How Synadia's attempt to exit the CNCF by holding a trademark hostage might have backfired

The CNCF kicked over an open-source hornet's nest last week when it revealed that Synadia was attempting to retake ownership of NATS, an open-source communications infrastructure project that it donated to the CNCF back in 2018, by asserting control over its trademark and planning to re-release it under a less-permissive license. After taking quite a bit of flak over the weekend for those tactics, it sounds like Synadia is backing down.

Synadia CEO Derek Collison told Runtime Tuesday that the company intends to transfer the NATS trademark to the CNCF at some point in the future "because we just feel that the damage to the ecosystem and the ugliness is not worth it for anyone." While nothing will be official until the lawyers sort it out, Collison said "my hope is that [this dispute] forces some open dialog outside of the CNCF and outside of NATS about the state of open source. I think open source for companies like Synadia is at a crossroads."

In a lengthy blog post published last Thursday, the CNCF outlined how lawyers working for Synadia sent it a letter in March demanding "full control of the nats.io domain name and the nats-io GitHub repository within two weeks," both of which the CNCF manages on behalf of projects it takes under its wing.

When a project is transferred to the CNCF, the foundation agrees to provide support and marketing services to the project but also requires that any trademarks related to the project be handed over along with the domain name and GitHub repository. However, Synadia never transferred the trademark to the CNCF after settling a dispute with Major League Baseball and the Washington Nationals over the mark in 2020 and accepting $10,000 in reimbursement for a portion of its legal fees from the CNCF.

In an interview Tuesday, Collison confirmed that Synadia had accepted that money but said at time of the dispute with MLB the company was under the impression that it only had to transfer the trademark once the project had graduated from the CNCF, which was not the case.

We have 200-plus projects, and we've never had a case where this has happened. We just assume all of our companies and members, over 700 of them, who all have signed an agreement and know the IP rules very clearly, would eventually adhere to them.

It is not entirely clear why it took the CNCF five years to realize it didn't actually own the NATS trademark, during which time it conducted several security audits on behalf of the project (including one completed after Synadia kicked off the dispute) and promoted it at industry events.

Chris Aniszczyk, CTO of the foundation, told Runtime that "we have 200-plus projects, and we've never had a case where this has happened. We just assume all of our companies and members, over 700 of them, who all have signed an agreement and know the IP rules very clearly, would eventually adhere to them."

However, the trademark dispute is just a vehicle for Synadia's broader ambition for the project, which is to re-license it under the Business Source License in order to prevent others from selling commercial products based around NATS. That strategy has become a popular one in recent years for companies that grew around open-source projects, such as HashiCorp, but it's not possible under the CNCF's charter.

If a company has second thoughts about whether or not the CNCF is the right home for a project, they have the option to fork the project under a different name, Aniszczyk said, which is what Grafana did with the Mimir database in 2022.

But Collison didn't want to throw out the NATS brand, which he suggested the CNCF urged him to do when Synadia faced the trademark dispute with MLB. "That brand has been my full commitment for the last 15 years of my life, I put my heart, sweat and tears into both the technology and the branding itself," he told Runtime.

However, after the last few days it appears Collison and Synadia are now willing to recognize that the original CNCF agreement requires a transfer of the trademark, which would make it impossible for Synadia to call any code relicensed under the BSL "NATS." Collison said Tuesday he was hopeful Synadia and the CNCF could find some middle ground between forking the project and archiving it, a stage in which the CNCF and the Linux Foundation still control the trademark but no longer provide support.

The CNCF has become a powerful force in enterprise tech, influencing the decisions of thousands of end-user companies around the world by marketing a trusted and supported stack of enterprise-ready open-source software. However, its control over the projects that were voluntarily transferred to its stable limits the opportunities for venture-capital backed startups working on those projects to find new revenue streams.

Given that those companies tend to contribute the vast majority of the code that makes up those projects — which is expensive to produce — Synadia's frustration is somewhat understandable. But an agreement is still an agreement, and Synadia appears to have damaged its credibility with those end-user companies with little to show for it.