Developing Competitive Advantage Using Open Source

Exceptional service. Dykema delivers.

Van Lindberg Licensing AI, May 17, 2018

3 Exceptional service. Dykema delivers. Free Software!*

*Terms and conditions may apply. See your local lawyer for details.

4 Exceptional service. Dykema delivers. “Bad” Open Source

5 Exceptional service. Dykema delivers. Open Source is Free Trade in Ideas

6 Exceptional service. Dykema delivers. Why Open Source?

1. Develop a platform for innovation 2. Gain mindshare/marketshare 3. Reduce long term risk 4. Recruit, retain, and develop 5. Reduce the cost of product/service delivery

In the field of AI/ML, widespread collaboration on models and techniques is the norm.

7 Exceptional service. Dykema delivers. Differentiating (Proprietary Strategy) Total Value Why Stay Proprietary? to Supporting Customer (Cooperative Strategy)

8 Exceptional service. Dykema delivers. How does OSS licensing compare to traditional licenses?

9 Exceptional service. Dykema delivers. OSS licenses are just like other software licenses…

• A set of restrictions on what you can do with software • Enforceable under copyright • Those who do not comply may be sued

10 Exceptional service. Dykema delivers. …except when they are not.

• Distribution-time obligations • Possibility of IP release (patent and trade secret) • Greater technical complexity • Requires extra-legal knowledge

11 Exceptional service. Dykema delivers. Open Source Licenses

1. BSD / MIT“Academic” / Python 2. Apache 2, AFLPermissive 3. Mozilla,Limited LGPL, Reciprocal GPL+Classpath Fully4. ReciprocalGPL, EUPL (“Copyleft”) 5. AGPLCopyleft + Network

12 Exceptional service. Dykema delivers. Open Source is not:

• Public domain • Without ongoing obligations • Unrestricted use • Subject to the same terms as all other OSS • Liability-free • “Viral” like a disease

13 Exceptional service. Dykema delivers. Common License Terms

• Technology netural • Must identify original source and modifications • Can’t have restrictions or fees on redistribution • Must include source code and compiled object code • Distribution of modifications subject to the same license terms • Can’t be restricted in a confidentiality agreement • Must be severable, e.g. not linked to specific product

14 Exceptional service. Dykema delivers. Legal Issues

• Linking or incorporating code could affect the choice of license for distributed code • Ambiguity around license terms • Lack of warranties and indemnities • No disclaimer of implied “conditions” nor the provisions of the United Nations Convention on Contracts for the International Sale of Goods • Certain limitation clauses may not be enforceable in certain jurisdictions • Do not deal with all IP rights of all jurisdictions, e.g. patent rights, or waivers of moral rights in Canada

15 Exceptional service. Dykema delivers. Legal Issues, cont.

• Risk of having to stop using or selling • Risk of patent infringement; someone could have independently created and with priority obtained a patent on an invention in the software • Risk of copyright infringement (due to not complying with terms of license) • Use of code not subject to confidentiality • Code distributed due to reciprocal license not protectable by trade secret law • Breach of license terms • Conflict with other legal compliance, e.g. export restrictions, SOX

16 Exceptional service. Dykema delivers. Legal Issues

• Linking or incorporating code could • Risk of having to stop using or selling affect the choice of license for • Risk of patent infringement; someone distributed code could have independently created and • Ambiguity around license terms with priority obtained a patent on an • Lack of warranties and indemnities invention in the software • No disclaimer of implied • Risk of copyright infringement (due to “conditions” nor the provisions of not complying with terms of license) the United Nations Convention on • Use of code not subject to Contracts for the International Sale confidentiality of Goods • Code distributed due to reciprocal • Certain limitation clauses may not license not protectable by trade secret be enforceable in certain law jurisdictions • Breach of license terms • Do not deal with all IP rights of all • Conflict with other legal compliance, jurisdictions, e.g. patent rights, or e.g. export restrictions, SOX waivers of moral rights in Canada • Existence of ongoing obligations

17 Exceptional service. Dykema delivers. The Real Legal Issues

• Compatibility of the business model with the received rights • Ineffective distribution-time controls • The Legal “Head in the Sand” – “We don’t use open source” • Ineffective Process: – “Inbound” use of open source without internal notice and controls – ...which leads to noncompliant distribution of OSS • Contradictory policies – Ownership of IP vs. participation in community

18 Exceptional service. Dykema delivers. The Ketchup Model

Exceptional service. Dykema delivers. The Open Core Model

Exceptional service. Dykema delivers. The Dual License Model

Exceptional service. Dykema delivers. The Proprietary Crust

Exceptional service. Dykema delivers. The Infrastructure Model

Exceptional service. Dykema delivers. The Adjacency Model

Exceptional service. Dykema delivers. Taking the Leap

25 Exceptional service. Dykema delivers. Q: How do you know if you or your client needs help with OSS?

26 Exceptional service. Dykema delivers. A: Do you ship anything that is or contains software?

27 Exceptional service. Dykema delivers. Q. Do we need to move to an all open source strategy if we start using open source code?

28 Exceptional service. Dykema delivers. Q. What about “bad” or “viral” open source?

29 Exceptional service. Dykema delivers. Q. We want to keep everything proprietary. Can we do that and still use open source?

30 Exceptional service. Dykema delivers. Thank you! Questions? Van Lindberg [email protected] Licensing AI, May 17, 2018

31 Exceptional service. Dykema delivers.