Apache-2.0 and MPL-2.0: To what extent does "license termination when instituting litigation" applied?

Question

Background

Apache-2.0 and MPL-2.0 contain a clause that if you sue the project/user for infringement of your patent, all of the licenses you have been granted are terminated (though the exact rights terminated vary).

• Apache-2.0

  3. Grant of Patent License.

  ... If You institute patent litigation against any entity ... then any patent licenses granted to You under this License for that Work shall terminate as of the date such litigation is filed.

• MPL-2.0

  5. Termination

  5.2. If You initiate litigation against any entity by asserting a patent infringement claim ... then the rights granted to You by any and all Contributors for the Covered Software under Section 2.1 of this License shall terminate.

As far as I understand, this clause exists to prevent the situation as follows.

• Case 1

  • Project: well-known and de facto standard open source project
  • A: patent holder of PatentedAlgorithm

  A contributed code including his PatentedAlgorithm to the Project. Later, A institute patent litigation against the Project because they are using his PatentedAlgorithm.

  In this case, if the Project uses Apache-2.0 or MPL-2.0, A will no longer have the right to use the Project and this discourages him from suing the "Project".

However, what happens in this case?

• Case 2

  • B: random contributor of the Project

  B contributed code including A's PatentedAlgorithm to the Project. Later, A institute patent litigation against the Project because they are using his PatentedAlgorithm.

Question

I've found some answers about this topic, but I don't think I understand them completely.

• What exactly does "If You […] litigation is filed" from Apache2 license mean?
• Interpretation of the Patent clause of Apache 2.0

My question is this given that my understanding above is correct.

1. Do A lose his right to use the Project in Case 2 even though a completely unrelated person contributed his patent to the Project?
2. If 1. is true then does A have to give up every patent that is submitted to the Project if he wants to use the Project?

Answer 1

First, let me say that 'algorithms' are very hard to protect by patents in many jurisdictions, most patents are for 'System and Methods'. So let's assume the patent of Company A is a methods-patent, where the code of the project implements the method.

The sentences you quoted above are so-called 'reciprocity clauses'. If you stop granting your rights to others, then all others are allowed to withdraw their rights from you. The Apache license is somewhat 'softer', as it only terminates the patent licenses, while Section 5.2 of the Mozilla license terminates all rights under the license, which is much harsher.

A patent holder would not sue the Project, because the code itself does not infringe the patent. It is the implementation and operation of the code that would infringe the patent. Therefore, a patent holder would need to sue individual users that implement the code of the project in their products or services.

Case 1: Contributor A has contributed their patented algorithm, and therefore (i) under Section 2.1 b. of MPL-2 and (ii) under Section 3 of the Apache License any user of the project has a valid patent license to use the code.

Case 2: Firstly I want to say that the 'random contributor' should not be blamed for contributing code that is covered by a 3rd party patent, because nobody can know all patents in all countries; even with an expensive FTO analysis you cannot be 100% sure.

If in Case 2 Company A files patent claims against a user of the project, then a) under the Apache License company A will lose all patent licenses of all other contributors, but will continue to be able to use the code, while b) under the Mozilla license Company A will lose all rights to use/modify/distribute the software under this license.

For Q2: Company A would not have to give up their patent rights in order to continue to use the project code. Under the Apache license the continued use is anyhow OK, as the reciprocity clause only withdraws the other patent licenses, and --unless there is a strong 3rd party patent of another contributor-- Company A will not have an issue. Under the Mozilla License --assuming that Company A is an actual user of the project and not a NPE-- Company A will avoid arguing their patent claim against the infringing user by referring to the Project code, Company A will argue based on the functional description of the infringing product or service and (if the patent is strong enough) will win the case likely without direct impact on their own license.

Please note: IANAL, and patent cases are different in many jurisdictions, and therefore you should not take this as legal advice or as a prediction of your chances to win an actual case. Please seek advice from a real lawyer!