The use of Open Source Software for the development of proprietary IP is more extensive than ever and the trend is increasing. Such increased use of open source by companies is a natural development, however, it should be properly managed while making informed decisions in order to avoid undesirable IP related surprises.
Wikipedia defines Open Source Software as a software whose source code (meaning the human-readable programing language underlying the software) is released under a license in which the copyright holder grants users the rights to study, change, and distribute the software to anyone and for any purpose.
Software development nowadays is considerably based on open source software, as developers tend to use more and more open source available solutions as an infrastructure for developing new software. Using a free of charge publicly available tool that other than money also saves time (no need to write from scratch) is obviously tempting.
However, though the concept of a free lunch can generally describe many of the open source software, this is not always the case, and sometimes there are strings attached. It is highly important for those who use open source software in their projects/initiatives/products/services/technologies to be familiar with and understand these strings and how to knowingly manage their use of open source, in order to avoid unpleasant surprises.
Each open source software is released for use under a certain open source license. Some under permissive licenses which terms can be quite easily accommodated by for-profit companies (terms like, for example, inclusion of a copyright notice which will give proper credit to the author of the open source software used); and some under stricter licenses (generally known as “copyleft” licenses) which include terms which may, under certain circumstances, result in implications which for-profit companies will find hard (if not impossible) to accommodate, like a requirement to reveal the source code underlying such for-profit company’s own core IP which is intertwined with the open source software component.
The analysis of what is ok to use, what’s not, and how to use, is done on a case by case basis and requires a close look on the open source components being used, the circumstances surrounding their use, the license they are subject to, and more. It requires, among other things, examination of distribution methods and whether derivative work has been created. Developers better consult an expert in advance since is it obvious that sooner or later the issue will arise (whether in the course of an investment round or an M&A transaction), and it is always recommended to avoid IP related issues and prevent them in advance or at least handle them when they are still minor…
It is also recommended to adopt an open source policy which is accompanied by a clear written open source work procedure, to be read by the parties involved and implemented in the company’s day to day R&D activities.