user=s]
modifications in the Standard Version of the Package.
b) use the modified Package only within [the user=s] corporation ororganization.
c) rename any non-standard executables so the names do not conflict withthe standard executables, which must also be provided, and provide aseparate manual page for each nonstandard executable that clearly
documents how it differs from the Standard Version, ord) make other distribution arrangements with the Copyright Holder.
The heart of the argument on appeal concerns whether the terms of the Artistic
License are conditions of, or merely covenants to, the copyright license. Generally, a
Acopyright owner who grants a nonexclusive license to use his copyrighted material waives
his right to sue the licensee for copyright infringement@ and can sue only for breach ofcontract. Sun Microsystems, Inc., v. Microsoft Corp., 188 F.3d 1115, 1121 (9th Cir. 1999);
Graham v. James, 144 F.3d 229, 236 (2d Cir. 1998). If, however, a license is limited inscope and the licensee acts outside the scope, the licensor can bring an action forSee, e.g., Triad Sys. Corp. V. Se. Exp. Co., 64 F.3d 1330, 1335 (9th Cir. 1995).
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copyright infringement. See S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1087 (9thCir.1989); Nimmer on Copyright, ' 1015[A] (1999).
Thus, if the terms of the Artistic License allegedly violated are both covenants andconditions, they may serve to limit the scope of the license and are governed by copyrightlaw. If they are merely covenants, by contrast, they are governed by contract law. See
Graham, 144 F.3d at 236-37 (whether breach of license is actionable as copyright
infringement or breach of contract turns on whether provision breached is condition of thelicense, or mere covenant); Sun Microsystems, 188 F.3d at 1121 (following Graham;
independent covenant does not limit scope of copyright license). The District Court did not
expressly state whether the limitations in the Artistic License are independent covenants or,rather, conditions to the scope; its analysis, however, clearly treated the license limitations
as contractual covenants rather than conditions of the copyright license. 4
Jacobsen argues that the terms of the Artistic License define the scope of thelicense and that any use outside of these restrictions is copyright infringement.
Katzer/Kamind argues that these terms do not limit the scope of the license and are merely
covenants providing contractual terms for the use of the materials, and that his violation ofthem is neither compensable in damages nor subject to injunctive relief. Katzer/Kamind=sargument is premised upon the assumption that Jacobsen=s copyright gave him no
economic rights because he made his computer code available to the public at no charge.
From this assumption, Katzer/Kamind argues that copyright law does not recognize a

4

The District Court held that ADefendants’ alleged violation of the conditions of
the license may have constituted a breach of the nonexclusive license . . . [and] the Court
finds that Plaintiff’s claim properly sounds in contract.@ Jacobsen, 2007 WL 2358628 at *7.
Thus, despite the use of the word Aconditions,@ the District Court treated the terms of theArtistic License as contractual covenants which did not limit the scope of the license.
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cause of action for non-economic rights, relying on Gilliam v. ABC, 538 F.2d 14, 20-21 (2dCir. 1976) (AAmerican copyright law, as presently written, does not recognize moral rights
or provide a cause of action for their violation, since the law seeks to vindicate theeconomic, rather than the personal rights of authors.@). The District Court based its opinion
on the breadth of the Artistic License terms, to which we now turn.
III.
The Artistic License states on its face that the document creates conditions: ATheintent of this document is to state the conditions under which a Package may be copied.@(Emphasis added.) The Artistic License also uses the traditional language of conditions bynoting that the rights to copy, modify, and distribute are granted Aprovided that@ the
conditions are met. Under California contract law, Aprovided that@ typically denotes a
condition. See, e.g., Diepenbrock v. Luiz, 159 Cal. 716 (1911) (interpreting a real property
lease reciting that when the property was sold, Athis lease shall cease and be at an end,
provided that the party of the first part shall then pay [certain compensation] to the party ofthe second part@; considering the appellant=s Ainteresting and ingenious@ argument forinterpreting this language as creating a mere covenant rather than a condition; and holdingthat this argument Acannot change the fact that, attributing the usual and ordinary
signification to the language of the parties, a condition is found in the provision in question@)(emphases added).
The conditions set forth in the Artistic License are vital to enable the copyright holder
to retain the ability to benefit from the work of downstream users. By requiring that users
who modify or distribute the copyrighted material retain the reference to the original source
files, downstream users are directed to Jacobsen=s website. Thus, downstream users

