China: Open Source Software Defence – Judicial Recognition and Practical Strategy

Open source software and licensing are well established in China’s technology sector, but their judicial recognition has only developed in recent years. Using China’s first “open source software innocence defence” case as a reference, a practical judicial roadmap is emerging:

• Identify the defendant’s core dilemma
• Understand judicial perspectives and reasoning
• Apply existing Chinese legal principles (through interpretative expansion)
• Develop a localised and workable defence strategy

Legal Basis for Open Source in China

While Chinese courts increasingly recognise the enforceability of open source licences, there is no direct statutory framework governing them. Instead, their legal validity is primarily grounded in:

• Private law autonomy
• Freedom of contract

Open source licences (e.g. GPL, Apache, BSD) are treated as intellectual property licence agreements, forming binding contractual obligations. Under Chinese law, these may also be characterised as standard contractual terms under the Civil Code.

Importantly, open source software remains protected by copyright. Licences such as the GPL grant rights to use, modify, and distribute software, subject to conditions such as maintaining openness (“copyleft”).

Judicial and Comparative Support

International case law supports this contractual approach:

• Welte v. D-Link (Germany): Open source licence terms were recognised as binding contractual clauses.
• Artifex v. Hancom (USA): Use of GPL software without complying with its terms constituted breach of contract.

These cases reinforce the view that open source licences are enforceable legal instruments rather than informal permissions.

Interaction with Trade Secret Law

In China, disputes often arise where open source software intersects with trade secret claims. Key principles include:

• Trade secret protection focuses on improper acquisition or use, not ownership
• Information that is publicly available or easily accessible cannot qualify as a trade secret
• Open source access may serve as a lawful acquisition defence

However, recent judicial interpretations narrow this defence mainly to:

• Independent development
• Reverse engineering

This creates challenges for explicitly recognising open source acquisition as a standalone defence.

Key Defence Arguments in Practice

In open source-related disputes, particularly under GPL-type licences, several arguments are central:

1. No secrecy
   
   Open source code is inherently accessible and therefore may fail the “non-public” requirement for trade secrets.
2. No competitive advantage
   
   Freely available code cannot provide exclusive commercial value.
3. No loss
   
   Where licences allow free use and distribution, claims of financial loss are difficult to establish.
4. No harm to legal interests
   
   Attempting to assert exclusivity over open source software may conflict with principles of fair competition and good faith.

Localisation of Defence Strategy

Chinese courts remain bound by strict statutory elements, particularly in criminal cases. As such, successful open source defences require:

• Careful alignment with formal legal elements (e.g. trade secret criteria)
• Framing arguments within existing legal doctrines, rather than relying solely on open source principles
• A fact-specific, evidence-based approach, including demonstrating lawful access and absence of secrecy

Conclusion

China’s approach to open source software defence is evolving through judicial practice rather than legislation. The most effective strategy combines:

• Contract-based enforceability of open source licences
• Careful application of trade secret law principles
• Localised legal reasoning aligned with Chinese judicial expectations

This framework not only supports defence strategies but also has broader implications for enforcement actions, contractual disputes, and the future regulation of open source technologies in China.

Anjie Broad, China, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact china@transatlanticlaw.com

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