Exhaustion of distributon rights in Open Source licensed software copies. A study on a Right holder's attempt of combining Open Source software with FRAND licensing.

Abstract

The ICT industry is an industry in convergence, where new technology and business models have been introduced. The increasing use of software, both in the product but also as the product has challenged the excluding view of intellectual property. New, arguably more effective working models have been introduced, such as Open Source, yet, actors are reluctant to part ways with the benefits of the monopoly right. Most recently the company PARC attempted to combine the Open Source working model with monetization on patent licensing through combining Open Source licensed software with FRAND-licensing, trying to combine the best of the two worlds. There are, however, a few mechanisms in intellectual property law, which purposes are to hinder unreasonable compensations to right holders. One of these mechanisms is the exhaustion doctrine, which could have effect on right holders attempts of combining Open Source software and licensing revenues. While the doctrine has existed since the 19-th century and was long considered a straight forward proposition, it has recently undergone a resurgence with the introduction of new technologies and business models. In the recent UsedSoft v. Oracle, a software license was deemed a ‘sale’ by the CJEU due to the broad wording of the license, which meant that the licensor exhausted its distribution rights to its licensed software copies. However, it was never concluded what implications the decision would have on other broad licensing constellations, such as Open Source licensed software. Therefore, will this paper study the exhaustion doctrine’s applicability on right holders’ distribution rights to Open Source licensed software copies and in the light of this examine PARC’s attempt of combining Open Source software with patent licensing, through their licensed FRAND commitment.