The Jurisdiction Paradox

Spikey Pods

I've been getting requests from a few people to remove the "choice of venue" clause from the CDDL. I'd like to discuss why I would rather not do that if I can avoid it. This is naturally my own opinion and intended as legal advice to no-one.

I trained as an electronic engineer in England, many years ago. Through one of those strange quirks of fate, when on graduation I applied for my first job the application was received by a software engineering manager rather than a hardware guy as I had anticipated. I thus ended up learning how to boot a mainframe using data-bus switches on the front panel and gradually became expert in the grey area between what's clearly hardware and what's clearly software - operating systems and data communications. It's therefore spectacularly ironic that these days I spend much of my life having to understand and manage issues related to software licensing law.

Keeping in mind that I'm not only not a lawyer, I have never even been stunt double for an actor playing one on TV, I feel forced to comment on stuff I've heard about "choice of venue" clauses in open source software licenses. In particular there are folk who think that these clauses take away their freedoms related to software. The rationale when applied to the Mozilla license goes something like:

  • The license says litigation has to be in California:
    any litigation relating to this License shall be subject to the jurisdiction of the Federal Courts of the Northern District of California, with venue lying in Santa Clara County, California
  • But I don't live in California
  • If I get sued by $CORPORATION I will have to travel there at my expense so their lawyers can roast me
  • That's not fair, they are bigger than me, why should they be allowed to bully me just because I want to use this software
  • That clause is therefore an abridgement of my freedom

That sort of logic is pretty easy to follow and seems compelling. However, it is wrong - the clause is highly unlikely to affect an individual developer like this. Here's why.

  1. First let's discuss jurisdiction and venue. Jurisdiction is a question of whether a court has the power to hear the claim. Jurisdiction must be had over both the subject matter and the parties involved. Once the parties have determined jurisdiction, then the question of venue comes forward. Venue is merely a choice of where, geographically, the case should be heard.
  2. When two companies that both trade in more than one jurisdiction and have more than one jurisdiction in common engage in litigation, before they can start they have to agree which jurisdiction and then which court within that jurisdiction will hear the case. They may well engage in a pre-lawsuit lawsuit to set the venue (aka "motion practice", apparently). This is a costly and uncertain exercise that can bias a case unfairly.
  3. A clause like the one I cite above, described as a "choice of venue" clause but actually selecting both jurisdiction and venue, allows a licensor to pre-agree which venue will be used in the case described above. It's pretty reasonable for two businesses agreeing a contract to make any future litigation faster by this sort of pre-agreement, apparently. It's like a default value in the case evaluation of the variable is required.
  4. If, however, you are an individual, or a company that trades in only one of the places in which the other party also trades, the only jurisdiction that can hear the case is the one you share in common with the other party. In this circumstance, the "choice of venue" clause has no effect - no reasonable court would hear a case involving a party with no connection to the court. The idea of corporations doing the equivalent of extraordinary rendition on the strength of a choice of venue clause is a literalist fantasy.

The main beneficiary of a "choice of venue" clause in an open source license is actually the smaller US business. Despite notionally trading in several states, a smaller business will only want to engage in litigation against a larger company in their home state. Without "choice of venue" clauses, the larger corporation may well be unfairly advantaged over the smaller company. Thus, paradoxically, the desire to be rid of choice of venue clause out of a sense of loss of freedom actually represents siding with large corporations over the smaller guy when he's the copyright owner.

So that's why I am in favour of "choice of venue" clauses in open source licenses (at least the ones that use contract law). I'm still open to discussion on it in licenses I can affect, like CDDL, where I notice the useful clarifying language about needing to be a US citizen that Mozilla has in section 11 was removed rather than reworked (probably for clarity because it's unnecessary in lawyer eyes).

That may have to go back in, but before I'll agree the clause should go altogether I'll need to hear why reducing the freedoms of small businesses like this is justified for the sake of an argument that revolves around a false premise about individuals having to travel elsewhere to defend a lawsuit.

Comments:

Simon, sounds like a good argument for keeping the clause - but maybe it's the wording of the clause that is not clear enough - maybe it should be clarified to explain things as you stated them...?
Darren.

Posted by Darren Kenny on September 27, 2006 at 04:55 PM PDT #

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