Stop saying Open Source when it’s not. The US Court of Appeals for the Ninth Circuit recently affirmed a lower court decision concluding what we’ve always known: that it’s false advertising to claim that software is “open source” when it’s not licensed under an open source license.
You can read the decision here. The facts, as described by the trial court, are that Neo4j, Inc. had been through several releases of its software and several license choices along the way, ending with what the court called “the Sweden Software License,” because the licensor was a Swedish subsidiary of the plaintiff.
This “Swedish license” was simply the combination of the Affero General Public License with an additional restriction known as the Commons Clause. The defendants forked the software, renamed it “Open Native Graph Database” (ONgDB), and started distributing their version as AGPLv3-only licensed. They advertised ONgDB as “free and open source,” “100% free and open,” and “100% open source.”
The parties didn’t dispute that the use of the Commons Clause makes a license non-free. There was also no allegation that Neo4j had claimed that its software under the AGPLv3 + Commons Clause was open source. However, the court held that it was improper for the defendants to remove the Commons Clause, and therefore the defendants’ claims in advertising that its ONgDB software was open source was false advertising.
For a false advertising claim, there must be a false statement in commercial advertising and the statement must be deceptive in a material way. The trial court held that characterizing software that was under the Commons Clause as “free and open source” was false. This deception was also material: “Because Defendants misrepresented ONgDB as a free version of Neo4j EE licensed under the APGLv3, there is no doubt that this price differential (free versus paid) was likely to influence customers’ purchasing decisions. Thus, the Court finds that Defendants’ statements suggesting that customers could obtain a ‘free and open source drop in replacement’ for Neo4j EE were material.”
The court only confirmed what we already know – that “open source” is a term of art for software that has been licensed under a specific type of license, and whether a license is an OSI-approved license is a critically important factor in user adoption of the software. Had the defendants’ desire to license its software as AGPLv3-only been permissible, its claims of “100% open source” wouldn’t have been false and there would have been no false advertising. But adding the non-free Commons Clause created a different license such that the software could not be characterized as “open source” and doing so in these circumstances was unlawful false advertising.
There’s another interesting aspect to this case. Even though the AGPL has a clause specifically allowing downstream recipients to remove “further restrictions” like the Commons Clause, the court stopped the defendant from doing just that. We’ve covered that in our next post.