2. Necessary Disclaimer
I am a lawyer, but . . .
This presentation is not legal advice
Legal advice requires:
□ Specific factual circumstances
□ An attorney-client relationship.
There will be time for questions at the end, but
my answers are not “legal advice.”*
*Fine Print: If you have specific issues, questions or problems in mind, we
can set up a time to discuss them separately
3. Open Source Software - Overview
What is open source software?
□ Subject to open source license.
What is an open source license?
□ Licensor must grant certain rights
□ Right to use, modify and distribute
□ Right to access source code
“Open source” vs. “Free software”
□ You can sell open source software.
□ Free” does not mean “no cost”; it means unencumbered.
Think “Free speech, not free beer.”
4. Open Source Software – Uses & Restrictions
What can businesses do with it? Some examples:
□ Use existing software as a head start
□ Modify code for additional functionality
□ Greater adaptability
□ Lower cost
Restrictions:
□ Must allow access to source code
□ Must allow further modifications
□ Must allow further redistribution
5. Intellectual Property Primer
Intangible property rights over “creations of
the mind”; four types:
Trademark
Patent
Copyright
Trade Secret
6. Trademark Law
Legal Basis: Lanham Act, 15 U.S.C. §§ 1051 et Seq.
Use: “Mark” or designation to indicate source
□ Indicates quality
□ Need not identify source
Rights accrue upon use in commerce
Registration provides additional benefits
Prevents others from using the same or any
confusingly similar mark with similar or related
goods or services.
7. Patent Law
Legal Basis: U.S. Constitution, Art. 1, § 8, Cl. 8
U.S. Patent Act, 35 U.S.C. §§ 1 et seq.
Use: Inventions, improvements.
□ Machines, Devices
□ Chemical compositions
□ Methods Processes
Rights accrue when granted a patent by Patent
Office
Must disclose to earn monopoly
Prevents others from using, making, selling,
importing, or offering for sale
8. Copyright Law
Legal Basis: U.S. Constitution, Art. 1, § 8, Cl. 8
U.S. Copyright Act, 17 U.S.C. §§ 1 et seq.
Use: Works of Authorship.
□ Does not protect ideas
□ Fixed in tangible medium of expression
Rights accrue when expression is fixed
Registration provides additional benefits
Prevents others from making copies,
distributing, making derivative works and, in
some cases, performance
9. Trade Secret Law
Legal Basis: Uniform Trade Secrets Act (enacted
state by state). E.g. 765 ILCS 1065/1 et seq.
Use: Protect confidential information
□ Information must derive economic benefit from secrecy
□ Owner must take steps to protect confidentiality
Rights accrue as confidential information
accumulates, so long as secrecy maintained
Registration provides additional benefits
Prevents others from wrongful using or
disclosing
Independent derivation okay
10. Software: Types of IP
Software is most clearly subject to Copyright
Literary work
More recently, patent protection
Could also be trade secret
11. Software Copyright Primer
17 U.S.C. § 101 defines a computer program as:
A set of statements or instructions to be used directly
or indirectly in a computer in order to bring about a
certain result.
Software copyright owners have exclusive right
to:
Reproduce the work
Distribute the work
Create derivative copies of the work
12. Software: Licenses
You do not buy software; you license it.
License: grants the right to use.
Permission.
Proprietary licenses withhold rights.
Limit number of computers.
Cannot distribute
Cannot make derivative works
What is open source?
13. Open Source Definition
Open Source Definition – Criteria of License
□ 1. Free Redistribution – no restrictions on selling or giving
away software. “License shall not require royalty or other
fee for such sale.”
□ 2. Source Code - program must include source code, or
include publicized means of obtaining source code for
reasonable reproduction cost. Must allow distribution in
source code
□ Derivative Works - must allow modifications and derivative
works, and must allow them to be distributed under the
same terms
□ No Discrimination – must not discriminate against any person
or group or persons, or against any field of endeavor
□ Automatic Distribution of License – rights attached to license
apply to all redistributions
14. Open Source Definition (Cont.)
Open Source Definition – Criteria of License
□ 3. Derivative Works - must allow modifications and
derivative works, and must allow them to be
distributed under the same terms
□ 4. No Discrimination – must not discriminate against any
person or group or persons, or against any field of
endeavor
□ 5. Automatic Distribution of License – rights attached to
license apply to all redistributions
□ Other requirements…
15. Open Source License – The GPL
Basic rights include access to the source code
and right to make derivative works
Key element: Reciprocity.
Changes to the software must be released
under the same license
Purpose:
Increase the amount of publicly available
software
Ensure compatibility
Drawback: Linking – cannot be combined with
proprietary software
16. Open Source Software - Advantages
No Vendor Lock-in
Proprietary software can require additional
monthly fee.
