Hello, I am lawyer with a PSA: almost everyone is wrong about the OGL and SRD. Clearing up confusion.

[bmcdaniel]

Is there a distinction in the law between revocation of the license itself and termination of the license w/r/t a particular licensee?

ETA for clarification: It seems to me I ought to be able to construct a license that is irrevocable but still provides for termination if a licensee breaches its terms.

There could be a distinction between "revocation" and "termination" of a license. For example, there is plenty of commentary among attorneys that are engaged in licensing that propose to differentiate between "revocation" and "termination." In many cases, this is because in certain contexts is necessary to have different effects, and "revocation" and "termination" are convenient labels to use.

For example, imagine an agreement that covered two subject matters: (a) Mr. X grants Mr. Y a license to use certain intellectual property; and (b) Mr. Y must pay a revenue-based royalty to Mr. X every year, and do other things to support the fee (for example, provide audited financial statements that show revenue). The requirement to pay the annual fee (and the other things) should stop if Mr. X engages in misconduct, but the license should continue. The agreement might express this as: "This agreement shall terminate, and the parties shall have no further rights or obligations hereunder in the event of Mr. X's misconduct; provided that the license to Mr. Y shall be irrevocable and survive the termination of this agreement." This would be a fairly clear distinction between "termination" which applies generally and "revocation" which applies specifically to the license.

However, merely because an agreement could draw a distinction between "revocation" and "termination" of a license, does not mean that an agreement does draw a distinction. As always, one has to interpret the actual agreement is there any evidence of intention, either in the agreement itself or (if the agreement is ambiguous) in parole evidence, that the parties intended to create the distinction.

With respect to OGL 1.0(a), I submit there is essentially no evidence in the agreement itself that the parties intended to create a distinction between termination and revocation, especially because OGL 1.0(a) never uses the term "revoke" or "revocable" or "irrevocable" or anything similar. To posit otherwise is to suppose that the parties intended OGL 1.0(a) to include a license that is revocable at will, even though the parties never used the word revocable or suggested that the license that the license could cease except in the termination clause which states the conditions under which the license would cease.
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In matters of law, there are complexities, nuance and exceptions to everything, including things said above. Don't expect a complete discussion in a forum post. Moreover, even if there are no complexities, nuance and exceptions that apply to your situation, there may be consequences that apply to you that you should consider. The fact that I don't know what complexities, nuance, exceptions and consequences apply to your specific situation is one reason (among many) that the things said above are not legal advice. So, I'll say what you hear so many lawyers say. The above is not legal advice. I am not your lawyer. You can rely on my legal advice only when we have discussed your specific situation after entering into an engagement letter with me or my law firm, and have agreed to pay me or my law firm for the provision of legal advice.

 

[S'mon]

2. Irreparable Harm

The applicant will suffer irreparable harm. Irreparable harm is the sort of harm that cannot be compensated for by monetary damages. This is likely, on these facts, to be the end of WotC's case for an injunction. This branch of the test doesn't vary by jurisdiction.

Good description - English Law is a 1A 'Prima Facie Case' system.

One quibble on Irreparable Harm - in England at least this can include "The respondent is poor and won't be able to pay our damages when we win" as well as "The respondent is a Bloody Pirate and is likely to do a runner, m'lud". So it can be quite easy for a big company to get an injunction vs a small company or a sole trader, if they can establish a prima facie case.

 

[DavyGreenwind]

Is there a distinction in the law between revocation of the license itself and termination of the license w/r/t a particular licensee?

ETA for clarification: It seems to me I ought to be able to construct a license that is irrevocable but still provides for termination if a licensee breaches its terms.

Great question! Yes, there is a distinction between revoking the license and terminating the agreement.

An important, complex point is the difference between the license itself and the licensing agreement. A "license" is not a contract, but rather a limited permission to use a property not owned by the user. The license is the subject (i.e. the product received) of a contract, the contract being the licensing agreement. Often on licensing practice, the two entities will be part of the same document, but they are legally distinct.

That's why interpreting the license merely with contract law will yield an incomplete picture. A licensing agreement is a contract between two parties, but a license is simply a set of permissions and conditions regarding a piece of property.

So back to termination and revocation. "Termination" is something that happens to a licensing agreement, when an agreement is broken between two specific parties as a result of breach or some other event.

"Revocation," as I have been using it in this thread, means the withdrawal of the license itself, regarding the property. (Sometimes revocation has a different meaning in contract law, but here we are talking about revoking a license). No new licensing agreements can be made, because the license would no longer exist.

There is a small chance that someone suing WotC or vice versa can claim that revoking the license is a breach of the licensing agreement, and win because of reliance or something. But even then, the winning party might only be entitled to damages (compensation for lost revenue), rather than specific performance (a court order to keep the license open), as specific performance is disfavored by US Courts (less so in Europe).

It could end up in a situation where WotC has to pay damages to certain companies, but they still get to revoke the license.

 

[Snarf Zagyg]

Oh every jurisdiction would do that. That's part of the test on these facts. It's all part of the merits.

