Of course, I'm not a lawyer, but let's not get too excited and make decisions too quickly. Courts don't decide who's right, they decide who makes the best argument.
Recently, the Artistic License was partly the subject of a copyright infringement and patent fraud case brought by Robert Jacobsen of JMRI, the Java Model Railroad Interface, against Matthew Katzer. I won't go into all the details (that's at JMRI's page for the case), but it's really a patent dispture. Katzer got a bunch of patents, and a lot of other people are claiming prior art and patent fraud after he tried to extract money from Jacobsen for distributing Jacobsen's own work. The lawsuit brought by Jacobsen is partly crap, adding claims on copyright infringement and unjust competition. The plaintiff apparently makes many claims hoping one of them will stick if the main complaints about patent fraud fail.
Jacobsen, is suing, by the way, to bring the case to court. Katzer keeps threatening action, so Jacobsen says "let's dance" by filing the complaint first, hoping the court makes Katzer stop harassing him.
The story showed up on Slashdot and then use.Perl, and in a few other blogs because the Artistic License is involved in some of the claims. People are worried about the strength of the Artistic License because the preliminary ruling on the motions before the court go against some of Jacobsen's claims, which open source folk automatically think should win because Jacobsen is an open source guy so he must be right. The slashdot kiddies then contort themselves in various ways to simultaneously say that they are not lawyers, but somehow can interpret the law wisely, all the while kissing as much rms butt as possible.
The world is not ending. The court dismissing some claims is not that bad because the court is really saying he made some wrong claims. The court has not decided the case, and many claims are still before the court. The court has not struck down the Artistic License!. Katzer still looks like a putz for patent fraud, but that's not the claim the court dismissed. There's not a ruling in the case yet, just a ruling on certain motions.
Reading Jacobson's complaint, and then the ruling of the Court on the preliminary motions, it sure looks to me like Jacobson only has himself to blame for losing the copyright claim and I think the court did the right thing by dismissing the copyright portion of the claim. If I distribute some code under the Artistic License, giving everyone the same rights to copy as everyone else, I shouldn't be able to sue you for copyright infringement later. I gave you the right to copy, so the question isn't whether you have the right to copy. That's the wrong claim.
Now, the other part of the copyright claim, according to the court, is if Katzer played by the rules of the license. That's not a copyright infringement claim according to the court. So, Katzer may have violated the license, but that is a different matter the court says, and calls for a different sort of relief. Allegedly, Katzer removed the copyright notice in the original source for the version he distributed. That violates Section 2 of the Artistic License, and some people complain that it violates Section 106a of Title 17, USC, "Rights of certain authors to attribution and integrity".
Complicating all of this is the very nature of open source: free as in beer (despite no one really wanting to admit that). Jacobsen is in a very weak legal position because he gives away his stuff for free (as in beer) without any expectation from anyone else. That means, effectively, that he can't suffer damages, and potentially, he can't claim any sort of contract because there is no exchange or consideration. A lot of us are basically screwed like that. I don't see anything in the copyright claim that the court can enforce other than making Katzer comply with the Artistic License, but they can't do that unless the plaintiff includes that as a claim with a specific relief that the court can grant.
The court can only rule on the complaints brought about by the plaintiff, and the court merely suggests that this might be a contract dispute because the plaintiff's claims are not covered by copyright law. Despite what people have said, the court made no ruling on the nature of the Artistic License, contract or otherwise, because that was not a claim before the court.