While this case turned on a contractual clause expressly prohibiting EMI from selling Pink Floyd’s songs “out of context”, New Zealand’s copyright law can give musicians (and other copyright holders) limited protection against “derogatory treatment” of their musical works outside of a contract (part of the “moral rights” of authors long recognised in civil law jurisdictions, but only since 1994 in New Zealand).

Under section 98 of the Copyright Act 1994, an author of music has the right (with various complex requirements and exceptions)  “not to have his or her work subjected to a derogatory treatment”. It is important to note that, where this section applies, it gives the right to the author, not the copyright owner who usually has all the rights under copyright law.

Derogatory treatment includes doing something “prejudicial to the honour or reputation of the author”.  What this actually means in practice is not always clear. In the case of a band, whose reputation might include concept albums portraying a high level of “interconnectedness” of songs, an argument could be made that breaking up the album, or rearranging it, or reducing a song to ring tone without permission, is a derogatory treatment. Similarly, using a musical work to accompany or promote a highly offensive movie could be derogatory treatment (one quirk is that moral rights extend to the “musical work” but not necessarily to an actual recording of it). In either case, the person using the work may be licensed to use it, but the author may still have a remedy for derogatory treatment. It would very much depend on the facts, taking into account the complex and incomplete coverage of moral rights.

One of the few New Zealand cases involving derogatory treatment is Radford v Hallensteins ([2009] DCR 907 and others). It involves a clothing chain that printed t-shirts showing an image of sculptor John Radford’s Western Park installation in Auckland. Radford has brought a claim against the clothing chain for copyright infringement, including derogatory treatment of his work. The case is yet to be heard, but the District Court refused to strike out the claim last year.

In Jacobsen v Katzer (13 August 2008), a software developer (Jacobsen) had developed a Java-based software library for controlling model train sets. The software was released through the SourceForge website under the open source Artistic License (version 1). Another developer (Katzer) took Jacobsen’s code and included it in his own software – which is permissible under the Artistic License – but did not comply with the conditions of the licence.

Specificall, Katzer failed to:

• Include the original author’s name;
• Retain the original copyright notices;
• Link back to the SourceForge website; or
• Describe what modifications had been made to the original code;

as required by the licence.

Jacobsen took Katzer to court to prevent him from continuing to use the code in breach of the licence.

In Court, the fact that Katzer had not complied with the licence was not in question. The key issue was whether, having breached the terms, Katzer could be prevented from using the code. Katzer’s argument was (in effect) that even though he had breached the licence, Jacobsen suffered no harm (as the software was freely given away and able to be modified), and therefore on the usual contract law damages principles, Jacobsen had no remedy.

In a significant victory for open source licensing, the US Court of Appeals for the Federal Circuit (the 2nd highest Court in the US, one level below the Supreme Court) rejected this argument. The Court ruled that failure to comply with the terms of the licence meant that Katzer had no right to use the software. His use of the software in contravention of the licence was therefore not a simple breach of contract, but a breach of copyright. As a result, Katzer would have to stop using the software.

While open source licences have been upheld before, and this particular case was only a procedural hearing, the decision is still noteworthy for two reasons:

1. Collapsible software licensing

It provides an excellent example of a “collapsible software licence”. The right to use the software was held to be conditional on continued compliance with the terms of the license. Failure to observe those conditions resulted in the right to use the software collapsing, or never coming into existence in the first place. This is quite different from a situation where the right to use the software exists independently from the other terms of its use, and any breach of a term of the licence simply allows to the licensor to claim for damages (if the breach has caused any loss) but does not take away the right to use the software.

2. Strong endorsement of open source licensing

It provides a robust endorsement by a high-level Court of an open source licence and the conventions surrounding them. For example:

• The Court implicitly accepted that including the terms of a license in a file called COPYING – which is customary, though not universal, in open source project – are binding.

• The Court also accepted that conditions such as author attribution, preservation of notices and links back to the project website are enforceable, valuable terms that the licensor can insist must be complied with.

• The Court stated that just because open source software is free, that does not mean the license is unenforceable (on the technical legal grounds of lack of consideration). On this point the Court said:

“The lack of money changing hands in open source licensing should not be presumed to mean that there is no economic consideration, however. There are substantial benefits, including economic benefits, to the creation and distribution of copyrighted works under public licenses that range far beyond traditional license royalties.”

Relevance in New Zealand

While New Zealand courts are not bound by this decision, being a US court applying US law, it is still of relevance in New Zealand. The Court’s robust, straight-forward interpretation of the terms of the licence may be influential on a New Zealand court facing a similar situation. Furthermore, as software development is a particularly international industry, developers in this country may be able to point to the decision should questions arise as to the intended effect of using a similarly-worded licence.

One small difference does arise under New Zealand’s copyright law. Unlike in the US, in New Zealand the right to be identified as the author of a “literary work” (which includes software) is enshrined in section 94 of Copyright Act.