The $100 Million Court Case for Open Source License Compliance

June 1, 2017 Ayala Goldstein

CoKinetic Systems Corporation, one of the major global players in the in-flight entertainment (IFE) market, has recently filed suit against Panasonic Avionics Corporation in a New York federal court, seeking damages of over $100 million.

CoKinetic claim that Panasonic, which holds a roughly 70% share of the embedded IFE hardware market, has willfully violated GPL v2 open source licensing requirements, in addition to a long list of other unlawful actions aimed at monopolizing the market for in-flight entertainment software and media services.

While the Lake Forest, California-based unit of Panasonic Corp, denied the allegations, issuing a statement saying it “vigorously disputes” them, we’d like to take a closer look at the charges made by CoKinetic regarding Panasonic’s violation of its open source license: as the use of open source components across all industries continues to grow exponentially, open source licensing and compliance are issues that should concern every organization.

What’s the FOSS About?

According to CoKinetic’s law suit, Panasonics in-flight entertainment hardware uses a Linux-based operating system, which is conditioned on free third-party distribution of the source code under the GNU General Public License. The GNU GPL requires that when you use GPL-licensed software to make other software and release it to the public, the resulting software must be open-sourced with the same license.

Panasonic allegedly refused to distribute the source code for its operating system, and by doing this, blocked its competitors (including CoKinetic) from having the ability to develop software for the In-flight Entertainment (IFE) hardware. CoKinetic claims and that this is a willful violation of the GPL v2 License, and that Panasonic is a willful infringer of the copyrights of thousands of software developers that have contributed to Linux. Infringement of that license alone exposes Panasonic to billions in statutory damages, the company said.

Open Source License Compliance

This legal battle between two commercial competitors is another example of how open source licensing compliance can come to the forefront when it’s not managed properly. We all need to be aware of a growing trend in the enforcement of open source license compliance. Previously enforced by open source advocacy groups, open source compliance enforcement is now also being pursued by commercial litigation, the case that CoKinetic Systems Corporation launched against Panasonic Avionics Corporation being the latest example. Clearly, defining open source usage policies and putting an open source management system in place is becoming increasingly important.

Download our free guide – Learn everything about the most common open source licenses

Track Your Licenses – Or Risk Litigation

While nearly all organizations involved in software or hardware development are using more and more open source components in their offerings, cases like these show that the use of open source components can be extremely costly when companies refuse to consider the risks involved when open source licensing regulations are not addressed.

While open source is free – that doesn’t mean that it doesn’t require compliance just like proprietary software does. As a recent WordPress vs. Wix scuffle showed us, most organizations still need to learn that open source usage demands putting the proper policies in place – and being vigilant about adhering to them.

Many non-profit open source organizations, like the Linux Foundation have been working hard to educate businesses about open source licenses and compliance, and help software and legal teams incorporate practices and tools to insure compliance policies are taken into consideration and prioritized throughout software production.

So – the first step for any organization is to have a clear compliance policy in place. The next step is to keep track of your company’s open source components in the most efficient and responsible way possible.

Some organizations still find it quite challenging to track all open source components used in their production environments. However, it’s essential to put a policy, practices and tools in place so that your organization's products are protected from litigation.

Previous Article
Keep Calm and Automate: Open Source Management and the DevOps Lifecycle
Keep Calm and Automate: Open Source Management and the DevOps Lifecycle

Widespread open source usage is simply a fact in organizations of every size, across all verticals. This is...

Next Article
Can We Afford the Damage of a Ransomware Attack on Financial Market Data?
Can We Afford the Damage of a Ransomware Attack on Financial Market Data?

The world is still picking up the pieces, dealing with the aftermath of the WannaCry ransomware attack that...