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Conservancy BlogDisplaying posts
by Bradley M. Kühn
by on June 23, 2023
This article was originally published primarily as a response to IBM's Red Hat's change to no longer publish complete, corresponding source (CCS) for RHEL and the prior discontinuation of CentOS Linux (which are related events, as described below). We hope that this will serve as a comprehensive document that discusses the history of Red Hat's RHEL business model, the related source code provisioning, and the GPL compliance issues with RHEL.
For approximately twenty years, Red Hat (now a fully owned subsidiary of IBM) has experimented with building a business model for operating system deployment and distribution that looks, feels, and acts like a proprietary one, but nonetheless complies with the GPL and other standard copyleft terms. Software rights activists, including SFC, have spent decades talking to Red Hat and its attorneys about how the Red Hat Enterprise Linux (RHEL) business model courts disaster and is actively unfriendly to community-oriented Free and Open Source Software (FOSS). These pleadings, discussions, and encouragements have, as far as we can tell, been heard and seriously listened to by key members of Red Hat's legal and OSPO departments, and even by key C-level executives, but they have ultimately been rejected and ignored — sometimes even with a “fine, then sue us for GPL violations” attitude. Activists have found this discussion frustrating, but kept the nature and tenure of these discussions as an “open secret” until now because we all had hoped that Red Hat's behavior would improve. Recent events show that the behavior has simply gotten worse, and is likely to get even worse.
The most concise and pithy way to describe RHEL's business model is:
“if you exercise your rights under the GPL, your money is no good
here”. Specifically, IBM's Red Hat offers copies of RHEL to its
customers, and each copy comes with a support and automatic-update
subscription contract. As we understand it, this contract
clearly states
that the terms do not intend to contradict any rights to copy, modify,
redistribute and/or reinstall the software as many times and as many places
as the customer likes (see §1.4). Additionally, though, the contract indicates that
if the customer engages in these activities, that Red Hat reserves the
right to cancel that contract and make no further contracts with the
customer for support and update services. In essence, Red Hat requires their customers
to choose between (a) their software freedom and rights, and (b) remaining a Red Hat
customer. In some versions of these contracts that we have reviewed, Red
Hat even reserves the right to “Review” a customer (effectively a
Red Hat's lawyers clearly take the position that this business model complies with the GPL (though we aren't so sure), on grounds that that nothing in the GPL agreements requires an entity keep a business relationship with any other entity. They have further argued that such business relationships can be terminated based on any behaviors — including exercising rights guaranteed by the GPL agreements. Whether that analysis is correct is a matter of intense debate, and likely only a court case that disputed this particular issue would yield a definitive answer on whether that disagreeable behavior is permitted (or not) under the GPL agreements. Debates continue, even today, in copyleft expert circles, whether this model itself violates GPL. There is, however, no doubt that this provision is not in the spirit of the GPL agreements. The RHEL business model is unfriendly, captious, capricious, and cringe-worthy.
Furthermore, this RHEL business model remains, to our knowledge, rather unique in the software industry. IBM's Red Hat definitely deserves credit for so carefully constructing their business model such that it has spent most of the last two decades in murky territory of “probably not violating the GPL”.
Perhaps the biggest problem with a murky business model that skirts the line of GPL compliance is that violations can and do happen — since even a minor deviation from the business model clearly violates the GPL agreements. Pre-IBM Red Hat deserves a certain amount of credit, as SFC is aware of only two documented incidents of GPL violations that have occurred since 2006 regarding the RHEL business model. We've decided to share some general details of these violations for the purpose of explaining where this business model can so easily cross the line.
In the first violation, a large Fortune 500 company (which we'll call Company A), who both used RHEL internally and also built public-facing Linux-based products, decided to create a consumer-facing product (which we'll call Product P) based primarily on CentOS Linux, but P included a few packages built from RHEL sources. Company A did not seek nor ask for support or update services for this separate Product P. Red Hat later became aware that Product P contained some part of RHEL, and Red Hat demanded royalty payments for Product P. Red Hat threatened to revoke the support and update services on Company A's internal RHEL servers if such royalties were not paid.
Since Company A was powerful and had good lawyers and savvy business development staff, they did not acquiesce. Company A ultimately continued (to our knowledge) on as a RHEL customer for their internal servers and continued selling Product P without royalty payments. Nevertheless, a demand for royalties for distribution is clearly a violation as that demand creates a “further restriction” on the permissions granted by GPL. As stated in GPLv3:
You may not impose any further restrictions on the exercise of the rights granted or affirmed under this License. For example, you may not impose a license fee, royalty, or other charge for exercise of rights granted under this License.
