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Open Source Software Rules for Start-ups, Part I

By Heather Meeker

Heather MeekerIf you’re a start-up, there’s a strong likelihood you’re using open source software in your business. Linux, Apache, Hadoop, WordPress and MySQL are all examples of open source software platforms used extensively by startups.

Using open source software improperly, however, can tie up your business legally, and limit or slow down your corporate exit options. And that’s the last thing any startup wants to hear.

Below are five basic rules to using open source software in a way that won’t slow you down.

  1. Don’t violate open source licenses. If anyone tells you that open source licenses are never enforced, or violating them never causes problems, they are wrong. Violating open source licenses can cause legal liability and embarrassment, and slow down or compromise investments or acquisitions for your company. Even worse, it could make potential customers refuse to buy your products. Complying with software licenses is simply the right thing to do. Lots of developers have gone to great effort to make the software available to you; it’s only fair to follow their licenses.
  2. Keep track of what you are using. From day one, keep track of the open source software you are using. Someday you will have to provide a list, and having one already in hand will save you a lot of time and effort. Most open source software downloads have an included file called “license.txt”. Keep a copy of the license file, and note what software it covers, so you know what license terms you need to follow. Most startup companies do this with a simple spreadsheet.
  3. Understand Copyleft and Permissive licenses. There are two kinds of open source licenses: copyleft and permissive. Copyleft licenses include GPL, LGPL, Eclipse Public License, Mozilla Public License, and the Common Development and Distribution License (CDDL). Permissive licenses include BSD, MIT, and Apache. There are many other licenses, but almost all open source software is under Copyleft or Permissive. Most companies — and their customers — have no legal concerns over using software under permissive licenses. Complying with Copyleft licenses takes more care, however, so if you want to use software under those licenses, be prepared to do what is necessary to comply.
  4. Comply with notice requirements. All open source licenses have notice requirements. A typical notice requirement states that when you distribute open source software, you need to include a copy of the license. This usually means the entire license — not a link, not a short form. Notices can be challenging to maintain, particularly for embedded software. It’s important to work out a license notice delivery strategy that complies with most open source licenses, but doesn’t confuse or alienate your customers.
  5. Finger Pointing Doesn’t Work. If you violate an open source license, it doesn’t matter if your supplier or contract developer was at fault. It’s still your problem. Be sure all your suppliers and contractors follow the rules. For example, don’t buy chips or computers with Linux if the supplier can’t also provide you the source code.

With careful planning, open source software can be a great way for startups to jump-start their technology. Simple awareness of key guidelines allows you to leverage all the benefits that open source provides while minimizing risk.

Want to know how to ensure you’re efficiently complying with the license terms of your open source software tools? Stay tuned for Part 2 of this article, coming soon!

More questions? Feel free to contact Heather Meeker at hmeeker @ omm.com.

 


 

This document is available under the Creative Commons Attribution-NoDerivs Unported 3.0 License

http://creativecommons.org/licenses/by-nd/3.0/legalcode  

The no-derivs license is applied to avoid inaccuracy and misunderstanding. If you wish to request other terms please contact Heather Meeker, O’Melveny & Myers, hmeeker@omm.com.

Attribution: Copyright 2016 Heather Meeker

2017-07-14T16:15:56+00:00