Plaintiff failed to allege antitrust injury resulting from Free Software Foundation’s use of GPL for Linux.

Plaintiff Wallace filed an antitrust lawsuit against the Free Software Foundation (“FSF”), claiming that FSF was conspiring with the likes of IBM, Red Hat, and Novell to fix the price of the intellectual property in the Linux operating system. Specifically, Wallace alleged that making the software available for free under the General Public License (“GPL”) has an anticompetitive effect, in that developers may be unwilling to create better products, knowing that they will not be rewarded financially for their efforts.

FSF moved to dismiss the complaint, and the court granted the motion. It held that although the allegations set forth a violation of Section 1 of the Sherman Act, the complaint could not survive because Wallace had not sufficiently alleged that he suffered an antitrust injury.

Wallace’s only allegations in this regard were, essentially, that he was unwilling to enter a market where he would have to compete with the free software distributed under the GPL. He had not alleged any injury to himself as a consumer, nor had he alleged injury to the software market as a whole. Because the complaint lacked this essential element of antitrust injury, the court dismissed the action.

Wallace v. Free Software Foundation, Inc., No. 05-618, 2005 WL 3239208 (S.D. Ind., November 28, 2005) (Not selected for official publication).

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