E.g. Security/Anti-spyware programs
Leads to longer useful life of software
Can’t Be Orphaned by Vendor End-of-Lifing
Proprietary software - vendor stops making
new versions.
E.g. Internet Explorer for Mac.
Lower Risk of Incompatibilities
Proprietary software licenses can preclude a
fix; open source licenses allow anyone to
create compatibility
Lower Cost Than Building From Scratch
17. Open Source Software – Advantages (Cont.)
Allows for Larger User Base
Proprietary licenses can assert limitations on
number of users.
E.g., downloading music
Control of Software Remains With User, Not
Vendor
Ability to Integrate with Open Standards
Greater adaptability
Increased Innovation
Avoid competing with proprietary modified
version of your own work
Peer Review
Greater reliability
Greater security
18. Open Source Software – Risks
Must adhere to copyright attribution and notice
requirements
Must adhere to requirement to include source
code
Linking can render proprietary source code
subject to open source license
GPL and similar licenses have not been
construed by American courts
Open source software can still be covered by
software patents
19. Open Source Software For Startups
The advantages discussed above particularly
apply to startups seeking to offer Software as a
Service.
Facebook and Google collectively required
millions of hours worth of coding.
Startups cannot afford to invest that much time
Goal: create and sell a mobile application that,
for example, allows users to find a reasonably-
priced parking space in downtown Chicago.
Map functionality
Payment processing functionality
Account profile
User Interface
20. Open Source Software For Startups
The advantages discussed above particularly
apply to startups seeking to offer Software as a
Service.
Startups cannot afford to invest millions of
hours of coding in a new service
Goal: create and sell a mobile application that,
for example, allows users to find a reasonably-
priced parking space in downtown Chicago.
Map functionality
Payment processing functionality
Account profile
User Interface
21. Can You Generate Revenue With Open
Source Software?
If software is a mobile application, that
application can be sold in an app store.
YOU CAN SELL (license) OPEN SOURCE
SOFTWARE, e.g. GPL, or from Drupal repository
“Sales” are really licenses.
Can charge as much as you want!
Purchasers (licensees) subject to the same license
Source code must be made available to
licensees
□ Need not give away code not distributed (internal use)
□ Viewing a website is not distribution, so need not give
away code to website visitors
22. Can You Generate Revenue With Open
Source Software? (Cont.)
Can I sell modules written by others?
□ No. That person retains copyright of their modules!
What does it mean to retain copyright even
though subject to GPL?
□ Right to control distribution; sell copies of YOUR work
□ What you give up: must make source code available and
others can modify your work
However, you can provide other services based
on modules written by others, like:
□ Support
□ Training
□ Customization
□ Integration
23. Sample Solutions of Open Source vs.
Proprietary Software
Grinnell College Campus Tour
24. FAQs
Difference between GPL2 and GPL3?
Protects right to tinker: prevents “tivoization”
“Distribute” changed to “convey”
Stronger protection against patent threats
Conveying software requires licensing
patents necessary to exercise GPL rights
If GPL3 licensee sues for patent infringement
their license is terminated
Offers new ways to provide source code
Clarifies compatibility
25. FAQs (Cont.)
Difference GPL and other licenses (MIT, BSD)
No reciprocity
People can modify software licensed under BSD
and then turn it proprietary
Fail to mention patents
26. FAQs (Cont.)
If I write a new module that does something
never done before, have I created intellectual
property?
You’ve created a module. The module can give
rise to intellectual property rights.
Patent
Copyright
Trade Secret
27. FAQs – Developers
What should I put in my contract to allow
myself to re-use my code for similar projects?
IP Ownership Clause – retain copyright for all
source code written.
If I develop GPL code for one client, can I sell it to
another client if I do not make any changes?
Yes! You own the copyright, and your “sale” to
the first client is merely a license for him to use
it.
28. FAQs – Developers
What should I put in my contract to allow
myself to re-use my code for similar projects?
IP Ownership Clause – retain copyright for all
source code written.
If I develop GPL code for one client, can I sell it to
another client if I do not make any changes?
Yes! You own the copyright, and your “sale” to
the first client is merely a license for him to use
it.
29. FAQs – Hiring Developers
If I want to hire a developer, what can I put in
my contract to prevent them from selling the
code to my competitors?
Insist that developer grant an exclusive license .
(But that will not prevent developer from
modifying code further and having the ability to
sell further modified code to competitors)
30. Summary & Wrap-Up
Numerous advantages to using open source
software to offer new functionality within a
business, or start a new business
Need not start from scratch
Lower cost
“Future Proof”
Main drawbacks include adhering to all rules
and requirements of license – requirements of
copyright notice, attribution and making source
code publicly available
31. Questions?
Contact information
Barry Horwitz, Greenberg Traurig, LLP
horwitzb@gtlaw.com
312-456-1037
Andy Kucharski, Promet Source
andy@promethost.com
773-525-8255