| Wallace v. International Business Machines Corp. | |
|---|---|
| Court | United States Court of Appeals for the Seventh Circuit |
| Full case name | Daniel Wallace v. International Business Machines Corporation; Red Hat, Inc.; and Novell, Inc. |
| Submitted | October 26, 2006 |
| Decided | November 9, 2006 |
| Citation | 467F.3d1104 |
| Court membership | |
| Judges sitting | Frank Easterbrook,Michael Stephen Kanne,Terence T. Evans |
| Case opinions | |
| Majority | Easterbrook, joined by a unanimous court |
| Laws applied | |
| Sherman Antitrust Act | |
Wallace v. International Business Machines Corp., 467 F.3d 1104 (7th Cir. 2006),[1] was a significant case in the development offree software. The case decided, at theCourt of Appeals for the Seventh Circuit, that inUnited States law theGNU General Public License (GPL) did not contravenefederal antitrust laws.
Daniel Wallace, aUnited States citizen, sued theFree Software Foundation (FSF) forprice fixing. In a later lawsuit, he unsuccessfully suedIBM,Novell, andRed Hat. Wallace claimed that freeLinux prevented him from making a profit from selling his own operating system.[2]
On April 28, 2005, Daniel Wallace filed suit against the FSF in theU.S. District Court for the Southern District of Indiana, stating that theGPL, by requiring copies of computer software licensed under it to be made available freely, and possibly even at no cost, is tantamount toprice fixing.[3] In November 2005 the case was dismissedwithout prejudice,[4] and Wallace filed multiple amended complaints in an effort to satisfy the requirements of an antitrust allegation. His fourth and final amended complaint was dismissed on March 20, 2006, by JudgeJohn Daniel Tinder, and Wallace was ordered to pay the FSF's costs.[5][6] In its decision to grant the motion to dismiss, the Court ruled that Wallace had failed to allege any antitrust injury on which his claim could be based, since Wallace was obligated to claim not only that he had been injured but also that themarket had. The Court instead found that
The Court also noted that prior cases have established that theSherman Act was enacted to assure customers the benefits of price competition, and have emphasized the act's primary purpose of protecting the economic freedom of participants in the relevant market. This decision thus supports the right of authors and content creators to offer their creations free of charge.
In 2006, Daniel Wallace filed a lawsuit against the software companies IBM, Novell, and Red Hat, who profit from the distribution ofopen-source software, specifically theLinux operating system.[7] Wallace's allegation was that these software companies were engaging in anticompetitive price fixing.
On May 16, 2006, JudgeRichard L. Young dismissed the case with prejudice:
Wallace later filed an appeal in theSeventh Circuit Appeal Court, where his case was heardde novo in front of a three-judge panel led byFrank Easterbrook. He lost his appeal, with the judge citing a number of problems with his complaint.[1][8]
| History | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Products |
| ||||||||
| Business entities |
| ||||||||
| Facilities |
| ||||||||
| Initiatives | |||||||||
| Inventions | |||||||||
| Terminology | |||||||||
| CEOs |
| ||||||||
| Board of directors | |||||||||
| Other | |||||||||
