Open Source Licensing

Wednesday, December 17, 2008 by David Castor
Open Source logoI am attending a conference this week in San Francisco on Intellectual Property licensing.  It may sound boring, but I find this stuff amazing – cutting edge cultural initiatives.  To my knowledge, I am the only private-practice Indianapolis attorney who focuses on Software as a Service (SaaS) and software licensing fields (of course, I also help clients in other business law fields, but a majority of my practice is in these technology areas).  

With this narrow focus and my lack of competition in Indy, I find that I need to go out of State to receive useful training.  So, about twice a year I go out to the west coast to receive instruction from industry experts on updates in the law in software and Internet legal fields.

I found one session of this conference particularly helpful – a lecture on Open Source Licensing led by a counsel for Mozilla.  As you may know, Mozilla is one of the chief Open Source software code providers in the world.  “Open Source” generally refers to programming code that is freely available in source form for modification and redistribution.  From a legal standpoint, one of the most misunderstood concepts of an Open Source license is that it is not “public domain” (i.e., you cannot freely use it for any purpose; Open Source carries restrictions and permission requirements on use).  

Many new software technology companies use Open Source licenses as an easy way to build alpha and beta versions of their product.  It makes sense - using Open Source code allows for shorter development time, which means lower operational cost and faster time to market.  That is great, but be careful!  Many of these Open Source licenses carry restrictions that cause derivatives or improvements to also be subject to Open Source obligations.  

The key is, if you are considering using Open Source code in your product, make sure to review, or have your SaaS attorney review, the terms of the Open Source license agreement.  Know what terms you are binding yourself to.  These licenses come in all types – some more readily allow for commercial development, some do not.

Comments for Open Source Licensing

Friday, December 19, 2008 by David P. Chameli:
David, this is a very interesting topic - thank you for raising awareness among legal practitioners. One issue that we see emerging with Open Source is the constant battle over indemnification obligations. Because of the collaborative nature of Open Source, where do you see the line being drawn regarding indemnification between a licensor and licensee?
Friday, December 19, 2008 by Dave Castor:
Great question. It depends on who the licensor and licensee are - right? In the case of a licensee using the code for its own commercial project, you have an unequal bargaining position - the Open Source licensor is essentially giving the licensee use of its code for no charge, but with certain obligations (of course, many licensors take advantage and count this as "free software" - which is different). So, licensors typically ask the licensee for a blanket indemnity on any liability arising from use of the code. I think it is fair for the licensee to ask for an indemnity for IP rights (right to license; no IP violations). In the collaboration situation, programmers are offering their code to the Open Source project, free of charge, for the benefit of the project. In this case, an IP indemnity by the programmer may be requested by the project, but programmers may be slow to agree to this as they are giving their code to the project free of charge. I am curious what you have come across?

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