Nvidia EULA limits GeForce Data Center Usage *fork*

Sure, IF, they purchased directly from NVidia. And IF they signed a bulk purchase contract. There would be some legal ground for NVidia to pursue IF Sakura breached any section of a signed legal contract.

However, IF, they purchased from a 3rd party or IF they just made a whole lot of accounts and purchased 2 at a time, then there is nothing NVidia could legally do to limit how they use the hardware.

Driver's MIGHT be legally limiting depending on the wording of the EULA at the time the driver's were obtained. You cannot create a new EULA for a new set of drivers and then attempt to apply them to previously released drivers. IE - if the limitation did not exist on the drivers that Sakura used, then it's a moot point. And even then as I mentioned EULAs are the least legally binding of any legal contract an entity can enter into.

There is absolutely nothing NVidia can do to legally prevent an entity purchasing Geforce video cards from using them however they wish except to ONLY sell them though their website and then also require signed legal documentation limiting their use prior to the hardware being purchased.

As long as Geforce cards are sold in consumer channels there is absolutely Zero things that NVidia can do to limit how the hardware is used. They can attempt to limit how the driver's are used, but if they are required for use of a consumer card, then it is highly unlikely that any limitations on use will find any footing in a legal court of law if challenged.

IE - consumer law provides protections that NVidia cannot circumvent just because they want to protect their more profitable professional lines of hardware. So, in the case of a consumer video card if sold to the consumer channel the card must work. If it cannot work without the drivers, then the drivers cannot have any limitations placed on them that prevent the consumer from using the hardware.

This is why professional drivers in general cannot be installed onto consumer level hardware, but consumer drivers can often be installed onto professional level cards.

What that means is if a datacenter can use X consumer hardware in their datacenter using consumer drivers, there is nothing Y company can do to legally prevent them from doing so.

Regards,
SB

 

Haven't seen it here, but this is Sakura's message to customers regarding the Nvidia issue:
December 21, 2017

Some other stuff:
December 7, 2017

https://www.sakura.ad.jp/press/2017/1207_koukaryoku-tesla-v100/

 

That's expected, do it safe and wait for the legal team response.

 

I’d bet if somebody wanted to they could fill their data centers with titans and maintain up to date drivers and there would be really nothing nvidia could do outside of filing an unwinnable lawsuit.

However, nvidia is free not to provide any technical resources. So who would want to invest millions of dollars in hardware with no vendor support?

Throwing the stipulation into the EULA is a round about way of Nvidia of telling a rogue company, “You are on your own dude and don’t come crying me or the world a river if you run into problems!”

 

How would they know you have a datacenter packed with Titans anyway? Unless the driver has some sort of phone home-capability, ratting you out, which could be trapped by a firewall anyway.

Do they even provide any substantial vendor support as it is? For geforces, I mean. Or is it more of the, "have you tried turning it off, and then on again" variety?

 

Who is going to support a large datacenter?
It does require external expertise who are usually certified partners in some way, and at this point it would be noticable.

So the downside is all support withdrawn in the situation of finding a large datacentre with Titans used outside of business sale agreement, and Nvidia tracking down the distributor involved (who with the numbers involved would also be a partner) and slapping them repeatedly in different ways.
Risk vs financial reward.

 

Does maintaining up to date drivers mean the data center is building their own drivers?

The EULA for the drivers is what the customer would agree to prior to receiving permission from Nvidia to obtain them. A data center lying about accepting its terms and then generating hundreds or thousands of illegal copies is large-scale copyright infringement for commercial gain.

 

The bindingness of shrinkwrap licenses haven't really been established legally. They're opaque to most anyone who isn't a lawyer and almost universally never actually read by those they supposedly apply to, and equally universally also geared to heavily favor the issuing corporation over the user.

It's difficult to see how that would be a fair business arrangement.

 

If you're a datacenter that has gone through the regulatory and contractual process for everything else that entails, the expectation is that there are lawyers and people reading contracts. Offering the cards as part of a service means drafting a different set of contracts, and the customers would have cause for knowing that the service they are paying into is sound.
This is a corporation vs corporation matter, and the number of significant zeroes in the financial figures removes the "too small to bother" limit that tends to limit going after individuals.

For a corporation, it's "don't want to agree to the restriction, don't get the driver".

 

You can put anything you want in your EULA. If you take someone to court over a EULA violation the court will try the case based on the merits of the stipulation. Agreeing to a EULA doesn’t automatically force you to give up legal rights.

MS SQL server software’s EULA forbids releasing benchmark data to third parties without MS’s approval. A lot of EULA forbids public remarks that disparage their products. Lawsuits are hardly filed in the US because of such violations due free speech rights.

Trying to control the legitimate uses of your hardware by using software EULAs as a leash in order to propped the sales of more expensive hardware, may not go over well with the courts.