Red Hat tried to impose a further restriction in this situation, and therefore violated the GPL. The violation was resolved since no royalty was paid and Company A faced no consequences. SFC learned of the incident later, and informed Red Hat that the past royalty demand was a violation. Red Hat did not dispute nor agree that it was a violation, and did informally agree such demands would not be made in future.
In another violation incident, we learned that Red Hat, in a specific non-USA country, was requiring that any customer who lowered the number of RHEL machines under service contract with Red Hat sign an additional agreement. This additional agreement promised that the customer had deleted every copy of RHEL in their entire organization other than the copies of RHEL that were currently contracted for service with Red Hat. Again, this is a “further restriction”. The GPL agreements give everyone the unfettered right to make and keep as many copies of the software as they like, and a distributor of GPL'd software may not require a user to attest that they've deleted these legitimate, licensed copies of third-party-licensed software under the GPL. SFC informed Red Hat's legal department of this violation, and we were assured that this additional agreement would no longer be presented to any Red Hat customers in the future.
In both these situations, we at SFC were worried they were merely a “tip of the proverbial iceberg”. For years, we have heard from Red Hat customers who are truly confused. It's common in the industry to talk about RHEL “seat licenses”, and many software acquisition specialists in the industry are not aware of the nuances of the RHEL business model and do not understand their rights. We remain very concerned that RHEL salespeople purposely confuse customers to sell more “seat licenses”. It's often led us to ask: “If a GPL violation happens in the woods, and everyone involved doesn't hear it, how does anyone know that software rights have indeed been trampled upon in those woods?”. As we do for as many GPL violation reports as we can, we zealously pursue RHEL-related GPL violations that are reported to us, and if you're aware of one, please do email us at <compliance@sfconservancy.org> immediately. We fear that be it through incompetence or malice, many RHEL salespeople and business development professionals may regularly violate GPL and no one knows about it. That said, the business model as described by IBM's Red Hat may well comply with the GPL — it's just so murky that any tweak to the model in any direction seems to definitely violate, in our experience.
Furthermore, Red Hat exploits the classic “caveat emptor” approach — popular in many a shady business deal throughout history. While, technically speaking, a careful reader of the GPL and the RHEL agreements understands the bargain they're making, we suspect most small businesses just don't have the FOSS licensing acumen and knowledge to truly understand that deal.
Until Red Hat's “aquisition” of CentOS in early 2014, CentOS provided an excellent counterbalance to the problems with the RHEL business model. Specifically, CentOS was a community-driven project, with many volunteers, supported by some involvement from small businesses, to re-create RHEL releases using the CCS releases made for RHEL. Our pre-2014 view was that CentOS was the “canary in the murky coalmine” of the RHEL business. If CentOS seemed vibrant, usable, and a viable alternative to RHEL for those who didn't want to purchase Red Hat's updates and services, the community could rest easy. Even if there were GPL violations by Red Hat on RHEL, CentOS' vibrancy assured that such violations were having only a minor negative impact on the FOSS community around RHEL's codebase.
Red Hat, however, apparently knew that this vibrant community was cutting into their profits. Starting in 2013, Red Hat engaged in a series of actions that increased their grip. First, they “acquired” CentOS. This was initially couched as a cooperation agreement, but Red Hat systematically made job offers that key CentOS volunteers couldn't refuse, acquired the small businesses who might ultimately build CentOS into a product, and otherwise integrated CentOS into Red Hat's own operations.
After IBM acquired Red Hat, the situation got worse. Having gotten rights to the CentOS brand as part of the “aquisition”, Red Hat slowly began to change what CentOS was. CentOS Linux quickly ceased to be a check-and-balance on RHEL, and just became a testing ground for RHEL. Then, in 2020, when most of us were distracted by the worst of the COVID-19 pandemic, Red Hat unilaterally terminated all CentOS Linux development. Later (during the Delta variant portion of the pandemic in late 2021) Red Hat ended CentOS Linux entirely. IBM's Red Hat then used the name “CentOS Stream” to refer to experimental source packages related to RHEL. These were (and are) not actually the RHEL source releases — rather, they appear to be primarily a testing ground for what might appear in RHEL later.