In a motion or application to grant an in junction (in some US jurisdictions a Temporary Restraining Order pending trial, or "TRO"). It's a three part test:

I already told you that this isn't true in the United States. Here's some examples:

Florida:
1) irreparable harm
2) a clear legal right
3) an inadequate remedy at law
4) consideration of the public interest.

Texas:
(1) a cause of action against the defendant;
(2) a probable right to the relief sought;
(3) a probable, imminent, and irreparable injury in the interim.

Minnesota:
(1) the nature and background of the relationship between the parties preexisting the dispute giving rise to the request for relief;
(2) the harm to be suffered by plaintiff if the temporary restraint is denied as compared to that inflicted on defendant if the injunction issues pending trial;
(3) the likelihood that one party or the other will prevail on the merits when the fact situation is viewed in light of established precedents fixing the limits of equitable relief;
(4) the aspects of the fact situation, if any, that permit or require consideration of public policy expressed in the statutes, state and federal; (5) the administrative burdens involved in judicial supervision and enforcement of the temporary decree

Hawaii:
(1) whether the moving party has shown that it is likely to succeed on the merits;
(2) whether the balance of irreparable harms favors the issuance of an injunction;
(3) whether the public interest supports granting such an injunction

Notice that in various states, there are additional factors or missing factors. More importantly, this is about a preliminary injunction, not about what might result from summary judgment or a full trial on the merits. In American commercial litigation, preliminary injunctions are incredibly rare, so it's barely worth going through these factors. Instead, it would be about the in terrorem effect of the on-going litigation.

Mind you, I also practice in a jurisdiction where costs are paid to the other side when you lose an injunction motion, and those costs aren't small as they usually are in most American jurisdictions. Elsewhere in the common law world, those costs follow the event and are both large and generous on any injunction motion. You can find yourself writing a cheque for $100,000+ to several times that amount to the other side when you lose the motion (even though the underlying case continues). In my experience, even wealthy litigants don't like throwing away money like that (spoilers: that's how they became wealthy in the first place).

Again, familiarity with different jurisdictions would help. In the United States, you do not pay attorney's fees or costs absent a rule or statute (the "American Rule,"), but the winning movant will almost always have to pay a sizeable bond for the issuance of an injunction.


ETA- it appears you are using Canadian law. I would wager substantial amounts of money that Hasbro's first shot fired won't be in Canada.

 

[Snarf Zagyg]

Good description - English Law is a 1A 'Prima Facie Case' system.

One quibble on Irreparable Harm - in England at least this can include "The respondent is poor and won't be able to pay our damages when we win" as well as "The respondent is a Bloody Pirate and is likely to do a runner, m'lud". So it can be quite easy for a big company to get an injunction vs a small company or a sole trader, if they can establish a prima facie case.

There's a fair amount of case law in the United States about irreparable harm, as well.

It's why (some, but not all) jurisdictions have a separate test for inadequacy of legal (monetary) remedies. But there's also the issue of ... well, judges be judgin'. There was a recent case that had a federal appellate court find that people who were on unpaid leave (which ... could be remedied by pay ...) were suffering irreperable harm because the lack of pay .... might coerce them. Which, you know. Go figure, right? The lack of money was an irreparable harm that couldn't be cured by money.

This is why people that express certainty tend to worry me.

 

[Steel_Wind]

What you are saying is 100% not true.

As you an experienced commercial litigator, with vast amounts of experience in the United States, you know that (setting aside the difference between mandatory and prohibitory injunctions, not to mention preliminary and permanent) the multi-part test for injunctions is different in different jurisdictions; you do not apply the same test in Minnesota that you do in Florida that you do in Hawaii that you do in South Carolina (yeah, they all have a materially different test). In most jurisdictions in the United States, the "balance of convenience" is not considered.

So yeah. Quite frankly, for anyone to say that they can confidently assert something without even knowing what law applies boggles the mind.

I don't even have words for that .... "Hey, I don't where the lawsuit is going to be, I don't know what law could possibly apply, but allow me to give you my confident analysis and rubbish other people."

Thanks, but no thanks.

Firstly, I'm a Canadian lawyer (Ontario). While I have appeared pro hac vice in American courts, I'm not an American lawyer; all true.

That said, if you re looking for an injunction such as this, ordinarily, that would be under your Rule 65 in Federal Court, right? I assume that this injunction sought is ultimately permanent and therefore equity is engaged. All three parts of that test are normally applied, (as is a broader public interest, for that matter)

I have previously mentioned undertaking in damages re security bond if you win the prelim injunction. That's not at issue. WotC can satisfy that.

If you are saying that there is some circuit in the US Federal Court that ignores the process as typically proceeds under Rule 65 in Federal Courts of NY and Michigan? Fine. You are a little late to be jumping in - if you have an opinion on where an injunction is easy to get on these facts (and which would allow WotC to avoids the submission of highly inconvenient evidence) I'd love to hear it. Enlighten us.

Summary judgment gets us to the same place, but as to availability of summary judgment in any American jurisdiction - I do not express any opinion; I'm not an American lawyer. Typically, that doesn't tend to fly in cases where credibility might be in issue (and it might be here, depending on) but that whole aspect of the law was until recently, an often moving target in Canada.