 

A consumer or a corporation?
Precedent often favors a presumably unsophisticated individual in the case of complex or long contracts, and consumer protection laws can take things further.

A large commercial enterprise doesn't fall into that category, and courts can be significantly less forgiving of professionals or companies that fail to apply due dilligence in a professional or fiduciary manner.

Many home versions of software products have limits placed on taking them in large quantity into a business and using them in a commercial context.
Companies have policies and audits about license use, and there are bounties and tip lines for people to report companies abusing them.
Lower-tier products have feature or capacity restrictions, even if the internal code or hardware isn't depopulated of them.
Segmentation in this way is a long-standing practice in many other product types.

Copyright is an area where consumer protections are more heavily eroded, and where industrial-level forms of infringement can be considered criminal acts.
The limits of this approach are not so heavily in favor of those that infringe, and there's limited sympathy for a data center doing this merely because they don't want to pay for readily available professional SKUs or roll their own open-source driver. Lying to a vendor to obtain copyrighted works is not a sympathetic position, and copyright owners in many jurisdictions have far-ranging powers to be as arbitrary as they wish. The US is generally very favorable to copyright owners, and it seems like Japan might be similarly inclined.

 

In this case the corporation is the consumer. It doesnt matter how well versed you are in legalese, an entity can’t create a EULA with a bunch of stipulations and use your expertise against you if the stipulations are found to be without legal merit.

EULA can contain language that the company itself and its lawyers know are unenforceable. In such cases they depend on your ignorance of law or unwillingness to dispute the language to encourage behavior favorable to themselves.

You can willfully enter into a contract with a ton of unenforceable stipulations and you won’t be legally penalized if you choose to ignore them. Simply agreeing to a EULA doesn’t give a stipulation merit. Merit of a stipulation in a EULA is dictated by both your agreement and the contract/copyright/IP law of the respective country involved.

Claiming copyrights violations on software meant for hardware obtained legally just because you trying to prop up other products isn’t a clear cut case of violating copyright law.

Edited: added more language

 

The datacenter is purchasing hardware and making copies of copyrighted software for the purposes of populating a commercial building providing services to its own customers, which is not a consumer position. While Nvidia is larger, there's a level of sophistication built into the datacenter business and the range of other Nvidia products it might already be buying and using in accordance with Nvidia's licensing terms.

The last part of this statement is begging the question. Meritless legal positions cannot be defended, but other than your distaste for the restriction what is the reason this is without merit?
Consumer protection is meant for cases where there is an asymmetry in sophistication or power for someone not using a product for a commercial purpose.
There's precedent in professional or enterprise product settings where such limitations have been considered standard practice and upheld.

The usual thrust against shrink-wrapped EULA agreements is either the protections for unsophisticated non-commercial end users, or that it is impossible to agree to an EULA inside a retail box without purchasing the item first.
A datacenter getting the most recent drivers from Nvidia directly doesn't get that benefit of the doubt.

Copyright holder permission can be very arbitrarily granted or rescinded, and precedent has favored the holder's position outside of case-by-case exemptions like fair use, which is at least in the US a claim that would need to be raised in court.

Many licensing terms have been struck down in specific contexts where there is law or precedent intended to protect a certain class, and upheld in places where those protections do not apply.
So the position that unenforceable licensing terms are unenforceable is true, but why does an enterprise-level restriction tailored to avoid applying to consumers fit in that category?

 

This is sort of going full circle now; Sakura though is not just agreeing to an EULA in same context as a consumer, to implement a large scale-out datacenter they would also be a lengthy business entity/project agreement with the parties involved who would also be certified Nvidia partners.
Now I doubt Nvidia would bother to sue, but they would make it a business nightmare ongoing and in future for Sakura in a way they could not take Nvidia to court; such as no support structure and no contact from any certified Nvidia partners including those specialised in datacenter services.
Large complex datacenters rely upon outside expertise as well, and a lot of Nvidia's Elite partners are those who implement/support datacenters beyond GPUs.

 

How would that work? What agreement has nVidia in place that a partner can't do business with someone nVidia doesn't like?

 

Just to clarify this is totally different to AIB partnership/standard sales channels-retailers (how many Titans you able to order from them, Nvidia can track back which partner broke the channel but context here is a large scale datacenter project implementation and business entity not buying 1-5 Titans from a scalper or OEM who sells just the card and if done on scale would find they probably lose access to that GPU in future).