Finally, Red Hat announced two days ago that RHEL CCS will no longer be publicly available in any way. Now, to be clear, the GPL agreements did not obligate Red Hat to make its CCS publicly available to everyone. This is a common misconception about GPL's requirements. While the details of CCS provisioning vary in the different versions of the GPL agreements, the general principle is that CCS need to be provided either (a) along with the binary distributions to those who receive, or (b) to those who request pursuant to a written offer for source. In a normal situation, with no mitigating factors, the fact that a company moved from distributing CCS publicly to everyone to only giving it to customers who received the binaries already would not raise concerns.
In this situation, however, this completes what appears to be a decade-long plan by Red Hat to maximize the level of difficulty of those in the community who wish to “trust but verify” that RHEL complies with the GPL agreements. Namely, Red Hat has badly thwarted efforts by entities such as Rocky Linux and Alma Linux. These entities are de-facto the intellectual successors to CentOS Linux project that Red Hat carefully dismantled over the last decade. These organizations sought to build Linux-based distributions that mirrored RHEL releases, and it is now unclear if they can do that effectively, since Red Hat will undoubtedly capriciously refuse to sell them exactly-one RHEL service and update “seat license” at a reasonable price. It appears that, as of this week, one must have at least that to get timely access to RHEL CCS.
Due to this ongoing bad behavior by IBM's Red Hat, the situation has become increasingly complex and difficult to face. No third party can effectively monitor RHEL compliance with the GPL agreements, since customers live in fear of losing their much-needed service contracts. Red Hat's legal department has systematically refused SFC's requests in recent years to set up some form of monitoring by SFC. (For example, we asked to review the training materials and documents that RHEL salespeople are given to convince customers to buy RHEL, and Red Hat has not been willing to share these materials with us.) Nevertheless, since SFC serves as the global watchdog for GPL compliance, we welcome reports of RHEL-related violations.
We finally express our sadness that this long road has led the FOSS community to such a disappointing place. I personally remember standing with Erik Troan in a Red Hat booth at a USENIX conference in the late 1990s, and meeting Bob Young around the same time. Both expressed how much they wanted to build a company that respected, collaborated with, engaged with, and most of all treated as equals the wide spectrum of individuals, hobbyists, and small businesses that make the plurality of the FOSS community. We hope that the modern Red Hat can find their way back to this mission under IBM's control.
by on July 11, 2022
Suppose you go to your weekly MyTown market. The market runs Saturday and Sunday, and vendors set up booths to sell locally made products and locally grown and produced food. On Saturday, you buy some delicious almond milk from a local vendor — called Al's Awesome Almond Milk. You realize that Al's Awesome would make an excellent frozen dessert, so you make your new frozen dessert, which you name Betty's Best Almond Frozen Dessert. You get a booth for Sunday for yourself, and you sell some, but not as much as you'd like.
The next week, you realize you might sell more if you call it Al's Awesome Almond Frozen Dessert instead of your own name. Folks at the market know Al, but not you. So you change the name. Is this a morally and legally acceptable thing to do?
This is a question primarily regarding trademarks. We spend a lot of time in the Free and Open Source Software (FOSS) community talking about copyrights and patents, but another common area of legal issues that face FOSS projects (in addition to copyright and patent) is trademark.
In fact, FOSS projects probably don't spend enough time thinking about their trademark. Nearly ten years ago, Pam Chestek — a lawyer and expert in trademark law as it relates to FOSS and board member of OSI — gave an excellent talk at FOSDEM (2013), wherein she explored how FOSS projects can use trademarks better and to ensure rights of consumers — particularly when dealing with bad actors. Our own Executive Director, Karen Sandler, had also spoken about this issue as well. These older talks, in turn, spawned an ongoing conversation that continues to this day in FOSS policy circles.
Specifically, last week, we learned that the Microsoft Store was changing their policies, ostensibly to deal with folks (probably some of whom are unscrupulous) rebuilding binaries for well-known FOSS projects and uploading them to the Microsoft Store. Yet, this is a longstanding issue in FOSS policy. FOSS experts in this area would have been happy to share what's been learned over the last ten years of studying this issue.
The problem Microsoft faces here is the same problem that the MyTown market folks face if you show up trying to sell Al's Awesome Almond Frozen Dessert. The store/market can set rules that you will no longer be able to sell if you are found to infringe the trademark of another seller. The market could simply require the trademark holder to take trademark action themselves, or it could offer some form of assistance, arbitration, or other-extra-legal resolution mechanism0.
