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Both intellectual property and other litigators need to know about a formerly radical, but now increasingly mainstream, method of innovation. A litigator’s assumptions, clients, adverse parties, workload, skills and even personal income may be affected by the open-source movement. Both the operating infrastructure and product development techniques of the global landscape have changed in recent years. No-fee, nontraditional software has been incorporated into most businesses and government and runs much of the Web. And the Internet-enabled, dispersed method of both corporate employees and unknown volunteers collaborating to design and develop new products, tools, components, and services is expanding beyond the realm of software. Open-source processes and strategies are now advocated and deployed in consumer goods, publishing (e.g., Wikipedia), biotechnology, academic research and other fields. Fortune, Forbes, Business Week, CIO , the New York Times and other news publications agree on the large, accelerating, widening effects of both this emerging norm for innovation and its dozens of associated licenses. Courts already are seeing the signs of this tsunami-scale change, and will encounter more. The recent revolution inside the complex, usually cautious centers of corporate computing and software operations will steadily move into the courthouses. Why? The new research-and-development and licensing practices yield new risks to trigger lawsuits. The catalysts to contention include programmers acting without supervision, evolving corporate norms and license agreements drafted by engineers with lingering ambiguities. (Regarding some of the new legal risks of these many, arguably immature documents, see Ryan Hatch, “Open-source software licenses present quagmire,” NLJ, Oct. 17, 2005, at S2.) Also, “upstream” licensors of components and tools, whose handiwork and intellectual property often are later incorporated into their customers’ technologies, sometimes break the new rules, indirectly placing clients in harm’s way. Or they sometimes fail to understand-or to collect and retain evidence of their compliance with-the new rules. Moreover, advocacy groups in the United States and Europe have undertaken vigorous monitoring and defense of the new “open” development ethic, embarrassing dozens of corporations by publicizing their breaches of General Public License 2.0 obligations on the Internet to programmer readers. They have also sued a few companies in Europe. These new legal risks accompanying the benefits of cheaper, faster, better innovations are increasingly acknowledged by open-source practitioners. For example, the terms of recent U.S. merger deals usually strongly filter or even ban “open source inside”-i.e., unexpected obligations under open-source licenses. And since late 2003, many publicly traded information technology products and services vendors have been disclosing in U.S. Securities and Exchange Commission (SEC) filings their new open-source-specific risks, striving to avoid liability for deficient disclosures under federal securities law. Companies have found that no-fee, high-quality, multi-author, vendor-independent software is an irresistible benefit. But litigators and other lawyers should plan and act now, to adapt to this large “paradigm shift” in the business world, due to the diverse impacts noted below. Potential IP litigation It’s tough to win a trespass case if one’s client doesn’t own all the involved land. Now, when companies sue competitors, ex-employees or former customers for alleged IP infringements or contract breaches, they should expect to face a new defense. Defendants can and now do claim that the plaintiffs’ prior incorporation of open-source components undercuts the IP predicate. IP misuse and antitrust counterclaims may follow. So would-be plaintiffs and their counsel must consider potential problematic gaps in their chain of title not possible in bygone years, when corporate products were created solely by employees and paid suppliers, and not by unknown Internet-enabled distant volunteers. Moreover, some open-source advocates assert copyright “fair use,” preservation of “culture” and “creativity” and the alleged “obsolete, broken status of the IP system” as justification for unauthorized modification of third-party intellectual property. Programmers, artists and other client and supplier personnel read on the Internet-and believe-that they have, or at least should have, inherent legal rights to modify and redistribute digital materials. For example, in a Sept. 1, 2005, ruling, the 8th U.S. Circuit Court of Appeals heard such arguments, but held to the contrary, rejecting defenses asserted by the defendants and amicus Electronic Frontier Foundation (roughly, the American Civil Liberties Union of the Internet) for the unlicensed modification of a popular video game to convert it to multiplayer, online form. Davidson & Associates v. Jung , 422 F.3d 640 (8th Cir. 2005). The plaintiff had asserted breach of both the end-user license agreement and the Digital Millennium Copyright Act.
INTELLECTUAL PROPERTY Counterfeits: Beyond the Knockoff FTC’s recent ruling in ‘Rambus.’ Cases decided since ‘Philips.’ Open-source software disputes. Emergence of Science Commons. Global patent-filing options. Keeping inventive-act records.

