Monsoon allegedly bundled the BusyBox open source application with some of its devices without providing the source code as required under the GPL.
While BusyBox and Monsoon typically attract little attention from the IT industry, the legal case is expected to influence the future of other GPL software including the Linux operating system.
"Whenever legal rights are repackaged in some way, whether through a new type of licence, as here, or the passage of a new law, such as an amendment to copyright law, the need eventually arises to test what was meant in court," Andrew Updegrove, a technology specialist at Boston law firm Gesmer Updegrove, told vnunet.com.
Mark Radcliffe, a Silicon Valley intellectual property lawyer and senior partner at DLA Piper, wrote in a blog posting: "This case will be very important for the future of open source software."
The debate over the legal status of open source has intensified recently. One camp, including the Software Freedom Law Center, argues that the GPL constitutes a copyright agreement.
But Radcliffe maintains that the GPL is a contract between the developer and its users, including consumers and device makers which embed the code in their appliances. Licence violations should therefore be considered as a breach of contract.
A decision for one or the other would have widespread legal implications. Judges award monetary damages for breach of contract, but do not always issue an injunction preventing the continued distribution of the code.
Copyright infringement claims, on the other hand, almost always lead to an injunction.
"Clearly, open source licensors would prefer to obtain injunctive relief to require the licensee to comply with the terms of the licence," said Radcliffe.
Although the GPL is lacking legal precedents, some can be found with other open source licences. One such case involves an application for controlling model trains.
A San Francisco judge ruled in August that the licence should be considered as a contract. Although the ruling does not settle the GPL discussion, Radcliffe argued that it "does suggest how courts will approach the issue".
Microsoft had licensed Sun's technology, but refused to subject its implementation to certification testing in an apparent attempt to undermine the standard.
The case was settled in January 2001 and ultimately led to Microsoft's introduction of .Net as an alternative to Java.
A judge had ruled that Sun's licence should be considered as a legally binding agreement rather than a copyright, and therefore denied Sun an injunction.
Microsoft was forced to halt its use of the technology because of alleged unfair competition.
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