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February 17, 2010: Settlement Agreement

We have agreed with Matt Katzer to settle the case and end the legal dispute.

The settlement agreement, which is now a legally-binding contract signed by both sides, accomplishes several things:

  1. A permanent injunction will be entered by the Court, expressly forbidding Katzer from further misuse of the software that JMRI has created, and forbidding him to register any domain names that should rightly belong to us.

    In the past, Katzer has told people that we've copyrighted manuals that others wrote, or trademarked terms that belong to others. Neither of these are true, and we've shown in Court that Katzer has no evidence for his statements. To prevent there being any uncertainly about this, the agreement explicitly states that we're not talking about anything from the NMRA or other manufacturers.

    This injunction is important. We consider his misuse of JMRI's decoderpro.com domain name and the decoder definition files to have caused significant damage to JMRI, and this injunction makes it clear that the Court will not allow it to happen again.

  2. Katzer explicitly releases all JMRI users and developers from any liability for anything related to JMRI, up until 18 months from now. This means that he can't try to extract patent royalties, claim infringement, argue that somebody infringed a copyright, or anything else. He has no right to complain about anything we've done in the past or will do in the near future.

    The goal was to make sure that this dispute really is over, and won't rise from the grave like a zombie that has to be fought over and over again. Katzer has said that he just wants to move on and put legal disputes behind him, and this provision is aimed at making sure that's what happens.

    As a matter of fairness, Jacobsen extended the same release to Katzer.

  3. A procedure was put in place for handling any future disputes, after the 18 month period is up. This has some important features:
    1. It's "loser pays", so neither side can bring spurious complaints without risk.
    2. It's based on mediation and arbitration, so it's faster and can include people with more technical and model railroading background.
    3. It forbids going outside the agreed procedure, for example to contact an employer or relative in an attempt to apply pressure.

    If anybody really does do something wrong, this provides a way to deal with it, while making it riskier and more difficult for anybody to try to make spurious claims.

  4. Katzer will pay $100,000, spread over the next 18 months.

    Despite generous support from over a hundred people, the costs defending against Katzer over the last six years are significantly more than 100K$. (Things like court reporters for depositions, travel expenses, and expert witnesses have to be paid for, and it adds up very quickly.) Katzer's payment gets us part-way back to where we would have been if all this hadn't started in the first place.

    To be sure, he has had significant costs of his own, and he has to pay them too.

    Although this doesn't entirely cover our costs, we believe this is the best we could do at this point, and there was no certainty that going to trial in June would result in a damage award large enough to offset the large additional costs of a trial.

    Sometimes, the best you can do is the best you can do.

This is not air-tight, in that it doesn't extend to e.g. future patent complaints about future patents, after the next 18 months. We believe that we've still got a very strong position on those, as Katzer stated in Court that JMRI didn't infringe any of his existing patents, because Katzer's ongoing chain of patents actually document the same set of claimed inventions, and because quite a few people have helped us accumulate several file drawers of strong prior art to defeat future patents.

It's very hard to craft an agreement that constrains all possible future behavior, so in the end you have to trust that the people making the agreement are going to live up to the intent of it. As Henry Stimson said, "The only way to make a man trustworthy is to trust him", and that's what we're doing here. We believe that this agreement has the right structure to motivate everybody to just work on their own stuff without getting into fights, and that it's fair. We're going to trust Katzer to approach it on that same basis.

We could not have reached this point without the help of the hundreds of model railroaders who have contributed money, time and knowledge to this effort, the open-source advocates and organizations who have worked on the legal effort, and particularly without the huge efforts by Victoria Hall, David McGowan and the other lawyers who have worked on this over the past six years. We'll have more to say about this later, but the message for right now is that we all owe them a huge debt of gratitude.

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