Open-Source Software: The Next Big Legal Battles

The past few years have been interesting, if not complicated, for CIOs and senior IT executives at companies using Linux and other open-source software. Some have been threatened with lawsuits (first publicly, now quietly, behind closed doors). They've been forced to dissect a steady flow of fear, uncertainty and doubt emanating from some whose business models are threatened by the growing success of Linux and open-source, and they are expected to understand and comply with the growing corpus of open-source software licenses.

The good news is that most lawsuits have not materialized; executives dissecting the FUD have consistently concluded it is just that, a campaign to engender fear, uncertainty and doubt; and a dialogue in earnest has started on the question of license proliferation. Linux and open-source software are more widely used than ever before. Momentum is growing. The issues are being successfully navigated.

So the question naturally arises, What should we focus on next? The answer: software licenses and software patents. These are two of the most important legal issues the industry will address in the coming years. How these issues are resolved will have a defining impact on the success of Linux and open-source software. These are the issues to which the entire IT community should devote its attention, energy and resources.

Like it or not, as the debates take shape, IT managers will need to have a basic understanding of the legal issues in play. They need to know how the possible answers to questions of patents and licenses could affect their businesses, their decisions and their development teams. As general counsel for the Open Source Development Labs (OSDL), I work with a variety of large, medium and small vendors and customers of open-source software. These two issues are the most important facing those vendors and customers. These are the issues that I am working to help resolve over the next few years.

Software Licenses

There's little doubt that the growing number of open-source software license types has the potential to work against the long-term success of open-source software. Understanding your company's rights and ensuring its compliance with a single software license can be challenging enough -- that's true whether the license involves proprietary or open-source products. The challenge and corresponding risks can increase, however, when several different licenses conveying different rights and imposing distinct, sometimes conflicting, obligations are in the mix.

Fortunately, many of the licenses approved by the Open Source Initiative (OSI) are compatible, work seamlessly with one another and are familiar to large numbers of developers and companies. In addition, only a small handful of the almost 60 software licenses approved by OSI are used by open-source projects. As of July, for example, more than 90% of the open-source projects registered on SourceForge.net were licensed under five OSI-approved licenses; the remaining 10% were scattered among 53 or so other licenses. Although those statistics do not account for all active open-source projects or adoption rates, they are compelling enough to conclude that a few open-source licenses seem to work well for the vast majority of projects. Unfortunately, the pool of OSI-approved licenses continues to swell, compounding the potential risks and the costs associated with understanding and complying with those additional licenses.

OSDL believes there are key open-source software licenses in which developers, vendors and users can have confidence and should use absent a compelling business reason. We are working with OSI through its license proliferation committee to identify and promote those licenses that best meet the needs of many developers, vendors and users. We also support the Software Freedom Law Center and the legal services it provides to open-source projects, including the Free Software Foundation in its efforts around the General Public License (GPL), one of the most important software licenses. The GPL alone accounts for about 70% of the open-source projects registered on SourceForge.net.

Software Patents

Whatever your position on the validity of software patents, most everyone in the software industry and community generally agrees that software patents can pose problems for vendors, distributors, users and developers of software. Most can also agree that the patent process in the U.S. is in need of reform, and the directives under consideration in the European Union need our attention and could benefit from our lessons learned.

Take, for example, the process by which a patent application is reviewed by the U.S. Patent Office. In that process, examiners search for and review prior "art" in the field of the invention. If good prior art is found, it can prevent a software patent from being issued altogether or could result in a narrowing of the patent claims. Fewer but higher quality software patents are then granted ("quality" in the sense that the patents that are granted are more likely to be deemed valid and enforceable if tested in court). Unfortunately, locating relevant prior art can be quite difficult, in part due to the challenges of searching source code.

Once a software patent is issued, it is presumed valid and is difficult to invalidate or narrow in scope. If the patent owner wants to enforce an issued patent, the ensuing battle is usually expensive and sometimes fatal, particularly for small and medium-size companies. Even if the patent is not enforced against a company, CIOs still live with the possibility and threat. The possibility alone is often costly and can affect a company's behavior.

These problems do not affect the open-source industry alone; these issues trouble the proprietary software industry as well. Yet there is one difference that makes Linux and other open-source software potentially more vulnerable to software patent claims, but not for the reasons many think. It is not because of the distributed development model or the fact that open code may be poured over line by line. Those factors actually work in favor of open-source software when it comes to software patents.

The difference is that many of the companies with the most to lose by the success of Linux and open-source are applying for, acquiring and holding many software patents. They could assert them directly, through formal cease-and-desist letters, or through subtler means, such as veiled threats in which the specific patent rights claimed to be infringed are not identified, at least without restrictions imposed. Whatever the means, at risk are the smaller companies, projects and developers with amazing potential but little (if any) in the way of a patent portfolio to use as a bargaining chip or as a defensive measure.

Fortunately, reform of the U.S. patent system is under way, as is an EU debate on the patentability of computer-implemented inventions.

Discussions on the complex and multifaceted issue of software patents are taking place across the industry and community, both in the U.S. and abroad. Already, the foundation has been built for a patent commons, the purpose of which is to reduce the likelihood that software patents will be asserted against open-source software and threaten innovation. A similar foundation is being built for improving accessibility to source code for purposes of locating prior art. The success of these efforts will depend on contributions, large and small, from everyone dedicated to the longevity of open-source software. It relies in part on executives staying involved and supporting these important projects.

Diane Peters is general counsel for the Open Source Development Labs.

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