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, butmy answers are not “legal advice.”* *Fine Print: If you have specific issues, questions or problems in mind, wecan 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 ofthe 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 anyconfusingly similar mark with similar or relatedgoods 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 PatentOffice 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, insome cases, performance
9. Trade Secret Law Legal Basis: Uniform Trade Secrets Act (enactedstate 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 informationaccumulates, so long as secrecy maintained Registration provides additional benefits Prevents others from wrongful using ordisclosing 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 directlyor indirectly in a computer in order to bring about acertain result. Software copyright owners have exclusive rightto: 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 givingaway software. “License shall not require royalty or otherfee for such sale.”□ 2. Source Code - program must include source code, orinclude publicized means of obtaining source code forreasonable reproduction cost. Must allow distribution insource code□ Derivative Works - must allow modifications and derivativeworks, and must allow them to be distributed under thesame terms□ No Discrimination – must not discriminate against any personor group or persons, or against any field of endeavor□ Automatic Distribution of License – rights attached to licenseapply to all redistributions
14. Open Source Definition (Cont.) Open Source Definition – Criteria of License□ 3. Derivative Works - must allow modifications andderivative works, and must allow them to bedistributed under the same terms□ 4. No Discrimination – must not discriminate against anyperson or group or persons, or against any field ofendeavor□ 5. Automatic Distribution of License – rights attached tolicense apply to all redistributions□ Other requirements…
15. Open Source License – The GPL Basic rights include access to the source codeand right to make derivative works Key element: Reciprocity. Changes to the software must be releasedunder the same license Purpose: Increase the amount of publicly availablesoftware Ensure compatibility Drawback: Linking – cannot be combined withproprietary software
16. Open Source Software - Advantages No Vendor Lock-in Proprietary software can require additionalmonthly 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 makingnew versions. E.g. Internet Explorer for Mac. Lower Risk of Incompatibilities Proprietary software licenses can preclude afix; open source licenses allow anyone tocreate compatibility Lower Cost Than Building From Scratch
17. Open Source Software – Advantages (Cont.) Allows for Larger User Base Proprietary licenses can assert limitations onnumber of users. E.g., downloading music Control of Software Remains With User, NotVendor Ability to Integrate with Open Standards Greater adaptability Increased Innovation Avoid competing with proprietary modifiedversion of your own work Peer Review Greater reliability Greater security
18. Open Source Software – Risks Must adhere to copyright attribution and noticerequirements Must adhere to requirement to include sourcecode Linking can render proprietary source codesubject to open source license GPL and similar licenses have not beenconstrued by American courts Open source software can still be covered bysoftware patents
19. Open Source Software For Startups The advantages discussed above particularlyapply to startups seeking to offer Software as aService. Facebook and Google collectively requiredmillions 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 particularlyapply to startups seeking to offer Software as aService. Startups cannot afford to invest millions ofhours 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 OpenSource Software? If software is a mobile application, thatapplication can be sold in an app store. YOU CAN SELL (license) OPEN SOURCESOFTWARE, 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 tolicensees□ Need not give away code not distributed (internal use)□ Viewing a website is not distribution, so need not giveaway code to website visitors
22. Can You Generate Revenue With OpenSource Software? (Cont.) Can I sell modules written by others?□ No. That person retains copyright of their modules! What does it mean to retain copyright eventhough subject to GPL?□ Right to control distribution; sell copies of YOUR work□ What you give up: must make source code available andothers can modify your work However, you can provide other services basedon modules written by others, like:□ Support□ Training□ Customization□ Integration
23. Sample Solutions of Open Source vs.Proprietary SoftwareGrinnell 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 licensingpatents necessary to exercise GPL rights If GPL3 licensee sues for patent infringementtheir 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 BSDand then turn it proprietary Fail to mention patents
26. FAQs (Cont.) If I write a new module that does somethingnever done before, have I created intellectualproperty? You’ve created a module. The module can giverise to intellectual property rights. Patent Copyright Trade Secret
27. FAQs – Developers What should I put in my contract to allowmyself to re-use my code for similar projects? IP Ownership Clause – retain copyright for allsource code written. If I develop GPL code for one client, can I sell it toanother client if I do not make any changes? Yes! You own the copyright, and your “sale” tothe first client is merely a license for him to useit.
28. FAQs – Developers What should I put in my contract to allowmyself to re-use my code for similar projects? IP Ownership Clause – retain copyright for allsource code written. If I develop GPL code for one client, can I sell it toanother client if I do not make any changes? Yes! You own the copyright, and your “sale” tothe first client is merely a license for him to useit.
29. FAQs – Hiring Developers If I want to hire a developer, what can I put inmy contract to prevent them from selling thecode to my competitors? Insist that developer grant an exclusive license . (But that will not prevent developer frommodifying code further and having the ability tosell further modified code to competitors)
30. Summary & Wrap-Up Numerous advantages to using open sourcesoftware to offer new functionality within abusiness, or start a new business Need not start from scratch Lower cost “Future Proof” Main drawbacks include adhering to all rulesand requirements of license – requirements ofcopyright notice, attribution and making sourcecode publicly available
31. Questions? Contact information Barry Horwitz, Greenberg Traurig, LLP firstname.lastname@example.org 312-456-1037 Andy Kucharski, Promet Source email@example.com 773-525-8255