Compliance Toolkit

EU lawmakers threaten open source

Ingrid Marson ZDNet.co.uk

Published: 01 Aug 2005 17:45 BST

The European Commission has proposed a law that could allow criminal charges to be pressed against businesses using software that is believed to infringe upon another company's intellectual property (IP).

The proposed directive, which was adopted by the European Commission last month, would allow criminal sanctions against "all intentional infringements of an IP right on a commercial scale".

Richard Penfold, a partner at law firm DLA Piper Rudnick Gray Cary, said last week that the proposed directive could "quite possibly" allow the imprisonment of the boss of a company that is using infringing software, although it would depend on whether the defendant can argue that the infringement was unintentional.

Although it is unusual for companies to target the users of software, rather than its manufacturers, there is one well-known example — the cases brought by the SCO Group against car maker DaimlerChrysler and auto-parts retailer AutoZone over their use of Linux. SCO claimed that AutoZone infringed on SCO Unix copyrights through its use of Linux and that DaimlerChrysler had breached its contract with SCO.

Ross Anderson, the chair of the Foundation for Information Policy Research, said the proposed directive could help SCO or other companies in future IP infringement cases against open source software.

"In future somebody like SCO will have another course of action open to them — the threat of criminal charges. This threat would enable SCO to cast a larger legal cloud," said Anderson.

The European branch of the Free Software Foundation (FSF) was also worried that SCO could use the directive to its advantage. Joachim Jakobs from FSF Europe said that not only could company managers face being tried in a criminal court, but SCO could also be allowed to join the criminal investigation — as the directive calls for "Joint Investigation Teams", where the holder of the IP rights in question can assist the criminal investigation.

But Paul Stevens, a partner at Olswang, said it was unlikely that software users would be affected by the directive, as any company that pursues criminal cases against users is likely to suffer from the bad publicity.

"It's not that often that companies who have IP rights pursue cases against users," he said. "Most IP owners want you to continue buying their product and to continue dealing with them. If they started threatening someone with prison or a criminal record, how do you think their customers will feel?"

The proposed directive, which has not yet been approved by the European Parliament, includes various penalties to those caught infringing IP rights, including four years' imprisonment; fines; seizure and destruction of the offending goods; closure of the establishment used to commit the offence; a ban on engaging in commercial activities; and denial of access to legal aid.

The proposal is described as a "European Parliament and Council directive on criminal measures aimed at ensuring the enforcement of IP rights". For more information on this law and how it may impact free software, file sharers and patent infringement lawsuits, please click here.