The GPL meets the UCC: does free software come with a warranty of no infringement?

Author:McJohn, Stephen
Position::General public license - I. Introduction into IV. The GPL Exclusion of Warranties May Not Include Infringement Claims, p. 1-32

Table of Contents I. Introduction II. Where Warranty of Noninfringement Claims for GPL'd Software Could Arise III. Whether Uniform Commercial Code Article 2 Applies to Software Under the GPL IV. The GPL Exclusion of Warranties May Not Include Infringement Claims V. Whether the GPL Excludes the Warranty of Noninfringement by Agreement VI. "Usage of Trade" and Free Software Licenses VII. Expressly Excluding the Warranty of Noninfringement VIII. Conclusion I. Introduction

The GNU General Public License, known as the GPL, is the cornerstone of free software. (1) The GPL has served as the organizing document for free software, providing a structure that has helped transformed the development of software and electronic devices. (2) Software licensed under the GPL may be freely copied and adapted. (3) The source code for the software is made available, to enable anyone to study and change it. (4) The GPL does have "copyleft" restrictions, intended to keep the software free for others. (5) If someone adapts and redistributes GPL'd software, they must likewise allow access to their source code. (6) The software is free, in the sense that there are no restrictions on adapting and redistributing it, even if copies are sold. (7) A GPL'd program typically includes the following clause:

This program is distributed in the hope that it will be useful, but WITHOUT ANY WARRANTY; without even the implied warranty of MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE. (8) The clause may not be quite accurate. (9) The licensor makes no warranty of quality that the software will work. (10) But, due to idiosyncrasies of the Uniform Commercial Code, someone who sells software under the GPL may--unknowingly--make a warranty of noninfringement, promising that use of the software does not infringe any patents, copyrights or other third party rights. (11) In other words, someone who sells software under the GPL might be liable for damages, if the buyer were sued by a third party claiming patent or copyright infringement. (12) In today's climate of wide-ranging software patent and copyright enforcement, that could be a substantial risk.

This paper has two goals. The first is specific: to analyze whether the GPL excludes the warranty of noninfringement. The GPL covers many millions of pieces of software. (13) There is a plethora of broad software patents. (14) Because software patents are often drafted in abstract terms, a patent developed in one area of technology may be read to apply broadly to software used in entirely different applications. (15) Many software patent holders seek to enforce them, whether for licensing revenue or strategic advantage. (16) Software copyright claims pose a smaller but still substantial hazard. (17) If someone distributing software under the GPL has, albeit unknowingly, promised that the software does not infringe third party rights, they could face a considerable risk. (18) This paper works through the relevant legal code, assesses the risk to developers, and suggests practical ways to reduce the risk.

The paper's broader goal is to analyze how courts may apply commercial law to the GPL. Court cases involving the GPL have been few but may well increase in number, as the GPL covers more commercial products. (19) For example, the GPL covers key software running Android devices. (20) Much litigation has already arisen with respect to intellectual property rights related to smartphones. (21) More broadly, commercial parties are increasingly taking free software and incorporating it into their products, meaning that many commercial devices and software packages include free software. (22)

The purpose of the UCC is to "simplify, clarify, and modernize the law governing commercial transactions." (23) In some areas, the UCC has paved the way for new technologies in commercial practice, such as its treatment of electronic chattel paper. (24) In many areas, however, the UCC has been hard-pressed to keep up with changing commercial practices, especially those involving software. (25) Whether modern practices of forming contracts are effective under the UCC remains unclear. (26) Congress has similarly not clarified the interplay between federal intellectual property law and state commercial law. (27) UCC Article 9 on Secured Transactions, for example, has been unable to resolve whether federal or state filing is necessary to effectively use intellectual property as collateral. (28) Whether a software transaction is a license or a sale is unsettled, with ramifications in other areas of the law. (29)

Software is becoming increasingly important in commercial life, but commercial law is adapting only in fits and starts to software transactions. (30) The Uniform Computer Information Transactions Act was proposed by the NCCUSL to deal with the sale or licensing of software. (31) UCITA provided comprehensive set of rules for such transactions. (32) But because UCITA was widely considered to favor software companies and disfavor consumers, it received little traction in state legislatures. (33) It was adopted in only two states, while four states enacted so-called "bombshelter" statutes, forbidding the application of UCITA. (34) Similarly, a comprehensive revision to Article 2 of the Uniform Commercial Code, which would have some the issues involving software transactions, foundered and became the first broad revision to the UCC not to be adopted by state legislatures. (35) Efforts continue to clarify the law, most notably the American Law Institute's Principles of Software Contracting project, (36) but at present uncertainty obtains in many areas. (37)

Meanwhile, a software license drafted by a software developer (not without help from skilled lawyers) has become one of the most influential documents in software law. (38) The GPL is by far the most widely used license among free and open source licenses. (39)

Most notably, the operating system kernel Linux is released under the GPL. (40) Linux has very wide use in computing and represents one of the largest software projects. (41) Because Linux is used in the operating system Android, which runs the majority of smartphones, GPL'd software is now carried around and used by tens of millions of people. (42) The GPL is also the license covering such widely used software as the GNU C Compiler (the preeminent compiler for the popular...

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