As technology evolves, the parameters of intellectual property rights, notably in software development where open-source software (OSS) is involved, are persistently examined. An example of this is the landmark case decided by the Supreme People’s Court of China – Netcom Technology (“Suzhou”) Co., Ltd. v. Yimou Communication Technology Co., Ltd. and others (“Yimou”), sheds light on the intricate nuances of copyright infringement and open-source software licensing. 

The crux of the case revolves around the infringement of computer software copyright, with Suzhou alleging that Yimou, along with some former employees, replicated and modified their software, “OfficeTen1800,” based on the OpenWRT system operation control software. This case not only underscores the importance of protecting software copyrights but also delves into the complex interplay between open-source licensing agreements and proprietary rights. 

At the heart of the dispute lies the interpretation of the GNU General Public License Version 2 (GPL 2.0) agreement, under which the OpenWRT software operates. The defendants argued that Suzhou, by utilizing OpenWRT, had forfeited its right to claim infringement as per the terms of the GPL 2.0 agreement, which mandates the disclosure of source code and grants free licenses to third parties. 

However, the court’s ruling offered a nuanced perspective on the matter. It distinguished between the attribution of copyright for software developed directly from open-source products and secondary development based on such products. While developers are bound by open-source agreements for the former, they retain the right to their own copyright for the latter, provided their contributions constitute independent work. 

In affirming Suzhou’s copyright ownership, the court recognized the originality and tangible expression of their “OfficeTen” gateway product system software, thereby entitling it to legal protection under copyright law. Importantly, the court rejected the notion of conflating compliance with the GPL 2.0 agreement with the right to claim copyright, emphasizing the independent legal issues at play. 

Central to the court’s decision was the application of the proportionality principle in determining compensation. By excluding the already open-sourced parts of the OpenWRT software and focusing solely on Suzhou’s independently expressive development, the court arrived at a fair compensation amount of 500,000 RMB. This approach balanced the interests of both parties while upholding the principles of copyright law. 

The decision on this case opens up a somewhat disturbing question: Can intellectual property rights be used to remove conditions imposed by open-source licenses? The ruling by the Chinese judiciary would seem to give a positive answer to the question. But on the other hand, the ruling clearly states that Suzhou could be sued by the original IP rights holders in connection with its non-compliance with the corresponding open-source license (GPL 2.0), implicitly recognizing the validity of the latter. 

Now what? 

By summarizing and to close this post, the key seems to be, firstly, to know reliably the origin and terms under which the open-source code used by the company is licensed (for example through OSS software audits); and secondly, as developers, to control that the OSS terms under which a given code is licensed are respected, not only so that the collaborative spirit of the OSS is not distorted but also as a defense of the IP rights themselves. 

Are you confident your software meets open-source licensing requirements? If you’re not sure visit fossity.com today for a confidential, cost-effective, and speedy open-source auditing.