Assuming it was available, you are still down to the merits and the evidence. And none of that evidence is great for WotC. Do you disagree?

 

[Snarf Zagyg]

Firstly, I'm a Canadian lawyer (Ontario). While I have appeared pro hac vice in American courts, I'm not an American lawyer; all true.

That said, if you re looking for an injunction such as this, ordinarily, that would be under your Rule 65 in Federal Court, right? I assume that this injunction sought is ultimately permanent and therefore equity is engaged. All three parts of that test are normally applied, (as is a broader public interest, for that matter)

No. First, there is no certainty you're in federal court. There's no reason that, for example, Hasbro couldn't file a claim against a 3PP in state court.

Second, the claim (most likely, claims) could be litigated without seeking a preliminary injunction. You could simply litigate the merits and receive a permanent injunction at the end. Or maybe just do the license/contract as a declaratory action ... but I'm sure that they will have the first case filed with additional claims ... if that's how they go.

Third, as I keep reiterating, preliminary injunctions in commercial litigation are extremely rare regardless of the merits. If Hasbro were to seek one, it would likely be on an IP claim, not under the license.

If you are saying that there is some circuit in the US Federal Court that ignores the process as typically proceeds under Rule 65 in Federal Courts of NY and Michigan? Fine. You are a little late to be jumping in - if you have an opinion on where an injunction is easy to get on these facts (and which would allow WotC to avoids the submission of highly inconvenient evidence) I'd love to hear it. Enlighten us.

I think I've said quite a bit! I keep reiterating that (1) I don't think your certainty is fully warranted, (2) I personally don't comment on law that is outside of my jurisdiction for a very good reason, and find it beyond strange that you are so confident that your knowledge of Canadian law allows you to speak for "all jurisdictions," and (3) did not think it was appropriate for you to attack someone (incorrectly, I would add) simply for having an opinion different than yours.

For what it's worth, I tend to think that Kit Walsh is more credible in matters of United States IP law, contract law, and open licenses than anonymous people on the internet- and that includes you and me.

 

[robconley]

Great question! Yes, there is a distinction between revoking the license and terminating the agreement.

An important, complex point is the difference between the license itself and the licensing agreement. A "license" is not a contract, but rather a limited permission to use a property not owned by the user. The license is the subject (i.e. the product received) of a contract, the contract being the licensing agreement. Often on licensing practice, the two entities will be part of the same document, but they are legally distinct.

I thought that the OGL was a license not a contract as well and then I read the appeals ruling in Jacobsen v. Katzer.

Traditionally, copyright owners sold their copyrighted material in exchange for money. The lack of money changing hands in open source licensing should not be presumed to mean that there is no economic consideration, however. There are substantial benefits, including economic benefits, to the creation and distribution of copyrighted works under public licenses that range far beyond traditional license royalties. For example, program creators may generate market share for their programs by providing certain components free of charge. Similarly, a programmer or company may increase its national or international reputation by incubating open source projects. Improvement to a product can come rapidly and free of charge from an expert not even known to the copyright holder. The Eleventh Circuit has recognized the economic motives inherent in public licenses, even where profit is not immediate. See Planetary Motion, Inc. v. Techsplosion, Inc., 261 F.3d 1188, 1200 (11th Cir.2001) (Program creator "derived value from the distribution [under a public license] because he was able to improve his Software based on suggestions sent by end-users.... It is logical that as the Software improved, more end-users used his Software, thereby increasing [the programmer's] recognition in his profession and the likelihood that the Software would be improved even further.").

This to me means a license like the OGL should be considered a contract as it fulfills all the elements of contracts including economic consideration. And that the rules pertaining to non-exclusive copyright license grants do not apply.

 

[Snarf Zagyg]

Assuming it was available, you are still down to the merits and the evidence. And none of that evidence is great for WotC. Do you disagree?

This was added after my post.

I'll put this as simply as possible-

I cannot possibly express my opinion on "the merits" and "the evidence" when:
1. We don't know what the actual new license looks like (we've only seen an alleged draft).
2. We don't know what Hasbro's theory is going to be.
3. We haven't seen ... you know ... a complaint.
4. We don't know where the complaint is filed (what law applies).
5. We don't know who the defendant is (facts ... matter).
6. We don't know what other claims Hasbro might bring.

So while I can offer general thoughts about the law and litigation, I certainly have not a clue what the "merits" and the "evidence" are, and I am somewhat surprised that you do? It's a truism, in America at least, that court don't provide advisory opinions because cases turn on actual controversies. Until we know what the actual controversy is, and what law applies, it's hard to make definitive statements.

 

[bmcdaniel]

For what it's worth, I tend to think that Kit Walsh is more credible in matters of United States IP law, contract law, and open licenses than anonymous people on the internet- and that includes you and me.

I'm not sure whether it should matter or not, but I don't pretend to be anonymous. This is me: Brian M. McDaniel and Brian Michael McDaniel # 200166 - Attorney Licensee Search