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Open Source Software: Avoiding the Pitfalls; Reaping the Rewards

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Open Source Software: Avoiding the Pitfalls; Reaping the Rewards McCarthy Tétrault LLP Open Source Software: Avoiding the Pitfalls; Reaping the Rewards Charles Morgan Presentation to the ALAI Auberge Le Saint-Gabriel September 24, 2003 McCarthy Tétrault Open Source »What is Open Source? »Brief History of Open Source »OSI Open Source Definition »Open Source Licenses »Open Source Business Models »Rewards & Pitfalls »Open Source Tips McCarthy Tétrault LLP What is Open Source? » Open source software can generally be defined by four freedoms: • The freedom to use the program • The freedom to examine and change the source code • The freedom to distribute the program • The freedom to distribute any changes to the source code McCarthy Tétrault LLP What is Open Source? » Nine core principles: • Free Distribution – no restriction on distribution of the software as a component of an aggregate software distribution (including royalty or fee) • Source Code - the source code must be accessible • Derived Works - license must allow modifications and derived works, and must allow them to be distributed under the same terms as the license of the original software • Integrity of the Author’s Source Code - the license may restrict source code from being distributed in modified form only if the license allows the distribution of ‘patch files’ with the source code McCarthy Tétrault LLP What is Open Source? • No Discrimination Against Persons or Groups - the license must not discriminate against any person or group of persons • No Discrimination Against Fields of Endeavor - the license must not restrict anyone from making use of the program in a specific field of endeavor • Distribution of License - the rights attached to the program must apply to all to whom the program is redistributed without the need for execution of an additional license • License Must Not Be Specific to a Product - the rights attached to the program must not depend on the program’s being part of a particular software distribution • License Must Not Contaminate Other Software - the license must not place restrictions on other software that is distributed along with the licensed software McCarthy Tétrault LLP What is Open Source? »Open Source is NOT: • Freeware – proprietary software programs that can be used at no cost subject to license restrictions • Shareware –distributed on a try-before-you-buy basis to drive sales • Public Domain – free software, not protected by copyright not subject to license, can be used, modified, integrated into other programs and distributed without restriction (subject to patent rights) McCarthy Tétrault LLP What is Open Source? » Goal of Open Source • To promote software reliability and quality by supporting independent peer review and rapid evolution of source code McCarthy Tétrault LLP Brief History of Open Source » Richard Stallman, the Free Software Foundation, and the efforts that led to the GNU General Public License (“GPL”) and the software released under the GPL (1984) » Linus Torvalds’ development of the operating system known as Linux, which was released under GPL (1991, with version 1.0 released in 1994) » Netscape’s release of its browser software under an Open Source license through an organization known as Mozilla.org (1998). Note that the term “open source” was coined at this time. McCarthy Tétrault LLP The SCO Saga » SCO’s Allegation: IBM has fed the open source movement with proprietary UNIX technology that SCO claims to own so as to undercut UNIX based proprietary operating systems and to fuel IBM’s services business; (see: www.sco.com/ibmlawsuit/amendedcomplaintjune16.html) » IBM’s response: SCO is a dead end company (financed by Microsoft) pandering fear and lies in order to undercut the open source movement, obtain royalties and raise the value of its stock; (see e.g. www.mozillaquest.com) » Truth?: the jury’s still out, but most tend to side with IBM » Recent developments: Red Hat has sued SCO [Red Hat Inc. v. SCO Group Inc., No. 03-772, complaint filed (Del. August 4, 2003)], claiming, among other things, deceptive trade practices and unfair competition McCarthy Tétrault LLP Types of Open Source Licenses »GNU General Public License (“GPL”) »GNU Lesser General Public License (“LGPL”) »BSD/MIT/Apache »Mozilla/IBM/Apple »Other McCarthy Tétrault LLP Types of Licenses » GNU General Public License (“GPL”): • Software may be copied, modified and distributed as long as required copyright notice is given (i.e. copyright remains intact) • Viral Clause – any derivative work that is based in whole or in part on the source code and/or derivative works are automatically subject to the GPL • Requires that source code be made available to licensees (including modifications) • Precludes the use of a proprietary license (i.e. can’t make