Neo4j v. PureThink is a lawsuit in the Northern District of California over the graph database Neo4j Enterprise Edition (EE) and ONgDB, a fork that the defendants promoted as a free and open-source version of it. Neo4j Sweden had released Neo4j EE 3.4 under the “Neo4j Sweden Software License”, the text of the GNU Affero General Public License version 3 (AGPLv3) with the Commons Clause added. The court held that the AGPLv3’s permission to remove “further restrictions” applies to restrictions added by licensees, not by the licensor, so the defendants could not strip the Commons Clause and their statements that ONgDB was free and open source were false.[1] The Ninth Circuit affirmed the resulting preliminary injunction in 2022, and judgment for Neo4j was entered in 2024.[2][4]
Background
Neo4j offered a Community Edition under the GPLv3 and an Enterprise Edition originally available under both a commercial licence and the AGPLv3. In May 2018 it released Neo4j EE 3.4 under the Neo4j Sweden Software License, which added the Commons Clause’s prohibition on commercial resale and certain commercial support services, and in November 2018 it released EE 3.5 under a commercial licence only.[1]
PureThink, founded by John Mark Suhy, had resold Neo4j commercial licences under a Solution Partner Agreement until Neo4j terminated it in July 2017. Suhy then formed iGov Inc. and, with others, the Graph Foundation, which released ONgDB based on Neo4j EE 3.4 with the Neo4j Sweden Software License replaced by the AGPL. The court found that ONgDB 3.5.1 contained at least 182 source files previously released only under the Neo4j Sweden Software License, and that replacing the licence files removed notices identifying Neo4j Sweden as copyright holder and licensor.[1]
The dispute
Neo4j sued on 2018-11-28, alleging trademark infringement, false advertising and unfair competition under the Lanham Act and California law, and later a claim under the Digital Millennium Copyright Act (DMCA) for distributing altered copyright management information.[6][3] The defendants relied on two AGPLv3 provisions: section 10, “You may not impose any further restrictions”, and section 7, “If the Program as you received it … contains a notice stating that it is governed by this License along with a term that is a further restriction, you may remove that term.”[1]
Decision or outcome
On 2021-05-18 Judge Edward J. Davila granted Neo4j partial summary judgment on the Lanham Act and unfair competition claims and entered a preliminary injunction. Following its earlier ruling in the related case against the Graph Foundation, the court held that because the AGPLv3 defines “you” as the licensee, sections 7 and 10 “prohibit a licensee from imposing further restrictions, but do not prohibit a licensor from doing so”, and that reading them otherwise would limit Neo4j Sweden’s right to license its software “under terms of its choosing”.[1] The injunction barred, among other things, representing that the addition of the Commons Clause violated the AGPL or that its removal is lawful.[1]
In an unpublished memorandum filed on 2022-02-18, the Ninth Circuit affirmed, holding that the representation that ONgDB is a “free and open-source” version of Neo4j EE was “literally false, because Section 7 of the Sweden Software License only permits a downstream licensee to remove ‘further restrictions’ added by an upstream licensee to the original work”.[2]
The district court later found the defendants liable under DMCA section 1202(b) and, after a bench trial on damages in November 2023, issued findings on 2024-07-22.[3] It awarded $597,000 in actual damages for a lost licence subscription, found insufficient evidence for other claimed losses, and did not decide whether Suhy was an “innocent” DMCA violator because he believed, after speaking with the Free Software Foundation, that the Commons Clause could be removed, since the same damages arose from the Lanham Act violations.[3] Judgment entered on 2024-08-15 added $57,288 in prejudgment interest less a stipulated $26,000 deduction, with a permanent injunction.[4] Suhy appealed (No. 24-5538), but the Ninth Circuit granted a stipulated motion for voluntary dismissal on 2025-12-10.[5]
Significance for software licensing and SAM practice
The case is a leading United States ruling on “open core” and “source-available” licences built on an open-source text. The district court and, in an unpublished and non-precedential disposition, the Ninth Circuit read the AGPLv3 “further restrictions” clause as not stopping the copyright holder from adding restrictions to its own licence.[1][2] Most of the liability was under trademark and false advertising law, with the DMCA claim based on removed licence and copyright notices.[4] The conditions of the GPL family are described in GNU GPL, LGPL and AGPL obligations.
Lessons learned
- An AGPL-based licence may carry the licensor’s own restrictions. The court held that sections 7 and 10 bind licensees, so the Commons Clause added by Neo4j Sweden could not be removed by downstream users.[1]
- Licences change between versions. Neo4j EE moved from the AGPLv3 to the Neo4j Sweden Software License in version 3.4 and to a commercial-only licence in 3.5, so the licence of each version in use must be checked.[1]
- Keep notices intact. Replacing licence files removed notices identifying the copyright holder and licensor, which the court treated as a DMCA section 1202(b) violation.[1][4]