There is often temptation in FOSS to give special status to maintainers, or the original developer, or the copyright holder, or some other entity that is considered “official”. In FOSS, though, the only mechanism of officialness is the trademark — the name of the upstream project (or the fork). The entire point of FOSS is that for the code itself, everyone should have equal rights to the original developers, to the maintainers, or to any other entity.
We have faced this with our member project, Inkscape. While the Inkscape Project Leadership Committee has chosen not to charge for the version of Inkscape that they upload on Microsoft Store, we did see this very problem for many years before these app stores even existed. Namely, it was common for third-parties to sell Windows binaries on CD's for Inkscape in an effort to make a quick buck. We did trademark enforcement in these cases — not forbidding these vendors from selling — but simply requiring the vendors to clearly say that the product was a modified version of Inkscape. Or, if it was unmodified redistribution of Inkscape's own binaries, we required the vendor to note that the Inkscape project's website was the official source for these binaries.
I have often written to complain about copyright and patent law. I have my complaints about trademark law (and I've seen trademark grossly abused, even), but trademark laws tenets are really reasonable and solid: to ensure consumers know the source and quality of the products they receive.
The problem of concern here is one well handled by trademark. It doesn't need excessive app store rules; we don't need FOSS licenses to be usurped or superseded by Draconian policy. And, this solution to this particular problem has been long-known by FOSS. Pam's talk in 2013 explained it quite well!
The MyTown Market doesn't need to create a policy that forbids you from buying Al's Awesome Almond Milk on Saturday and reselling a product based on it on Sunday. They just need to let Al know his rights under trademark, and maybe offer a lightweight provisional suspension of your booth if the trademark complaint seems primia facie valid. But, most importantly, before it announces new rules with a 30 day clock, MyTown's leadership really should discuss it with the citizens first to find a policy that takes into account concerns of the people. Even if they fail to do that, there are MyTown's elected officials whose actions are accountable to the people. App store companies are accountable only to their shareholders, not the authors of the apps. Companies could benefit by learning that the FOSS community prioritizes respecting authors, protecting consumers' and users' rights, and by understanding that the line between user and contributor should blur. The FOSS marketplace functions because the community works.
0 I hesitate to even suggest that an app store should create an extra-legal process regarding trademark enforcement beyond the typical governmental mechanisms — lest they decide they have to do it. A major problem with app stores is that they create rules for software distribution that are capricious, and arbitrary. We all do want FOSS available on Microsoft, Apple, and Google-based platforms — and as such are forced to negotiate (or, rather, try to negotiate) for FOSS-friendly terms. Ultimately, though, the story of major vendor-controlled app stores is always the story of “just barely” being able to put FOSS on them, because the goal of these entities is to profit themselves, not serve the community. We prefer app stores like F-Droid that are community-organized and are not run for-profit.
by on May 11, 2022
In our previous update regarding our copyleft enforcement lawsuit against Vizio, we talked about how Vizio “removed” the case to USA federal court (namely, the Central District of California), and how we filed a motion to “remand” the case back to state court. While this all seems like minor legal wrangling early in a case, this very first skirmish in our case goes to the very heart of the right for software repair for consumers. While it won't be a final decision in the case, this motion will be the first indication whether the federal courts view the GPL as purely a copyright license, or as a contract, or as both. That question has been central to legal debate about the GPL for decades, and, thanks to our case, for the first time, a federal Court will directly consider this question.
Our view (and the view of many attorneys whose opinions we trust) and which is supported by substantial case law, is that the GPL functions as both a copyright license and a contract, and that third parties who receive distribution of GPL'd (and LGPL'd) software are third-party beneficiaries. We've done both copyright-based and contract-based enforcement, and both have their advantages. Contract-based enforcement as a third-party has advantages that are central to the GPL's policy goals. Consumers are the first to discover violations in the first place. Consumers are the most likely to utilize complete, corresponding source code (CCS) to enhance their use of the products they have purchased. Third-party, contractual based enforcement gives consumers legal authority when they ask companies for access to the source code that should be available to them. In other words, this approach gives consumers the ability to ask the Court directly for the most important thing that copyleft assures: a right to receive the CCS and “the scripts used to control compilation and installation of the executable”. Indeed, in our suit we have asked only for access to the source code, not for any money.