software or modifications private) • Use or modification of the software constitutes acceptance of the GPL McCarthy Tétrault LLP Types of Licenses »GNU Lesser General Public License (“LGPL”): • Theoretically allows for separate programs to be combined but still maintain separate rights • Reality is that the license is poorly drafted – ambiguity, poor drafting and technology changes • Requires that source code (including modifications) be made available to licensees McCarthy Tétrault LLP Types of Licenses »BSD/MIT/Apache Style License: • Permits unrestricted use of the software as long as the licensee: – retains the copyright notice required by the license; and – does not use the name of the original licensing organization or any of the developers to promote products derived from the software • The software may be combined with other software, fully integrated into other software and distributed in object and/or source form under proprietary licenses (i.e. non-viral) McCarthy Tétrault LLP Types of Licenses »Other • Artistic License • Q Public License Version 1 (QPL) • IBM Public License Version 1.0 • Sun Industry Standards License (SISSL) McCarthy Tétrault LLP Open Source Business Models » Sale of media and accessories (CD-ROMs, books) » Widget Frosting – drive hardware sales » Loss leader for traditional commercial software » Core free with proprietary enhancements » Support services (e.g. Red Hat) » Service enabler (eg. web based interactive services) » Branding / Software Franchising » Open Source Threshold Escrow Program (O-STEP) McCarthy Tétrault LLP Open Source Rewards » Collaborative Innovation • Broad based community of developers leads to innovation • Development at a faster pace then commercial proprietary software » Reliability • Fosters a “natural-selection” evolution of software • Can identify and correct “bugs” » Stability • Self-supporting • Can choose when to upgrade McCarthy Tétrault LLP Open Source Rewards » Cost • Possibly zero purchase price • Longer life and less upgrades required » Flexibility • Choose solutions that meet your business needs (not constrained by your software) • Decreases Vendor lock-in • Freedom to modify McCarthy Tétrault LLP Open Source Pitfalls » Legal Aspects • Contract formation – “Notice” form of license • IP Infringement – Copyright infringement » Illegal inclusion of 3rd party software by someone upstream » e.g. IP rights acquired by Employers – Patent infringement – SCO saga fall out: has SCO code found its way into LINUX? – Survey: over 50% of programmers in corporate US use open source; of these, 40% do so without knowledge of their boss. McCarthy Tétrault LLP Open Source Pitfalls » Legal Aspects (con’t) • No indemnification • No warranty • Jurisdiction – Choice of law clauses • Moral rights – May place requirements on downstream licensees (e.g. acknowledgement of developer) McCarthy Tétrault LLP Open Source Pitfalls • Viral Licenses (“forcing” clauses) – Introducing a piece of code containing a viral license into a program will cause the entire program to come under that license – Becomes a very technical discussion of links, sockets, packaging, distribution etc. – Open source license agreements have not kept up with technology – What is a “derivative work”? McCarthy Tétrault LLP Open Source Pitfalls • Enforceability – Intellectual Property Misuse Doctrine – Passive acceptance of contractual terms • Termination – Who holds termination rights – Can you get the genie back in the bottle? McCarthy Tétrault LLP Open Source Pitfalls »Business Aspects • Limited ability to capitalize on the IP you create • Limited ability to “commercialize” the software • “Forking” of software • No guaranteed support McCarthy Tétrault LLP Open Source Tips » Know thy code (and thy programmers!) » Ensure the form of license is compatible with your business model » Ensure compliance with license terms » Take active steps to avoid viral effects of GPL and LGPL » Ensure the license is not infringing third party rights » When using open source develop a set of open source policies («clean room») » Consider defensive patenting or publishing to ensure the technology remains unrestricted McCarthy Tétrault LLP Open Source Tips » Identify open source software being used in software development work. » Ensure management is aware of risks. » Minimize risk of contaminating proprietary code: • undertake open source audit • implement company-wide « open source policy » • consider implementing « clean room » development practices for open source work (i.e. separating your open source developers from proprietary) • ensure compliance without applicable open source license (including availability of open source) • add appropriate « open source » clauses to agreements without software suppliers and licenses • in licenses, prohibit mixing of proprietary in open source. McCarthy Tétrault LLP McCarthy Tétrault LLP Thank you. McCarthy Tétrault.
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