Software/High Technology Practice Group Newsletter
Spring 2005
Open Source Software - Not Immune From Infringement Risks
The United States was the first country to consider software patentable subject matter as a result of the 1981 Supreme Court ruling in Diamond v. Diehr, 450 U.S. 175 (1981) (U.S.S.C), where the Court held that computer-related machines and processes may be patented. In Europe, software inventions must possess “technical character” in order to be considered patentable subject matter. In Canada, software inventions must have a “practical application in industry trade or commerce”. Although different legal standards are employed in different jurisdictions with respect to determining whether software is patentable, it is clear that software is considered to be patentable subject matter in most jurisdictions.
Patents are granted on a country by country basis. When a patent is granted, the patent owner has the right to prevent others from making, using or selling the invention in the country at issue. As software patents can protect specific software processes and data structures, holders of software patents can prevent others from incorporating such protected subject matter into their software. As a result, software developers and users must keep in mind that any software that they develop and/or use may infringe third party patent rights.
Open source software generally refers to software for which the underlying source code is made available for the purpose of study, modification or improvement. Open source software is generally distributed under a license, which allows a user to share and/or change the software without restrictions. Many open source software products use software license agreements that satisfy what is known as the Open Source Definition (OSD). OSD has ten requirements, some of the more notable ones being: 1) the license must allow for free distribution of the software, 2) the license must allow for modification of the software and 3) the license applied to the program must apply to those to whom the program is redistributed.
Although it has been the rare case where patent holders have asserted their rights with respect to potentially infringing open source software, open source software is just as vulnerable as any other software with respect to actions for patent infringement.
The results of a study released in August of 2004, by Open Source Risk Management LLC, a company that provides insurance against lawsuits related to the use of open source software products (such as Linux), has found there to be at least 283 U.S. patents, which may be infringed by the Linux kernel. The patent study concerned an examination of approximately 1,000 software-related patents that had been upheld as valid by United States courts, as well as patents that were found through automated searching of the United States Patent and Trademark Office database.
Although this study concerned U.S. patents, this study is of interest to Canadian companies and open source users, specifically Linux users, for at least two reasons: 1) the study illustrates that there have been patents granted for subject matter that may now arguably be found in Linux; and 2) there is a possibility that there are corresponding Canadian patents (which are the equivalents of the U.S. patents the study uncovered) which may be infringed by Linux.
Although, patent infringement actions have not been brought against any open source software products in Canada or the U.S. (though there have been actions in the U.S against Linux users for copyright infringement), open source software is at just as much risk as any other software with respect to patent infringement.
There are those who argue that the threat that is posed by patents to open source software is overstated, as many patent holders will shy away from patent litigation due to budget constraints and the fact that the validity of the patent will often be called into question.
Although this may be the case, developers, distributors and users of open source should be aware that a successful action for patent infringement may result in the requirement that royalties be paid to the patent holder, or that the software product should cease to be made, used or sold. Accordingly, software developers should consider conducting appropriate due diligence to ensure that existing and proposed software developments do not infringe third party patent rights.
Edited by Isis Caulder. Please send feedback and suggestions to Isis at icaulder@bereskinparr.com.
The contents of this update are informational only, and do not constitute legal or other professional advice. To obtain such advice, please contact one of our group members.
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