Our case now is the first of its kind to adjudicate the third-party beneficiary contractual theory. We are excited that a federal district Court is poised to give its first answer to the central question to this endeavor, namely: “Are the GPL and LGPL merely copyright licenses, and thus preempted and only subject matter for the US federal courts, or can a third-party bring a contract claim in state court?” If this question intrigues you, we encourage you to read our motion for remand, Vizio's reply to that motion and our rebuttal reply.
Most importantly, clear your calendar for this Friday 13 May 2022 at 10:30 US/Pacific! While Judge Staton may chose to rule on this motion strictly based on those paper filings, the judge has scheduled a hearing for that date and time. What's more, anyone in the world can attend this hearing to listen! Instructions for how to attend are found on Judge Staton's website0.
While, as FOSS activists, we're very sad that the Judge has chosen to use a proprietary videochat platform, we're glad that PSTN dial-in is provided, and we'll be dialing in and encourage you to do so as well. Watch our microblog for live updates!
0 Please
take careful note of the warning on the Judge's website: Recording,
copying, photographing and rebroadcasting of court proceedings is prohibited
by federal law.
Remember: you can take as many notes as you like, and
even live blog/microblog what you hear, but take great care to follow the
directives on Judge Staton's website.
by on March 30, 2022
Update (2023-11-14): Unfortunately, the Court has made further bad decisions in this matter, and was not swayed by our expert report. If the SFC were the copyright holder of the text of the AGPLv3, or the trademark holder of the license's name, we would have intervened in this case to clarify these matters for the Court. Since the SFC did not create the AGPLv3 (our employees have been involved in GPLv3-related drafting, but not on behalf of SFC), filing the expert report was the only action that SFC could take to assist in this matter. However, going forward, we do encourage anyone facing a “further restrictions” issue with copyleft license to contact us for support — so that those who care about the future of copyleft can coordinate a response together. Note that the case has still not reached the appeal stage.
(Original blog post follows:)
We at Software Freedom Conservancy proudly and vigilantly watch out for your rights under copyleft licenses such as the Affero GPLv3. Toward this goal, we have studied the Neo4j, Inc. v. PureThink, LLC ongoing case in the Northern District of California , and the preliminary injunction appeal decision in the Ninth Circuit Court this month. The case is complicated, and we've seen much understandable confusion in the public discourse about the status of the case and the impact of the Ninth Circuit's decision to continue the trial court's preliminary injunction while the case continues. While it's true that part of the summary judgment decision in the lower court bodes badly for an important provision in AGPLv3§7¶4, the good news is that the case is not over, nor was the appeal (decided this month) even an actual appeal of the decision itself! This lawsuit is far from completion.
The primary case in question is a dispute between Neo4j, a proprietary relicensing company, against a very small company called PureThink, run by an individual named John Mark Suhy. Studying the docket of the case, and a relevant related case, and other available public materials, we've come to understand some basic facts and events. To paraphrase LeVar Burton, we encourage all our readers to not take our word (or anyone else's) for it, but instead take the time to read the dockets and come to your own conclusions.
After canceling their formal, contractual partnership with Suhy, Neo4j alleged multiple claims in court against Suhy and his companies. Most of these claims centered around trademark rights regarding “Neo4j” and related marks. However, the claims central to our concern relate to a dispute between Suhy and Neo4j regarding Suhy's clarification in downstream licensing of the Enterprise version that Neo4j distributed.
Specifically, Neo4j attempted to license the codebase under something they (later, in their Court filings) dubbed the “Neo4j Sweden Software License” — which consists of a LICENSE.txt file containing the entire text of the Affero General Public License, version 3 (“AGPLv3”) (a license that I helped write), and the so-called “Commons Clause” — a toxic proprietary license. Neo4j admits that this license mash-up (if legitimate, which we at Software Freedom Conservancy and Suhy both dispute), is not an “open source license”.
There are many complex issues of trademark and breach of other contracts in this case; we agree that there are lots of interesting issues there. However, we focus on the matter of most interest to us and many FOSS activists: Suhy's permissions to remove the “Commons Clause”. Neo4j accuses Suhy of improperly removing the “Commons Clause” from the codebase (and subsequently redistributing the software under pure AGPLv3) in paragraph 77 of their third amended complaint. (Note that Suhy denied these allegations in court — asserting that his removal of the “Commons Clause” was legitimate and permitted.
