Free software advocates are praising a US federal appeals ruling that allows greater protection for open-source software against copyright infringement.

The case concerns a company, Kam Industries, that downloaded open-source code for use in a product that programs the chips that control model trains.

The code used was written by Robert Jacobsen, who released it under an Artistic License, which requires other people who use it to give credit to the author, identify the original source of the files and describe how the new code has been changed, among other conditions.

Jacobsen alleged Kam Industries violated those terms and in turn violated the software's copyright. He sought an injunction to prevent Kam from using the software, which was denied by the U.S. District Court for the Northern District of California. But the U.S. Court of Appeals for the Federal Circuit overturned the ruling on Wednesday.

The key point in the ruling is that it gives those who use the Artistic License the leverage to also argue copyright infringement rather than just breach of contract.

That distinction is important, said Andy Updegrove, an attorney with Gesmer Updegrove LLP in Boston who studies licensing issues. Under contract law, the remedy is monetary damages, which aren't likely to amount to anything involving open-source software that is given away, Updegrove said.

However, statutory damages -- money awarded for a violation of law -- can be awarded for copyright infringement without requiring proof of monetary damages, Updegrove said. Also, people can recover attorney fees for copyright infringement cases, he said. "And, most importantly for licenses such as the GPL, it means that your rights to use the copyrighted work at all disappear," Updegrove said, referring to the General Public License, widely used for open source software.

The right to claim copyright infringement is important for other economic reasons, the appeals court said. Even though open-source software is given away for free, the terms under which that software is distributed can be crucial in fostering other money-making products.

"The lack of money changing hands in open-source licensing should not be presumed to mean that there is no economic consideration," the court ruling said. "For example, program creators may generate market share for their programs by providing certain components free of charge."

Open-source proponents applauded the ruling, saying it upholds the legal argument for open-source licensing that the community has supported for years.

Eben Moglen, Columbia University law professor and founding director of the Software Freedom Law Center, said the decision will reduce legal uncertainty and increase the "attractiveness of free software and open-source distribution models for both software developers and IT vendors."

"The Court of Appeals for the Federal Circuit has agreed with the basic legal theory upon which we have relied for years," he wrote in an e-mail.

The ruling is also important given that U.S. Court of Appeals for the Federal Circuit is a court that has the most authority on intellectual property cases in the U.S., Updegrove said.

"For the community, this wasn't about money at all, but about receiving the blessing of an important court that the foundations upon which the entire free and open source and Creative Commons philosophies are based," Updegrove said.

One of the major vendors of the Linux operating system, Red Hat, said it was pleased with the court's ruling. "Because open-source lawsuits are rare, a published appellate decision is especially significant," according to a company statement.