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The biggest risk of using open source software is turning a blind eye to the implications of using such software. Most companies, aware or not, use open source software. OSS might be acquired “free” of cost and the user may be “free” to modify and/or distribute the OSS. It is not, however, free of risk. The risk arises because OSS is typically protected by copyright and the license to use the OSS, while often requiring no payment, carries with it certain obligations and disclaimers. These obligations and disclaimers affect the rights of companies that buy or use software, companies that develop software and investors in or purchasers of such companies. In a case of first impression, a company was recently sued for allegedly violating the most widely used open source software license. With this warning shot, others in the software business should be on notice. Unfortunately, the obligations that go with OSS are often not well understood and/or are overlooked by OSS users. WHAT IS OPEN SOURCE SOFTWARE? Open source software is software for which the source code is available for users of the software and for programmers who may modify it or incorporate it in other software. Source code is the form of a computer program written in a programming language (e.g., C++, Fortran) that is readable by humans and may be translated into an executable or machine code format that a computer understands and can execute. A value of having source code is the ability to modify the source code and thereby modify the operation of the computer program. This is in contrast to typical closed source programs (e.g., Microsoft Word) that are available only in machine code format and are difficult, if not impossible, to modify. Linux is an example of open source software. Time and money are the primary benefits of using OSS. Many open source programs may be downloaded from the Internet at no cost and then modified to suit the needs of the user. This may save significant time and expense as opposed to developing entirely new software from scratch. What’s the catch? OSS is usually distributed under a license (i.e., an open source license or OSL, of which there are many varieties) that allows the licensee to access the source code and then to modify and/or distribute the OSS. This license, however, is not unrestricted. It usually carries with it restrictions on use, modification and distribution, the general purpose of which is to ensure that the source code of the distributed software will also be made freely available for use by others. With more than 50 varieties of OSLs in use, it is critical that an OSS user understands the terms of the license covering any particular OSS. KNOW THE RISKS A key to managing the risk of using OSS is knowing which OSL applies and then understanding and complying with its terms. Generally, the various types of OSLs in use have been approved and published by an industry group known as Open Source Initiative ( www.opensource.org). Another open source proponent, Software Freedom Law Center, is often involved in legal actions against OSS users accused of violating terms of an OSL. The recently filed Monsoon lawsuit is an example of this. On Sept. 19, 2007, for the first time in the U.S., a company was sued for allegedly violating an OSL. Monsoon Multimedia Inc. was sued for copyright infringement by two developers of a computer program called BusyBox. The developers of BusyBox distributed it under what has been the most commonly used OSL, version 2 of the General Public License. Monsoon allegedly distributed BusyBox as part of Monsoon’s own products but, in violation of the GPLv2 license, did not make the BusyBox source code available to the recipients of its products. BusyBox charged Monsoon with copyright infringement by virtue of its noncompliance with a condition of the OSS license. The developers of BusyBox later filed three more copyright infringement suits for OSS license violations against Xterasys Corporation and High-Gain Antennas LLC on Nov. 19, 2007, and against Verizon Communications Inc. on December 6, 2007. In all cases, the developers of BusyBox sought damages, injunctive relief and attorney fees and costs. With the objective of protecting the “freedom” of open source software, the developers of BusyBox were represented by the Software Freedom Law Center. The SFLC is an organization committed to providing legal representation and other law-related services to protect and advance free and open source software. Of the many cases of OSL violations in the past that were settled out of court, Monsoon’s case was the first to require litigation. What damages could a developer of OSS be entitled to for infringement of software that is made available to the world free of charge? Although actual damages may or may not be significant, a copyright owner in some circumstances may pursue statutory damages, which may be enhanced for willful infringement. Possibly of greater concern, a copyright owner may seek to enjoin use of OSS that has been incorporated into a commercial product. In order to settle the BusyBox suit, which could have been avoided by originally making the source code available, Monsoon agreed to a monetary payment in addition to a commitment to remedy its prior violation and to ensure its future compliance. Similarly, SFLC has announced that the case against Xterasys was also settled with a monetary payment and commitments to ensure future compliance and remediation of past infringement. Another risk generally associated with use of OSS arises from the fact that many OSLs include a disclaimer of all warranties, including warranties of non-infringement. With no warranty, a user of OSS has no recourse to the OSS supplier if a defect is encountered in the OSS. In addition, without a warranty of non-infringement and without any indemnification from claims of infringement, OSS inherently carries the risk that the OSS provider, knowingly or otherwise, has infringed the rights of a third party, and the innocent OSS user may be liable as well, without recourse to the OSS provider. This risk is present even if a user complies with the terms of an OSL. For example, Red Hat Inc. and Novell Inc. were recently sued for patent infringement by IP Innovation LLC and Technology Licensing Corporation. The complaint alleges that by selling and offering for sale their respective versions of Linux, an OSS program, Red Hat and Novell directly infringed, induced others to infringe and contributed to the infringement of others of the asserted patents. But for the OSS disclaimer, the defendants may have had recourse against the provider of the OSS. Whether the facts of the Red Hat case would have permitted recourse to the OSS provider is another matter. Another risk inherent in the use of OSS under certain OSLs (e.g., the General Public License) is that it may infect proprietary software with which it is combined. In other words, the proprietary software may become subject to the OSL as a result of its combination with the OSS. To comply with such an OSL, access must be provided to the source code of what previously was the proprietary software. This may destroy the trade secret status of technology embedded in what was formerly proprietary software. In addition, the GPL may impact copyrights and patent rights because the GPL prohibits placing restrictions on users of GPL OSS other than those already in the GPL. Therefore, if proprietary software becomes subject to the GPL, patents and copyrights covering the proprietary software may be unenforceable against users under the GPL. These intellectual property implications may diminish the commercial value of what was previously proprietary software. Obviously then, an intellectual property protection strategy requires that whenever an enterprise is based on commercially valuable assets � like patents, trade secrets and copyrights of which software is an important component � the software must be carefully vetted to evaluate the possible devaluation of those assets by the inclusion of or derivation from OSS. This may be an important consideration, for example, in a due diligence study of a software development company. It will be important to know whether the acquisition target has incorporated OSS into its products. Does the company have a corporate policy regarding use of OSS? Should a code scan be performed that searches for OSS? If OSS is used, it is crucial to identify the corresponding OSL, understand its terms, confirm that the acquisition target complies with the OSL and to determine the impact on valuation of any intellectual property rights that may have been diminished by OSS. CONCLUSION This article provides an overview of some of the implications of using open source software. The consequences of using open source software vary greatly depending on the terms of the applicable open source software license and how the open source software is used or incorporated into products. There are great benefits to using open source software that may be exploited, provided that the user makes informed decisions regarding the associated risks. CHRISTOPHER J. DERVISHIAN is a shareholder in the intellectual property law firm RatnerPrestia. He focuses his practice in the areas of business transactions, patent prosecution, litigation and due diligenceinvestigations concerning the electrical and computer arts.

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