The Elite partnerships would not be light in contract structure, of course they can do other business and they do BUT they cannot break their certified business agreement-structure they have with Nvidia.
The Sakura situation would break that Elite integrator partnership.
The money involved in the partnership with Nvidia when it comes to datacenter/Quadro/Tesla is large to say the least not just because of the initial purchase but the ongoing support structure this outside experts bring in supporting large scaled out/up datacenters; they would not want to lose their certification and channel structure with Nvidia.
This is not like AIB partners.
Why do you think such as Cray are also certified partners with Nvidia and have a close relationship when it comes to CPU-GPU large scale implementation; they sell other products/solutions but they would not break that rather strict business contract with Nvidia.

A couple of the large tech companies I know have strict business partner/channel relationships in this regard and talking about large scale tech projects such as what Sakura has, but sure I cannot speak for all.
Anyway like I said it is risk vs rewards, and Sakura it seems has decided to back down because of what Nvidia could pull away from them in terms of a structured external expertise support for their large and complex datacenter (the aspects relevant to a certified partner) and importantly make it a nightmare for Sakura to implement a future datacenter or upgrading the existing one using any of their datacenter/HPC sized partners and distributors by having them blacklisted unless they agree to a penalty charge.
And from my experience Sakura could not take them to court for having them blacklisted due to breaking the original agreement for the various reasons touched upon also by others.

 

I don't think it's uncommon to have these type of business agreements. I'm not a lawyer but if you download software from Oracle's website it does list restrictions on third parties, people and countries who you can give access. Nvidia's large commercial customers (data centers, corporations, etc) might have to comply with similar agreements.
http://www.oracle.com/technetwork/licenses/standard-license-152015.html

 

It doesn’t matter whether you a consumer buying for personal use or a business buying for commercial use, public policy set by the law of the land and precedents set by its courts is enjoyed by all unless designated otherwise. You or a company agreeing to a EULA or TOS doesn’t allow a licensor to skirt public policy. There is no such thing as “Well, you are right this stipulation is invalid but you are going to be held accountable because you falsely agreed to the terms.” If the terms that you have broken are ruled invalid then your actions (agreeing to terms which you willfully ignored) are deemed acceptable.

Copyright laws are designed to protect the code in question. They are not designed to protect hardware or software that fall outside the scope of the copyright itself. In the US, defendants have often used a misuse defense to override such actions because the courts have set precedents that those actions don’t align with public policy especially in the cases of monopolization attempts.

Here Nvidia through CUDA and it’s Titan’s EULA or TOS are basically trying to limit a certain segment of datacenter users to strictly Tesla based gpus. CUDA being proprietary (nothing wrong with that now) and exclusion of Titans (in my opinion has no legal validity) means datacenters who have clients that are dependent on CUDA are forced to use Tesla gpus and are restricted from capable alternatives through the use of EULA or copyright restrictions. Nvidia is using EULAs and copyright protection of Titans and it’s drivers not to protect the Titan product itself but rather it’s Tesla products. Nvidia is basically trying to extend it Titan copyrights onto Tesla products. It’s an anticompetitive practice even though both are products of the same company. Notice how Nvidia exempts block chain processing. They don’t want to forego competing in that datacenter space with Titans. They just don’t want Titans competing with Tesla in the AI or other applicable data center usage.

Yes, the nature of shrink wrapped or click through EULAs may allow unsophisticated users to skirt perfectly legal stipulations but anyone is perfectly in their rights to ignore EULA and TOS stipulations with no legal weight. Because shrink wrapped and click through contracts arent considered mutually drafted. Boilerplate contracts don’t have the same legal weight as mutually drafted contracts because courts have deemed that boilerplate contracts tend to be construed in favor the drafter. It’s one thing to have a mutually drafted contract with input from both parties that dictate exclusive use of a product. It’s another to try to force exclusivity of a product by using EULAs and TOSes of competing products that you provide to the market.

Again your agreement alone does not legally validate the language in an EULA or TOS. That language needs validation by the courts to allow a licensor to legally enforce such terms unless there exist a mutually drafted contract where both parties agree that the EULAs and TOSes involved will be followed.

And yes licensors have been able to invoke favorable behavior through stipulations not supported by public policy or mutually drafted contracts out of ignorance or an unwillingness to litigate by licensees. That’s the case because companies are in the business of making money and not litigation. Market acceptance doesn’t automatically mean a EULA stipulation has legal weight behind it. There have been times a single company has invalidated terms that have been dutifully followed by the rest of the market.

 

If you wish to be treated as a consumer in the eyes of consumer protection law, it means not using something in a professional or profit-making enterprise. Once you make something your business, the law tends to expect that you know your business.

Which policy? What happens if an office building buys a home edition of a word processor and uses it for its technical writing division?
Are you saying businesses haven't been nailed for doing that, and that the courts didn't enforce penalties on those businesses?
Boilerplate OEM and OS licensing being violated by businesses has led to significant sanctions.

