NET(net), Inc.


Open Wha? by jigordon
April 25, 2007, 4:01 am
Filed under: IP Indemnity, license grant, risk, source code, warranty

[OK… my bad… things got a bit busy yesterday.]

I live in Raleigh, NC – home to RedHat Software. Most of you have heard of RedHat as a result of their linux offering. But more than that, almost everyone has heard of RedHat because they sell free software. Initially, this was absolutely dumbfounding, confusing even seasoned contract negotiators with the world’s first broad introduction to the concept of free software, also known as open source software.

[Let’s clear something up just in case there are still any misunderstandings. “Free” software, is not actually free. The term “free” is meant to refer to access to the source code, not to financial costs. As a result, it’s better to use the term “open source” when talking about this access.]

Open source software, then, is based on the idea that the source code would be provided along with the object code at no additional charge. In other words, you still end up BUYING the object code, but you get the source for free and a license to make changes (and distribute the source code per the constraints of the license if you make said changes).

But all of this open distribution leads to an absence of definitive liability. The result is that if you have licensed open source products for use in an enterprise environment, you can have problems with indemnification, warranty, and other “missing” traditional contract terms. So the trick is to understand the scope of the open source usage in your environment in conjunction with the license provided. This obviously can become a large issue.

Additionally, there are currently more then 50 “accepted” open source standard agreements. Each one is unique in some form or fashion – and thus each one provides at least a small difference in terms of the rights and obligations apportioned. The net effect is that each of these licenses has to be read very carefully. Any vendor looking to use open source software (and any customer looking to use a vendor who uses open source software) needs to read, re-read, and triple-re-read the license to understand the specifics of what is provided, what has to remain “open” in the future and what kinds of protections you have in the event of a problem. At the end of the day, then, what you have is a completely custom software license that has to be read with a fine-tooth comb. DO NOT TAKE THE USE OF OPEN SOURCE SOFTWARE IN VENDOR PRODUCTS LIGHTLY!!!

ICN offers a slew of conferences and presentations on a variety of contracting and negotiation topics. In June, the Technology Procurement Conference in Chicago will offer attendees the chance to deep-dive into technology contracting-related topics in a series of 3-hour sessions. It sounds like one of the topics for this conference is going to be on Open Source procurement. Check it out (especially since I’m going to be there as a presenter)!

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