Neo4j filed for summary judgment on all the issues, and throughout their summary judgment motion, Neo4j argued that the removal of the “Commons Clause” from the license information in the repository (and/or Suhy's suggestions to others that removal of the “Commons Clause” was legitimate) constituted behavior that the Court should enjoin or otherwise prohibit. The Court partially granted Neo4j's motion for summary judgment. Much of that ruling is not particularly related to FOSS licensing questions, but the section regarding licensing deeply concerns us. Specifically, to support the Court's order that temporarily prevents Suhy and others from saying that the Neo4j Enterprise edition that was released under the so-called “Neo4j Sweden Software License” is a “free and open source” version and/or alternative to proprietary-licensed Neo4j EE, the Court held that removal of the “Commons Clause” was not permitted. (BTW, the court confuses “commercial” and “proprietary” in that section — it seems they do not understand that FOSS can be commercial as well.)
In this instance, we're not as concerned with the names used for the software; as much as the copyleft licensing question — because it's the software's license, not its name, that either assures or prevents users to exercise their fundamental software rights. Notwithstanding our disinterest in the naming issue, we'd all likely agree that — if “AGPLv3 WITH Commons-Clause” were a legitimate form of licensing — such a license is not FOSS. The primary issue, therefore, is not about whether or not this software is FOSS, but whether or not the “Commons Clause” can be legitimately removed by downstream licensees when presented with a license of “AGPLv3 WITH Commons-Clause”. We believe the Court held incorrectly by concluding that Suhy was not permitted to remove the “Commons Clause”. Their order that enjoins Suhy from saying that such removal is permitted is problematic because the underlying holding (if later upheld on appeal) could seriously harm FOSS and copyleft.
Because this was an incomplete summary judgment and the case is ongoing, the injunction against Suhy's on making such statements is a preliminary injunction, and cannot be made permanent until the case actually completes in the trial court. The decision by the Ninth Circuit appeals court regarding this preliminary injunction has been widely reported by others as an “appeal decision” on the issue of what can be called “open source”. However, this is not an appeal of the entire summary judgment decision, and certainly not an appeal of the entire case (which cannot even been appealed until the case completes). The Ninth Circuit decision merely affirms that Suhy remains under the preliminary injunction (which prohibits him and his companies from taking certain actions and saying certain things publicly) while the case continues. In fact, the standard that an appeals Court uses when considering an appeal of a preliminary injunction differs from the standard for ordinary appeals. Generally speaking, appeals Courts are highly deferential to trial courts regarding preliminary injunctions, and appeals of actual decisions have a much more stringent standard.
In their partial summary judgment ruling, the lower Court erred because they rejected an important and (in our opinion) correct counter-argument made by Suhy's attorneys. Specifically, Suhy's attorneys argued that Neo4j's license expressly permitted the removal of the “Commons Clause” from the license. AGPLv3 was, in fact, drafted to permit such removal in this precise fact pattern.
Specifically, the AGPLv3 itself has the following provisions (found in AGPLv3§0 and AGPLv3§7¶4):
- “This License” refers to version 3 of the GNU Affero General Public License.
- “The Program” refers to any copyrightable work licensed under this License. Each licensee is addressed as “you”.
- If the Program as you received it, or any part of it, contains a notice stating that it is governed by this License along with a term that is a further restriction, you may remove that term.
That last term was added to address a real-world, known problem with GPLv2. Frequently throughout the time when GPLv2 was the current version, original copyright holders and/or licensors would attempt to license work under the GPL with additional restrictions. The problem was rampant and caused much confusion among licensees. As an attempted solution, the FSF (the publisher of the various GPL's) loosened its restrictions on reuse of the text of the GPL — in hopes that would provide a route for reuse of some GPL text, while also avoiding confusion for licensees. Sadly, many licensors continued to take the confusing route of using the entire text a GPL license with an additional restriction — attached either before or after, or both. Their goals were obvious and nefarious: they wanted to confuse the public into “thinking” the software was under the GPL, but in fact restrict certain other activities (such as commercial redistribution). They combined this practice with proprietary relicensing (i.e., a sole licensor selling separate proprietary licenses while releasing a (seemingly FOSS) public version of the code as demoware for marketing). Their goal is to build on the popularity of the GPL, but in direct opposition to the GPL's policy goals; they manipulate the GPL to open-wash bad policies rather than give actual rights to users. This tactic even permitted bad actors to sell “gotcha” proprietary licenses to those who were legitimately confused. For example, a company would look for users operating commercially with the code in compliance with GPLv2, but hadn't noticed the company's code had the statement: “Licensed GPLv2, but not for commercial use”. The user had seen GPLv2, and knew from its brand reputation that it gave certain rights, but hadn't realized that the additional restriction outside of the GPLv2's text might actually be valid. The goal was to catch users in a sneaky trap.
