I think I understand why the Free Software Foundation insists that
a license is not a contract. Their belief is grounded upon
a mistaken interpretation of the case law on licensing patents,
highlighted in a 1938 decision by the Supreme Court in
General Talking Pictures Corp. v. Western Electric Co.,
Inc., 305 U.S. 124
The question of law requiring decision is whether the restriction
in the license is to be given effect. That a restrictive license
is legal seems clear. Mitchell v. Hawley, 16 Wall. 544. As was said
in United States v. General Electric Co., 272 U.S. 476, 489 , 47
S.Ct. 192, 196, the patentee may grant a license 'upon any
condition the performance of which is reasonably within the reward
which the patentee by the grant of the patent is entitled to secure.'
The restriction here imposed is of that character. The practice of
granting licenses for a restricted use is an old one, see Providence
Rubber Company v. Goodyear, 9 Wall. 788, 799, 800; Gamewall Fire-Alarm
Telegraph Co. v. Brooklyn, C.C., 14 F. 255. So far as appears, its
legality has never been questioned. The parties stipulated that 'it
is common practice where a patented invention is applicable to
different uses, to grant written licenses to manufacture under
United States Letters Patents restricted to one or more of the
several fields of use permitting the exclusive or non-exclusive use
of the invention by the licensee in one field and excluding in
another field.
The phrase above, the patentee may grant a license 'upon any
condition the performance of which is reasonably within the reward
which the patentee by the grant of the patent is entitled to
secure.' refers to the fact that any condition imposed in a bare
license (no contractual terms) may restrict only the use of the
exclusive rights (reward) of the patentee. The patentee
alone is the only person who can restrict his exclusive rights.
The phrase quoted above does not apply analogously to all
exclusive rights in derivative copyrighted works. In patent law
there is no such thing as a derivative patent defined as two
distinct legal parties owning independent exclusive rights in
the same idea.
Sec. 103 (b) The copyright in a compilation or derivative work extends
only to the material contributed by the author of such work...
The copyright in such work is independent of, and does not affect or
enlarge the scope, duration, ownership, or subsistence of, any
copyright protection in the preexisting material.
An original author has an exclusive right to commission a derivative
work, but his exclusive rights encompass only his preexisting work
in the commissioned work. The original author must bargain for the
modifying author's exclusive rights. They exist independently of the
original author's exclusive rights and hence do not fall under the
scope of a bare license. They are not within the reward which the
copyright holder by the grant of the copyright is entitled to secure
of the original author.
A summary of the above reasoning is a unilateral grant of permission
for a derivate copyright work does not exist within the scope of the
definition of a 'bare' license.
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