A federal appeals court established this Wednesday a very solid foundation for open-source services, by upholding a controversial lower court’s decision on the legal terms of open-source copyrights. The U.S. Court of Appeals for the Federal Circuit thus established that users can be held responsible under copyright law if their actions come in violation of the so-called “Artistic License.”

The same ruling also states that open-source publishers can obtain monetary damages from legal actions against those who violate copyrights. The decision comes to protect a series of services that have become increasingly popular these days: open source licensing.

The legal discussions started when Robert Jabobsen offered online availability for a free software, which Matthew Katzer and his company further developed for commercial purposes.

According to the Artistic License, under which Jacobsen made the software available, modifying the software came under copyright terms, requiring the user who modified the software to attribute the original one to its author.

A lower court established that Katzer was only guilty of breaking contractual promises under a broad license, therefore making it impossible to be qualified under copyright infringement. The court established at the time that Katzer and his associates could not be sued due to an “intentionally broad” Artistic License.

However, the new court order established that it was in fact a situation of copyright violation, finding that the terms of the Artistic License are enforceable copyright conditions. Although he had been rejected a motion for preliminary injunction, Jacobsen has now been given the chance to win an injunction.

According to the court order, open source licensing is now broadly used as a method of creative collaboration that would not have been possible several decades ago. Furthermore, the court added, the terms of the Artistic License are clear enough to create the necessary conditions to protect the economic rights at stake of a public license.

“These conditions govern the right to modify and distribute the computer programs and files included in the downloadable software package,” the court order writes, adding that the lack of economic terms in open source licensing does not imply there is no economic consideration at stake.

“There are substantial benefits, including economic benefits, to the creation and distribution of copyrighted works under public licenses that range far beyond traditional license royalties,” the court order says.

The ruling states that if a downloader wishes to modify and distribute copyrighted materials, which are under an Artistic License, the downloader needs to make other arrangements with the copyright holder, which Katzer and associates didn’t.

While Katzer and associates admitted they did not comply with the conditions described in the Artistic License, the previous court order did not make any factual findings on the likelihood of success on the merits in proving that Katzer and associates have violated the condition of the Artistic License, therefore granting Jacobsen a favorable decision. The case was remanded for further proceedings based on this ruling.