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know about the collaborative effort to improve and expand the SourceForge project once
they learn of the Aupstream@ project from a Adownstream@ distribution, and they may join inthat effort.
The District Court interpreted the Artistic License to permit a user to Amodify thematerial in any way@ and did not find that any of the Aprovided that@ limitations in the Artistic
License served to limit this grant. The District Court=s interpretation of the conditions of theArtistic License does not credit the explicit restrictions in the license that govern adownloader=s right to modify and distribute the copyrighted work. The copyright holder here
expressly stated the terms upon which the right to modify and distribute the material
depended and invited direct contact if a downloader wished to negotiate other terms.
These restrictions were both clear and necessary to accomplish the objectives of the open
source licensing collaboration, including economic benefit. Moreover, the District Court did
not address the other restrictions of the license, such as the requirement that all
modification from the original be clearly shown with a new name and a separate page forany such modification that shows how it differs from the original.
Copyright holders who engage in open source licensing have the right to control themodification and distribution of copyrighted material. As the Second Circuit explained in
Gilliam v. ABC, 538 F.2d 14, 21 (2d Cir. 1976), the Aunauthorized editing of the underlying
work, if proven, would constitute an infringement of the copyright in that work similar to any
other use of a work that exceeded the license granted by the proprietor of the copyright.@
Copyright licenses are designed to support the right to exclude; money damages alone donot support or enforce that right. The choice to exact consideration in the form ofcompliance with the open source requirements of disclosure and explanation of changes,

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rather than as a dollar-denominated fee, is entitled to no less legal recognition. Indeed,because a calculation of damages is inherently speculative, these types of license
restrictions might well be rendered meaningless absent the ability to enforce throughinjunctive relief.
In this case, a user who downloads the JMRI copyrighted materials is authorized tomake modifications and to distribute the materials Aprovided that@ the user follows the
restrictive terms of the Artistic License. A copyright holder can grant the right to makecertain modifications, yet retain his right to prevent other modifications. Indeed, such agoal is exactly the purpose of adding conditions to a license grant. 5 The Artistic License,
like many other common copyright licenses, requires that any copies that are distributed
contain the copyright notices and the COPYING file. See, e.g., 3-10 Nimmer on Copyright' 10.15 (AAn express (or possibly an implied) condition that a licensee must affix a proper
copyright notice to all copies of the work that he causes to be published will render apublication devoid of such notice without authority from the licensor and therefore, aninfringing act.@).
It is outside the scope of the Artistic License to modify and distribute the copyrighted
materials without copyright notices and a tracking of modifications from the originalcomputer files. If a downloader does not assent to these conditions stated in the COPYING
5Open source licensing restrictions are easily distinguished from mere Aauthor
attribution@ cases. Copyright law does not automatically protect the rights of authors tocredit for copyrighted materials. See Gilliam, 538 F.2d at 20-21 (“American copyright law,as presently written, does not recognize moral rights or provide a cause of action for theirviolation, since the law seeks to vindicate the economic, rather than the personal rights ofauthors.”); Graham, 144 F.3d at 236. Whether such rights are protected by a specificlicense grant depends on the language of the license. See County of Ventura v. Blackburn,
362 F.2d 515, 520 (9th Cir. 1966) (copyright infringement found where the county removed
copyright notices from maps licensed to it where the license granted the county Athe right to

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file, he is instructed to Amake other arrangements with the Copyright Holder.@Katzer/Kamind did not make any such Aother arrangements.@ The clear language of theArtistic License creates conditions to protect the economic rights at issue in the granting ofa public license. These conditions govern the rights to modify and distribute the computer
programs and files included in the downloadable software package. The attribution andmodification transparency requirements directly serve to drive traffic to the open source
incubation page and to inform downstream users of the project, which is a significant
economic goal of the copyright holder that the law will enforce. Through this controlled
spread of information, the copyright holder gains creative collaborators to the open source
project; by requiring that changes made by downstream users be visible to the copyrightholder and others, the copyright holder learns about the uses for his software and gains
others= knowledge that can be used to advance future software releases.
IV.

obtain duplicate tracings@ from photographic negatives that contained copyright notices).
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For the aforementioned reasons, we vacate and remand. While Katzer/Kamind
appears to have conceded that they did not comply with the aforedescribed conditions of
the Artistic License, the District Court did not make factual findings on the likelihood of
success on the merits in proving that Katzer/Kamind violated the conditions of the Artistic
License. Having determined that the terms of the Artistic License are enforceable copyrightconditions, we remand to enable the District Court to determine whether Jacobsen has
demonstrated (1) a likelihood of success on the merits and either a presumption of
irreparable harm or a demonstration of irreparable harm; or (2) a fair chance of success on
the merits and a clear disparity in the relative hardships and tipping in his favor. 6
The judgment of the District Court is vacated and the case is remanded for further
proceedings consistent with this opinion.
VACATED and REMANDED

6

At oral argument, the parties admitted that there might be no way to calculate
any monetary damages under a contract theory.
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