Neo4j tried to use the AGPLv3 to set one of those traps. Neo4j, despite the permission in the FSF's GPL FAQ to “use the GPL terms (possibly modified) in another license provided that you call your license by another name and do not include the GPL preamble”, left the entire AGPLv3 intact as the license of the software — adding only a note at the front and at the end. However, their users can escape the trap, because GPLv3 (and AGPLv3) added a clause (which doesn't exist in GPLv2) to defend users from this. Specifically, AGPLv3§7¶4 includes a key provision to help this situation.
Specifically, the clause was designed to give more rights to downstream recipients when bad actors attempt this nasty trick. Indeed, I recall from my direct participation in the A/GPLv3 drafting that this provision was specifically designed for the situation where the original, sole copyright holder/licensor0 added additional restrictions. And, I'm not the only one who recalls this. Richard Fontana (now a lawyer at IBM's Red Hat, but previously legal counsel to the FSF during the GPLv3 process), wrote on a mailing list1 in response to the Neo4j preliminary injunction ruling:
For those who care about anecdotal drafting history … the whole point of the section 7 clause (“If the Program as you received it, or any part of it, contains a notice stating that it is governed by this License along with a term that is a further restriction, you may remove that term.”) was to address the well known problem of an original GPL licensor tacking on non-GPL, non-FOSS, GPL-norm-violating restrictions, precisely like the use of the Commons Clause with the GPL. Around the time that this clause was added to the GPLv3 draft, there had been some recent examples of this phenomenon that had been picked up in the tech press.
Fontana also pointed us to the FSF's own words on the subject, written during their process of drafting this section of the license (emphasis ours):
Unlike additional permissions, additional requirements that are allowed under subsection 7b may not be removed. The revised section 7 makes clear that this condition does not apply to any other additional requirements, however, which are removable just like additional permissions. Here we are particularly concerned about the practice of program authors who purport to license their works under the GPL with an additional requirement that contradicts the terms of the GPL, such as a prohibition on commercial use. Such terms can make the program non-free, and thus contradict the basic purpose of the GNU GPL; but even when the conditions are not fundamentally unethical, adding them in this way invariably makes the rights and obligations of licensees uncertain.
While the intent of the original drafter of a license text is not dispositive over the text as it actually appears in the license, all this information was available to Neo4j as they drafted their license. Many voices in the community had told them that provision in AGPLv3§7¶4 was added specifically to prevent what Neo4j was trying to do. The FSF, the copyright holder of the actual text of the AGPLv3, also publicly gave Neo4j permission to draft a new license, using any provisions they like from AGPLv3 and putting them together in a new way. But Neo4j made a conscious choice to not do that, but instead constructed their license in the exact manner that allowed Suhy's removal of the “Commons Clause”.
In addition, that provision in AGPLv3§7¶4 has little meaning if it's not intended to bind the original licensor! Many other provisions (such as AGPLv3§10¶3) protect the users against further restrictions imposed later in the distribution chain of licensees. This clause was targeted from its inception against the exact, specific bad behavior that Neo4j did here.
We don't dispute that copyright and contract law give Neo4j authority to license their work under any terms they wish — including terms that we consider unethical or immoral. In fact, we already pointed out above that Neo4j had permission to pick and choose only some text from AGPLv3. As long as they didn't use the name “Affero”, “GNU” or “General Public” or include any of the Preamble text in the name/body of their license — we'd readily agree that Neo4j could have put together a bunch of provisions from the AGPLv3, and/or the “Commons Clause”, and/or any other license that suited their fancy. They could have made an entirely new license. Lawyers commonly do share text of licenses and contracts to jump-start writing new ones. That's a practice we generally support (since it's sharing a true commons of ideas freely — even if the resulting license might not be FOSS).