The open-source movement can also mean changes in many procedural aspects of lawsuits, including expanded discovery and project budgets. New legal research, forensics, experts, briefing, demonstrations, magistrate meetings and other tasks may be helpful or necessary for lawyers, judges and juries to understand this new technology and its unique, evolving concepts and customs. Also, the new world of conditionally licensed, Internet-shared digital assets can change burdens of proof, precedents, judicial notice of common facts and stare decisis. The pace of some lawsuits may be slowed as a result. Expect “open source inside” to be asserted in vendor-customer disputes. Already, one recent federal lawsuit focuses on alleged verbal promises by the plaintiff vendor’s salesperson regarding its products interoperating with free Web site operations software. Red Prairie v. Jerome’s Furniture Warehouse , No. 05-cv-1072 (E.D. Wis.) (Nov. 28, 2005 Answer and Counterclaim). The plaintiff had asserted a mutually signed software deal and unauthorized reneging by the defendant would-be customer. Smart technology vendors have mustered new internal teams to audit their software assets. Corporate committees search for unauthorized or ambiguous open-source licenses and possible prior breaches. These internal investigations frequently occur when preparing for a merger or other large transaction, in formulating and launching new corporate technology policies or in updating old policies. In-house counsel are often deployed to such project teams. One can expect such corporate counsel to be targeted as deponents in future litigation and for such audits to increasingly utilize open-source-fluent outside counsel. Open source is also a new factor in settlement analysis. Juries and judges usually don’t “speak geek” (i.e., understand Internet mores, tools and concepts) and may be confused by assertions of shared, not-invented-at-your-client, quasi-proprietary property. Both in considering new litigation work and in settlement deliberations, litigators may need to recalculate the odds of various outcomes in technology-related fights. Moreover, employment law litigators can look forward to new riddles to resolve. Most companies have been slow to update their policies to give employees clear rules about open source. For example, may employees contribute ideas, code, testing assistance, documentation or other digital aid to third-party open projects? Can they do so using their corporate employee e-mail accounts? Programmers, product managers and others may bear the disciplinary brunt of belatedly discovered loose open-source practices, and, litigators will be called. Insurance coverage of open-source disputes is virgin territory. Do old contracts providing defense and/or indemnification for infringement cover breach of new, open-source licensing terms? Will new open-source-specific insurance be widely sold in the future? Careful clients will ask counsel for guidance on the adequacy of their current coverages. Open-source disputes are not just for technology vendors. Software users are also affected by the open-source revolution. For example, on Oct. 21, 2004, the Federal Deposit Insurance Corp. issued open-source-specific guidance to financial institutions, including prior consultation with expert counsel. See www.fdic.gov/news/news/financial/2004/ FIL11404a.html. Government agencies have issued new procurement rules. Expect regulatory initiatives in other industries to emerge. Consumer class actions challenging data privacy leaks and various shareholder class actions are mainstream foci for many litigators. Future corporate privacy, Sarbanes-Oxley and other corporate compliance and governance litigation may include a new angle: assessment of the quality, management and appropriateness of such no-charge software. Can open source mean malpractice? Competent counsel must understand these new, evolving facts and practices in order to meet their ethical obligations and minimize malpractice risks. Rule 11 of the Federal Rules of Civil Procedure and other mandates may be triggered when a client’s assumptions and assertions regarding the supposed “facts”-e.g., the history or provenance of technology affecting their operations-are wrong. Open source may cause some law firms to modify their standard services agreements, e.g., to adjust project budgeting and withdrawal rights if errors are discovered in the assumed ownership of the client’s information technology assets or infrastructure. False confidence But for legal advisors, the phone may not ring soon. Clients’ technical staff may read and blithely believe assurances on the Web written by open-source advocates asserting that the new way is safer than traditionally licensed technology. Proponents often paint lawyers as worrywarts who should be managed (better yet, kept out of engineering territory). Such assurances are authored even by some advocates who have already been in the courts. See, e.g., Red Hat v. Monotype , No. 02-CV-345-BO(3) (E.D. Ill.); Monotype v. Red Hat , No. 1:02-CV-3713 (N.D. Ill.) (open-source vendor sued by conventional software vendor plaintiff for unauthorized incorporation of plaintiff’s digital technology); MontaVista Software Inc. v. Lineo , No. 2:02-CV-0309J (D. Utah) (same, by open-source vendor plaintiff). A false sense of security may cause the client to defer or undercut “preventive law” opportunities. Failing to deploy policy updating, client training, internal audits, contract updating and other risk management steps now may escalate breaches, litigation costs and delay, and damages later. But despite the stress of new rules and unfamiliar changes, there is good news for some litigators. First, these new disputes may fund their retirements or children’s college costs. There are several dozen contracts now used daily by companies and programmers, without initial input of counsel. The Internet and its culture allows both employees and vendors to borrow, recycle and deploy technology and contracts “found on the Web” without any solid or confirmed knowledge of their impacts and without any real communication or negotiation with third parties. And belated identification of open- source use and risks, long after adoption, means litigators will be deployed. Younger lawyers may find career opportunity in the open-source movement. Are senior partners adequately prepared for depositions with technology-focused experts and witnesses who “speak Internet more than English”? Can crusty courtroom warhorses really master Internet forensics, electronic architecture and software construction techniques? Might not key witnesses (often younger technology-job employees) disclose more and better information to younger, more “techie” counsel? And open-source license litigation may give litigators the chance to say “I told you so” to commercial colleagues about the challenges of contract enforcement and effective design and drafting. Open-source software has created hard new challenges and homework, but also sizable opportunities, for trial lawyers. More good news, for litigators who prefer courts to alternative dispute resolution, is that most open-source licenses lack arbitration clauses. Henry W. (Hank) Jones III, a 26-year technology lawyer, is the principal at Law Office of Henry W. Jones III, based in Austin, Texas. He is an intermittent litigator and expert witness, and an active open-source lawyer. He can be reached at [email protected] .

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