Facts & Fairy Tales about Open Source Code Presented to: Society for Information Management Fairfield & Westchester Chapter September 18, 2003 Rye Brook,

Facts & Fairy Tales about Open Source

Code

Presented to:

Society forInformation ManagementFairfield & Westchester Chapter

September 18, 2003Rye Brook, New York

By: Rich Green, Wiggin & Dana LLP

© 2003 Wiggin & Dana LLP

and the Hat

and the

SCO Big Bad

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Fairy Tale One: You can’t control the use of open source because intellectual property laws don’t apply.

Fairy Tale Two: There is a single, largely beneficial purpose behind open source code—to improve the quality and reduce the cost of software through community development.

Fairy Tale Three: Open source software isn’t “commercial” software so licensees-customers have no rights against open source vendors.

Facts & Fairy Tales about Open Source Code

OVERVIEW

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OVERVIEW

What makes Proprietary Software Proprietary?

What makes Open Source Software “Open”?

Is Open Source Governed by Intellectual Property Laws?

Managing Open Source Risks in the Enterprise

Pulling it all Together: SCO, Red Hat and IBM

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Some Basic U.S. Intellectual Property Law

Copyright ©

Trade SecretsPatents

Trademarks ®tm

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Owning the “Bundle”

of Rights


Some Basic U.S. Intellectual Property Law

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Certain rights

can be granted to others:

5 under copyright statute

2 under trade secrets theory

broad range under patent

Facts & Fairy Tales about Open Source Code Some Basic U.S. Intellectual Property Law

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Copyright:

Display

Perform

Create Derivative Works (modify/enhance/translate)

Reproduce/Copy

Sublicense/assign/transfer

Trade Secrets:

Use

Access

Disclose


Patents:

Use in manufacture

Embed in product

“Improve”

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Licensing: Licensing is when the owner gives the user

certain “sticks” from the owner’s “bundle” of rights


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Licensing: Giving certain “sticks” from the ownership “bundle”

License Scope Who gets the rights?

What rights are granted?

What parts of the software can be used?

Where can the rights be exercised?

How long can the rights be exercised?

Are the rights restricted or conditional (no reverse engineering, no third party benefit)?


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U.S. IP Rights Related to Vendors & Employees

Work-made-for-hire

Invention Disclosure and Assignment



U.S. IP Rights of Vendors & Employees

Work-made-for-hire

Applies to © only and must be:

an employee

or

1 or more of the 9 statutory categories and written agreement as work-made-for-hire



U.S. IP Rights of Vendors & Employees

Invention Assignment & Disclosure

Applies to all other rights (including patents and trade secrets) as well as “safety-net” for © that may not be a

“work-made-for-hire”



Fairy Tale One: You can’t control the use of open source because intellectual property laws don’t apply.

Fact: Intellectual property laws do apply and control the use of open source software in exactly the same manner as proprietary software—only the effect of that application is different.

Facts & Fairy Tales about Open Source Code Applying Intellectual Property Laws to Open Source


What Makes Proprietary Software Proprietary?

What Makes Open Source Software Open?



Scope of License



Scope of License: Open & Proprietary SimilaritiesAddress the same subject matter


distribution use of underlying human readable code permission to modify/make derivatives definition of number/classes of users definition of types of permitted use



Limiting number/classes of users

Limiting types of use

Limiting the components used

Limiting duration of rights

Limiting or restricting completely modification rights

Limiting or restricting completely distribution rights

Open Source Software LicensesEnhance the economic value and quality of the software

by giving a broad license scope and thus access to many developers*

Scope of License: Open & Proprietary Differences

Proprietary Software Licenses

Preserve the economic value of the software by

limiting use through restrictive license scope

No limits on number/classes of users

No limits on types of use

No restriction on modification rights

No restriction on distribution rights

All conditions are posed in the “positive”


Facts & Fairy Tales about Open Source Code The Origins of Open Source

The asterisk

*



Fairy Tale Two: There is a single, largely beneficial purpose behind open source code—to

improve the quality and reduce the cost of software through community development.

Fact: There are ideological purposes behind open source code that undercut the commercial cost reduction/quality improvement camp and

(unfortunately) increase risk of use.



The “copyleft” movement

Richard Stallman and the GNU

Eben Moglan and the Free Software Foundation


Facts & Fairy Tales about Open Source Code The Origins of Open Source: The copyleft movement

“We [. . .] mean to wrest from the bourgeoisie, [ . . .] the shared patrimony of humankind [. . .] stolen from us under the guise of ‘intellectual property,’ [ . . .] The measures by which we advance that struggle [. . . ] will be:

Abolition of all forms of private property in ideas. Withdrawal of all exclusive licenses, privileges and

rights [. . .]. Nullification of all conveyances of permanent title. Common social development of computer programs

and all other forms of software [. . .].

By these and other means, we commit ourselves to the revolution [. . .] of overthrowing the system of private

property in ideas.”

--Eben Moglan, dotCommunist Manifesto Jan. 2003


Facts & Fairy Tales about Open Source Code Managing Open Source Risks

Fairy Tale Three: Open source software isn’t “commercial” software so licensees-customers have no rights against open source vendors.

Fact: Open source software is acquired by most corporate users as part of “commercial” distributions (i.e., Red Hat Linux) and thus user licensees-customers have as many potential rights as in any other transaction.


Facts & Fairy Tales about Open Source Code Managing Open Source Risks

1. Establish an “Open Source Policy” for your company much like the Internet use policy you likely have now (e.g., no unauthorized Linux downloads over company networks);

2. Use heightened project documentation best practices when developing with or in relation to known open source products in order to keep proprietary source separate from open source;

3. Don’t take “no” for an answer from your vendors (open source and non-open source) when negotiating open source license terms such as warranties, indemnities and remedies;

4. Look for open source where you least expect it –most non-open source vendors today have open source embedded in or bundled with their products in some form; and

5. Include open source risks in your disaster and business continuity planning (e.g., are there reasonable proprietary alternatives to the open source products that can be substituted if the law changes or your open source vendor goes bankrupt).

Five Best Practices for Managing Open Source Risk


SCO, Red Hat and IBM


Pulling it all Together


SCO, Red Hat and IBM

1. Generally speaking, the typical end user of AIX and Linux has no material risk of liability to SCO;

2. SCO has no legal basis to demand license fees from third party users unless it prevails on the merits against IBM; and

3. Even if SCO prevails, third party Linux users may not necessarily be without remedies against their Linux vendors even if they acquired their Linux rights under a typical open source license.




QUESTIONS

&

ANSWERS



Documents

Facts & Fairy Tales about Open Source Code Presented to: Society for Information Management Fairfield & Westchester Chapter September 18, 2003 Rye Brook,