The Federal Circuit’s ruling in Jacobsen v. Katzer finally settled the question of whether open source licenses are enforceable. Unfortunately, three recent cases from the Ninth Circuit have complicated matters. I call this trio of cases the “MDY Trio” in honor of the Ninth Circuit’s prior trio of licensing cases known as the “MAI Trio.” On the surface, the MDY Trio provides a boost for the enforceability of software licenses, but the MDY Trio also creates two significant complications for open source licenses. First, the MDY Trio’s test for distinguishing between licenses and copyright “first sales” does not fit open source licenses. Second, the MDY Trio’s method of delineating between contractual covenants and license conditions will prevent many open source licensors from obtaining injunctive relief. This complication is particularly dire because injunctive relief is the most critical remedy in enforcing open source licenses. My article proposes a modification to the MDY Trio’s test for determining whether a transaction is a license or first sale that better fits open source licenses. The article also proposes a more effective approach to distinguishing between contractual covenants and license conditions by focusing on remedies. My alternative approach capitalizes on the experience of trial courts in granting injunctive relief, serves the public policies underlying copyright and contract law, and better fits open source licenses. Given the importance of licensing as a transaction model in the information economy, other federal courts soon will be deciding whether to follow or diverge from the MDY Trio’s lead in future licensing cases.