Copyright laws grant a creator with a legal monopoly over the distribution of their work. This grants wide-ranging ability to define the terms of the conditions needed for them to grant permission for a copy to be made, with a limited set of carve-outs.

Hardware can be covered by other things like patents, however, I do not get the "software" portion you added there. How does software, which is code, fall outside the scope of the copyright of itself?

You mean plaintiffs? It's generally not a crime to exercise one's rights to their state-granted monopoly.

Yes, this is the apparent goal. Copyright law is not structured to prevent this, and as a mechanism for granting a monopoly tends to concentrate this kind of power.

Nvidia is declining to grant data centers permission to copy their Titan drivers for use in their services. For now at least, there is still the option that a data center roll their own software stack at their own expense, or purchase the SKU and copyrighted software with the applicable permissions.

This is inherent to copyright, as it forbids others from copying someone else's work and gives the producer a large amount of arbitrary power over the disposition of their work. There are other scenarios from books, music, and various forms of open-source licensing where a copyright owner adds stipulations or can even arrange means to revoke permission after the fact. They can, except in certain situations, even arbitrarily allow one thing and not another.

In the US, it's one thing to argue that these powers are being leveraged in a manner counter to the original intent of the framers of the Constitution when they empowered the legislature to create this legal foundation, or that the laws do not make a distinction concerning a created work that in some fashion serves an integral or functional role in a system. That's an argument on what ought to be, rather than how the industry, laws, and courts have generally behaved.

This is begging the question by declaring a set of stipulations to have no legal weight, so they can be ignored. This has not been demonstrated, either by the behavior of Sakura Internet or the cases of other enterprise-level or professional software products.
The decision that something has no legal weight isn't made prior to a court's decision or legislation, and the equivalent boilerplate in other services or products has shown that the laws and precedent in the US are eroding even the protections around consumers.
While this is being challenged in spots, the legal system has in recent times opted to consider stipulations signing away the rights to filing lawsuits or joining in a class action sufficiently weighty for things ranging from credit cards to data plans.

This is shifting from "no weight" to it being not the same, which seems like a crucial difference. A non-zero weight can still be a different weight--as is something legally "heavier"-- which becomes more non-zero the further out of scope a defendant is from being a non-professional user.
There's always the option to not purchase something whose terms you find unfavorable, and there's limited policy compelling that a product that conforms to your specific budget-cutting needs be produced.

If Sakura Internet wanted to roll the dice, they could have tried. It probably would have taken more than their data center group being unhappy that they couldn't get Tesla or Quadro features rolled into their offered services cheaper. While I wouldn't know about Japan's precedents, if this were a US case there would have been pushback on the court's compelling Nvidia to give their created work to Sakura Internet. There's other public policy that tends to be unfavorable in forcing speech, although there have been federal attempts to compel the delivery or creation of software for law enforcement.

There would need to be something more explicitly invoked, such as legislation or anti-trust being asserted by the government.

 

I’m not making an argument that consumer laws cover businesses. Rather that the laws and court precedent I am referring to are enjoyed by all.

Public policy refers to the laws in place and major law cases that set forth how courts interpret such laws.

Yes, copyrights laws grant limited monopoly. But courts have generally ruled that you can’t abuse your rights by trying to extend those rights in a way that covers areas not included within the copyright itself with the intent to “stifle competition”.

The misuse doctrine showed up in a patent case early in the last century. It was first recognized in the mid 20th century as a viable defense for copyright infringement. It was successfully used in software copyright cases in the 1990s.

Lasercomb vs. Reynold was a case where the defendant successfully used a misuse defense. Lascomb licensed 4 copies of its software to Holiday Steel. The license involved forbade the the licensee from developing competing software.

Holiday Steel not only made additional unauthorized copies. It basically cloned the software and start selling it own version. Lasercomb found out and sued for copyright infringement. Lasercomb originally won the suit but on appeal lost. Because the appeal court ruled that Lasercomb had misused their copyrights (anticompetitive license language), Holiday was allowed to outright infringe on those copyrights.

Practice Managment Info vs AMA was another case where a misuse defense was successfully applied because AMA forced its licensees to agree not to use competing software. Courts ruled this was a misuse of copyrights and AMA lost.

https://www.theiplawblog.com/2011/1...e-defense-apples-software-license-agreements/

“The Ninth Circuit found that this was consistent with the long history of copyright law which provides that “copyright owners may choose to simply exclude others from the work, i.e., not to transfer their rights … courts have long held that copyright holders may also use their limited monopoly to leverage the right to use their work on the acceptance of specific conditions.” The only prohibition on the ability to control the use of copyright material is that copyright holders cannot use “the conditions to stifle competition.”

You enjoy all type of rights when you are a patent holder or own a copyright but the moment a court rules you are misusing that copyright or patent, they can and will basically treat it as if no copyright or patent exists.