Published March 24, 2025
Neo4j is locked in a legal battle with consequences that stretch far beyond one lawsuit. This case, now on appeal in the Ninth Circuit, could reshape the meaning of open source licensing for everyone, not just Neo4j users. And depending on the outcome, it might also spell the end for Neo4j as a company.
Let’s be clear: Neo4j has spent $5–10+ million in legal fees and incurred over $19 million in total losses in a case against a single individual. Why would any company burn this much cash fighting one person?
Because Neo4j’s entire business model may depend on what the Ninth Circuit decides. This is about who gets to define open source, the Free Software Foundation and original license authors, or private companies like Neo4j trying to bend licenses like GPLv3 and AGPLv3 to serve their commercial interests.
If the Ninth Circuit does not overturn the lower court’s rulings, Neo4j may gain legal cover to unilaterally redefine how GPLv3, Apache 2, and other open source licenses they leverage apply to their software. That would mark a dangerous shift in how open source governance works.
In short, Neo4j could decide what “open source” means when it comes to their software, even if their interpretation goes against the intent of the license authors. This would open the door for Neo4j to continue, or even escalate, its pattern of scare tactics and legal threats.
This isn't hypothetical. Neo4j has already spent years warning agencies, companies, and developers that using its open source editions in production could be a legal risk. Through efforts like its Fair Trade Licensing campaign (PDF), Neo4j pushed the idea that any “serious” or “commercial” use of its software required a paid license, despite the fact that AGPL explicitly allows such use under open conditions.
“Neo4j’s Fair Trade Licensing concept was to scare people to purchase Neo4j out of concern they would have to make any use of their open source public.”
— From federal court records (text | pdf)
This wasn’t just marketing language. Internal emails from Neo4j’s own Federal Technical Account Manager, Jason Zagalsky, make the company’s intent crystal clear:
“We do expect that a court would rule based on the intent of the owner of the copyright (Neo Technology). The ambiguity around AGPL requiring open sourcing of an application only in case where AGPL code is embedded vs. linked to, etc. is all irrelevant in our case, as we clearly state our intent to be used only for open source projects. So if you choose to use Neo4j EE under AGPL, there can be no interpretation that would allow your application to remain closed sourced.”
And in another email:
“They cannot use AGPL for EE, period, unless they are open sourcing their application, which I expect they can not and will not. Again, you should NOT be advising them that they can use EE under AGPL.”
These are not theoretical concerns. They are documented communications, already part of the federal court record, showing how Neo4j pressured end users, particularly government agencies, by promoting an interpretation of the AGPL license that many in the open source community strongly dispute.
Until now, open source foundations and advocates could push back and clarify the license terms. But if Neo4j wins this appeal, those safeguards could vanish.
If the Ninth Circuit overturns the lower court, it will be a massive win for the open source community. It would reaffirm that companies can’t rewrite the rules of open source licenses after the fact, no matter how badly they want to convert free users into paid ones.
But if the court sides with Neo4j, things could get ugly, fast. Anyone using Neo4j’s “Community Edition,” its drivers, or its libraries in commercial, government, or enterprise settings might suddenly find themselves at legal risk or facing pressure to buy commercial licenses.
Neo4j’s messaging already suggests that unless you're a hobbyist or student, they don’t want you using the open source version at all, unless you’re paying them. And if that strategy is no longer viable, the company may not have much of a path forward.
Neo4j has hinted at or mentioned an upcoming IPO several times over the years, only for it to never materialize , and 2025 seems to be no different. If this legal strategy fails, and they lose the ability to threaten or scare existing users into commercial contracts, a mass migration could follow. And with that, Neo4j’s revenue base may crumble.
Make no mistake, a legal loss for Neo4j could be a win for open source, but a breaking point for Neo4j’s commercial ambitions.
Understanding how exposed your organization might be under Neo4j’s licensing posture is not just a technical checklist, it’s a legal and operational risk assessment that could affect procurement, compliance, and continuity.
Until the court rules, you may want to hold off on adopting Neo4j open source tools—especially in production environments or commercial contexts—given the potential risks tied to their licensing interpretation.
Neo4j’s case isn’t just a legal battle, it’s a wake-up call for the open source community. Their approach undermines the principles open source was built on, and it’s time the community takes notice.
If you're relying on Neo4j as a free, open platform, you may be in for a surprise.
If your organization has already invested heavily in Neo4j’s open source offerings and now faces uncertainty due to this ongoing litigation, you may want to reach out directly to Neo4j leadership or its backers. Let them know how this legal strategy affects your trust, adoption, and future plans.
You can contact Neo4j CEO Emil Eifrem at [email protected]. You can also make your voice heard by engaging with some of the investors and supporters behind this licensing approach:
On Twitter/X:
@GVteam, @eurazeo, @emileifrem, @creandum, @MorganStanley, @pichette, @davidoklein, @denisepersson, @dtcp_capital, @tpreuss, @chr_l_jepsen, @mtreskow, @welchasw, @heartcorecap, @greenbridge_lu, @OlaRollen
Disclaimer:
The views and opinions expressed in this post are those of the author.