Open-source software allows developers to gain access to a wide array of free software which they can then modify and redistribute. However, there are several legal issues associated with open-source code. Businesses and developers who utilize open-source code should be aware of these legal issues including licensing and copyright issues, usage restrictions, warranties and liabilities, as well as other intellectual property concerns.

In terms of licensing, businesses and developers must ensure that their use and distribution complies with the terms of the applicable licensing agreement. Businesses and developers must be especially aware of copyright issues when using open-source code. Open-source licenses often contain “copyleft” clauses, requiring the open-source code to be redistributed in the same manner in which the developer obtained it. This is important because if a developer receives and modifies an open-source software package for free, the developer must then redistribute the modified code for free. Many open-source licenses, such as the BSD license, require developers to display a copyright notice and disclaimer at all times. Many open-source licenses require the developer to disclose the source code, even if the final product is a closed-software deliverable.

The Open Source Initiative (“OSI”) bars developers from restricting the use of their open-source software. Developers should be allowed to freely modify, copy, and redistribute the open-source code. Developers and businesses need to take care when they distribute open-source software that they do not attach their own “terms and conditions” to the open-source software. Doing so would restrict another developer’s ability to freely modify and use the open-source code.

Businesses and developers should consider including sufficient disclaimers regarding their use of open-source code. A basic disclaimer may read something like “this product contains open-source code and is subject to the terms of the applicable open-source license.”

Businesses and developers may also incur liability if their product infringes on any intellectual property rights, even if the infringement results from the incorporated open-source code. Businesses should be especially careful when drafting software agreements with their clients so that both parties understand the potential risks associated with indemnification and intellectual property infringement. Generally, the business or developer who modifies and redistributes the open-source software is responsible for ensuring the terms of the applicable licensing agreement are followed.

As a final note of caution, if a business decides to utilize open-source software, it is important that all company developers be made aware of the business’s policies regarding open-source software. Developers should always flag or disclose when and how open-source code is incorporated into a final product so that the business can ensure compliance with the applicable open-source license.