'Open Source Software' (OSS) refers to a type of
software that is subject to the terms of an open source licence
where, often, the 'source code' has to be made available to
users. While there are numerous types of open source licences, a
common feature is that users are permitted to modify, adapt or
enhance the software, subject to an obligation to make such
modifications freely available to other users. In comparison, users
of proprietary software have limited rights to modify or
sub-licence software and normally cannot access the source
OSS is increasingly being recognised as an economical, flexible
and robust software alternative to proprietary software. It is
these characteristics that have seen predictions by analyst firm
Gartner that, by the end of 2009, all businesses will utilise some
from of open source software in their business. Presently, the
Linux Operating System, one of the most well-known examples of open
source software, is widely used by the private and public sector,
including the NSW Government. A substantial OSS industry has
developed in Australia and internationally which derives its
income, not from licence fees but, from software development and
customisation services. If your business uses or is associated with
software development and programming, open source is relevant to
The characteristics of OSS licences give rise to particular
legal issues. If the OSS licence terms are not adhered to, it may
result in exposure to litigation enforcing the terms of the
licence. This occurred in the case of the software utility
'BusyBox'. In this case the software developers
(represented by the Software Freedom Law Centre (SFLC) initiated
action (which was later settled out of court) against several
software companies who had incorporated a portion of OSS code into
a larger proprietary software package, without adhering to the
terms of Busy Box's OSS licence.
Where OSS is used by a company contrary to the terms of the OSS
licence, an OSS rights owner may commence proceedings against the
company to enforce the terms of the licence. Supported by industry
associations such as the SFLC, OSS rights owners (like BusyBox) are
becoming increasingly litigious in enforcing their software
licences against companies.
The consequences of breaching an OSS licence agreement may
include injunctions, damages and specific performance, not to
mention the costs of litigation and potential damage of a
Accordingly, companies should undertake a review of their
systems and keep track of what OSS they are operating. Employees
should be educated about OSS licences and the implications of using
OSS and integrating OSS with proprietary software. In larger
organisations, it may be necessary to appoint a compliance officer
to monitor and ensure compliance with the terms of any OSS
Steps a company should take to protect itself from potential OSS
Establish a compliance checklist, particularly in the case of
any in-house software development, to ensure that OSS is not
incorporated into in-house software contrary to the terms of the
relevant OSS licence.
Where appropriate train employees to ensure that staff are well
briefed on potential OSS issues.
Audit existing software systems and maintain a register of OSS
to assist in compliance with the terms of OSS licences.
When carrying out due diligence prior to the acquisition of a
business, ensure that OSS issues are considered and investigated.
Where necessary, obtain appropriate warranties and indemnities from
the vendor to cover any identified risk.
When obtaining software development or programming services
from third parties, ensure that appropriate warranties and
indemnities in relation to OSS are obtained.
OVERVIEW OF OPEN SOURCE SOFTWARE LICENCES
The most common OSS licences are:
'GNU General Public License' (GPL) 2.0 and 3.0. Linux
is an example of a GPL licence;
'GNU Lesser General Public License' (LGPL) 2.1;
Permissive free software licences, such as the 'MIT
License' (Massachusetts Institute of Technology and the
'BSD License 2.0' (Berkeley Standard Distribution) ;
'Apache License 2.0'; and
'Mozilla Public License' (MPL) 1.1.
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This publication is intended as a first point of reference
and should not be relied on as a substitute for professional
advice. Specialist legal advice should always be sought in relation
to any particular circumstances and no liability will be accepted
for any losses incurred by those relying solely on this
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