But Neo4j consciously chose not to do that. Instead, they license their software “subject to the terms of the GNU AFFERO GENERAL PUBLIC LICENSE Version 3, with the Commons Clause”. (The name “Neo4j Sweden Software License” only exists in the later Court papers, BTW, not with “The Program” in question.) Neo4j defines “This License” to mean “version 3 of the GNU Affero General Public License.”. Then, Neo4j tells all licensees that “If the Program as you received it, or any part of it, contains a notice stating that it is governed by this License along with a term that is a further restriction, you may remove that term”. Yet, after all that, Neo4j had the audacity to claim to the Court that they didn't actually mean that last sentence, and the Court rubber-stamped that view.
Simply put, the Court erred when it said: “Neither of the two provisions in the form AGPLv3 that Defendants point to give licensees the right to remove the information at issue.”. The Court then used that error as a basis for its ruling to temporarily enjoin Suhy from stating that software with “Commons Clause” removed by downstream is “free and open source”, or tell others that he disagrees with the Court's (temporary) conclusion about removing the “Commons Clause” in this situation.
The case isn't over. The lower Court still has various issues to consider — including a DMCA claim regarding Suhy's removal of the “Commons Clause”. We suspect that's why the Court only made a preliminary injunction against Suhy's words, and did not issue an injunction against the actual removal of the clause! The issue as to whether the clause can be removed is still pending, and the current summary judgment decision doesn't address the DMCA claim from Neo4j's complaint.
Sadly, the Court has temporarily enjoined Suhy from “representing that Neo4j Sweden AB’s addition of the Commons Clause to the license governing Neo4j Enterprise Edition violated the terms of AGPL or that removal of the Commons Clause is lawful, and similar statements”. But they haven't enjoined us, and our view on the matter is as follows:
Clearly, Neo4j gave explicit permission, pursuant to the AGPLv3, for anyone who would like to to remove the “Commons Clause” from their LICENSE.txt file in version 3.4 and other versions of their Enterprise edition where it appears. We believe that you have full permission, pursuant to AGPLv3, to distribute that software under the terms of the AGPLv3 as written. In saying that, we also point out that we're not a law firm, our lawyers are not your lawyers, and this is not legal advice. However, after our decades of work in copyleft licensing, we know well the reason and motivations of this policy in the license (described above), and given the error by the Court, it's our civic duty to inform the public that the licensing conclusions (upon which they based their temporary injunction) are incorrect.
Meanwhile, despite what you may have read last week, the key software licensing issues in this case have not been decided — even by the lower Court. For example, the DMCA issue is still before the trial court. Furthermore, if you do read the docket of this case, it will be obvious that neither party is perfect. We have not analyzed every action Suhy took, nor do we have any comment on any action by Suhy other than this: we believe that Suhy's removal of the “Commons Clause” was fully permitted by the terms of the AGPLv3, and that Neo4j gave him that permission in that license. Suhy also did a great service to the community by taking action that obviously risked litigation against him. Misappropriation and manipulation of the strongest and most freedom-protecting copyleft license ever written to bolster a proprietary relicensing business model is an affront to FOSS and its advancement. It's even worse when the Courts are on the side of the bad actor. Neo4j should not have done this.
Finally, we note that the Court was rather narrow on what it said regarding the question of “What Is Open Source?”. The Court ruled that one individual and his companies — when presented with ambiguous licensing information in one part of a document, who then finds another part of the document grants permission to repair and clarify the licensing information, and does so — is temporarily forbidden from telling others that the resulting software is, in fact, FOSS, after making such a change. The ruling does not set precedent, nor does it bind anyone other than the Defendants as to what they can or cannot say is FOSS, which is why we can say it is FOSS, because the AGPLv3 is an OSI-approved license and the AGPLv3 permits removal of the toxic “Commons Clause” in this situation.
We will continue to follow this case and write further when new events occur..
0 We were unable to find anywhere in the Court record that shows Neo4j used a Contributor Licensing Agreement (CLA) or Copyright Assignment Agreement (©AA) that sufficiently gave them exclusive rights as licensor of this software. We did however find evidence online that Neo4j accepted contributions from others. If Neo4j is, in fact, also a licensor of others' AGPLv3'd derivative works that have been incorporated into their upstream versions, then there are many other arguments (in addition to the one presented herein) that would permit removal of the “Commons Clause”. This issue remains an open question of fact in this case.
1 Fontana made these statements on a mailing list governed by an odd confidentiality rule called CHR (which was originally designed for in-person meetings with a beginning and an end, not a mailing list). Nevertheless, Fontana explicitly waived CHR (in writing) to allow me to quote his words publicly.