Brussels / 31 January & 1 February 2015


Discrimination & Reciprocity

Termination Clauses in FOSS and FRAND Licenses

Termination provisions are a standard component of license agreements. FOSS licenses and FRAND commitments, however, are not standard agreements, as they are founded on ideals of non-discrimination. Termination clauses, which permit licensors to cancel rights of specific licensees, contradict these ideals. The talk will clarify the contradictions between these principles and license termination provisions, explain why termination provisions are nonetheless justified in these models, and illustrate these explanations by reference to a number of current debates.

A fundamental principle of FOSS and FRAND licensing is that the rights under the license must be made available to all end users or willing licensees. The Open Source Definition, for example, expressly provides that open source licenses must not “restrict any party” from redistributing the licensed software, and that such licenses cannot “discriminate against any person or group of persons”. The principles of FRAND licenses are perhaps less sharply defined, but the “ND” in FRAND also imposes a similar requirement of “non-discrimination”.

Notwithstanding these principles, many FOSS licenses provide that licensees that breach the terms of the license can have their rights terminated. FOSS and FRAND licenses may also include “defensive termination” provisions, which allow for the termination of rights in retaliation for patent infringement suits. Such provisions allow licensors to discriminate against specific and identifiable licensees by revoking previously granted rights. Typically, according to these provisions, once a licensee’s rights are terminated the licensor has no obligation to reinstate these rights. Even if the licensor does agree to reinstate the licensee’s rights, the licensor may discriminate against the licensee by imposing restrictions or obligations that would not be permitted under the original terms of the license.

One could imagine an alternative means of structuring FOSS and FRAND licenses that, in hewing more closely to standards of non-discrimination, would not include termination provisions. Licensors would perhaps be required to allow licensees to continue exercising their rights, even as the licensor brings suit against the licensee for copyright infringement or breach of the license. Licensors would not be allowed to impose additional obligations on a licensee in exchange for the reinstatement of license rights.

The talk will advance several explanations of why termination provisions are nonetheless a justified breach of the non-discrimination principles in FOSS and FRAND licenses. Such explanations will include a discussion of the basic principles of non-discrimination and reciprocity in FOSS licenses and FRAND commitments, an analysis of possible remedies available to licensors aside from termination, and an exploration of the legal risks to licensors and licensees of not including termination provisions in the license. The talk will also illustrate the tensions between termination provisions and non-discrimination principles by reference to a number of current debates.


Eli Greenbaum